CANSLIM is an investment strategy popularized by William J. O’Neil, the founder of Investor’s Business Daily. He is an investor, stockbroker, and author.
The CANSLIM formula is a systematic approach to stock picking and portfolio management that emphasizes the importance of following rules and guidelines.
The CANSLIM Formula To Choose Good Stocks
Now that we are done with the introduction let’s look at how we can use the CANSLIM formula to choose good stocks.
C – Current Earnings and Earnings Growth
This component of the CANSLIM formula emphasizes the importance of finding stocks with strong earnings growth. This means looking for companies that have consistently posted strong earnings reports and are expected to continue to do so.
The emphasis is on finding companies that have been able to deliver consistent earnings growth and have a strong track record of delivering on their financial commitments.
The annual earnings increase component of the CANSLIM formula is all about finding stocks with a strong upward trend in earnings. This means looking for companies that have posted year-over-year increases in earnings and are expected to continue doing so in the future.
N – New Products, Services or Management
The new products, services or management component of the CANSLIM formula is all about finding companies that are innovating and introducing new products or services to the market. This component also emphasizes the importance of having a strong management team, as a well-run company is more likely to succeed in the long term.
S – Supply and Demand
This component of the CANSLIM formula is all about understanding the forces of supply and demand and how they impact the price of a stock. In general, stocks with strong demand and limited supply perform better than those with weak demand and abundant supply.
The leader or laggard component of the CANSLIM formula is all about finding stocks performing well compared to their peers. This means looking for companies outpacing their competitors in earnings growth, sales growth, and market share.
I – Institutional Sponsorship
The institutional sponsorship component of the CANSLIM formula is all about finding stocks backed by large institutional investors. This means looking for companies with a large base of institutional shareholders likely to receive continued support from these investors.
The market direction component of the CANSLIM formula emphasizes the importance of timing your investments based on the market’s overall direction. This means looking for opportunities to invest in the stock market in a long-term uptrend and avoiding investments in a downtrend.
CANSLIM formula is designed to help investors identify stocks with strong earnings growth, solid management teams, and favorable market conditions. By following the guidelines of the CANSLIM formula to choose good stocks, investors can increase their chances of success and avoid common mistakes such as investing in stocks with poor earnings growth or investing in the stock market during a bear market.
In conclusion, the CANSLIM formula to choose good stocks is a comprehensive investment strategy many investors have used to build successful portfolios. While it is not a guarantee of success, following the CANSLIM formula can help investors make informed decisions and minimize their risk of loss.
Hope that you now know how to use the CANSLIM formula to choose good stocks. But as with any investment strategy, it is important to do your research and due diligence before making investment decisions.
Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) and Maybank will co-host the 21st instalment of Invest Malaysia (“IMKL 2023”) on 8 March in Kuala Lumpur. The forum, which is Malaysia’s largest annual capital market gathering, is expected to attract an estimated 1,000 local and foreign fund managers, attending in person and online, with an estimated total AUM of USD10 trillion (approximately RM44 trillion).
Themed “Reshaping Malaysia’s Narrative: Strengthening Resilience & Sustaining Growth”, IMKL 2023 will provide an in-depth look at the strategic approaches and measures introduced in the recent re-tabled Budget 2023, which will support Malaysia’s long-term efforts to achieve sustainable development and economic growth. The conference will be inaugurated by Prime Minister YAB Dato’ Seri Anwar Ibrahim, who will deliver the Keynote Address, which is expected to focus on the country’s efforts to achieve high-income nation status while adhering to the values espoused in the “Malaysia Madani” concept.
“The recent budget reinforces Malaysia’s commitment to fiscal reform while addressing key concerns investors have when making investment decisions. The absence of a prosperity tax from this year’s budget also bodes well and encourages Malaysian companies to aim for higher earnings, thus raising their attractiveness to global investors,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.
“Further, the tax incentives on listing fees for the ACE and LEAP markets, as well as for technology-based companies listed on the Main Market, will encourage the listing of more high-potential and innovative companies,” added Datuk Muhammad Umar Swift. “This would result in more investment opportunities and increased trading interest among investors while also helping us achieve our target of 39 listings for 2023.”
Dato’ Khairussaleh Ramli, Group President & Chief Executive Officer at Maybank said, “We are honoured to partner with Bursa Malaysia once again to bring IMKL 2023 to the investing community. The conversations at Invest Malaysia will provide a better understanding of Malaysia’s medium-term fiscal and economic strategy in sustaining development, enhancing competitiveness and resuming its growth trajectory. We believe that a holistic approach that balances social and economic needs is pivotal for the nation to strengthen its resilience and to sustain growth. This is reflected in Maybank’s own mission of Humanising Financial Services, driven by our M25+ strategy.”
IMKL 2023 will showcase the following conversations:
• YB Tuan Mohd Rafizi Ramli, Minister of Economy will discuss “Strengthening Economic Resilience”, • YM Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz, Minister of International Trade & Industry will share his thoughts on “Enhancing Malaysia’s Competitiveness”, • YB Ahmad Fahmi Mohamed Fadzil, Minister of Communications & Digital will talk about “Developing a Thriving Digital Ecosystem”, • YB Anthony Loke, Minister of Transport will discuss on “Infrastructure Development for Sustainable Growth”, and • YBhg Datuk Johan Mahmood Merican, Treasury Secretary General, Ministry of Finance will share further details on “Budget 2023 Highlights and Strengthening Fiscal Reform”.
“IMKL 2023 will provide impetus to strengthen the key building blocks that will reinforce Malaysia’s reputation as an attractive investment destination in the region,” concluded Datuk Muhamad Umar Swift.
IMKL 2023 will be live-streamed for public viewing on Bursa Malaysia’s Facebook page at https://www.facebook.com/BursaMalaysia/ on Wednesday, 8 March 2023 starting at 10.00am.
About Bursa Malaysia
Bursa Malaysia is an exchange holding company incorporated in 1976 and listed in 2005, and has grown to be one of the largest bourses in ASEAN today. Bursa Malaysia operates and regulates a fully-integrated exchange offering a comprehensive range of exchange-related facilities, and is committed to Creating Opportunities, Growing Value. Learn more at www.bursamalaysia.com.
About Maybank
Maybank is among Asia’s leading banking groups and South East Asia’s fourth largest bank by asset. The Maybank Group has an international network of over 2,600 offices in Malaysia, Singapore, Indonesia, Philippines, Cambodia, Thailand, Vietnam, Myanmar, Brunei, Laos, India, China, UK, USA, Pakistan, Saudi Arabia, Uzbekistan, and Dubai. The Group offers an extensive range of products and services, which includes consumer and corporate banking, investment banking, Islamic banking, stock broking, insurance and takaful and asset management. It has over 42,000 employees worldwide. (www.maybank.com).
Saturna Sdn Bhd, a leading shariah-compliant financial services firm, today officially launched its digital platform to help investors grow their wealth ethically and securely.
The online tool enables individuals to begin their investment journey in just a few clicks, with the guidance of Saturna’s deep expertise in the world of Islamic finance. Unlike other offerings currently available on the market, Saturna takes an investor-friendly approach by imposing no sales nor redemption charges and no hidden fees. Potential investors can also enjoy flexibility as Saturna’s funds do not come with a minimum holding period.
“Our new online platform is designed to be simple and secure for a seamless user experience,” said Pn. Shahariah Binti Shaharudin, President of Saturna Sdn Bhd. “It’s accessible enough for anyone to start investing in shariah-compliant solutions instantly, regardless of their experience or investment budget.”
Pn. Shahariah Binti Shaharudin, President of Saturna Sdn Bhd
The launch of Saturna’s digital platform was officiated by Pn. Ruslena Ramli, Director of Digital Finance and Islamic Digital Economy of Malaysia Digital Economy Corporation (MDEC), who expressed her hope that more organisations within the Islamic financing space will adopt innovative solutions to grow the industry further. “With this online platform, Saturna has led the way in making Islamic-based investment opportunities more available to a wider audience, enabling more individuals to benefit from the wealth of expertise they have to offer ,” said Pn. Ruslena.
In addition to Islamic principles, Saturna’s funds also comply with global Environmental, Social, and Governance (ESG) standards, where investments are made in companies engaging in socially-responsible and environmentally-friendly business practices or products.
“We see ESG measures as complementary to shariah-compliant initiatives, as they are both driven by sustainability considerations, mitigate volatile risk-taking, and value long-term growth,” explained Pn. Shahariah. “I believe the events of the past few years, from the 2008 financial crisis to the Covid-19 pandemic, have inspired a paradigm shift in the way we view investing and increased the appetite for socially-conscious metrics. With our extensive expertise in Islamic-based fund management, Saturna is well-positioned to meet this demand with alternatives to conventional financial planning solutions.”
The launch event also featured a forum discussion on future trends that will shape the investment scene in the coming year. Panellists at the dialogue included Pn. Ruslena Ramli, Director of Digital Finance and Islamic Digital Economy of Malaysia Digital Economy Corporation (MDEC), Yang Berusaha Ahmad Dasuki Abdul Majid, Chief Executive Officer of PTPTN and Professor Dato’ Dr Mohd Azmi Omar, President and Chief Executive of the International Centre for Education in Islamic Finance (INCEIF).
Saturna Sdn Bhd is a wholly-owned subsidiary of US-based Saturna Capital, whose Amana Growth Fund was ranked as the top Large Growth Fund of 2022 by US News & World Report. Since entering the Malaysian market in 2010, Saturna has established itself as a reputable and transparent Islamic financial firm, listing the National Higher Education Corporation Fund (also known as Perbadanan Tabung Pendidikan Tinggi Nasional or PTPTN) and the the Employees’ Provident Fund (EPF) as among its largest corporate investors.
Among the key tenets of shahriah-based investing are the prohibition on interest (or riba) as well as investments in activities that are prohibited by Islam (or haram), such as alcohol, gambling, and conventional insurance. Pn. Shahariah points out that these criteria are underpinned by a need to be socially responsible, making shariah-friendly investments an attractive option for anyone interested in ethical and transparent financial solutions.
“We are unique even within the Islamic finance sector as we prioritise value-orientated investments and sustainability over short-term profits, as backed by strong research and screening tools; our global track record over the decades has shown that this is an approach that works. Our commitment to Islamic principles shines throughout our investment process and client relationships. Since we operate on a collaborative model based on profit-and-loss sharing, we do not charge any fees when it comes to investing or withdrawing returns — we only earn if our clients earn,” said Pn. Shahariah.
In Malaysia, Saturna manages two popular shariah-compliant equity trust funds, namely the ICD Global Sustainable Fund and the ASEAN Equity fund, which offer investors exposure to global and regional investments respectively. Both funds are authorised by the Securities Commission Malaysia, and invest in a diversified portfolio that favours stable earnings for the long-term.
To sign up to Saturna’s digital platform, or learn more about its investment portfolio, go to: https://saturna.com.my/
About Saturna Sdn Bhd
Saturna Sdn. Bhd. (199501012969) is the wholly-owned Malaysian subsidiary of Saturna Capital Corporation, resulting from the 2010 purchase by Saturna Capital of Alpha Asset Management located in Kuala Lumpur. Saturna Capital is internationally recognised as an adviser to the Amana Mutual Funds Trust. We help individuals and institutions build wealth and preserve capital.
We serve institutional clients with active asset management services, individual investors with private mandates and manage unit trust funds approved and regulated by the SC of Malaysia
Saturna’s deep-rooted belief in value investing shines through in the quality of our investments. We don’t follow trends, we analyse opportunities. Our broad experience distinguishes Saturna in the investment business. Each of our employees is committed to creating and maintaining a unique firm, where client interests always come first.
Our global headquarters in Bellingham, WA sits between the Pacific Northwest’s major cities (Seattle and Vancouver, BC). Employees in the Bellingham, Los Angeles, Henderson (Nevada), and Chicago metropolitan areas service clients across the U.S.
Saturna Sdn Bhd holds an Islamic Fund Management Licence (“IFML”) with the Malaysian Securities Commission. Saturna is the first conventional asset manager to be converted to an Islamic asset manager.
Exchange-traded funds (ETFs) are a popular investment vehicle that has recently gained popularity due to their simplicity, flexibility, and low cost. An ETF is a type of investment fund traded on a stock exchange, similar to a stock. It is designed to track the performance of a specific market index, such as the FTSE Bursa Malaysia KLCI or the MSCI Malaysia Index.
ETFs, offer several advantages over other investment vehicles, such as mutual funds and individual stocks. They provide investors with a low-cost way to invest in a diversified portfolio of assets that can be bought and sold throughout the trading day. This article will look at some of the reasons why you need to invest in ETF.
Why You Need To Invest In ETF#1 Diversification In Portfolio
One of the main advantages of investing in Malaysia’s ETFs is that it allows investors to gain exposure to a diversified portfolio of assets that would be difficult or expensive to acquire individually.
For example, MyETF MSCI Malaysia Islamic Dividend or MyETF-MMID aims to provide investment results that closely correspond to the performance of the Benchmark Index, which is a price return index comprising 16 to 30 Shariah-compliant securities listed on Bursa Securities, with higher than average dividend yield that is deemed both sustainable and persistent by MSCI.
With an ETF, you will own multiple shares with only one purchase!
Why You Need To Invest In ETF#2 Exposure to Malaysia’s Fast-Growing Economy
Another advantage of investing in Malaysia’s ETFs is that it allows investors to gain exposure to a fast-growing emerging market. The Malaysian economy has been growing consistently over the years, and the country is known for its export-oriented industries, such as electronics, palm oil, and petroleum.
The Malaysian government has also been implementing various initiatives to attract foreign investors, such as providing tax incentives and streamlining regulations.
Source: Bursa Malaysia
To encourage investors to invest in the ETF, the Malaysian government has exempted Stamp Duty of 0.1% until 31 December 2025.
Investing in Malaysia’s ETFs is also a cost-effective way to invest in the Malaysian stock market. ETFs are passively managed, which means that they track a particular market index rather than being actively managed by a fund manager.
As a result, ETFs typically have lower management fees than actively managed funds, making them an attractive investment option for cost-conscious investors. For example, the MYETF Dow Jones U.S 50 (METFUS50) has a total expense ratio of 0.62%, which is relatively low compared to other actively managed funds.
In other actively managed funds, the minimum cost usually involves around 2% to 5% annually for management fees. Some mutual funds also will charge you a performance fee when your investment outperforms the market or the benchmark.
ETFs are also highly liquid, meaning they can be bought and sold on a stock exchange throughout trading. This gives investors great flexibility and control over their investments, as they can buy and sell their ETF holdings anytime.
Additionally, because ETFs are traded on a stock exchange, investors can buy and sell them at market prices, which means they can take advantage of price movements throughout the trading day.
Investors can consider several ETFs on the Bursa Malaysia stock exchange. In addition to the two ETFs mentioned above, other ETFs provide exposure to specific sectors of the Malaysian economy.
For example, the TradePlus Shariah Gold Tracker (0828EA) tracks the London Gold Fixing PM price performance. The MyETF MSCI South East Asia Islamic Dividend (0825EA) or MyETF-MSEAD is an ETF that tracks the performance of the MSCI South East Asia IMI Islamic High Dividend Yield 10/40 Index, which objectively and passively represents the dividend yield opportunity within South East Asia’s Shariah equity markets.
Investing in Malaysia’s ETFs can expose investors to a fast-growing emerging market and a diversified portfolio of assets. ETFs are also cost-effective, highly liquid, and easy to invest in. However, as with any investment, it is important to conduct thorough research and seek professional advice before investing in Malaysia’s ETFs or any other investment vehicle.
The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) are exchange-traded funds that track the performance of the S&P 500 index, but they have different approaches to selecting the stocks that make up the index.
The SPY tracks the performance of the S&P 500 index, which includes the 500 largest publicly traded companies in the US. The SPUS also tracks the S&P 500 index but excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, such as alcohol, tobacco, and gambling.
Over the past few years, both funds have performed well, with the SPY showing slightly better performance overall. However, there have been periods where the SPUS has outperformed the SPY. For example, in 2020, the SPUS had a slightly better performance than the SPY, with a return of 18.8% compared to 18.4% for the SPY.
It is important to note that the SPUS may have a more limited selection of stocks than the SPY, potentially impacting its performance. Additionally, the criteria used to exclude certain companies from the index may result in excluding companies that may perform well in the future.
The SPY and the SPUS have shown positive performance over the past few years. The choice between the two depends on an investor’s preference for investing in socially responsible companies that adhere to Islamic principles.
The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) both track the performance of the S&P 500 index. Still, the SPUS excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, such as alcohol, tobacco, and gambling.
As of February 18, 2023, the top 10 constituents of the SPY are:
Apple Inc. (AAPL)
Microsoft Corporation (MSFT)
Alphabet Inc. (GOOGL)
Amazon.com Inc. (AMZN)
Facebook Inc. (FB)
Berkshire Hathaway Inc. Class B (BRK.B)
Tesla Inc. (TSLA)
JPMorgan Chase & Co. (JPM)
Johnson & Johnson (JNJ)
Visa Inc. (V)
As for the SPUS, the top 10 constituents as of February 18, 2023, are:
Apple Inc. (AAPL)
Microsoft Corporation (MSFT)
Alphabet Inc. (GOOGL)
Visa Inc. (V)
Procter & Gamble Co. (PG)
PepsiCo Inc. (PEP)
Cisco Systems Inc. (CSCO)
Coca-Cola Co. (KO)
McDonald’s Corporation (MCD)
Verizon Communications Inc. (VZ)
Dividends Payout
The SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) are exchange-traded funds that track the performance of the S&P 500 index. As such, the dividends paid by these ETFs are based on the dividends paid by the individual companies in the index.
The SPY has a current dividend yield of approximately 1.24%, which means that for every share held, an investor would receive an annual dividend payout of US$1.24. The SPY pays dividends every quarter, and the dividend amount can fluctuate depending on the performance of the companies in the index.
The SPUS, which excludes companies that generate revenue from activities deemed non-compliant with Islamic principles, may have a different dividend yield than the SPY. As of February 18, 2023, the dividend yield for the SPUS is approximately 0.66%.
This means that for every share held, an investor would receive an annual dividend payout of US$0.66.
It is important to note that the dividend yield for both the SPY and the SPUS can vary over time based on several factors, including changes in the underlying companies’ dividend policies, overall market conditions, and other economic factors.
How Much?
As of the market close on February 18, 2023, the prices for the SPY (SPDR S&P 500 ETF) and the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) were:
SPY: US$499.55 per share
SPUS: US$50.53 per share
With US$1,000, You Can…
As of the market close on February 18, 2023, the price for one share of the SPY was US$499.55, and the price for one share of the SPUS was US$50.53. Based on these prices, $1000 could buy approximately:
2 shares of the SPY (US$1,000 / US$499.55 = 2.00)
19 shares of the SPUS (US$1,000 / US$50.53 = 19.77)
Over the past year (as of February 18, 2023), the SPY (SPDR S&P 500 ETF) has had a total return of approximately 31.7%. Assuming that you invested US$1000 in the SPY at the start of the year, your investment would have grown to approximately US$1,317 by the end of the year (not accounting for any fees or expenses).
Meanwhile, the SPUS (SP Funds S&P 500 Sharia Industry Exclusions ETF) has had a total return of approximately 28.5% over the past year (as of February 18, 2023). Assuming that you invested US$1000 in the SPUS at the start of the year, your investment would have grown to approximately US$1285 by the end of the year (not accounting for any fees or expenses).
Assuming that you invested US$1,000 in each S&P 500 ETF and held them for a year, the projected dividend income would be approximately:
SPY: US$13.70 (1.37% of US$1000)
SPUS: US$6.80 (0.68% of US$1000)
Important Notes
It is important to note that past performance does not guarantee future results and that investing in the stock market always carries some risk. It is also important to consider various factors, including expense ratios, historical performance, and overall investment strategy, before making investment decisions.
Additionally, it is important to note that the prices of the S&P 500 ETFs can fluctuate daily based on many factors, including changes in the underlying companies’ stock prices, overall market conditions, and other economic factors. Additionally, investors need to consider factors beyond just the price of the S&P 500 ETF, such as its performance history, expense ratio, and other factors, when making investment decisions.
Mukhriz Mangsor is currently the Head Global Market Strategist at Quantdynamic Research Company. His expertise includes financial education, financial institutions, and property trading with clients, including Brunei, Canada, Malaysia, Singapore, and the United States firms.
Maybank Asset Management Sdn Bhd (“MAM Malaysia”) today announced the launch of a Shariah-compliant multi-asset Maybank Global Wealth Conservative-I Fund (“Fund”). The new Fund joins the Maybank Global Wealth Moderate-I Fund and Maybank Global Wealth Growth-I Fund in the suite of Maybank Flexible Retirement Solution offerings launched last year.
The enhanced suite of Maybank Flexible Retirement Solution provides investors, across different life stages, distinct lifestyles and retirement needs, the flexibility and access to Shariah-compliant flexible retirement-focused solutions to supplement and diversify their retirement planning. The solution incorporates dynamic asset allocation and downside risk management, which is crucial in ensuring stability for investors when saving for retirement in the medium to long term.
Retirement planning has become more difficult in Malaysia as a consequence of the pandemic and EPF stimulus withdrawals. An estimated four to six years are now needed to rebuild lost savings for retirement. With longer life expectancy and higher cost of living due to inflation, market volatility and recession risks looming, Malaysians require a flexible retirement solution to ensure financial stability in their later years.
The new decumulation fund aims to deliver higher income payouts while drawing down capital to convert assets to income systematically. This new approach supplements income post-retirement or even temporary time off from the workforce. The Fund aims to achieve an income distribution of 7% per annum. Remaining assets continue to be investedin seeking returns, giving investors the opportunity to continue to build their retirement nest egg further. This provides investors with peace of mind, knowing that they have a regular source of income stream post retirement. In addition, investors have unparalleled access to a diversified portfolio of Shariah-compliant global assets. To achieve its investment objective, the asset allocation for the Fund will comprise minimum of 70% in Sukuk with the remainder invested in Equities and Cash.
With close to two decades of supporting the Malaysian investment community, Schroder Investment Management (Singapore) Ltd (“Schroders”), is the solution’s Investment Adviser. Schroders manages over RM4 trillion of assets (as of 30 Jun 2022) globally and is one of Malaysia’s biggest offshore providers of Shariah solutions. Investors in the fund will benefit from the deep experience of Schroders’ multi-asset investment team, which comprises 90 dedicated investment professionals across the globe, with an established 30-year track record.
The Maybank Global Wealth Growth Conservative-I Fund and other funds in the Maybank Flexible Retirement Solution are available exclusively at Maybank branches nationwide.
Ahmed Muzni Mohamed, Chief Executive Officer, Maybank Asset Management Malaysia, said, “Retirement planning remains a problem in Malaysia. Most of us only think about retirement only when we get older. Given the continuous rise in cost of living and inflation, we need to inculcate the importance of supplementing our existing retirement savings as early as possible to ensure a financially secure retirement.”
“The beauty of Maybank’s Flexible Retirement Solution is that we have reframed the traditional age-based approach to retirement planning and made it appealing to a wider audience segment by designing solutions based on understanding and targeting Malaysians various life stages, time horizons and financial goals. Our Funds certainly gives Malaysians more flexibility and choice to start planning.”
He reiterated “Investors of different segments will be able to choose what levels of risk to take, i.e. growth, moderate or conservative and have the flexibility to decide on how their retirement planning should fit their life goals and needs. Now with our decumulation fund, it supplements one’s income post-retirement, by providing higher income pay-outs. This helps in their income stability and longevity protection of their savings, giving them a peace of mind to continue with a quality life without worrying about finances.”
Lily Choh, CEO of Singapore, Schroders, said, “At the heart of retirement planning is financial security and peace of mind to enjoy our later years. We are delighted to partner with Maybank Asset Management to develop an innovative strategy that focuses on providing a reliable income stream to fund current and future needs. This solution is built on Schroders’ strong track record and extensive world-class institutional capabilities in managing pension schemes. The addition of the fund to the current suite of Shariah retirement solution reflects our strong commitment to support the retirement planning journey of Malaysian investors.”
MAM Malaysia and Schroders have been co-developing a range of specialised investment solutions since 2018, including Shariah-compliant Environmental, Social and Governance (ESG) funds for the growing wealth market in Malaysia.
Maybank Global Wealth Conservative-I Fund is offered in MYR-Hedged Decumulation Class. Investors can purchase units in the Funds at a minimum initial investment of RM1,000 and make additional investments at a minimum of RM100. To know more about the Fund, investors can visit www.maybank-am.com.my or invest through Maybank branches nationwide.
About Maybank Asset Management Sdn. Bhd.
Maybank Asset Management Sdn. Bhd. is a subsidiary of Maybank Asset Management Group Berhad (MAMG) and is owned by Malayan Banking Berhad (Maybank) and Permodalan Nasional Berhad (PNB) as its asset management arm.
MAMG is one of the pioneers in the local asset management industry with a highly capable fund management team, averaging over 20 years of investment experience and expertise in Asian markets. It has presence across three (3) Asean key markets namely, Malaysia, Singapore and Indonesia offering Asian-based investment solutions encompassing both conventional and Islamic assets. The portfolio management services cater to all types of investors, including corporate and institutions, high net-worth individuals and mass retail.
MAMG has a strong foothold in Asean with strategic intent to enhance its investment capabilities with on-the-ground market intelligence and expertise as well as expanding its regional distribution capabilities to market products cross-border. MAMG’s AUM stands at MYR 31.9 billion as at 31 January 2023.
About Schroders Plc
Founded in 1804, Schroders is one of Europe’s largest independent investment management firms by assets under management. As at 30 June 2022, assets under management were £773.4 billion (€898.4 billion; $939.2 billion). The founding family remain a core shareholder, holding approximately 48% of the firm’s voting shares. Schroders has continued to deliver strong financial results. It has a market capitalisation of circa £7.7 billion and employs over 5,800 people across 38 locations.
Schroders has benefited from the most diverse business model of any UK asset manager by geography, by asset class and by client type. Schroders offers innovative products and solutions across their five business areas of solutions; institutional; mutual funds; private assets & alternatives; and wealth management. Clients include insurance companies, pension schemes, sovereign wealth funds, endowments, and foundations. They also manage assets for end clients as part of their relationships with distributors, financial advisers, and online platforms. Schroders’ Wealth Management offering reflects their strategic ambition to provide wealth management and financial planning services to clients across the wealth spectrum.
Schroders’ strategic aims are to grow their asset management business, build closer relationships with end clients and expand their private assets and alternatives business. Schroders’ purpose is to provide excellent investment performance to clients through active management. The business channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders’ business philosophy is based on the belief that if they deliver for clients, they deliver for Shareholders and other stakeholders.
Further information about Schroders can be found atwww.schroders.com.
First of all, congratulations to you! We believe you are here reading this article because you have finally decided to start investing.
Before we look at how to kickstart your stock market investment journey, we need to understand what investing is all about.
Investing is buying assets that increase in value over time and provide returns through income payments or capital gains. These assets can be stocks, bonds, property or anything that can give you some returns.
This article will share how to kickstart your stock market investment journey.
Perhaps you might be wondering how to start investing for the first time. First of all, to invest in the stock market, you will need three things.
You will need investment knowledge, some money as your capital and an account to buy stocks. To make your life easier, let us help you how to kickstart your stock market investment journey.
Here are the things that you need to consider before you begin investing in the stock market.
Kickstart Your Stock Market Investment Journey#1 Understand the Instrument or Product That You Want to Invest In
To invest in Bursa Malaysia, you must know their products and services. Among the products available are equities, bonds, derivatives and many more.
Under equities are shares, company warrants, structured warrants, Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), Closed-end Funds, Business Trusts and Stapled Securities.
As a beginner, we would suggest you begin with shares or stocks. According to Investopedia, a stock, also known as equity, is a security that represents the ownership of a fraction of the issuing corporation.
If you purchase company shares, you are one of the owners because you own a fraction of ownership in that company. You may not be the major shareholder, but at least you can proudly say you are part of the company business.
Once you understand what stocks are and how they work, do not stop learning and keep searching for more reading materials and videos over the internet. Believe me. If you wish to sustain long enough in the stock market, there is no shortcut.
Kickstart Your Stock Market Investment Journey#2 Decide How Much to Invest
Each investor may have a different size of capital to start with. Some may be able to start small such as RM1,000. Meanwhile, others who have higher capital perhaps wish to start with more than RM10,000.
As a beginner, always start small. You need to get some experience before you go with higher capital. The most important thing is to only invest with your surplus cash.
Never invest with your emergency funds. Investors who invest with their emergency funds tend to trade emotionally, affecting their decision-making.
Different sizes of capital require different strategies.
If you have bigger capital, you might want to diversify your portfolio by purchasing stocks from different sectors or instruments. A piece of advice to new investors and traders. Don’t put all your eggs in one basket.
So let’s see an example. Assuming that you have RM30,000, to begin with. Our suggestion for you is you can split the RM30,000 into three different stocks, which means each stock is purchased with RM10,000.
The three types of stocks that you can consider are:
High dividend yield stocks that can give consistent dividends
Good momentum stocks for short to medium term
Large market cap stocks that are more stable for long term
Kickstart Your Stock Market Investment Journey#3 Open a Central Depository System (CDS) & Trading Account
After deciding which broker to open an account with, the next step is to open a CDS & trading account.
Any investors who wish to trade in securities listed on Bursa Malaysia must open a CDS & trading account. A CDS account acts like a wallet. Any stocks bought or sold will be credited into your CDS account & debited from your CDS account accordingly.
Simply put, when you buy stocks, shares are credited into your CDS account, and when you sell your stocks, they are debited from your CDS account.
Meanwhile, trading accounts enable you to buy and sell shares on the stock exchange. Normally, CDS and trading accounts will be opened together when you open with the brokers. The list of Participating Organisations can be found on the Bursa Malaysia website.
Do you have a trading account? If not, you are invited to open an account with one of the brokers available in Malaysia.
When it comes to investing, Malaysians have a wide range of options. With a growing economy and a rapidly developing financial sector, there are many ways to put your extra money to work.
Today, we will explore some of the most popular investment options to invest your extra cash for Malaysians, including real estate, bonds, mutual funds, and stock investing.
Invest Your Extra Cash#1: Real Estate
Real estate is one of the most popular investment options for Malaysians, particularly those looking for a long-term investment that can provide steady returns. Whether you’re looking to invest in a rental property, purchase a second home, or buy and hold a piece of land, real estate can be a great way to grow your wealth over time.
But to start on this journey, you might need to prepare a huge amount of money, and not everyone knows how to determine a good property for investment purposes. Some of them might have chosen the wrong property and suffer every month.
Bonds are another popular investment option for Malaysians. These fixed-income investments pay a set interest rate over a specified period, typically in return for a loan to a government or corporation. They are generally considered safer investments than stocks, as they offer a predictable rate of return and low risk.
However, bonds might be a bit boring for most investors, and it might take a very long time to enjoy the profit of it.
Mutual funds are professionally managed portfolios of stocks, bonds, or other assets. By pooling your money with that of other investors, mutual funds allow you to access a diverse range of investments and benefit from the expertise of professional fund managers.
However, investors need to pay those professionals for their services, even when the market is in bad condition and their investments are in a loss position.
Finally, stock investing is a popular option for those looking to grow their wealth over the long term. By buying shares in a company, you become a partial owner and are entitled to a portion of its profits. Stock investing can be a high-risk, high-reward investment, as the value of your shares can rise or fall depending on the company’s performance and the stock market.
For Malaysians, stock investing has become increasingly accessible in recent years, with the rise of online brokerages and the ability to buy and sell shares from your computer or mobile device. There are many different approaches to stock investing, including buying and holding individual stocks, investing in mutual funds or exchange-traded funds (ETFs) that track the stock market’s performance, or using more complex strategies such as options trading or short selling.
Managing your fund is difficult, so you need knowledge and experience before starting your stock investment journey.
Regardless of your choice, having a well-defined investment strategy and being comfortable with your risk level are important. It’s also a good idea to seek the advice of a financial advisor or professional who can help you determine the best investment options for your needs and risk tolerance.
In conclusion, when you want to invest your extra cash as a Malaysian, you have many options, including real estate, bonds, mutual funds, and stock investing. Each option has unique advantages and risks, and the best investment for you will depend on your individual goals, risk tolerance, and investment strategy.
Whether you’re looking for a long-term investment that provides steady returns or is willing to take on more risk in pursuit of higher returns, there is sure to be an investment option that fits your needs.
Environmental, social, and governance (ESG) are on the lips of everyone these days. So what is ESG investing, then?
‘Sustainable investment’ is an investment that contributes to environmental or social objectives. Firstly, sustainability is often defined as ensuring that development meets the needs of the present without compromising the capabilities of future generations.
Second, the investment shouldn’t hurt the goals of these activities, and the companies that get the money should use good governance practises. These investments are techniques for considering ESG factors in portfolio selection and management across seven sustainable or responsible investment strategies.
With that, ESG analysis has become an increasingly essential investment process. ESG investing is a good way for people to ensure their money choices match their values. One of the most popular investment vehicles is exchange-traded funds (ETFs), a pooled investment security.
ESG ETFs make sustainable investing easy for investors. Moreover, ETFs offer low expense ratios and fewer broker commissions than buying stocks individually. ESG ETFs combine two investment strategies.
Firstly, ESG investing, or responsible investment describes various ways to incorporate ESG factors into the investment process. For investors, it is about investing in progress which helps companies perform better and create more value.
Secondly, ETF investing, in which ETFs invest in a basket of stocks, bonds, or other assets. In many cases, ETFs offer a flexible and low-cost way to build a highly diversified investment portfolio. So, ESG ETFs make it easy to spread your money out over a wide range of investments while still owning companies with strong ESG traits.
What Is ESG Investing: The Various Types Of ESG Investing
Figure 1: Various types of ESG Investing
Sustainable investing is a growing trend that combines traditional investment strategies with ESG considerations. Demographic shifts, trends, government policies, and evolving views on risk drive demand.
Sustainable investing has grown by leaps and bounds in recent years, where a recent survey found that 75% of respondents have integrated ESG into their investment approach. In sustainable investing, budgets are mandated towards companies with business practices capable of being continued indefinitely without driving harm to current or future generations or exhausting natural resources.
The common problem is that companies may send their production to other countries or companies that don’t do much to ensure they are sustainable. A company might not look too deeply into its suppliers’ practises.
Best practises, on the other hand, would require companies to look at their resource chains and keep track of their production processes, from where the materials come from to how they are thrown away after use. Externalising costs also apply to forcing labour to subsidise activities, saving money with potentially health-damaging practices or insufficient wages.
What Is ESG Investing: Sustainable Finance Disclosure Regulation (SFDR)
Responsible investors want capital to be used responsibly while providing a reasonable return and benefiting others. The Sustainable Finance Disclosure Regulation (SFDR) is the central pillar of the Sustainable Finance Action Plan. SFDR marks a big step for ESG investing as the EU seeks to enforce and align sustainability requirements.
Although non-EU companies are not legally obligated to disclose sustainability-related data, this shift in the industry could also impact the United States markets and set the standard for the future. SFDR aims to ensure that EU investors have the disclosures to make investment choices that align with their sustainability goals.
Nonetheless, significant challenges require collective solutions that need a shared purpose and practical assessment of risks. Other than that, people need to change from a market society to a market economy, where the values can be reassessed within the transition process.’
What Is ESG Investing: Getting To Know The ESG Indices
Figure 2: Various ESG Indices
With impact investing, Morgan Stanley Capital International (MSCI) measured the alignment of 8,550 companies in the MSCI All Country World Index (ACWI) to the United Nations Sustainable Development Goals (UN SDGs). An investable framework is mapped to the UN SDGs with nine pillars:
Circular economy;
Sustainable energy;
Food & Agriculture;
Water & Sanitation;
Health & Social care;
Financial inclusion;
Sustainable real estate & Infrastructure;
Education & Employment, and;
Impact leader.
The three stages of impact are measured against intentionality, implementation, and impact. Firstly, intentionality is when companies must clearly define a strategy (qualitative) supported by a significant R&D budget (quantitative).
Second, implementation checks how well a company’s strategy and R&D work are working to meet a certain revenue threshold and growth goals for each pillar. Lastly, a company with an impact strategy tells the public about specific pillar indicators and shows yearly progress.
Nevertheless, companies whose products and services do not fit within the pillars are integral to the supply chains and enable other pillars to contribute positively to society. There are two common approaches to screening: negative and positive screenings.
What Is ESG Investing: Negative Screening And Positive Screening
Negative screening excludes companies producing ‘undesirable’ products such as alcohol, tobacco, gambling, adult entertainment, and weapons manufacturing. The main challenge is deciding whether a company should be excluded if only part of its operations is involved in an ‘undesirable’ activity.
To address this, the accepted exposure level to that activity may be used to determine the firm’s turnover or revenue: the lower the level, the stronger the exclusion.
In contrast, positive screening supports companies that provide positive solutions to challenges such as climate change and social justice. This excludes companies concerned with activities considered to be unacceptable. Green bonds were created to fund projects that have positive environmental benefits.
Green bonds are traditional debt instruments where the funds raised are used solely to finance or refinance, in part or in full, new or existing eligible ‘green’ projects with positive environmental or climate advantages. These include energy efficiency, pollution prevention, sustainable agriculture, clean transportation, and environmentally friendly technologies.
However, green bonds lack standardisation as to what comprises a green bond in the first place. The simultaneous concern is that it could become a convenient label for marketing objectives.
The Green Bond Principles (GBP) were made by the International Capital Market Association (ICMA) to deal with this problem. These rules suggest openness and transparency and encourage honesty in building the green bond market by laying out the essential parts of a credible green bond.
What Is ESG Investing?
So what is ESG investing? In summary, ESG investing or ‘sustainable investment’ is an investment that contributes to environmental or social objectives.
About the Author
Mukhriz Mangsor is currently the Head Global Market Strategist at Quantdynamic Research Company. His areas of expertise include financial education, financial institutions, and property trading with clients, including firms in Brunei, Canada, Malaysia, Singapore, and the United States.
Bursa Malaysia Berhad (“Bursa Malaysia” or the “Exchange”) recorded a Profit After Tax and Zakat (“PAT”) of RM226.6 million for the financial year ended 31 December 2022 (“FY2022”), a 36.2% reduction from the RM355.3 million reported in the previous financial year ended 31 December 2021 (“FY2021”). The decrease was due to lower overall trading revenue of RM377.1 million in FY2022, lower by 30.7% as compared to FY2021. Total operating expenses in FY2022 increased marginally by 1.4% to RM292.7 million from RM288.6 million in FY2021.
The Board of Directors approved and declared a final dividend of 11.5 sen per share amounting to approximately RM93.1 million. This brings the total dividend payout for FY2022 to 26.5 sen per share, which includes the interim dividend of 15 sen per share paid out in August 2022.
The Securities Market registered trading revenue of RM263.5 million in FY2022 compared to RM442.9 million in FY2021, a decrease of 40.5%, due to lower Average Daily Value (“ADV”) traded for Securities Market’s on-market trades and direct business transactions. Meanwhile, the Derivatives Market trading revenue rose by 11.3% to RM97.2 million in FY2022 from RM87.3 million in FY2021, in part due to higher collateral management fees earned, as well as higher number of FCPO and FKLI contracts traded. Bursa Suq Al-Sila’s (“BSAS”) trading revenue increased by 17.8% to RM16.4 million in FY2022 from RM14.0 million in FY2021.
“Bursa Malaysia enjoyed another year of resilient performance despite challenging global operating conditions resulting in the softening of trading in Securities Market. Trading value declined by 41.5% with ADV of RM2.1 billion in 2022 but this is still higher than pre-pandemic ADV of RM1.9 billion. The Derivatives Market, however, performed better with Average Daily Contracts (“ADC”) increasing by 4.6% from 75,178 contracts in FY2021 to 78,621 contracts in FY2022. Our Commodity Murabahah platform, BSAS similarly performed well with 22.3% higher ADV from RM37.3 billion to RM45.6 billion,” commented Tan Sri Abdul Wahid Omar, Chairman of Bursa Malaysia.
He added, “We also had a very active listing interest on the Exchange with 35 IPOs recorded in FY2022 that raised a total of RM3.5 billion, higher than the 30 IPOs recorded in FY2021. These numbers prove that both companies and investors have confidence in the Malaysian capital market, and look at Bursa Malaysia as a worthy platform for fundraising and investing.”
“In our Derivatives Market, we are offering more products and better access. To encourage more participation from global traders, the Exchange was recently recognised as a Third-Country Central Counterparty by the European Securities and Markets Authority. This recognition, together with the After-Hours (T+1) Night Trading Session (“After-Hours Trading”), will generate greater trading volume for the Exchange,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia.
Bursa Malaysia made significant progress on a number of pioneering market development initiatives in FY2022, which included the launch of the world’s first Shariah-compliant carbon exchange, the inaugural East Malaysia Palm & Lauric Oils Price Outlook Conference & Exhibition (“emPOC2022”) and the inception of the PLC Transformation Programme. The Exchange was recognised with several industry awards last year, including The Edge Billion Ringgit Club Awards 2022 for “Highest Return on Equity Over 3 Years in the Financial Services Sector (for RM10 billion market cap)”.
Commented Datuk Muhamad Umar Swift, “The Market Data business segment improved in FY2022, delivering 12.5% growth to RM60.8 million from RM54.0 million in FY2021. To achieve further growth in our non-trading revenue, we will continue improving the delivery of richer data to clients to empower the industry to undertake analytics or offer better products or services. The Exchange recently signed MOUs with the Companies Commission of Malaysia and the Department of Statistics Malaysia, to collaborate on mutual data sharing arrangements with the objective of unlocking new revenue opportunities, while supporting the national data and digitalisation agenda.”
“We are becoming a multi-asset Exchange and diversifying our revenue streams. With the launch of the Bursa Carbon Exchange in December 2022, we are now better able to facilitate the journey for Corporate Malaysia to become a global ESG investment destination. Among our priorities in 2023 is to help develop the carbon market ecosystem, and strengthen our engagement with listed companies to raise their understanding and improve their ESG practices and disclosures,” concluded Datuk Muhamad Umar Swift.
“We are invariably focused on enhancing the attractiveness of the Exchange to market participants, and our shareholders,” said Tan Sri Abdul Wahid Omar. “As espoused under the PLC Transformation Programme, we are stepping up by committing to five Headline KPIs for FY2023 − covering targets for Profit Before Tax, Non-Trading Revenue growth of 5% to 7%, 39 IPOs, innovative product launches including the Bursa Gold Dinar, and reduction in our organisation’s emissions1.”
The financial results for FY2022 is available on Bursa Malaysia’s website at www.bursamalaysia.com. Details of the FY2022 financial results and the FY2023 Headline KPIs can be found in the Condensed Consolidated Financial Statements report which was released today (as appended and also available on our website).
1 The headline KPIs are targets or aspirations set by the Company as a transparent performance management practice. These headline KPIs shall not be construed as either forecasts, projections or estimates of the Company or representations of any future performance, occurrence or matter as the headline KPIs are merely a set of targets/aspirations of future performance aligned to the Company’s strategy.
About Bursa Malaysia
Bursa Malaysia is an exchange holding company incorporated in 1976 and listed in 2005, and has grown to be one of the largest bourses in ASEAN today. Bursa Malaysia operates and regulates a fully-integrated exchange offering a comprehensive range of exchange-related facilities, and is committed to Creating Opportunities, Growing Value. Learn more at www.bursamalaysia.com.
