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Sales Performance of Automotive Brand in Malaysia
Comparison of the year 2018 and the year 2019 for car sales of different brand in Malaysia for the first 8 months. The two national brands, Proton and Perodua has bucked the downtrend of the automotive industry and recorded a higher sales number. Good product mix and price have helped them to stay afloat.
Inverted Yield Curve
Interest rate affects us in every aspect of our life. We look at the interest rate when we are applying for a home loan or placing our fixed deposit. The interest rate of Malaysia is largely determined by the interest rate of our government bond, Malaysia Government Securities (MGS). The spread of the MGS is a very strong tool to forecast the economy and it has never failed to predict a recession. When the short term interest rate is higher than a long term interest rate, a recession is imminent.
Merger and acquisition that creates value
Companies may acquire someone to eliminate the industry competition or to complement with its current products and services. However, some companies acquire another company just to grow bigger and this is also known as empire building. Here is a checklist that helps you to identify whether a merger & acquisition is creating value for the company or it is destroying value.
The major shareholders of a public listed company may privatize the company for several reasons. However, privatization most often occurs when a company is substantially undervalued due to the mispricing of the market.
The 3 major tobacco companies in Malaysia, British America Tobacco, Japan Tobacco International and Philip Morris are facing a decline in sales. Increasing government tax, declining adult consumption of traditional tobacco products and the flood of the illicit market for cigarettes have damaged the industry's growth potential.
From the Bank Negara Malaysia (BNM) statistics, we can see that the non-performing loan (NPL) of residential property has remained resilient and kept under control but the NPL for non-residential property has been increasing at a steady pace since the year 2014. This figures may also be the reason why banks are more cautious on disbursing the loan to the non-residential property segment.
The refined sugar industry in Malaysia is dominated by 2 players, Central Sugar Refineries and MSM Malaysia Bhd. With an annual capacity of approximately 3 million tonnes, the supply has outstripped the local demand, causing a margin compression for these two companies. In July 2019, the government has removed the restriction of sugar import, causing more woes for these two players.
This is the loan approval rate obtained from Bank Negara Malaysia (BNM) monthly publication. The loan approval rate is calculated by using loan disbursed divided by loan applied. The trend in the loan approval rate provides an important indicator to understand the banks' intention in which industry in the economy should receive more liquidity than others.
The four factors of production are labour, capital, land and entrepreneurship. If you are wondering why your salary is low, a high possibility is you are living in an unproductive society. Also, a weakening currency erodes your purchasing power, making you being in an unfair situation among the mix of Factors of Production.
Industrial Production Index (IPI) is an indicator published by the Department of Statistics Malaysia (DOSM) monthly. It is an indicator used to measure the production level of different industries in Malaysia. It served as a leading indicator to gauge the economy as a rising IPI indicate that the producers are more confident in their future sales and started to produce more.
Non-Performing Loan (NPL) is the utmost important indicator of a bank. A ballooning NPL tells a lot on the bank. Not only the asset quality of the bank is deteriorating, but it is also a sign showing that the bank had been reckless in disbursing the loan to its borrower. NPL usually rise quickly when the unemployment rate of the country has been increasing quickly.
Cost to income ratio (CIR) is an important metric for a bank as it represents the cost for every single dollar earned. The major cost for a bank is its interest expense and labour cost. With the low-interest-rate environment, labour cost has become the major focus of the bank's management. Replacing bank tellers with machines and encouraging online transactions had helped banks to keep their cost low.
The more efficient a company is, the higher the valuation it deserves. In the banking industry, Return on Equity (ROE) is used to determine the efficiency while price to book ratio (P/B Ratio) is used to determine its valuation. There is a positive correlation between the banks' ROE and R/B Ratio.
A township provides affordable landed property to home buyers who seek to have a piece of land in front of their home, providing spaces for children and also privacy. However, townships are usually located several kilometres outside of the city centre due to the availability and cost of land. Not every township development will succeed like Bandar Utama or Desa Park City. Here is a checklist for investors or buyers to ponder whether the township will succeed or not.
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