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GELD AGGRESSIVE
SHARIAH FUND
1 | P a g e
PROFILE
Name GELD Investment Bhd.
Established Date 20/01/2012
Address No. 150, Jalan Bangsar,
59000, Kuala Lumpur,
Malaysia.
Tel: +603 2212 7200
Fund Managers Mirra Nabila Mohd Sukri
Yasmin Abd Rahman
Shuang Ge
GELD Investment Bhd invests based on
Shariah principles strictly prohibited any
business activities that includes interest,
uncertainty, gambling, and any other
disallowed activities. We focus on giving
the Islamic alternative in portfolio
management. Thus far, we operate only
in Malaysian market where most of the
Islamic finance infrastructures are
adequate to avoid uncertainty on the
Shariah issue.
2 | P a g e
SUMMARY OF THE
FUND
This portfolio is customized for Albukhary Foundation of
Malaysia, with an objective of seeking long-term capital
appreciation and growth in this portfolio. Investment of this
portfolio is based on Shariah principles, strictly prohibited
any business activities that includes interest, uncertainty,
gambling, and any other disallowed activities. However, the
portfolio is subject to the market's uncertainty and risks
that are normally associated with making investment in
securities. Therefore, investors cannot be guaranteed
against a loss of the principals invested in. When investing
in this portfolio, investors should consider the risk factors
carefully before make investments.
3 | P a g e
SUMMARY OF THE
FUND
Portfolio Category:
Shariah compliant Equity
Objective of the Portfolio:
To be in line with Shariah Principles, this portfolio aims to provide
investors with medium to long term balanced-capital appreciation by
investing in Shariah compliant equities.
Exit Strategy:
a. If any equity in the portfolio decrease by 5 percent changed from
its targeting weighting, the stock will be sold or the portfolio will
be rebalanced.
b. If any equity in the portfolio increase by 25 percent changed from
its targeting weighting, the portfolio will be rebalanced or the
stock will be sold.
Asset Allocation:
100% of the fund will be invested in Shariah-compliant stocks. Up to
20% of the fund will be invested in Property sector and Technology
sector respectively. Almost 35% of the fund will be invested in
Services sector. Any surplus arises from the changing circumstances of
the stock in the portfolio will be invested in Mudarabah account.
4 | P a g e
SUMMARY OF THE
FUND
Risk Barometer:
Moderate
Risks Involved in the Portfolio:
Market Risk
Default Risk
Business Risk
Inflation Risk
Investor Profile:
Albukhary Foundation
Established in 1996
Participate in securities market only
Seeks long-term capital appreciation on its investment
Has moderate risk tolerance
Seeks Shariah-compliant investments
Size of Fund:
1 million MYR
Time Horizon:
From June 11, 2014 until June 11, 2019 (5 years)
Income Generated:
Dividends will be deposited into investor's bank account.
Performance Indicator:
FTSE Bursa Malaysia EMAS Shariah Index
Dow Jones Islamic Emerging Market Index
Malaysian Government Bond Yield - 5 year
Currency Risk
Liquidity Risk
Country Risk
Governance Risk
5 | P a g e
OBJECTIVE The funds aims to provide investors
with medium to long term balanced-
capital appreciation through investing
principally in Shariah compliant
equities duly listed in Bursa Malaysia.
The fund also seeks to outperform the
benchmark.
In line with its objective to facilitate
investor with Shariah compliant
equities, the equity chosen had been
screened by Securities Commission
Malaysia, thus, guaranteed the fund
will not tainted with elements of riba,
gharar, maysir and immoral activities
such as prostitutions. In order to
achieve its objective to outperform
the market, the fund had been well
rounded with diversification of its
equities, consists of an aggressive and
blue chips securities as the risk shield.
PHILOSOPHY This fund adopted capital growth
strategy in order to maximize
investor’s capital gains, therefore, the
equities chosen is from small and
undervalued companies, with
characteristics of their earning is
expected to grow at above average
rate as compared to its industry or
overall market. These is based on the
life cycle theory of corporations which
indicates that ‘the best time to invest
is when its small before its shares ‘gain
in stature’ and sell at high price
earnings ratios’. Therefore, this fund is
active and closely monitored by the
fund manager.
6 | P a g e
METHODOLOGY As all the selected stocks in this
portfolio are listed stocks in Bursa
Malaysia, obviously they are all
Shariah compliant stocks which were
approved by the Securities
Commission of Malaysia (SC).
Therefore, this portfolio follows the
screening methodology of SC that
consists of both quantitative and
qualitative analysis in assessing the
Shariah compliance of equities. A
newly-revised screening methodology
has been applied to the Shariah-
compliant securities in Bursa Malaysia
since November 2013. The following
table explains the newly revised
benchmarks of the new methodology.
[Source: Shariah Screening Methodology, Adopting a Two-Tier Quantitative
Approach, Malaysia International Islamic Finance Centre (MIFC)]
7 | P a g e
METHODOLOGY In addition, the work process of newly
revised Shariah screening
methodology can be summarized into
four stages. Firstly, companies whose
primary activities or core businesses
are Shariah non-compliant are
eliminated. For instance, conventional
banks and insurance companies who
provide riba-based products and
services are unable to meet this
requirement thus been dropped.
Secondly, a mixed activities’ company
where no-halal elements are
secondary to its core business are
examined based on the 5% and 20%
benchmarks. At the third stage,
besides the income based benchmark,
financial ratios on debt and cash level
are also assessed as they must be less
than 33%. Finally a qualitative
assessment is still necessary before
the security is deemed as Shariah-
compliant one. Example is the public
image of the company must be
positive and the core activities are
considered as maslahah (public
interest) to society. The following
diagram simplifies the four stages
process flow of the newly revised
Shariah screening methodology.
(Source: Towards Tightening the Shariah Compliance of Equities in Malaysia, ISRA)
8 | P a g e
PORTFOLIO STRATEGY 1. Diversification
Modern Portfolio Theory (MPT)
disciple that, a well-diversified
portfolio will outperform a
concentrated portfolio during market
downturn period. Consequently,
diversification within this portfolio is
expected to avoid undue risk of large
losses over the time horizon of the
portfolio. The portfolio is well
diversified based on different industry
sector, for instance, healthcare,
telecommunication, construction and
service. Furthermore, diversification is
also applied according to the category
of the stock, whether it is a blue chip
company’s stock with a favorable
return or growth stock. To protect the
portfolio against unexpected
outcomes due to the assumption of
large risk, portfolio managers are
responsible to precaution excessive
investment concentrations in the asset
allocation of portfolio.
2. Customization
This portfolio is custom built for
Albukhary Foundation in Malaysia. The
establishment of this portfolio is
unique as it reflects certain group’s
specific Replace. When constructing
this portfolio, we take into account
various aspects of our client’s Replace.
First of all, we examine the risk
tolerance level of Albukhary
foundation and also the implications
of any unrealized losses it might bear.
In general, we attempt to maximize
the total return of our client that
includes both income and capital
appreciation. Last but not least,
Shariah compliance is the main
principle we should do consider when
we customize portfolio for our client
to meet its objective.
3. Monitoring
Our portfolio managers will monitor
the portfolio consistently to ensure
that the portfolio is invested as
expected and to meet the stated
objective of our client. We will keep
your investment strategy on track and
review your portfolio semiannually
(June 30 and December 30). Rather
than that, a composite benchmark
consisting of the following market
indexes is used to monitor the
performance of this portfolio.
a. FTSE Bursa Malaysia EMAS
Shariah Index
b. Dow Jones Islamic Market
World Index
c. Malaysian Government Bond
Yield – 5 year
9 | P a g e
Taking FTSE Bursa Malaysia EMAS
Shariah Index as an example, the
following chart and table state the
total return five years performance of
this index. Therefore, when we
monitor the performance of our
portfolio, the return of our portfolio
should not be less than this amount
from year to year.
(Source: FTSE Group as at 30 June 2014)
4. Rules of Engagement and
Disengagement
During the period of this investment,
the fund will be invested fully in the
Shariah compliant stocks as a
portfolio. It is expected that the
portfolio’s target stock allocation will
be changed when a certain stock does
not meet the requirement. Therefore,
the portfolio will be rebalanced from
time to time to enable the efficient
management of the portfolio.
However, in case of adverse economic
and market condition, the portfolio
10 | P a g e
manager may be defensive to become
inconsistent with the investment
strategy. In this Replace, the manager
may reallocate the stock and change it
into Mudarabah investment account
which is defensive naturally. When
new money is added in, the
investment portfolio will be
rebalanced to the target by selling
whatever has gone up and buying
whatever has gone down. The
following parameters will be applied in
our rebalancing part:
a. If any equity in the portfolio
decrease by 5 percent changed
from its targeting weighting, the
stock will be sold or the portfolio
will be rebalanced.
b. If any equity in the portfolio
increase by 25 percent changed
from its targeting weighting, the
portfolio will be rebalanced or the
stock will be sold.
11 | P a g e
RISK FACTOR The fund is exposed to equity
investment risk in profit/loss-sharing
investments on the asset aside. Equity
investment can lead to volatility in the
fund’s earning arising from liquidity,
credit, and market risks associated
with equity holdings.
1) Market risk
Market risk arises in the form of
unfavourable price movements
such as yields (rate of return risk),
benchmark rates (interest rate
risk), foreign exchange rates (FX
risk), equity and commodity price
(price risk) which have a potential
impact on the financial value of an
asset.
2) Default risk
Default risk occurred when the
Company is having difficulties to
make the required payments on
their debt obligations thus further
will exposed to a bankruptcy risk.
3) Inflation risk
Inflation risk exists due to
uncertainty over the future real
value (after inflation) of investor’s
investment.
4) Liquidity risk
Liquidity risk referred to an ability
to convert an asset to cash
immediately. It represents a
company’s ability to accommodate
the demand for funding in the loan
and investment portfolio.
5) Business risk
The fund exposed to the business
risk due company invested
exposed to business environment,
including the macroeconomic and
policy concerns, legal and
regulatory factors and overall
infrastructure. It also includes the
risk of becoming insolvent.
6) Country risk
Country risk can also be known as
political risk in which investor
might face due to the changes of
political changes or instability of
the country. Political unrest of
instability may affect investor’s
investment return due to changes
of government, legislative bodies
or military control.
7) Currency risk
Currency risk arises due the
changes in price of one currency
against another, especially to the
12 | P a g e
investor or the company whose
operates across national border.
8) Governance risk
Governance risk refers to the risk
arising from a failure in governing
the institutions, negligence in
conducting business and meeting
contractual obligations, and from a
weak internal and external
institutional environment,
including legal risk.
Risk management
The company is committed in
maintaining a sound system of risk
management practice. In pursuing
these objectives, the company has put
in place an Operational Risk
Management framework within the
company to ensure that there is
ongoing process of identifying,
evaluating, monitoring and managing
the significant risk exposures
surrounding the portfolio.
13 | P a g e
GLOBAL OUTLOOK The world’s economic position
exhibits the suppressed growth in
2013 but a steady rebound is expected
in the 2014-2015. This is a result by
the impetus in the high-income
countries except the drawbacks in the
United States due to severe natural
climate change and financial market
turbulence as well as the conflict in
Ukraine which affects the whole world
variously in the first quarter. The
growth of these economies is
expected to be at 1.9 percent in 2014,
accelerate the economic growth to 2.4
percent in 2015 and in 2016, 2.5
percent.
The developing economies will not
contribute more to the global growth
since of them are already fully
recovered and currently moving close
to potential. The high income
countries contribution to the world’s
growth is expected to rise from less
than 40 percent in 2013 to roughly 15
percent in 2015. The global economy
is expected to progress quicker by 2.8
percent this year underpinning the 3.4
and 3.5 percent growth in 2015 and
2016.
2010 2011 2012 2013 2014
World 5.176 3.939 3.221 3.005 3.586
Advanced Economies 3.035 1.72 1.421 1.293 2.223
Emerging market and
developing economies
7.516 6.272 5.05 4.688 4.904
ASEAN 5 6.972 4.528 6.176 5.166 4.946
0
1
2
3
4
5
6
7
8
2010 2011 2012 2013 2014
Gross Domestic Product (%)World
Advancedeconomies
Emerging marketand developingeconomiesASEAN-5
14 | P a g e
Productivity Stagnation
World economy is expected to be
reshaped according to the birth rates
in most part of the world steep
decline. 600million is said to be 65
years old or older, forming the
percentage of 8% of world population
currently. The number has doubled
within 25 years and is expected to
increase over the years according to
UN projections. The momentum
created is more than enough to cause
a ‘productivity stagnation’ which has
significant impact on the economy.
This will result in a slower economic
growth and less savings in the world.
Interest rate will strike in response to
this circumstance. The change of
average age of workforce affects the
size of the workforce in the world,
subsequently reflected in the rate of
productivity growth and in addition
also changes the pattern of savings.
However, education and skills are seen
to be the way out for this
encumbrance. Besides that,
governments all over the world are
perceived to take the steps where
they cut the pension guarantee and
manage the budget deficit which is
seen will help the savings to elevate in
the economy.
Global risk
Overall global risk has decline
although more needs to be done and
the economy remains sensitive to the
volatility especially in the financial
market. Medium and short term risks
are presence in both high income and
developing countries. The medium
term risk for example the fiscal
sustainability challenges,
unconventional monetary policy exit,
deflation risk and the need for
structural reforms in order to boost
productivity growth, are seen to be
experience by mostly high income
country. Apart from that, risks are
seen to be declining due to realization
of risks over the past years and
economic adjustments made have
reduced the vulnerabilities particularly
among the developing countries.
However, rising risks in several
economies could spill over other
countries. It is observed that domestic
price and wage pressures in some
countries could shake the evenness in
several economies if domestic
demand credit and demand start to
expand too rapidly. Policies need to be
tightened to fights inflation, fiscal
balance deterioration and to add as a
buffer in the event of economic
shocks. Generally, the risk in
structural form and policy need to be
observed very carefully to absorb any
mishap from outside of the country
while managing domestic issues in this
post-crisis period.
15 | P a g e
2010 2011 2012 2013 2014
World 3.591 4.913 3.945 3.561 3.492
Advanced Economies 1.539 2.713 1.973 1.372 1.515
Emerging market and
developing economies 5.888 7.285 5.993 5.761 5.476
ASEAN 5 4.426 5.962 3.837 4.387 4.733
2010 2011 2012 2013 2014
Commodity Prices (Fuel
and Non-Fuel) 152.086 191.889 185.654 182.854 180.311
Energy 79.03 104.008 105.007 104.069 104.171
Food 166.479 231.239 236.376 218.26 173.619
Metal 202.32 229.719 191.034 182.897 172.957
0
1
2
3
4
5
6
7
8
2010 2011 2012 2013 2014
Inflation (%)
World
Advanced economies
Emerging market anddeveloping economies
ASEAN-5
0
50
100
150
200
250
2010 2011 2012 2013 2014
Commodity Prices Index
Commodity Prices (Fuel and Non-Fuel) Energy Food Metal
16 | P a g e
MALAYSIA ECONOMIC
OUTLOOK Gross Domestic Product
Malaysia is developing country with a diversified and highly open economy. The
Gross Domestic Product in Malaysia boost to 6.2 percent in the first quarter of 2014.
The average GDP in
Malaysia from 2000
until 2014 is 4.68.
The largest sector
constituting the GDP
is the service sector
which contributes 54
percent of the GDP.
25 percent of the
GDP is contributed
by the manufacturing
sector which has been growing in the past few years.
Inflation
The inflation rate in Malaysia reached 3.20 percent in May 2014 and it is averaged
3.71 percent from 1973 until 2014. It has declined from previous months which
recorded 4.1 averages in
the first quarter of 2014.
Interest Rate
Central Bank of Malaysia
decided to increase the
overnight policy rate at
the end of second
quarter, for the first time
Services54%
Manufacturing
25%
Mining and Quarring
9%
Agriculture9%
Other3%
Sector Constitute GDP
2.95 2.95
4.013.20 3.26
3.88
Inflation Rate (%)
Inflation Rate
17 | P a g e
in three years. All this while, the
interest rate has been capped to 3.00
percent and recently, it has been
increased by 25 basis points to 3.25
percent with the floor and ceiling rates
are 3.00 and 3.50 percent
respectively.
Business Confidence increases to
103.10 in the first quarter 2014 as
compared to 92 in the last quarter. It
averaged 104.93 and covers 11
industries in the aspect of production
level, sales, inventory management,
new job openings and bankruptcy
likelihood. The sustainability of
Malaysia is accelerated by the
structural reforms. Aiming to be a high
income nation in 2020, the
implementation economic model
impact many areas and increase the
competitiveness and human
capabilities since they are the key for
long term growth. Taking into
consideration this fund is intended to
be invested in Malaysia for 5 years
time while all this reformation taking
place, we can benefit from the
economic development.
Current Outlook
High Income Country Prospect
Q1 2014 May 2014 2015 (estimates)
GDP Growth 6.06 6.20 5.29
Inflation Rate 4.01 3.20 3.26
Interest Rate 3.00 3.25 3.50
Business Confidence 97.19 103.10 96.68
2020
GDP Growth 3.25
Inflation Rate 3.88
Interest Rate 3.17
Business Confidence 132
18 | P a g e
ASSET ALLOCATION We choose our stocks in Malaysia
market only and screen to only
Shariah-compliant stock. We mix the
portfolio with blue-chips stock, new
and technology stock which traded in
ACE market. For diversification, the
portfolio is divided to the various
markets even it is in the same trading
platform, Bursa Malaysia. In choosing
the stock, we adapt the fundamental
analysis. The selected stocks comprise
of well diversified sectors. The graph
shows the diversification in among the
sector in our portfolio stock selection.
Division in Service Sector
Service (industry)
Service (diversified)
Service (oil & gas)
Service (Postal_
Service (shipping)
Services (Healthcare)
Services (power)
Sector Amount
Consumer 50,000
Industrial Product
100,000
Property 200,000
Services 350,000
Technology 200,000
Transportation 50,000
Utilities 50,000
1.00
2.00
4.00
7.00
4.00
1.00 1.00
Consumer Industrial Product Property
Services Technology Transportation
Utilities
19 | P a g e
FUNDAMENTAL ANALYSIS
KPJ HEALTHCARE BHD
Current Business and Prospect
KPJ is a holding company of healthcare
provider. Its dynamic strategy includes
investing in leading edge equipment
and state-of-the-art technology
promising the bright future in this
industry. The business also well-
diversified demonstrates the effective
risk management functions within the
company.
Corporate Governance
There is experienced and balanced
composition of directors in the aspects
of expertise and there is clear
separation if power between board
and management. They have their
own internal policy, “Corporate
Disclosure Policy” to ensure
transparency.
Financial Standpoint
EPS 0.26
Dividend Yield 0.04
FinancingDebt equity
ratio0.57
Liquidity
WarningAcid-Test Ratio 0.87
Indicator Average
Performance
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2009 2010 2011 2012 2013
Sales/Revenue
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2009 2010 2011 2012 2013
Total assets
0
100,000
200,000
300,000
400,000
2009 2010 2011 2012 2013
Cash Flow
20 | P a g e
FUNDAMENTAL ANALYSIS KLCC PROPERTY BHD
Current Business and Prospect
KLCCP owns a diverse property
portfolio largely within the KLCC
Development. With its niche position
in property investment and facility
management services, KLCC Property
intends to continue to grow its
earnings potential by building on the
strength of its premium assets,
maintaining high standards in its
operational performance and
exploring prospects for sustainable
progress.
Corporate Governance
Apart from compliance with relevant
law and guidelines, the Board and
Management exhibit a satisfactory
level of independence, governance,
commitment and competency. There
are also clear responsibilities for the
Board and Management. They also
promote full disclosure subject to
current legislation.
Financial Standpoint
Indicator Average
Performance EPS 0.76
Dividend Yield
0.03
Financing Debt equity ratio
0.22
Liquidity Warning
Acid-Test Ratio
2
0
500,000
1,000,000
1,500,000
2009 2010 2011 2012 2013
Sales/Revenue
0
500,000
1,000,000
1,500,000
2009 2010 2011 2012 2013
Cash Flow
0
5,000,000
10,000,000
15,000,000
20,000,000
2009 2010 2011 2012 2013
Total assets
21 | P a g e
FUNDAMENTAL ANALYSIS SUMATEC RESOURCES BHD
Current Business and Prospect
Sumatec Resources Berhad is a service
provider in the downstream sector of
the oil and gas industry. It is entering
the upstream sector via a joint
investment agreement with other
companies to develop the
Rakushechnoye Oil and Gas Field in
West Kazakhstan. The company looks
for opportunities to acquire and
develop new and under-performing
fields. The target assets will be mainly
onshore, as this reduces the capital
cost of infrastructure required.
Corporate Governance
The Board gives special attention to
transparency and they ensure timely
and high quality disclosure as they
valued shareholders to access the
company information. There
experienced people on board which
ensure the reporting are accurate and
risk is controlled.
Financial Standpoint
0
100,000
200,000
300,000
2009 2010 2011 2012 2013
Sales/Revenue
0
200,000
400,000
600,000
800,000
1,000,000
2009 2010 2011 2012 2013
Total assets
-25,000.00
-20,000.00
-15,000.00
-10,000.00
-5,000.00
0.00
5,000.00
10,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS -0.29
Dividend Yield
0.00
Financing Debt equity ratio
4.54
Liquidity Warning
Acid-Test Ratio
0.54
22 | P a g e
FUNDAMENTAL ANALYSIS
PESTECH INTERNATIONAL
BHD
Current Business and Prospect
PESTECH International Berhad
(PESTECH) is an integrated electric
power technology group of companies
listed on the Main Market of Malaysia
Stock Exchange (5219 / PESTECH).
Currently, the Group focuses on
emerging and developing countries
where there is demand for the
development, improvement and
builds up of electricity transmission
and distribution assets.
Corporate Governance
This company believes that having
effective and productive
communication with its shareholders
and investors is essential in ensuring
good corporate governance and to
improve disclosure and transparency.
Financial Standpoint
0
50,000
100,000
150,000
200,000
2012 2013
Sales/Revenue
0
100,000
200,000
300,000
2012 2013
Total assets
0
5,000
10,000
15,000
20,000
2012 2013
Cash Flow
Indicator Average
Performance EPS 0.12
Dividend Yield
0.02
Financing Debt equity ratio
0.51
Liquidity Warning
Acid-Test Ratio
1.39
23 | P a g e
FUNDAMENTAL ANALYSIS
MEXTER TECHNOLOGY BERHAD
Current Business and Prospect
The Mexter Group, which commenced
operations in 1992, provides a wide
range of solutions and services such as
E-manufacturing Solutions, Talent
Outsourcing and Recruitment Services,
Computing and Electronics Services,
The provision of Mobile Services and
Solutions.
The corporate plan is to reduce
exposures in a single large sector,
business have been diversified into
renewable energy sector, digital
security solutions and supply of hi-
tech building products.
Corporate Governance
There are clear functions of the Board
and Management. Both Board and
Management involve continuing
education program to sustain
competency. They also undergo timely
assessment in reinforcing
independent, integrity and
compliance.
Financial Standpoint
Indicator Average
Performance EPS -0.01
Dividend Yield
0.00
Financing Debt equity ratio
0.28
Liquidity Warning
Acid-Test Ratio
1.48
0
20,000
40,000
60,000
2009 2010 2011 2012 2013
Sales/Revenue
0
10,000
20,000
30,000
2009 2010 2011 2012 2013
Total assets
0
5,000
10,000
15,000
2009 2010 2011 2012 2013
Cash Flow
24 | P a g e
FUNDAMENTAL ANALYSIS
NETX HOLDINGS BHD
Current Business and Prospect
NetX Holdings (formerly known as
Ariantec Global) serves the growing
demand in data communication,
managed security, hardware and
software solutions, e-business strategy
and business consulting.
This company prospect is on end-to-
end ICT projects within the
telecommunication, education,
government and financial sectors.
Most of these areas are to develop
their own ICT strategies in keeping
with the Government’s National Key
Economic Agenda (“NKEA”).
Corporate Governance
The Board of Directors continue to
ensure compliance to Bursa Malaysia
Listing Requirements for the ACE
Market and strives to adopt and
adhere to the principals and best
practices of good corporate
governance.
Financial Standpoint
0
20,000
40,000
60,000
2009 2010 2011 2012
Sales/Revenue
0
50,000
100,000
2009 2010 2011 2012
Total assets
0
1,000
2,000
3,000
2009 2010 2011 2012
Cash Flow
Indicator Average
Performance EPS -0.02
Dividend Yield 0.00
Financing Debt equity ratio
0.28
Liquidity Warning
Acid-Test Ratio
2.23
25 | P a g e
FUNDAMENTAL ANALYSIS
EASTERN & ORIENTAL BERHAD
Current Business and Prospect
Eastern & Oriental Berhad is a premier
luxury lifestyle property developer
with a proven track record for
delivering innovative concepts of
exceptional quality, is built across a
series of exclusive addresses in Kuala
Lumpur and Penang Island. The core
business of Eastern & Oriental Berhad
(E&O) contains property development,
hospitality and lifestyle, and property
investment.
Corporate Governance
The Board Charter of Eastern &
Oriental Berhad (E&O) sets out the
principles for the operation of the
Board of Directors and describes the
functions of the board and also those
delegated to the management of the
company. The board ensures the high
standards of corporate governance of
the company and also the efficient
management team of the company.
Financial Standpoint
0
1,000,000
2,000,000
3,000,000
2009 2010 2011 2012 2013
Total assets
0
200,000
400,000
600,000
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.28
Dividend Yield 0.01
Financing Debt equity ratio
0.85
Liquidity Warning
Acid-Test Ratio
1.65 0
200,000
400,000
600,000
800,000
2009 2010 2011 2012 2013
Sales/Revenue
26 | P a g e
FUNDAMENTAL ANALYSIS RAPID SYNERGY BERHAD
Current Business and Prospect
Rapid Synergy Berhad (RSB) is one of
the pioneers of the tool-making
industry in Malaysia. Over the years,
RSB’s products have earned a
reputation for high precision and
endurance in the semi-conductor
industry. Besides, RSB also make
investments on properties. RSB
Group’s current investment strategy is
to invest in a diversified portfolio of
income-producing real estate with
particular focus on retail, office and
shops properties. The primary
objectives are to provide shareholders
with stable cash flows with the
potential for sustainable growth,
principally from the ownership of
properties, and to enhance long-term
stock value.
Corporate Governance
The board structure of RSB is clear
enough to ensure a high level of
independence, governance and
competency between the
management and its stakeholders. The
responsibilities of board and
management are separated to each
party and recognized well by both
parties.
Financial Standpoint
0
20,000,000
40,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
200,000,000
400,000,000
2009 2010 2011 2012 2013
Total assets
-10,000,000.00
0.00
10,000,000.00
20,000,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.28
Dividend Yield 0.01
Financing Debt equity ratio
0.85
Liquidity Warning
Acid-Test Ratio
1.65
27 | P a g e
FUNDAMENTAL ANALYSIS
LTKM BERHAD
Current Business and Prospect
LTKM Berhad is one of the largest egg
producers in Malaysia, it is currently
amongst the leading producers in the
industry in terms of profitability. LTKM
Group's core business continues to be
production and sales of eggs.
However, it has also recently begun its
diversification into manufacturing and
property development, albeit a
smaller scale.
Corporate Governance
LTKM embodies its Corporate
Values in striving towards its Vision.
The Group’s management style is clear
and direct yet insightful and remains
focused on its Mission. The Directors
of LTKM support high standard of
corporate behaviour and
accountability. The board of LTKM is
clear on its responsibilities.
Financial Standpoint
0
50,000,000
100,000,000
150,000,000
200,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
50,000,000
100,000,000
150,000,000
200,000,000
2009 2010 2011 2012 2013
Total assets
0.00
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
1 2 3 4 5
Cash Flow
Indicator Average
Performance EPS 0.31
Dividend Yield 0.05
Financing Debt equity ratio
0.30
Liquidity Warning
Acid-Test Ratio
1.95
28 | P a g e
FUNDAMENTAL ANALYSIS
PRICEWORTH INTERNATIONAL BERHAD
Current Business and Replace
Priceworth Wood Products Berhad
(PWPB) , established in 1992 has
developed a strong presence in the
Malaysian timber industry. Today the
Company has successfully established
an effective integrated upstream and
downstream operation while
maintaining a strong corporate
responsibility towards the
environment in which it operates.
Having secured among the largest
logging concession rights in the
country, PWPB is able to tap into a
steady source of quality raw material
to ensure efficient production in the
years to come. The Company adheres
by strict quality control measures to
ensure PWPB products maintain world
class standards to meet a strong
international demand.
Corporate Governance
PWPB’s corporate structure includes a
high performance group of companies
with specialised focus areas to support
its fully integrated harvesting,
manufacturing and distribution
businesses. Recently, the Board of
PWPB has formalized the Board
Charter of the Company, in which
defined the roles, duties and division
of responsibilities between the Board
and those delegated to the
management, the Board Committees.
Trainings were provided to directors
to aid them in discharging their duties
and responsibilities more effectively.
29 | P a g e
Financial Standpoint
0
200,000,000
400,000,000
600,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0200,000,000400,000,000600,000,000800,000,000
2009 2010 2011 2012 2013
Total assets
0.00
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS -0.05
Dividend Yield 0.07
Financing Debt equity ratio
1.09
Liquidity Warning
Acid-Test Ratio
0.62
30 | P a g e
FUNDAMENTAL ANALYSIS
INARI AMERTRON BERHAD
Current Business and Replace
The Inari Amertron Berhad Group
started in June 2006 with the
establishment of Inari Technology Sdn
Bhd (Inari Technology). Inari
Technology is an EMS company
principally involved in back-end
semiconductor packaging, which
comprises back- end wafer processing,
package assembly and RF final testing
for the electronics/semiconductor
industry. In June 2013, the group
acquired Amertron Global Inc and
changed name to Inari Amertron
Berhad. The acquisition of Amertron
Global added opto-electronics and
fiber optic capabilities to the group
and manufacturing facilities in
Malaysia, Philippines and China.
Corporate Governance
Inari has an efficient management
team with the leadership of board of
directors to ensure the regular flow of
its business operation. In addition, the
board structure is also clear enough to
assist directors understanding on their
own roles and responsibilities. The
Board also maintains an effective
communications policy that enables
both the Board and management to
communicate effectively with
shareholders, stakeholders and the
general public.
31 | P a g e
Financial Standpoint
0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
2011 2012 2013
Sales/Revenue
0
100,000,000
200,000,000
300,000,000
400,000,000
2011 2012 2013
Total assets
0
20,000,000
40,000,000
60,000,000
2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.09
Dividend Yield 0.03
Financing Debt equity ratio
0.02
Liquidity Warning
Acid-Test Ratio
0.94
32 | P a g e
FUNDAMENTAL ANALYSIS
NESTLE (MALAYSIA) BERHAD Current Business and Replace
Nestle Malaysia is one of the oldest
brands in the country, has grown
together with the nation and was
listed on the Bursa Malaysia in 1989.
The Company has since grown in
depth and magnitude, taking its place
as part of the Malaysian psyche and
part of the community. The food
business of Nestle Malaysia is widely
from milks, beverages to ice creams
and etc.
Corporate Governance
Nestle Malaysia Berhad has its own
board namely Creating Shared Value
(CSV) Advisory Board, which provides
the Company with a diversity of
informed ideas, recommendations and
feedback, which help assess their
progress, opportunities and
challenges. CSV Advisory Board
represents a high level of competency,
independence, integrity and
governance.
Financial Standpoint
0
2,000,000
4,000,000
6,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
1,000,000
2,000,000
3,000,000
2009 2010 2011 2012 2013
Total assets
0.00
20,000.00
40,000.00
60,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 1.94
Dividend Yield 0.03
Financing Debt equity ratio
1.65
Liquidity Warning
Acid-Test Ratio
0.53
33 | P a g e
FUNDAMENTAL ANALYSIS
POS MALAYSIA BERHAD
Current Business and Replace
Pos Malaysia Berhad is Malaysia’s
premier postal service provider which
has a widespread network of over
1,000 touch points countrywide. Pos
Malaysia’s 5 Business Clusters, aimed
to provide quality, reliable, timely and
innovative solutions to our customers,
encompasses the communication and
distribution solutions, supply chain
solutions, one-stop solutions, digital
solutions and international business
solutions. Throughout the years, Pos
Malaysia has grown from strength to
strength and is progressing from being
a mail and postal services provider
towards becoming a dynamic
communications, financial services
and supply chain solutions provider.
Corporate Governance
The Board of Directors and
Management of Pos Malaysia Berhad,
remain committed to upholding and
continuously improving good
corporate governance practices
throughout the Pos Malaysia Group of
Companies for the protection and
creation of greater shareholder and
other stakeholder value and for
maintaining integrity, trust and
confidence in the Company.
34 | P a g e
Financial Standpoint
0
500,000
1,000,000
1,500,000
2,000,000
2009 2010 2012 2013
Sales/Revenue
0
500,000
1,000,000
1,500,000
2,000,000
2009 2010 2012 2013
Total assets
0.00
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
2009 2010 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.02
Dividend Yield 0.00
Financing Debt equity ratio
0.63
Liquidity Warning
Acid-Test Ratio
1.27
35 | P a g e
FUNDAMENTAL ANALYSIS
DIALOG GROUP BERHAD
Current Business and Prospect
Dialog Group Berhad is a Malaysia-
based company engaged in
investment holding and the provision
of management services to its various
subsidiaries in the oil, gas and
petrochemical industry. The company
is leading integrated technical services
provider to the upstream and
downstream sectors in the petroleum
and petrochemical industry.
Corporate Governance
The Board had emphasize on
strengthening their shareholder value,
retaining their staff talent, upholding
robust Health, Safety and the
Environment (HSE) practices and
reinforcing high standard on the
Quality Assurance and Quality Control,
and not to forget to 'give back' to
society via their Corporate Social
Responsibility initiatives.
Besides that, the Board is committed
to upholding the tenets of integrity,
transparency and accountability to
safeguard their business reputation
and stakeholders’ interests to ensure
the long-term viability of their
business through adopt and
implementing good corporate
governance practices as advocated by
the Malaysian Code on Corporate
Governance 2012.
36 | P a g e
Financial Standpoint
0
500,000,000
1,000,000,000
1,500,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
2009 2010 2011 2012 2013
Total assets
0.00
50,000,000.00
100,000,000.00
150,000,000.00
200,000,000.00
20092010201120122013
Cash Flow
Indicator Average
Performance EPS 12.10
Dividend Yield 2.73
Financing Debt equity ratio
0.25
Liquidity Warning
Acid-Test Ratio
1.80
37 | P a g e
FUNDAMENTAL ANALYSIS
TENAGA NASIONAL BHD
Current Business and Prospect
Tenaga Nasional Berhad (TNB) is
engaged in the business of the
generation, transmission, distribution
and sale of electricity. Through its
subsidiaries, the Company is in the
manufacture of transformers, high
voltage switchgears and cables; the
provision of professional consultancy
services; architectural, civil, electrical
engineering works and services, repair
and maintenance; as well as in
research and development; property
development, and management
services.
The company aspiration is for TNB to
live up to their new motto of Domestic
Dominance and Regional Champion
and deliver higher value to their
stakeholders. In order for them to
deliver on their new aspiration, the
company had developed a 1TNB
Transformation Programme, which
will revolutionise the business
strategies and operations towards
their motto a ‘Better and Brighter’
TNB.
Corporate Governance
The Board also confident that with the
regulatory and policy changes taking
place, coupled with internal
transformation initiatives, they stand
in a good position in order to attain
their vision of Domestic Dominance
and Regional Champion.
38 | P a g e
Financial Standpoint
0
10,000
20,000
30,000
40,000
2009 2010 2011 2012 2013
Sales/Revenue
0
20,000
40,000
60,000
80,000
100,000
120,000
2009 2010 2011 2012 2013
Total assets
0.00
2,000.00
4,000.00
6,000.00
8,000.00
10,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.00
Dividend Yield 0.00
Financing Debt equity ratio
0.70
Liquidity Warning
Acid-Test Ratio
1.43
39 | P a g e
FUNDAMENTAL ANALYSIS
UMW HOLDINGS BERHAD
Current Business and Prospect
UMW Holdings Berhad is an industrial
enterprise with global interests in the
automotive, equipment,
manufacturing and engineering, and
oil and gas industries. The company is
a confident to be a leading role in
shaping the future of their industries
globally. They had been inspired by
vibrant ideas, nurturing potential,
pioneering partnerships and delivering
excellence in everything they do and
the rewards of which contribute to the
progress and well-being of all the
Company’s stakeholders.
Corporate Governance
The governance framework adopted
by the UMW Group is based on the
principle that sound CG practices are
fundamental towards long term
sustainability of business and values
via closely monitoring in their
operations, business efficiency and
quality of the accounting function,
financial reporting and system of
internal controls of each division.
Financial Standpoint
0
10,000,000
20,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
10,000,000
20,000,000
2009 2010 2011 2012 2013
Total assets
0.00
100,000.00
200,000.00
300,000.00
2009 2010 2011 2012 2013
Cash Flow
Indicator Average
Performance EPS 0.53
Dividend Yield 0.04
Financing Debt equity ratio
0.36
Liquidity Warning
Acid-Test Ratio
1.37
40 | P a g e
FUNDAMENTAL ANALYSIS
TAMBUN INDAH LAND BERHAD
Current Business and Prospect
The company main core business is in
the development and marketing of its
own property development projects
comprising mainly of residential,
commercial and industrial buildings.
Corporate Governance
Besides of complied with Malaysian
Code of Corporate Governance 2012
(“MCCG”), the Company also adopt
with other requirement and guidelines
such as Main Market Listing
Requirements of Bursa Malaysia
Securities Berhad (“Bursa Securities”),
Corporate Governance Guide:
Towards Boardroom Excellence of
Bursa Securities and Code of Ethics for
Company Directors issued by the
Companies Commission of Malaysia.
The Board had clearly guided the
company via establishing clear roles
and responsibilities, thus, we may
conclude that the Board had strongly
emphasized on ethical and ruling to be
followed by the Company in order to
maintain their business in the long
run.
The implementation of such is proven
as the company had been awarded by
Forbes Asia’s as list of “200 Best Under
A Billion”.
41 | P a g e
Financial Standpoint
0
100,000,000
200,000,000
300,000,000
400,000,000
2010 2011 2012 2013
Sales/Revenue
0
200,000,000
400,000,000
600,000,000
2010 2011 2012 2013
Total assets
0
50000000
100000000
150000000
2010 2011 2012 2013
Cash flow
Indicator Average
Performance EPS 0.37
Dividend Yield 0.06
Financing Debt equity ratio
0.31
Liquidity Warning
Acid-Test Ratio
25.23
42 | P a g e
FUNDAMENTAL ANALYSIS
HUA YANG BERHAD
Current Business and Prospect
Hua Yang Berhad is an investment
holding Company. It is engaged in the
business of property development and
provision of management services. Its
subsidiary companies currently are
involved in investment holding,
provision of management services,
property development and building
construction.
Corporate Governance
The company is taking seriously on
accountability and auditing in their
financial reporting and risk
management framework and internal
control. Besides that, the Board
believed that a strong company
requires not only skilled but driven,
motivated and loyal employees, thus,
the Board had giving attention on
their human capital development. Not
only have that, the Company also
concerned in equality of education in
order to create a better community
development. Besides that, the
company also sensitive towards
environmental practices in its business
environment. Therefore, it shows that
the Company is not profit-centered,
but also concerning other elements in
order to build a better nation.
43 | P a g e
Financial Standpoint
0
200,000,000
400,000,000
600,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
200,000,000
400,000,000
600,000,000
800,000,000
2009 2010 2011 2012 2013
Total assets
0.00
10,000,000.00
20,000,000.00
30,000,000.00
40,000,000.00
2009 2010 2011 2012 2013
Cash flow
Indicator Average
Performance EPS 0.37
Dividend Yield 0.06
Financing Debt equity ratio
0.31
Liquidity Warning
Acid-Test Ratio
25.23
44 | P a g e
FUNDAMENTAL ANALYSIS
FRONTKEN CORPORATION BERHAD
Current Business and Prospect
Frontken Corporation Berhad is an
investment holding company and
engaged in the provision of
management services to its
subsidiaries. It is engaged in the
provision of engineering services. It is
a service provider of surface
metamorphosis engineering in the
Asia Pacific region. The Company
provides upgrade, maintenance, repair
and overhaul services on
stationary/rotating equipments and its
components. The Company has
operations in Malaysia, Singapore,
Philippines, Taiwan, Hong Kong and
Indonesia. Its subsidiaries include
Frontken (Singapore) Pte. Ltd.
Corporate Governance
The Company recognises the
importance of adopting high standards
of corporate governance in the
Company in order to safeguard
stakeholders’ interests as well as
enhancing shareholder’s value. The
Director had emphasized their
Corporate Governance via four key
concepts namely four key concepts,
namely transparency, accountability,
integrity as well as corporate
performance.
45 | P a g e
Financial Standpoint
0
100,000,000
200,000,000
300,000,000
2009 2010 2011 2012 2013
Sales/Revenue
0
100,000,000
200,000,000
300,000,000
400,000,000
2009 2010 2011 2012 2013
Total assets
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
2009 2010 2011 2012 2013
Cash flow
Indicator Average
Performance EPS 0.00
Dividend Yield 0.00
Financing Debt equity ratio
0.30
Liquidity Warning
Acid-Test Ratio
1.584
46 | P a g e
FUNDAMENTAL ANALYSIS
DAGANG NEXCHANGE BERHAD
Current Business and Prospect
TIME Engineering Berhad (TIME) is a Malaysia
based investment holding company. The
Company operates in two segments:
Information communication technology and
corporate. Information communication
technology is engaged in supplying, delivering,
installation, testing, commissioning and
maintenance of information technology (IT)
hardware, development, management and
provision of business to business (B2B)
ecommerce and computerized transaction
facilitation services, providing of cyber
security solutions, managed services, project
fulfillment, assets maintenance and contact
centers.
Corporate Governance
The Company via their Corporate Governance
Statement shows concern on their staff roles
and responsibilities, upholding integrity in
financial reporting, risk management,
strengthening their relationship with the
shareholder’s despite of emphasize on
nurturing talent for the staff and ensuring the
environment sustainability.
47 | P a g e
Financial Standpoint
0
50,000
100,000
150,000
200,000
2009 2010 2011 2012 2013
Sales/Revenue
0
500,000
1,000,000
2009 2010 2011 2012 2013
Total assets
0.00
50,000.00
100,000.00
150,000.00
2009 2010 2011 2012 2013
Cash flow
Indicator Average
Performance EPS 0.10
Dividend Yield 0.38
Financing Debt equity ratio
0.24
Liquidity Warning
Acid-Test Ratio
2.06
48 | P a g e
PORTFOLIO
PERFORMANCE The portfolio has been monitored for
approximately one month calendar
period (22 days if we exclude the day
when the market is close). We
benchmark the portfolio with three
indices namely FTSE Bursa Malaysia
EMAS Index, Dow Jones Islamic
Market Emerging Market Index and
Malaysian Government Bond Yield - 5
Years. We compare with Dow Jones
Islamic Market Emerging Market Index
to see the performance against the
comparable market in the world. The
Malaysian Government Bond Yield is
taken to demonstrate the return
against risk free securities
performance.
The graphs exhibit our return
outperformed all three indices by
producing the annualized return of
6.42% where as the annualized return
for FTSE Bursa Malaysia EMAS Shariah
Index, Dow Jones Islamic Market
Emerging Market Index and Malaysian
Government Securities 5 Years Index
are 1.22%, 0.36% and -1.18%
respectively. We take FTSE Bursa
Malaysia EMAS Shariah Index as our
main benchmark since all the stocks
comprised in the portfolio are
Malaysian stock. The capital
appreciation contributes 100% of the
rate of return stated above while the
dividend income generated apart from
that calculation.
0.024 is the Treynor Ratio which
measures returns earned in excess as
compared to riskless investment per
each unit of market risk. The Sharpe
ratio shows 27.7 excess returns gained
for the extra volatility endured. We
see that we have excess return and
our portfolio has outperformed the
three indices.
Return
Portfolio Annualized Return
6.42%
FTSE Bursa Malaysia EMAS Shariah Index
1.22%
Dow Jones Islamic Market Emerging Market Index
0.36%
Malaysian Government Securities 5 Years Index
-1.18%
Risk-Adjusted Return
BETA 1.14
Standard Deviation 0.001
Treynor Ratio 0.024
Sharpe Ratio 27.7
Jensen Alpha 0.00
Excess Return 2.77%
49 | P a g e
Portfolio Performance Against FTSE Bursa Malaysia EMAS Shariah Index
Portfolio Performance Against Dow Jones Islamic Market Emerging Market
Portfolio Performance Against Malaysian Government Bond Yield – 5 years
-0.60%
-0.40%
-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
PORTFOLIO FTSE Bursa Malaysia EMAS Shari’ah Index
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
PORTFOLIO DJIMEM
-1.00%
-0.50%
0.00%
0.50%
1.00%
PORTFOLIO MGS
50 | P a g e
APPENDIX