Tuesday, December 21, 2004

Unit Trust and Share market


last friday I was invited ...not really. I was being asked to be representative for a friend's friend in a function about KLCI(Kuala Lumpur Composite Index) prediction competition that was organized by Avenue Unit Trust Fund alongside Nang Yang Siang Pau and NexNews (The SUN).

there were couple of pretty girls there... too bad I didnt bring my business card.. one of them looks really sweet, a non-chinese who is not very tall and in mini skirt and shoulder-length hair wavy hair.

Anyway, the competition is supposed to outcome as such that the winner whose predition of the KLCI would match closest to the actual one at 5:00pm (malaysian time of course) on 17th Dec 2003. The grand winner would pocket RM 100k, runner up = 30k and third place = 10k.

it was pretty fun..the CEO of Avenue Unit Trund Management Sdn Bhd;Mr.Danny Wong was giving us a finger or two about unit trust and some hints about the share market.. It is great information for me as I hadn't been really good at this area.

Unit Trust
1. Unit trust income are taxable.
2. There is no shortfall when it comes to buying unit trust before or after the incom distribution period. Unlike the share market, where the unit price is based on supply and demand. Thus, over here, if the fund is value at 110 million, and if 10 million is to be distributed out as income(dividend) . The number to be distributed is called NAV (not sure..). the income distributable is 10 million divided by NAV. The new price for the unit trust is thus = 110 million - 10 million = 100 million. so in order words, the unit price is not based on supply and demand but on other calculations.
3. You should buy when equity prices are low.

1. The top few listed shares determine what is the KLC. Thus KLCI may not represent the overall market.
2. The top few which consisted of 45% are those:
2a. Telekom
2b. Maybank
2c. Public Bank
2d. Sime darby
2e. etc
These shares moved 16% and impacted KLCI to move at 7%.
3. Instering share to consider:

Core group (Stable)
3a. YTL power.
3b. BAT

Volatile group (Risky but fast turnover)
3c. Genting
3d. Tanjung
3e. Maxis

4. People will not buy the stock when the news is confirmed, but before. so people buy on news and sell on facts. This is the reason why the newspaper are involved here.

5. Factors affecting KLCI.
5a. Oil prices.
5b. Global economy growth
5c. US interest rate
5d. China
5e. Malaysia valuation versus others.
5f. Malaysia growth rates (GDP)
5g. Weakening dollar (deficit)

So eventually, they announced the winner which KLCI closed at 903.00. The closest predition was 902.99 and belonged to a lady. She is quite an emotionless person..

me and my friend went back nothing.. except with glimpse of some pretty ladies. The MC was pretty hot stuff too, tall & lean and speaks well of course.

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