Thursday, April 28, 2011

Malayan Banking Berhad (Maybank) has just issued a Dividend Reinvestment Plan (DRP)

Malayan Banking Berhad (Maybank)has just issued a Dividend Reinvestment Plan (DRP). The plan calls for shareholders to trade in the dividends declared to shares at RM7.70 per share. Today's price of Maybank is RM9.10 per share. So, it makes sense to convert just on the price difference alone.

Do note however, the transaction does require a RM10 stamp duty to be paid. Nevertheless, it is still cheaper to buy compared to buying it straight from the market which will involve transaction costs (>RM10).

Deadline for submission is 5:00 pm tomorrow, Friday 29 April 2011.

Monday, April 25, 2011

Learning from Amazon's cloud collapse - Moral of the story? Technology is just an enabler and fallible

A lot of people did not know about a major shock that happened last week that had a big implication for businesses going forward. This article from CNN, View article...,you will learn that Amazon's cloud computing service went offline.

The concept of cloud computing is good. I wrote a piece in this blog earlier, However, a lot of people forget that technology is only an enabler and not a panacea for businesses of the future. One shouldn't put all their eggs in one basket. You must always have redundancy in place.

Below is an excerpt of the original article.


Learning from Amazon's cloud collapse

(Mashable) -- Call it Cloudgate, Cloudpocalyse or whatever you'd like, but the extended collapse of Amazon Elastic Cloud Compute (EC2) is both a setback for cloud computing and an opportunity for us to figure out how to stop it from happening again.

Amazon may be best-known for its online shopping site, but it also has a substantial cloud computing business. It provides a scalable, flexible and particularly efficient solution for companies to store and deliver massive amounts of content.

Its model of only paying for what you consume was a radical innovation when it launched in 2006.

In fact, Amazon Web Services has been so affordable and reliable that thousands of companies from Foursquare to Netflix utilize the company's cloud computing technology and servers to run their businesses.

They put their faith in Amazon's cloud because there was no reason to think that it would falter. One of cloud computing's key tenants is reliability through redundancy of both servers and data centers.

Then on Wednesday, Amazon's northern Virginia data center started experiencing problems that caused major latency and connectivity issues.

The trouble was apparently due to excessive re-mirroring of its Elastic Block Storage (EBS) volumes -- this essentially created countless new backups of the EBS volumes that took up Amazon's storage capacity and triggered a cascading effect that caused downtime on hundreds (or more likely thousands) of websites for almost 24 hours.

The collapse took its share of victims. Among the most prominent companies affected were Foursquare, Quora, Hootsuite, SCVNGR, Heroku, Reddit and Wildfire, though hundreds of other companies big and small were affected.

Luckily, one of Amazon's most prominent customers, Netflix, didn't experience problems because it's built for the loss of an entire data center, while companies relying on Amazon's four other global data centers didn't experience too many issues.

A learning moment

FathomDB founder Justin Santa Barbara has a detailed post on his blog about what may be the biggest problem to come out of this week's collapse: Amazon's cloud redundancies failed to stop a mass outage.

Its Availability Zones are supposed to be able to fail independently without bringing the whole system down. Instead, there was a single point of failure that shouldn't have been there.

This week's disaster in the cloud is a reminder to startups to build redundancy into their applications and their own systems, but as Santa Barbara points out, most startups don't have the time or resources to engineer for multiple cloud systems (each Amazon global region/data center has its own rules and features, making a simple "switch" to another center difficult).

These companies trusted Amazon to keep them online, and Amazon failed to deliver.

Catastrophic issues will always occur, but in the pre-cloud era, downtime only affected a single computer or website. Today, a catastrophic event takes down thousands of websites, causing millions or even billions of dollars in lost revenue and productivity.

This incident is no reason for us to shun cloud computing, though. Its benefits (scalability, cost reduction, device independence, performance and more) far outweigh its cons.

We do need to take a hard look at how we structure our cloud infrastructure though and find new ways to either prevent single points of failure or quickly move content off failing clouds faster, especially as the world's computing power is consolidated into fewer and fewer systems.

Cloud computing is still in its infancy, and today's events make it clear that we still have a lot of work to do. It could be a whole lot worse next time if we aren't prepared.

Thursday, April 21, 2011

Bondholders not accepting haircut - The StarBiz 15 April 2011

Article from the Star newspaper using BPA Malaysia's data. Bondholders not accepting haircut - The StarBiz 15 April 2011

Tuesday, April 12, 2011

RM1b wipeout due to downgrades, 12 April 2011, The Star

Article with BPA Malaysia providing the information.

RM1b wipeout due to downgrades, 12 April 2011, The Star

Monday, April 11, 2011

What is Acid Test Ratio and ROA Ratio?

Investors calculate the acid test ratio, also known as the quick ratio or the pounce ratio. This ratio excludes inventory and prepaid expenses, which the current ratio includes, and it limits assets to cash and items that the business can quickly convert to cash. This limited category of assets is known as quick or liquid assets. The acid-text ratio is calculated by dividing the liquid assets by the total current liabilities.

This ratio is also known as the pounce ratio to emphasize that you’re calculating for a worst-case scenario, where the business’s creditors could pounce on the business and demand quick payment of the business’s liabilities. Short term creditors do not have the right to demand immediate payment, except in unusual circumstances. This ratio is a conservative way to look at a business’s capability to pay its short-term liabilities.

One factor that affects the bottom-line profitability of a business is whether it uses debt to its advantage. A business may realize a financial leverage gain, meaning it earns more profit on the money it has borrowed than the interest paid for the use of the borrowed money. A good part of a business’s net income for the year may be due to financial leverage. The ROA ratio is determined by dividing the earnings before interest and income tax (EBIT) by the net operating assets.

An investor compares the ROA with the interest rate at which the corporation borrowed money. If a business’s ROA is 14 percent and the interest rate on its debt is 8 percent, the business’s net gain on its capital is 6 percent more than what it’s paying in interest.

ROA is a useful ratio for interpreting profit performance, aside from determining financial gain or loss. ROA is called a capital utilization test that measures how profit before interest and income tax was earned on the total capital employed by the business.

Friday, April 8, 2011

Blue Ocean Strategy: Value Innovation

Value Innovation is the cornerstone of blue ocean strategy. Value innovation is the simultaneous pursuit of differentiation and low cost. Value innovation focuses on making the competition irrelevant by creating a leap of value for buyers and for the company, thereby opening up new and uncontested market space.

Because value to buyers comes from the offering’s utility minus its price, and because value to the company is generated from the offering’s price minus its cost, value innovation is achieved only when the whole system of utility, price and cost is aligned.

  • What factors can be eliminated that the industry has taken for granted?
  • What factors can be reduced well below the industry’s standard?
  • What factors can be raised well above the industry’s standard?
  • What factors can be created that the industry has never offered?
This concept is actually intuitive. We all use it when faced with choices.

Monday, April 4, 2011

Good Time for Corporates to Issue Bonds - The StarBiz, Page 1 - 04 April 2011

This was the article that came out in today's StarBiz on page 1. The interview took place last Friday.
Good Time for Corporates to Issue Bonds - The StarBiz, Page 1 - 04 April 2011

Friday, April 1, 2011


KUALA LUMPUR, April 1, 2011 – BPA Malaysia has released its latest bond market league table report today. The report highlights market performance from three perspectives, namely Top Issuer, Top Traded Bond and Top Bond Trustee.

In addition, BPA Malaysia has also released a new set of league tables, listing the Top Lead Arrangers by amount issued, by number of issuance, by facility limit and by number of facility issued.

The latest report covers the period 1st January 2011 to 31st March 2011.

Summarised Results:

Top Bond Issuer Overall: Bank Negara Malaysia RM 60.75 bil
Top Corporate Bond Issuer: Tanjong Capital Sdn Bhd RM 1.35 bil
Top Sukuk Issuer: BNM Sukuk Berhad RM 22.35 bil

Top Traded Bond Overall: Government of Malaysia RM 154.60 bil
Top Traded Corporate Bond: Cagamas Berhad RM 1.24 bil
Top Traded Sukuk: BNM Sukuk Berhad RM 44.23 bil

Top Bond Trustee Overall (by value): Malaysian Trustees Berhad RM 2.98 bil
Top Bond Trustee (by issuance): Equity Trust (Malaysia) Berhad 67 issues
Top Conventional Bond Trustee (by value): Malaysian Trustees Berhad RM 1.16 bil
Top Sukuk Trustee (by value): Malaysian Trustees Berhad RM 1.82 bil

Top Lead Arranger Overall CIMB Investment Bank Berhad RM5.83 bil
Top Lead Arranger (by issuance) Maybank Investment Bank Berhad 46 issues

Results of the previous quarter (1st October 2010 to 31st December 2010)

Top Bond Issuer Overall: Bank Negara Malaysia RM 60.20 bil
Top Corporate Bond Issuer: CIMB Bank Berhad RM 2.00 bil
Top Sukuk Issuer: BNM Sukuk Berhad RM 22.20 bil

Top Traded Bond Overall: Bank Negara Malaysia RM 138.55 bil
Top Traded Corporate Bond: Cagamas Berhad RM 0.77 bil
Top Traded Sukuk: BNM Sukuk Berhad RM 27.40 bil

Top Bond Trustee Overall (by value): Mayban Trustees Berhad RM 7.63 bil
Top Bond Trustee (by issuance): Mayban Trustees Berhad 103 issues
Top Conventional Bond Trustee (by value): Malaysian Trustees Berhad RM 3.26 bil
Top Sukuk Trustee (by value): Mayban Trustees Berhad RM 5.85 bil

Full details of the leagues tables can be obtained directly from the BPA Malaysia website at

About BPA Malaysia

Established in 2004 under the name Bondweb Malaysia Sdn Bhd, BPA Malaysia is currently the only registered bond pricing agency as accredited by the Securities Commission of Malaysia. We are the market leader in delivering evaluated pricing and bond data services on the Malaysian Fixed Income market, and currently serve over 120 local and international financial institutions. BPA Malaysia works with a wide range of strategic partners ranging from financial institutions and intermediaries, academia, global information vendors, research houses, media organizations and training providers. Visit us at

For more information, contact:

Market Development
Tel: +603 2772 0888
Fax: +603 2772 0887

Bond Pricing Agency Malaysia Sdn Bhd
17-8 & 19-8, The Boulevard, Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur
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