HDFIV Report Card @ 11 April 2008

(will try to update the chart later - unable to upload at the moment)

Performance
Kuala Lumpur Composite Index ("KLCI") increased from 1,221.98 (4 April 2008) to 1,246.79 (11 April 2008), representing an increase of 2.0%. Hengdai Equity Fund IV ("HDFIV")'s registered a return of RM26.64 or 0.31%, down from 1.37% in the previous week. So far, HDFIV is beating KLCI by 6.61%, lower compared to 9.54% a week ago. KLCI had a small rally on Wednesday and Thursday, increasing from 1,228.63 to 1,246.79, mostly boosted by plantation stocks. At the moment, our portfolio does not hold any plantation stocks hence not riding up together with the KLCI.

Purchase

Bought 700 units of Bursa Malaysia (Stock code 1818) today at RM8.70.

Sell

No disposals during the week.


Asset Allocation

We have increased the equity exposure to 76% after today's purchase of Bursa Malaysia. That leaves a cash buffer of about 24% which will easily replenish itself back to 50% thereabout come the third month's capital inflow.


Note: Asset allocation shows the three main categories that our money lies in. The main category which we are expected to invest in to make the return that we wanted is Equities. Secondly, Fixed Income is in the form of fixed deposits that provides stable but low return. This second category provides small return when the cash is yet to be utilised for investment. As there is a lock-in period for fixed deposit such as at least for two months (if the amount is less than RM5,000), there is a need to maintain cash in the form of 'pure' cash, which is the third category. The set back of holding 'pure' cash ("Cash") is that we do not earn any return at all.

Financial Teasers 10 April 08

Top Stories

Yahoo, Microsoft collect allies in takeover battle
Source: CNBCYahoo is lining up partners to defend against a threatened takeover by Micrsoft. Yahoo will begin running Google's search ads alongside some of Yahoo's search results. Yahoo also may be close to a deal with Time Warner's AOL. Time Warner is considering folding its AOL unit into Yahoo, giving Yahoo cash to buy back its own shares. Meanwhile Microsoft was reported to be talking to News Corp. about a joint bid for Yahoo. CNBC (09 Apr.) , The Mercury News (San Jose, Calif.) (09 Apr.)

Volcker says credit crisis rooted in easy U.S. spending
Former Federal Reserve Chairman Paul Volcker said spendthrift Americans can blame themselves for the country's economic upheaval. "Financial crises do not happen in a vacuum and the current U.S. banking debacle is linked to imbalances in an economy that favored spending at the expense of saving," Volcker said Wednesday at a conference in New York. Forbes (10 Apr.)

Investor Wilbur Ross shopping for deals among banks, thrifts
A billionaire who made his fortune buying battered companies in the steel, coal and textile industries now is turning to banks and thrifts for bargains. "I believe the next phase of the cycle will be the failure of depositary institutions," Wilbur Ross said. Big banks can attract cash from sovereign wealth funds when they need more capital, but smaller and regional banks may not have that option, Ross said. Reuters (10 Apr.)

RWE offers up to £11 billion for British Energy
German utility company RWE offered up to £11 billion for British Energy, the U.K.'s nuclear operator. The power company would earmark its £4 billion share of the sale to a fund for the cleanup of nuclear reactor sites. British Energy is still considering whether to sell to one bidder or a consortium. Financial Times (09 Apr.)

Gazprom, Eni discuss gas pipeline from Libya to Europe
Russia's Gazprom and Eni of Italy are discussing a partnership to pipe natural gas from Libya across the Mediterranean to Southern Europe. The deal would increase Europe's dependence on Russia's state-controlled gas company. "Europe is sleeping as Gazprom makes every effort to become a global player and increase its grip on Europe," said Igor Tomberg, an energy expert at the Institute of World Economy and International Relations in Moscow. International Herald Tribune (09 Apr.)

Venezuelan oil minister says tax applies to all exporters
Venezuela plans to collect its planned windfall oil tax from all exporting private companies, including joint ventures formed with the national oil company, the country's oil minister said. The tax will bring in several billion dollars a year, Oil Minister Rafael Ramirez said. The government last week announced the new tax will take 50% of oil revenues above $70 per barrel and 60% of revenues above $100 per barrel. Reuters (09 Apr.)

IMF says commodities should keep Africa from slump
Africa should be able to avoid the global economic slowdown as an unceasing demand for commodities keep exports from the world's poorest continent flowing, the International Monetary Fund said. Africa's economy will probably expand 6.3% this year and 6.4% in 2009, compared with 6.2% last year, the IMF said in its World Economic Outlook report Thursday. In January, the IMF predicted Africa would expand by 7% this year. Bloomberg (09 Apr.)

Market Activity

Asian markets mixed; Seoul, Hong Kong rise from early lows
Asian stock markets were mixed Thursday, with declines recorded in Tokyo, Australia, New Zealand and Singapore. South Korea's Kospi rebounded from early declines after the country's central bank left a key interest rate unchanged at 5%. MarketWatch (10 Apr.)

Banks to use exotic derivative to hedge counterparty risk
Counterparty risk has become a huge issue in the massive over-the-counter derivatives market, prompting banks to develop a weapon against the risk. Risk managers will soon be able to use a revamped version of the so-called contingent credit default swaps to hedge exposure to other market participants. Financial Times (09 Apr.)

Economics

BoE faces tough call on interest rates, ECB likely to hold steady

Economists are urging the Bank of England to cut interest rates by at least a quarter point, citing falling housing prices, the dismal growth forecast and increased rates from mortgage lenders. But the bank's Monetary Policy Committee is also seeing the price of Brent crude soar to more than $109 a barrel and a strong performance from the manufacturing sector. Still, most forecasters expect the committee to cut the rate to 5% while a survey of economists expects the ECB to hold rates steady. ClipSyndicate/Bloomberg (10 Apr.) , Telegraph (London) (10 Apr.) , Bloomberg (10 Apr.)

IMF warns of 25% chance of global recession
The International Monetary Fund cut its forecast for growth in Western economies and said there is a one-in-four chance of worldwide recession. The IMF also warned that while the euro is overvalued, the Chinese renminbi and Japanese yen are undervalued. The fund said the UK will probably grow by about 1.6% in 2008 and 2009, much less than predicted by Chancellor Alistair Darling. Telegraph (London) (10 Apr.) , The Scotsman (Edinburgh) (10 Apr.)

Yuan rises to new mark against dollar
China's currency rose Thursday to trade at less than 7 yuan to the dollar, the first time the yuan has reached that mark since China unpegged it from the dollar in 2005. The yuan has gained 4.47% this year. People's Daily (China) (10 Apr.)

Dollar may emerge stronger after U.S. recession
If historical trends hold, a U.S. recession will signal the dollar's recovery from its long slide. In four of the past five recessions going back to the early 1970s, the dollar went higher after the downturn ended than it had been four months before it began. Some experts think the dollar will begin climbing in this year's second half, while others say it will be no sooner than the end of the year. Reuters (09 Apr.)

China's trade surplus down 10% in first quarter
The spreading economic slowdown has cut global consumer demand, shrinking China's quarterly trade surplus for the first time in more than three years. The trade surplus narrowed to about $41.6 billion in the three months to March 31 from a year earlier, Bloomberg News reported. Foreign direct investment almost doubled to $27.4 billion from a year earlier, the Ministry of Commerce said. Bloomberg (10 Apr.)

Geopolitical/Regulatory

Banks promise new rules to avert next credit crisis
The Institute of International Finance, representing hundreds of the world's largest financial companies, publicly acknowledged that banks made mistakes in the lead-up to the credit crisis and promised new rules to prevent a repeat. "We want to demonstrate we can do a better job within the industry," said Josef Ackermann, chief executive of Deutsche Bank and chairman of the institute's board. ClipSyndicate/Bloomberg (09 Apr.) , Financial Times (10 Apr.) , International Herald Tribune (09 Apr.)

New Bank of Japan head brings Chicago School mindset
The compromise candidate just confirmed as the Bank of Japan's new governor brings with him a free-market outlook gained from his education at the University of Chicago. Masaaki Shirakawa is believed to be resistant to the interest rate cuts some say are necessary. Goldman Sachs Group Inc. and Morgan Stanley say Japan is already in recession. Bloomberg (10 Apr.)

Nepal goes to polls day after violence kills at least 8
Polls in Nepal opened Thursday for an election seen as the best way to bring Maoist guerrillas into a parliamentary democracy. At least eight people were killed in three incidents in the tense western hill region. Nepal's 17.6 million voters will choose a special assembly that will rewrite the constitution and govern the nation in the meantime. International Herald Tribune (10 Apr.)

Financial Products

Deutsche Bank opens funds after spike in food prices
Deutsche Bank has launched two funds in Singapore that give retail investors a chance to profit from the rising cost of food. The DB Platinum Agriculture Funds (one in euro, the other in dollars) track the bank's own agriculture index, which invests in futures contracts. The funds drew $750 million in three weeks. Financial News Online (10 Apr.)

Ethics

Accounting rules "irretrievably broken"
A report by members of the Financial Accounting Standards Board and the International Accounting Standards Board concludes that the accounting rules for banks' off-balance-sheet interests must be overhauled. "Completing a final standard by mid-2011 will be extremely difficult, perhaps impossible," the report says. Financial Times (09 Apr.)

U.S. prosecutors show corporations leniency
Under the Bush administration, the Justice Department -- once the prosecutor of corporate giants like accounting firm Arthur Andersen -- has turned to agreements that avoid court. Justice has entered so-called deferred prosecution agreements with more than 50 companies suspected of wrongdoing over the last three years. Some legal experts think the policy shift has led companies to test the limits of corporate anti-fraud laws. International Herald Tribune (09 Apr.)

Financial Teasers 8 April 08

Top Stories

Will poor countries use commodities windfalls to diversify?

The huge price jump in agricultural and mining commodities is boosting the economies of the world's poor countries. Will they improve their economic future by investing the bounty? The lessons of the oil price boom of the 1970s suggest the answer depends on a country's political choices, says Pranab Bardhan, an economics professor at the University of California at Berkeley. International Herald Tribune (08 Apr.)

WaMu to stop offering mortgages through independent brokers

Washington Mutual plans to focus on offering mortgages through its retail bank branches as it puts an end to the wholesale side of the business. Legend Mortgage CEO Mitch Ohlbaum said a WaMu representative told him that Thursday is the last day to submit loan applications. Meanwhile, Washington Mutual appears set to receive a $5 billion cash injection from TPG. BusinessWeek (07 Apr.)

China to finance bulk of new Syrian oil refinery

China and Syria will team up to build an oil refinery in eastern Syria. China National Petroleum Corp. said an agreement the two countries signed last week calls for China to pay 85% of the cost to construct a refinery with a capacity of about 110,000 barrels a day. Forbes/Associated Press (08 Apr.)

Phase two of Novartis swoop for Alcon priced at $28B

Source: CNBCNovartis will become the world's biggest maker of eye-care products with a two-stage purchase of Alcon Inc. from Nestle SA. Novartis is buying 25% for $11 billion and has an option to buy another 52% for $28 billion. Nestle says it will use the money to reduce debt and expand its health-foods unit. CNBC (07 Apr.) , Bloomberg (07 Apr.)

Permira opens private equity office on U.S. West Coast
The U.K.-based private equity group Permira plans to expand its U.S. operations by opening a new West Coast office this year. The new location will focus on buying stakes in technology companies. Financial Times (07 Apr.)

Market Activity

Asian shares fall on profit-taking

Asian markets retrenched Tuesday as concerns of rising prices for crude oil and other raw materials hurt airline and steel stocks. Shares of Japanese financials declined when investors locked in profits after a strong run. Matt McKeith, head of equity dealing at First State Investments, called it a "breather" after "several good up days" for Asian shares. MarketWatch (08 Apr.)

Convertible issuance soars in Asia, falls elsewhere

Issuance of convertible bonds reached record levels in the Asia-Pacific region in the first quarter of 2008, according to Thomson Financial, but issuance dropped in the rest of the world. China was for the first time one of the top issuers, second only to the US, in part because of a $4.2 billion offer from Sinopec. Japan, Singapore and Malaysia also made the top 5. Financial Times (07 Apr.)

Other News

Percentage of firms with distressed debt hits 5-year high Financial Times (08 Apr.)
Alcoa Q1 profits cut in half by weak dollar, costly energy

Source: CNBCHigher energy costs and a weak dollar overcame a surge in the price of aluminum, cutting in half Alcoa Inc.'s first-quarter profit. The aluminum producer missed Wall Street's earnings expectations by 5 cents a share, but investors instead focused on high metals prices. "I think the fundamentals for aluminum could be quite strong over the next couple of years," said Brian Hicks, co-manager at U.S. Global Investors' resources fund. CNBC (07 Apr.) , Reuters (08 Apr.)

Economics

Rising wages, costs in Asia pushing inflation in West
Rising energy and labor costs have forced exporters even in poor countries to increase prices. While producers are passing on their higher prices, American consumers are able to buy less from exporting countries because of the falling value of the dollar. That contributed to U.S. consumers paying 4% more in the past year. But so far, Asian exporters have passed along only a portion of their costs. International Herald Tribune (07 Apr.)

Uptick in Indian wages, falling dollar turn IT services nearshore

North American companies are turning away from India as their offshore IT site in favor of the Western Hemisphere. A company used to be able to save 40% to 50% by hiring Indian firms to handle IT and other services, said Atul Vashistha, chairman at management consulting firm neoIT. But if the dollar keeps falling and Indian wages keep rising, that differential would shrink to 10%, he said. Spiegel Online (07 Apr.)
IADB lending mark shows Latin American expansionThe Inter-American Development Bank last year approved more loans and guarantees for projects in Latin America and the Caribbean since the debt crisis of 1999. "Much of the bank's lending last year was focused on investments that will help our members to deepen and consolidate the gains from booming commodity exports and growing trade with new markets in Asia," IADB President Luis Alberto Moreno said. Bloomberg (07 Apr.)

Vietnam's middle class becoming a prized market

Its emerging urban middle class could turn Vietnam into one of Asia's biggest consumer markets, said Tung Kim Nguyen, a partner at Indochina Capital. Investors attending the Credit Suisse Asian Investment Conference were told Vietnam's other advantages included political security, an appreciating currency and plans to privatize more state-owned firms.
FinanceAsia.com (08 Apr.)

Geopolitical/Regulatory

Financial officials call on governments to work together

Source: CNBCAhead of the Group of Seven meeting in Washington this week, several top financial leaders have called for a coordinated government effort to prevent another crisis and protect the global economy. So far, no firm proposals have emerged and U.S. officials have kept unusually quiet.
CNBC (08 Apr.) , CNBC/Reuters (08 Apr.)

Former SEC heads criticize proposed Bush revamp of agency

Three former leaders of the U.S. Securities and Exchange Commission say the Bush administration's proposed overhaul of financial regulation would weaken the agency. SEC chiefs under Presidents Reagan, Clinton and George W. Bush said it was wrong to change the SEC's approach to one that solves problems through informal discussions with market actors. "We have to have an enforcement approach," said David Ruder, an SEC chairman under Reagan. Bloomberg (08 Apr.)

Mortgage brokers oppose Fed rules on fee disclosure

The public comment period ends Tuesday for proposed Federal Reserve rules aimed at limiting abusive mortgage lending. One rule would bar mortgage brokers from receiving yield-spread premiums unless consumers state in writing that they understand their broker will be paid more for arranging their higher-rate loan. Mortgage brokers say the proposed Fed rules are unfair. MarketWatch (07 Apr.)

China allows banks to buy shares on U.S. markets

Chinese banks will be allowed to buy on U.S. stock markets for institutional investors, the country's banking regulator said. The banks also will be permitted to invest in U.S. mutual funds if they get approval from U.S. regulators, the China Banking Regulatory Commission said. Chinese banks are already allowed to direct money into markets in Hong Kong, Japan, the U.K. and Singapore. Financial News Online/Dow Jones Newswires (07 Apr.)

Financial Products

Technical standard sought for credit derivatives market

The scope of counterparty risk if Bear Stearns had collapsed last month, potentially scarring the $45 trillion credit derivatives market, galvanized regulators and bankers to fix flaws in the market's infrastructure. The New York Federal Reserve has pushed to computerize over-the-counter derivatives processing to improve the speed and accuracy. Many trades are still confirmed by e-mail, instant messaging and fax. Financial Times (07 Apr.)

Financial Teasers 4 April 08

Top Stories

Hedge funds face new threat as investors bail
First, banks started pulling hedge fund credit lines and demanding greater security against loans. Hedge funds were forced to sell assets and incur heavy losses. Now, investors are pulling out of the hedge funds, increasing the risk of more fire sales of assets to raise capital to meet withdrawals. Financial Times (03 Apr.)

Officials, executives defend their actions in Bear Stearns takeover
Testifying before the Senate banking committee, top Wall Street executives and federal officials for the first time publicly explained the negotiations that led to JPMorgan Chase buying
Bear Stearns. Officials from the Federal Reserve, SEC and Treasury defended their roles in the deal and the government's rescue of the investment bank's creditors. ClipSyndicate/Bloomberg (03 Apr.) , International Herald Tribune (04 Apr.) , Bloomberg (04 Apr.)

Late payments by U.S. borrowers reach 16-year high
A study by the American Bankers Association found that 2.65% of U.S. consumer loans were at least 30 days past due in the fourth quarter. That's up from 2.44% in the third quarter and from 2.23% in the fourth quarter of 2006. The results show that credit trouble has spread from mortgages into other types of debt. Reuters (03 Apr.)

Spike in food prices triggers panic in developing nations
The prices of rice, corn, wheat and other food staples have been rising the past couple of years, but recent spikes have sparked food riots in Morocco and Yemen and driven governments to radical steps to make sure they have enough. Egypt, for example, has banned rice exports for the next six months. Economists say the problem stems from farmers planting crops for biofuel rather than food. ClipSyndicate/Bloomberg (04 Apr.) , The Washington Post (04 Apr.)

Thailand denies rumors it will reduce rice exports: Thailand, the biggest exporter of rice in the world, is not planning to reduce rice exports, according to a government official. "We are confident that Thailand has ample supply for both domestic consumption and exports," said Apiradi Tantraporn, head of the Commerce Ministry's Foreign Trade Department. The Guardian (London)/Reuters (03 Apr.)

Venezuela plans tax on oil sales to boost revenues
Venezuela's Congress is expected this week to give initial approval to a tax measure that will take half of oil revenues above $70 per barrel, and 60% of revenues above $100 per barrel. "Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability," legislator Angel Rodriguez said. "One way to distribute them to our people, who are the owners of the oil, is to create this tax."
CNBC/Reuters (03 Apr.)

Moody's warns about Latin America's maturing corporate debt
Moody's Investors Service said the amount of corporate debt in Latin America that will mature in the last six months of this year will reach $6.8 billion, up from less than $2 billion in the first half of the year. If the debt market slump continues, the companies may have trouble refinancing. "Debt maturities should be the main area of focus for liquidity risk in the region," Moody's analysts wrote. The "big spike in maturities in the second half of the year will test investor appetites for Latin American credit and the ease of corporate access to alternative sources of financing." Bloomberg (03 Apr.)

Analysis: Asian banks to emerge from subprime crisis OK
Analysts say that Asian banks will face losses related to the U.S. subprime meltdown, but they won't be as severe as the losses hitting UBS, Merrill Lynch and Bear Stearns. "They are nowhere near as embroiled as the large U.S. and European banks," said Jason Rogers, a credit analyst at Barclays Capital. Reuters (04 Apr.)

Other News

Former UBS chief launches campaign to overhaul bank Financial Times (03 Apr.)

Merger set up tumultuous decade for Citi The New York Times (registration required) (03 Apr.)

Market Activity

Asian markets mostly down, Sydney inches up
Japanese stocks ended the week down and Australian shares were propped up by gains by oil and mining companies. Tokyo's Nikkei 225 Average fell 0.7%, South Korea's Kospi slid 0.2% and India's Sensex dropped 2.2%. Meanwhile, the S&P/ASX 200 in Sydney gained 0.2%. Markets in Shanghai, Hong Kong and Taipei were closed Friday for a holiday. MarketWatch (04 Apr.)

Collapse of auction-rate securities market hits student lenders
No student loan-backed municipal bonds were sold in the first quarter of 2008, a situation that hasn't occurred in nearly 40 years, according to Thomson Financial. The lack of debt sales by public student-loan agencies is a result of the collapse of the auction-rate securities market. Bloomberg (04 Apr.)

Samurai bond issuance soars to nearly $5 billion
Yen-denominated bonds issued in Japan by foreign institutions more than quadrupled from $1.12 billion in the first quarter of 2007 to $4.95 billion in the same quarter this year. The boost in issuance of Samurai bonds highlights the attraction to Japan as a funding source during the global credit crisis. Financial Times (04 Apr.)

Economics

Bernanke says full benefit of rate cuts not yet realized
Federal Reserve Chairman Ben Bernanke said the full effect of the Fed's recent reductions in interest rates has not yet been realized by the economy. "Further actions will have to depend on how the economy evolves and we are looking of course at both sides of our mandate, growth and inflation," Bernanke testified at a Senate hearing. ClipSyndicate/Bloomberg (03 Apr.) , Reuters (03 Apr.)

RBA governor indicates Australia's economy is slowing
Glenn Stevens, governor of the Reserve Bank of Australia, said he expects inflation to hover around 4%. "I can't tell you at what point (interest) rates can start to come down," Stevens said. "I can't even promise that they might not rise again." The bank believes the Australian economy may be slowing, but Stevens said more evidence is needed. Forbes/Associated Press (03 Apr.) , The Herald Sun (Melbourne, Australia) (04 Apr.)

Investment banks boost borrowing from discount window
The Federal Reserve reported Thursday that large Wall Street banks averaged more than $38 billion in daily borrowing from the Fed's discount window. That's up from just under $33 billion the previous week and $13.4 billion during the first week the lending facility opened to the investment banks. CNBC/Associated Press (03 Apr.)

Service sector, jobless reports point to economic slowdown
For the third consecutive month, the U.S. service sector contracted in March. Meanwhile, government data show that the number of workers applying for unemployment benefits jumped to the highest level since September 2005. The reports reinforce concerns that the U.S. economy is sputtering. ClipSyndicate/Bloomberg (03 Apr.) , Reuters (03 Apr.)

Geopolitical/Regulatory

EU finance officials meet to address economic woes
Finance ministers and central bankers from the 27 European Union nations are meeting in Slovenia today and Saturday to address a slowdown in the region's economy and climbing inflation rates. They will try to develop a joint response to these problems, and the 15 countries that use the euro will discuss the currency's rapid acceleration against the dollar. ClipSyndicate/Bloomberg (04 Apr.) , International Herald Tribune (03 Apr.) , Forbes/Associated Press (04 Apr.)

Financial Products

Credit Suisse launches first ETN from its new platform
Credit Suisse's first exchange-traded notes began trading on the New York Stock Exchange. The ETN is tied to the Credit Suisse Global Warming Index, which is made up of 50 top ranking stocks of companies that take on climate change. Credit Suisse is the seventh issuer to enter the American ETN market. Structured Products (03 Apr.)

Ethics

SEC accuses London-based Pentagon Capital of fraud
The SEC has filed a complaint against Pentagon Capital Management, a London-based hedge fund, and its CEO, Lewis Chester, for allegedly scheming to defraud U.S. mutual funds and investors. The suit claims Pentagon defrauded the funds through deceptive market timing and late trading. Lawyers for Pentagon said they are confident they have legal and factual defenses to the claim. Reuters (03 Apr.)

Marubeni, Lehman both say they are victims in scam
Lehman Brothers is suing Marubeni, an influential Japanese trading company, over an allegedly fraudulent banking scheme. The Japanese trading company says it, too, is a victim in the scam. This Financial Times article outlines the case, the players involved and the questions surrounding the deal. Financial Times (03 Apr.)

HDFIV Report Card @ 4 April 2008

Performance

Kuala Lumpur Composite Index ("KLCI") decreased from 1,256.54 (28 March 2008) to 1,221.98 (4 April 2008), representing a decrease of 2.8%. Hengdai Equity Fund IV ("HDFIV")'s registered a return of RM101.94 or 1.78%, down from 4.39% in the previous week. Reason for the decrease is due to the lower valuation of Malayan Banking Berhad and a larger capital base in view of the new shareholders and as well as the impact from 2nd month's inflow of capital.

So far, HDFIV is beating KLCI by 9.94%, consistent with 9.76% a week ago.

Purchase
No purchases during the week.

Sell
No disposals during the week.

Asset Allocation
With additional capital coming from new shareholders and 2nd month's inflow of capital, equity allocation has decreased from 71% to 42%. We are again holding back a comfortable cash buffer of 58%. This comfortable cash buffer will allow us to snap up some cheap stocks that took some beatings during this week. Hapseng Plantations Berhad is currently in my radar as the stock plummeted to one year low of RM2.57 on 3 April 2008. The stock recovered some lost ground by closing at RM2.65 today.

Note: Asset allocation shows the three main categories that our money lies in. The main category which we are expected to invest in to make the return that we wanted is Equities. Secondly, Fixed Income is in the form of fixed deposits that provides stable but low return. This second category provides small return when the cash is yet to be utilised for investment. As there is a lock-in period for fixed deposit such as at least for two months (if the amount is less than RM5,000), there is a need to maintain cash in the form of 'pure' cash, which is the third category. The set back of holding 'pure' cash ("Cash") is that we do not earn any return at all.