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

BPA MALAYSIA BOND LEAGUE TABLES FOR 1ST QUARTER 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 www.bpam.com.my


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 www.bpam.com.my


For more information, contact:

Market Development
Tel: +603 2772 0888
Fax: +603 2772 0887
E-mail: enquiries@bpam.com.my

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

Facilitated in the Islamic Funds & Sukuk School organised by CERT

I was invited to conduct a session at the recent IFSS event organised by CERT. I talked about the importance of Sukuk valuation. Below is the brochure.

IFASS - March 2011

I will upload my slides later.

Why cloud computing will be the next new thing for all of us

I recently went for a conference organized by Oracle regarding cloud computing. In a nutshell, cloud computing is just the notion of aggregating everything to the internet. In other words, the current environment of individual operating systems, individual file storage and individual licensed software will become the thing of the past.

In cloud computing, the only item that is necessary to have is a simple terminal with internet accessibility. The calculating power no longer resides on a chip but will be handled by the cloud itself. These following factors introduces a few interesting potential scenarios. These are:

1. Upfront cost of ownership reduces substantially. Instead of getting the latest computers with the fastest chip, a simple basic computer is all that is needed to do anything.
2. Education to the masses. Every child can be provided a terminal for internet based learning. The classroom is no longer defined as a physical location. Everyone can attend “a” class, no matter where there are in the world. Age will also not be a factor. Adults that did not have the opportunity to go through the standard education process can now attend. As there will not be any requirement to be at a certain place and hence meet other people in class, it minimizes “embarrassment” and hence more adults will be willing to take such classes.
3. Reduces the cost of maintaining a large quality teaching staff. With webcam and audio interaction, one quality teacher can handle a multitude of students at any point of time.
4. Ease of review and feedback. Using the internet meant everything that is done through it will be recorded. Hence, the ability to review and provide feedback will be a good learning experience not only for the students but also for the teachers and facilitators.

A few downsides to the cloud computing concept should also be noted. These are:

1. Internet infrastructure is crucial. Without a good internet infrastructure in place, the power of the cloud computing cannot be utilized effectively. This factor makes less develop countries unable to maximize of this technology to leapfrog towards the more developed nations.
2. Discipline is paramount. Using the infrastructure for non-productive activities reduces the capacity for more productive proceedings. Moreover, learning via internet will require discipline by students to remain at the terminal to learn as there will not be any form of disciplinary figure present.

For me, the benefits outweigh the negatives. I am all for the transition to cloud computing. What about you?

Nuclear energy - a must have technology for advancement

The events unfolding in Japan regarding its nuclear power stations is disturbing. I hope they can contain any fallout from any failure of the various reactors.

This is not be used as an excuse to limit Malaysia's energy focus to purely non-nuclear. Although renewal energy is the best option, the current renewable energy technology is not sufficient to support our current standard of living. To make it a reality, we must change the very nature of our life.

Instead, we should look at what has happened as a case study and ensure that if it does happen, we can adequate tackle the problem head on.

I am all for nuclear technology.

Evolution of computer infrastructure to business

After attending a talk by oracle on the evolution of computers to the business,it got me thinking.The concept of cloud computing can revolutionise how we do business. Now companies do not need to invest in hardware extensively to do the same job in the future.

I am currently using my Galaxy Tab to upload this post. Once I get back to office I will expand this subject further.

My comments in the papers: Influx of gulf funds viewed as temporary

Below is the link to the article in The Star Newspaper that quoted me.

http://www.bpam.com.my/fileDownload.asp?File=/upload/in_the_press/&Name=TheStar_030311.pdf&Size=0

Bond Market performance for February 2011 appears lower compared to the previous month

Returns in the Malaysian bond market remain mixed for the second month running. Practically all bond classes suffered poorer performance in February 2011 compared to January 2011. Although this is typical for this time of the year due to the number of public holidays as well as the shorter month compared to other months of the year, other factors have multiplied it further. The possible impact to the world's economy due to events in the Middle East is one key factor that caused yields for the bond market to be more hawkish. Government papers appears to take the brunt of the current market sentiment.

Visit: http://www.bpam.com.my/ for a copy of the report

Special Discounts - a good method to grab undecided customers

Recently I was shopping for a resort to host my company's upcoming retreat. The specification was simple: somewhere beautiful, requires a short plane ride and all inclusive. The resort that I had in mind was Tanjung Rhu Resort in Langkawi. I started inquires about the prices as well as the flight tickets.

Within a space of 4 hours, I have not only committed to the Resort but also booked the flight tickets through MAS. This is not the normal speed for company type purchases. So why the difference?

Special Discounts. Both the resort and MAS suddenly offered a special deal to the company that is nearly 40% and 70% lower, respectively over the standard price. The catch is; the company must commit within 4 hours or the special rates will disappear.

In this case, although I knew what I wanted, it is still not a foregone conclusion that I will go to Tanjung Rhu. Cost matters considerably. Nevertheless, the "special discount" by both the resort and MAS was too good to resist.

On reflection, I realised the power of "special discounts". Although your margin drops considerably if it is offered, the positive angle to it is that you will get a big booking. Sometimes it is not the marginal profit that matters. Bottom-line profit and effective use of company assets should also be looked into.

In the case of the resort, they have sunk cost in terms of the rooms. If a big booking comes in, it makes sense to take up the booking as it ensures a good proportion of the rooms will be occupied. Keeping strictly to the standard rates reduce your potential to monetize your operating assets.

In the case of MAS, taking a big booking now ensures that a number of seat on their plane will be taken. Now, the other seats can be priced at standard rate without the need to offer any further concessions.

Net position - Revenue and profit gain!

Bond Index Monthly Report - January 2011 - Returns in the Malaysian bond market were mixed

Returns in the Malaysian bond market were mixed. Some bond classes fared better while others did not. Government Bonds improved when compared to the returns registered in December 2010 but Corporate Bonds returns moved in the opposite direction. Due to the concerns of the market of another rate hike by BNM, the yield for the bond market has been pushed higher. However, the status-quo in the Malaysian Overnight Policy Rate by BNM on 27 January 2011 did help reverse the hawkish market sentiment hence reducing the yields of the Government papers. Although this has an effect of improving the returns for government bonds, the same has yet to be seen for the corporate bond which tends to lag the Government papers.
Bond Index Monthly Report - January 2011; by Bond Pricing Agency Malaysia