I created this category to complile all related expenses concerning cars especially purchasing car, car loans car depreciation etc. One of Malaysian biggest expenses is Car which hinder or slow down our road to wealth if we make mistake on this expenses like what i did. Right now, I try to educate myself as much of possible about car purchasing.
0220 GMT [Dow Jones] STOCK CALL: HwangDBS keeps Fully Valued rating on Maybank (1155.KU), target price MYR8.40; says Maybank reiterated stance to pay up to MYR8.6 billion for Bank Internasional Indonesia, or 4.7X FY07 BV or 41X adjusted FY07 PE (4.1X FY08 BV and 35X FY08 PE) based on future opportunities and growth in Indonesian banking sector. Notes Maybank expected to raise MYR8 billion via combination of Tier-1 and Tier-2 capital funding. “After imputing possible interest and merger costs, the acquisition could lower our FY09F earnings by 11%. BII is expected to contribute marginally in FY10F, while synergies are expected from FY11. We have not imputed synergistic benefits from this acquisition in our forecasts,” says analyst Sue Lin Lim. Stock +1.2% at MYR8.50. (ALE)
http://biz.thestar.com.my/news/story.asp?file=/2008/3/28/business/20771845&sec=business
PETALING JAYA: Unlike some of their foreign counterparts, banks in Malaysia are not generally expected to tighten credit amid the uncertainty in the global economy.
HSBC Bank Malaysia Bhd managing director for commercial banking Eddie Norton said this was due to the country’s strong economic growth and fundamentals, ample liquidity and resilient banking system.
“We have strong fundamentals in the palm oil and the oil and gas sectors which are key drivers of export receipts and gross domestic product growth.
“It is worth noting that corporate liquidity, as measured by deposits with banks, has increased by more than 6% in the past year.
“Furthermore, strong demand for loans has seen outstanding loans rise by about10% last year,” he said in an interview.
According to Norton, Malaysia has a strong banking sector and the competition is such that both corporate and personal borrowers have access to attractive funding rates.
The bank’s corporate lending grew by 10% in tandem with the market, which grew to RM310bil in 2007.
“You only have to glance at the daily newspapers to see the latest promotions in the credit card, personal loan and mortgage markets to realise that there is no obvious sign of credit tightening here.
“On the corporate side there has been no discernible impact on bond spreads and indeed a number of overseas issuers are looking to tap the ringgit market here,” Norton said.
The Asian markets, however, appeared to be relatively less affected by the US and European markets, he said.
He said even last year when credit spreads overseas had begun to widen, there was not much impact on local Asian credit spreads.
Therefore, a local Malaysian company looking to raise US dollars via a bond issue sold to offshore investors would have had to pay credit spreads that were far wider than those payable to local investors on ringgit debt, he noted.
“This is largely because Asian banks have by and large not suffered write-downs or credit losses anywhere close to the extent suffered by their counterparts in the US and Europe,” Norton said.
An official from another bank who concurred with Norton said to an extent the Asian market was decoupled from the US and European markets and the impact would not be excessive.
A spokesman from another bank said the tightening of credit would affect businesses with significant exposure to the US market, but banks had ways to reduce or mitigate cross-border risks.
Norton said: “At HSBC, we pride ourselves on being consistent in our approach throughout the economic cycle. This means avoiding excess (credit/loans) in a bull market and not being overly stringent in a downturn.
“We do this by staying close to our customers, and understanding their business.
“Our assessment will of course be dynamic which means we will take into account the risk factors in the industry and the general outlook.
“Healthy dialogue with your bank is the best way of maximising support when conditions deteriorate.
“We have extensive knowledge on how to structure cross-border trade transactions by using a number of instruments and in accessing the credit insurance market.”
Filed under: Stocks Investing | Tags: bank internasional indonesia, maybank
http://biz.thestar.com.my/news/story.asp?file=/2008/3/28/business/20777600&sec=business
PETALING JAYA: Malayan Banking Bhd’s (Maybank) successful bid for PT Bank Internasional Indonesia Tbk (BII) does not seem to have gone down well with the investing public as the stock fell to its lowest level in almost five years.
While analysts and fund managers concurred that the acquisition was the right move for cultivating long-term growth, some investors were more concerned about the short-term pain Maybank might have to bear.
Maybank shares was down 55 sen, or 6.1%, to RM8.40 – the lowest since July 2003. The counter dipped to an intra-day low of RM8, with 42 million shares changing hands.
BII shares, however, rocketed to seven-year high of 470 rupiah on the Jakarta Stock Exchange yesterday amid expectation that Maybank would soon make a tender offer of around 510 rupiah per share for the remaining 44.3% that it does not own in the Indonesian bank.
The strong selling came after a few foreign stockbrokers downgraded the banking blue chip to “sell” following Maybank’s announcement of the RM8.6bil deal to buy BII at price-to-book value of 4.6 times.
Maybank intends to take over Sorak Holdings Ltd, which owns a 55.7% stake in BII from Fullerton Financial Holdings and Kookmin Bank for RM4.8bil cash. It will later make a general offer for all BII shares it does not own.
South Korea-based Kookmin Bank, however, has yet to decide on the sale of its 25% equity interest in Sorak to Maybank, according to Bloomberg.
Apart from the high price that Maybank was paying for BII, analysts were also concerned the acquisition might sap the group’s financial resources to maintain its dividend payment.
A Maybank spokesman said: “The bank would keep to a minimum dividend policy of 60%, subject to Bank Negara approval, we intend to maintain dividends per share. Whatever that was paid in terms of quantum last year will be maintained.”
In terms of capital repayment, the spokesman said: “We have informed shareholders to give two years until the end of financial year 2008 if there are no acquisitions, then we can look into capital repayment. But now we have found good use for the money through a long-term acquisition in Indonesia.”
Said Merrill Lynch analyst Loo Kar Weng: “This deal dashes the hope of Maybank returning excess capital to shareholders in the form of dividends. That was one of the key attractions of the stock.
“Furthermore, even its normal annual dividends may be affected as its earnings get diluted from the cost of the acquisition,” he wrote in a research note.
Dividends had been the factor making Maybank shares appealing to investors when the earnings growth of the country’s biggest bank was getting less exciting compared with its peers, such as Bumiputra-Commerce Holdings Bhd and Public Bank Bhd, which are enjoying contribution from investments abroad.
The concerns over the possibility of less generous dividend payment and expectation of no immediate contribution from its Indonesia operations gave no solid reason for investors to hold onto Maybank shares, a dealer said.
Investors could always buy the shares later when the acquisition in Indonesia started to yield fruit, he added.
Citi Investment Research analyst Stephan Hasjim in Indonesia said having Maybank as a new shareholder was good news for BII as it could add significant value and strengthen the bank’s franchise.
However, he noted that it would take a few years for BII to achieve the industry average of 18% return on equity given the growing competition, the bank’s high cost base and Indonesia’s rising inflation.
At a press conference on Wednesday, Maybank acting chief executive officer Datuk Aminuddin Md Desa said BII would only start contributing to the group’s profit in the third year after the acquisition.
He defended the high price was for a “scarcity premium” and the great potential of the sizeable consumer loan market.
“Some may balk at the hefty price target for BII but we see this investment as one that would enhance Maybank’s earnings profile and provide sustainable growth over the long term,” said AmResearch, which maintains its “buy” recommendation on the stock.
It said BII would provide Maybank with the platform to tap onto Indonesia’s banking industry with “limited execution risks”.
0343 GMT [Dow Jones] Deutsche Bank cuts Maybank (1155.KU) to Sell from Buy, target to MYR7.50 from MYR11.60, on concern its growth and stability may be offset by near-term concern it overpaid for Bank Internasional Indonesia (BNII.JK); “an entry price of 4.6 times 2007 book value is the most aggressive by far compared to 3.0 to 3.5 times in recent transactions. BII may drag earnings for one to two years, yield attraction may fade, key performance indicators may change. Switch to Public Bank (1295.KU) for a sustainable return on equity of above 20% and 6 per cent net yield,” say analysts Irene China and Krista Yue. Adds price tag of 4.6x BV surpassed expectations, especially for bank with ROE of less than 15% vs Maybank’s 18-20% target of FY08/09. EPS dilution, assuming 50% debt, is minimal 3% but impact would depend on mode of funding, which could be combination of excess capital, debt and equity. Dividend payout of 66-70% may be at risk; KPIs may be reviewed and remain unclear until new CEO comes on board in June. Maybank down 7.8% at MYR8.25.(ALE)
http://biz.thestar.com.my/news/story.asp?file=/2008/3/27/business/20080327101320&sec=business
KUALA LUMPUR: Malayan Banking Bhd’s share price fell as much as 10.6% or 95 sen in early trade on Thursday on some investors’ concerns that it was paying a high price of RM8.6 bil for a 100% stake in PT Bank Internasional Indonesia Tbk.
It opened at RM8.40, down 55 sen. Within the first hour of trade, there were 14.81 million shares done at prices ranging from RM8 to RM8.45.
At 10am, it was trading at RM8.45, down 50 sen or 5.6%.
The KLCI fell points to 12.18 points to 1,233.24 as investors locked in gains, uninspired by the weak closing on Wall Street. US financial shares slid when concerns resurfaced that bank profits will take much longer than expected to recover from the housing slump. The Dow Jones industrial average closed down 109.74 points, or 0.88%, at 12,422.86.
On Maybank, OSK Investment Research said in a note to clients that the acquisition price was not cheap as based on the acquisition price.
“We must admit that the acquisition price is not cheap as based on the acquisition price, BII is essentially priced at 4.45 times and 61.5 times FY07 BPS and EPS, respectively, or 4.26 times and 33.0 times FY08 BPS and EPS,” it said.
However, it always believed that Maybank should expand its overseas presence in order to mitigate the saturated domestic market share.
“We believe the Indonesia banking sector offers more upside in the long-run as per the ratio of total outstanding loans-to-nominal GDP. However, due to the potential near-term profitability dilution, we have lowered our fair value to RM10.80 but maintain our BUY call,” it said.
On Wednesday, Maybank announced it wanted to take over Sorak Holdings Ltd, which has a 55.7% stake in PT Bank International Indonesia Tbk (BII), from Fullerton Financial Holdings and Kookmin Bank for RM4.8bil cash. It will later make a general offer for all BII shares it does not own. Starbiz reported that to some people, Maybank’s move to pay RM8.6bil, or 4.6 times book value, indicated how desperately the group wanted BII, Indonesia’s sixth biggest bank.
The valuation is among the highest in the industry. The offer price is about 20% above Jakarta Stock Exchange-listed (JSE) BII’s market price. The book value of 4.6 times is about double the average valuation among Indonesia’s publicly traded banks.
The top four banks listed on JSE are currently trading at about 3.9 times. BII’s net profit has been declining since 2004. For the year ended Dec 31, 2007, the bank’s net profit fell to 404.7 billion rupiah (RM142mil) from 633.7 billion rupiah (RM222.3mil) in 2006.
http://finance.yahoo.com/loans/article/104709/Use-DIY-Method-of-Extra-Loan-Payments
Dear Dr. Don,
I have a 30-year mortgage. I want to make biweekly payments. My lender wants to charge me. Is this legal? I have to set it up with them and pay a setup fee and a monthly fee for the service.
– Arnetta Averse
Dear Arnetta,
You’re buying a service — of course it’s legal for them to charge for it. That said, I’m not recommending that you convert your mortgage to a biweekly mortgage. Save the fees and expenses and do it yourself.
A lot of homeowners think that most of the interest savings and the shortened loan term that result from a biweekly mortgage come about because of saving interest expense within the month. That’s not the case.
What saves interest expense and reduces the loan term is the fact that you’re making the equivalent of 13 monthly mortgage payments each year.
Dividing 52 weeks in a year by 2 gives you 26 biweekly loan payments. The biweekly loan payment is half the size of the monthly payment, so you pick up an extra payment each year (26 x ½ = 13).
One of two do-it-yourself options will accomplish the same goal. One way is to make an additional principal payment each month of one-twelfth of the monthly payment.
Another method works for people who are paid biweekly. In such arrangements, you’ll have at least two months each year that you get an extra paycheck. Use those three-paycheck months to make an additional principal payment of one-half the monthly mortgage payment.
Either way you end up with the same 13 payments per year. People who get paid weekly have at least four, five-paycheck months in a year. They can make additional principal payments of one-fourth the monthly mortgage payment in those months.
Use the amortization feature of Bankrate’s mortgage payment calculator to verify that you can do as well on your own as you can by converting your mortgage to a biweekly mortgage. You can check the latter by using Bankrate’s biweekly mortgage payment calculator.
The table below shows an example. Yes, the biweekly has a one month and $563 advantage over the do-it-yourself approach, but not after considering the fees and expenses your lender wants to charge to convert your loan.
Extra Payment Options
| Conventional mortgage | Do-it-yourself | Biweekly mortgage | |
| Loan amount: | $200,000 | $200,000 | $200,000 |
| Interest rate: | 6.39% | 6.39% | 6.39% |
| Original loan term (years): | 30 | 30 | 30 |
| Scheduled payment: | $1,249.70 | $1,249.70 | $624.85 |
| Additional principal payments (monthly): | $- | $104.14 | $- |
| Adjusted loan term (years): | 30 | 24.25 | 24.17 |
| Total interest expense: | $249,893 | $193,805 | $193,242 |
I don’t recommend homeowners convert to biweekly mortgages because it reduces their financial flexibility.
People who use the do-it-yourself option can skip the additional principal payment if they find themselves between a rock and a hard place. On the other hand, if you convert to a biweekly mortgage, you’ve made the payment contractual.
Don’t convert. Make additional principal payments instead.
KUALA LUMPUR, March 26 (Bernama) – Against the backdrop of a sluggish global economic outlook, mainly due to the impact of the financial market turbulence in US, Bank Negara Malaysia (BNM) expects the domestic economic growth to moderate to 5-6 percent in 2008 from 6-6.5 percent targeted by Ministry of Finance.
It said the stronger commodity sector and economic growth in the Asian region and other emerging markets would continue to support the export sector and help cushion the external negative impacts.
The slowdown in US is likely to be mitigated by strong growth in China and India along with vibrant economic expansion in commodity-exporting countries.
“As a commodity producer, Malaysia will continue to benefit from high prices of crude oil, palm oil and rubber,” BNM said in its 2007 Annual Report released here Wednesday.
In addition, it said, the strong base in the commodity sector would further strengthen the linkages with downstream activities, including the resource-based industries which would continue to benefit from the robust domestic as well as regional demand.
On the converse, the resilience of the Malaysian economy to weather a slowdown in the global economy has also strengthened over the years, due mainly to the emergence of domestic demand as a key driver of growth, it said.
Therefore, in 2008, although consumer and business sentiments could be affected by the prospects of a sharper-than-expected global economic slowdown and uncertainties in the international financial markets, the major underlying factors supporting domestic private sector activities were expected to remain generally intact.
Growth in private consumption expenditure is expected to moderate but remain high at 6.5 percent in 2008 (2007: 11.7 percent), while aggregate domestic demand would moderate to 5.6 percent in 2008 from 10.5 percent in 2007.
Private investment is expected to be sustained in 2008, albeit at a slower rate of expansion.
The increased investment activities will be supported by the generally favourable business climate and pro-business initiatives implementation, in particular the reduction in corporate tax to 26 percent in 2008 and to 25 percent next year.
In terms of public sector expenditure, public consumption is expected to increase by six percent (2007: 6.4 percent), mainly on account of higher expenditures on emoluments, supplies and services.
Federal government spending this year is expected to remain high and mainly channelled towards improving the economic and social services sectors.
On the production side, the central bank said all economic sectors, except manufacturing, were projected to record high growth rates.
“Growth will continue to be driven by the services sector, with further impetus emanating from the construction, mining and agriculture sectors,” it said.
The services sector is expected to sustain its strong growth momentum, expanding by 7.7 percent (2007: 9.7 percent) contributing 4.1 percentage points to overall gross domestic growth (GDP) growth.
As a result, the share of the services sector to GDP is expected to increase to 54.5 percent from 53.4 percent last year.
The manufacturing sector is expected to record a modest growth of 1.8 percent (2007: 3.1 percent) due to weaker performance of the export-oriented industries.
In the agriculture sector, growth is expected to strengthen to 3.4 percent (2007: 2.2 percent), supported by the recovery in output of major industrial crops namely, palm oil and rubber.
The mining sector is expected to continue to lend further support to economy growth, expanding by six percent this year compared with 3.2 percent in 2007.
It said the construction sector was expected to expand by 5.5 percent (2007:4.6 percent), led mainly by higher activities in the civil engineering sub-sector, benefiting mainly from the implementation of the Ninth Malaysia Plan projects.
– BERNAMA
0138 GMT [Dow Jones] STOCK CALL: OSK Research keeps buy Call on Malayan Banking (1155.KU) or Maybank, but cuts target price to MYR10.80 from MYR11.70 on potential near-term profit dilution following Bank International Indonesia (BNII.JK) or BII acquisition; says MYR8.6 billion Maybank paying for BII not cheap; notes BII essentially priced at 4.45X BPS, 61.5X EPS for FY07, or 4.26X BPS, 33X FY08 EPS for FY08. Says Maybank should expand overseas presence to mitigate saturated domestic market share, “we believe the Indonesia banking sector offers more upside in the long-run as per the ratio of total outstanding loans-to-nominal GDP,” says Chan Ken Yew. Stock last down 6.1% at MYR8.40.(SJO)
0223 GMT [Dow Jones] STOCK CALL: Citigroup downgrades Maybank (1155.KU) to Sell from Buy, cuts target price to MYR8.38 from MYR10.63 after reducing dividend payout assumption to 55% (Maybank earlier guided 60-70%), removing 40 sen/share capital management; follows Maybank plan to buy Bank Internasional Indonesia (BNII.JK) for $2.7 billion. Analyst Julian Chua says price tag of 4.7X P/B 50% higher than initially assumed for mediocre franchise. “Recent transactions averaged 2.5X price-to-book and we did not expect it to go beyond 3X. At present, sector leaders like BCA and BRI which have far superior ROEs trade at less than 4X,” he says. Adds areas for synergy include cross selling new Islamic, wealth management, bancassurance products, improving operational efficiency, containing charge-off rates, but will be “a gradual process versus the high upfront cost of the investment.” Maybank down 5.6% at MYR8.45, off intraday low of MYR8. (VGB)
