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3: Malaysia REITs - Looking For My 2nd Durian Runtuh
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Head to the watch list on the above tab to see my what's on my radar and foreseeable future postings =)

Decided to make adjustments on the way I blog & share due to time constraints and other commitments. In the coming weeks you should see them. Short updates but more frequent & concise.

Sunday, November 29, 2015

December Prediction of Pump Oil Price (Ron 95)

**It is easier to predict the direction of fuel price than to estimate amount of swing of fuel price due to the government REFUSING to disclose the compute mechanism.**

This is the sixth time I'm posting my prediction in a blog posting. Please bare that I will repeat some lines for new readers :) Also I always care to post my predictions before any official news or other analysts have given their views (typically too late after the queue starts at the stations).

Why is this sort of important? Say every month you know ahead of official price announcement and let's assume there is a price swing on average of 10 sen per month and you can fill in 35 litres. 0.10 x 35 x 12 = RM 42 savings a year. Obviously you don't feel it's a lot but every year you will always call and beg for credit card waiver of RM50 on govt service charge? Ironic isn't it? :)

Dec 2015
Global oil price has waned slightly below $50. The avg price for Tapis crude oil for Nov is ~$49 as stockpiles remain near record highs. U.S. Energy Department said crude stockpiles ticked up by 1 million barrels last week, bringing the total tally to 488.2 million barrels, around a level not seen in the last eight decades. Also oversupply issue will be exacerbated by Iranian oil coming to market soon in 2016. 

MYR's performance was muted; trading sideways for the entire month between 4.25 to 4.30. Nevertheless MYR might take a dive in December when the US Fed anticipated interest rate rise happens. Malaysia continues to suffer from a crisis of confidence and political uncertainty (now with UMNO's incoming annual general meeting, also Budget 2016 has not reveal any catalyst to bring MYR back to less than 4 to the Dollar. Even Moody's has the same thought: Moody's Says Budget 2016 'Tame'.

Domestically we received a "Kerja Bodoh" budget that is delivering so little with every corner being cut. I've talked about this in my previous post: Budget 2016: Ini Kerja Bodoh. Other than that I don't see anything interesting until the end of the year when global markets are usually more quiet during the festive season (Thanksgiving and Christmas).

Some asked why the price of crude oil has dropped in 2015?
- Strong US dollar; all commodities are priced in dollar and that includes oil.
- Organization of Petroleum Exporting Countries (OPEC); refuses to cut production in order to maintain market share.
- Oversupply of crude oil; thanks largely to US shale oil producers which is now the world's biggest swing producers.
- Declining demand; world's no.2 economy China is slowing.
- Iran nuclear deal; removes Western sanctions and thus allowing country to export oil once again.

How come our pump fuel price did not drastically drop in 2015? 
- This is primarily due to weakening MYR to the USD.

RM/L has dropped back to 1.77 (even lower than that of September, just by 2 sen though). With such a negligible difference I would predict that fuel price will remain the same. There is no need to rush to the petrol station, it would be even better if you wait it out after the announcement tomorrow; 1st December (Tuesday) in case there is a 5 sen drop but judging from previous price adjustment this is not very likely.

Below is a table of my previous predictions way back to the beginning of 2015. My predictions are based on Tapis crude oil price, performance of Ringgit (added after Mar) & domestic politics (which was added after May). My total savings to date: RM 43.75 (I have already exceeded RM 42 and now heading towards RM50)

**It is easier to predict the direction of fuel price than to estimate amount of swing of fuel price due to the government REFUSING to disclose the compute mechanism.**

Thursday, November 26, 2015

Land Public Transport Commission (SPAD) Needs Your Help

Dear readers, SPAD is conducting a short online survey to seek public views on Uber, GrabCar and Malaysia's taxis. I assure you it's really short: only 13 questions. Survey is anonymous and no personal data is collected. SPAD stands for "Suruhanjaya Pengangkutana Awam Darat", a unit under the Prime Minister's Office whose central role is to improve road and rail-based public and freight transport in the country. The survey is a "reality check" to gauge public sentiment please DO the survey, it counts. Here is the link: Do share out to friends and family.

In my opinion the survey did not ask some other important questions (e.g. on a scale of 1-10, how would you rate the taxi service in Malaysia…) Anyway here's  a sample of some of the questions (with multiple choice answers) in the survey are:

- What is your preferred method to book a taxi?

- If and when you are not satisfied with the taxi services, what are your common causes of your complaint?

- Why do you prefer to use Uber or Grabcar services instead of the current taxi services available in the market?

- In your opinion, should we regulate internet based taxi network applications i.e. Uber, Grabcar and Myteksi to allow them to operate within the boundaries of Malaysia’s laws and regulations?

**The last question is very cunning.
Thank you for your time.

Monday, November 2, 2015

Weekly Market Highlights November (1)

Source: Amp Capital (here for full market update) & iCapital biz (subscription required)

It’s been a strong October with US, Eurozone and Japanese shares up 8-10%, Chinese shares up 10.8% and Australian shares up 4.3%. After the sharp share market falls in the September quarter, October has lived up to its reputation as a “bear killer”. However, November is unlikely to be as strong given that, after rising 10% from their September lows, global shares are overbought and due for a correction.

Fed on hold, but still thinking of hiking in December. The Fed’s post-meeting statement was a bit more hawkish with US consumer spending and investment seen as “solid”, less concern about global developments, and a clear statement that it will decide in December whether to raise the Fed Funds rate. December hike is arguably still less than a 50/50 proposition.

United States
US economic data was on the soft side, with falls in home sales, durable goods orders, consumer confidence and the Markit services Purchasing Managers’ Index (PMI) contradicting the Fed’s more upbeat view on the US economy. 

US September quarter earnings results were better. With 68% of S&P 500 companies having reported, 75% have beaten earnings expectations. But only 44% have beaten on sales, as the strong US dollar and oil price fall weigh.

In the US, October employment data (Friday) will be watched very closely as a guide to whether the Fed will raise rates in December. Growth in US employment costs of just 2% year-on-year (yoy) in the September quarter, and the Fed’s preferred measure of inflation stuck at just 1.3% yoy, do not support the case for a December hike and perhaps see the Fed delaying into 2016.

Meanwhile, the risk of a US debt default next month or government shutdown in December has been all but eliminated by a bi-partisan deal that will suspend the debt ceiling to March 2017 and fund the government for two years. US congressional politics remains low risk for financial markets.

Eurozone economic confidence improved further in October, pointing to okay growth. However, a slowing in private lending growth in August would have concerned the European Central Bank, as would inflation that remained well below target in October.

Not much to get excited about from China’s fifth plenum, beyond the shift from a one child to a two child policy. Allowing all couples to have two children is a big move for China, but it won’t impact the labour force for 15-20 years and will still see the population decline, as two per couple is still below replacement and it’s doubtful that all urban residents want to have more anyway. So it’s hard to see much economic impact. 

In terms of growth, a target to double per capita income by 2020 implies a 6.5% per annum GDP growth target for the next five years, which is in line with expectations and reflects China’s slowing population and productivity growth, as the focus shifts from investment to consumption

In terms of the recovery in Chinese shares we continue to see good medium-term return potential, particularly Chinese companies listed in Hong Kong, where the H-share market is trading on a forward price/earnings ratio of 7.6 times.

Japanese economic data was a bit more upbeat. September household spending was weak, but industrial production rose, the unemployment rate remains low and the jobs-to-applicants ratio is now at its highest since 1992. There was also good news on the inflation front with core inflation at 0.9% yoy, its highest since 1994. There is still a way to go to reach the 2% inflation target though, and so while the Bank of Japan made no change to its monetary stimulus program at its October meeting, the pressure remains for further easing.

Closer to home, Budget has been tabled and it's full of crap. Also I have yet to share out important Malaysian economic indicators, hopefully I'll get there soon. 
Oct 27: Budget 2016: Ini Kerja Bodoh (Tolong baca)
Aug 22: Alarming Figures of Malaysia's Debt Problem
Aug 16: Stuck in the Middle of Nowhere
Aug 8: Weekly Market Highlights August (1) - Special Malaysia Highlights
Aug 5: The Risk of Holding Ringgit is Skyrocketing, WTB Donations
July 26: Sunday Lite: Flip Flop In Malaysia's Property Market

I saw an interesting article from TheEdge about property (I think I was reading it on the news stand). By the end of 2016, many units that were sold under DIBS are going to have to start servicing their loans. Boleh tak? Certainly you know the market has been soft lately and looks to remain so. 

Plus the below how long more can the middle class take all these hits?