Journaler0203: Feb 1, 2012

February 01, 2012

London Pacific Insurance Capital-Impressive Growth

Rising like the Phoenix

Yes, though the counter did not garner any premium when it went ex-dividend, it is still a good stock worthy of a part of your portfolio.

After ex dividend, it should be at RM13.50 but some weak sellers forced it to slide to RM13.32. Today it is sitting at RM13.40 for a 10 sen loss.

I was just looking at the Annual Report 2011 which I just received. Apparently, LPI derived most of its revenue from fire insurance policies (40.6%) followed by motor(24.1%), marine, aviation and transit(2.85%); and miscellaneous (32.5%). The premiums received for the year 2011 were RM304,337,000 for fire, RM263,470,000 for motor, Rm38,461.000 for Marine,Aviation and transit and RM 301644,000 for Miscellaneous.

In terms of performance, net profits attributing to owners of the company amounted to RM154,494,000, a 12% increase over 2010. Earnings per ordinary share rose from 63.8 sen to 70.1%.

As for dividend, LPI paid out a dividend of 75 sen per share.

Under the section called 'Superior Returns to Shareholders', LPI is proud of its returns. I qoute some of their 'pride' as follows.

"Over the medium-term period of 5 years,an LPI shareholder purchasing 1000 shares at the price of RM9.35 at the beginning of 2007 would have received gross dividends of RM5,463 and would have 1,600 shares be the end of 2011.At the price of RM13.52 per LPI shares, a shareholder would have RM21,632 along with his gross dividends of RM5,463 making his returns to be RM27,095 or 27.4% for the 5 year period.

Going further back if a shareholder bought and held 1,000 shares of LPI when it was listed and have subscribed to all its rights issue without selling nay, at the end of 2011, that shareholder will have 8,640 shares worth RM116,813. At the same time the shareholder would have received total gross dividend of RM46,230.

As sch with a capital outlay of RM10,730 and subscribing to all rights issues,that shareholder would have secured a remarkable average rate of return of 26.6% annually for 18 years or 1,420% for that said period."

So, do you still think is worth buying LPI today at RM13.40?

This you will know from hindsight many years down the road.

So let us time capsuled it today.

Risk Takers and the Risk Averse

If you do have some spare financial resources, what would you do?

Daredevils or Cowards?

Any financial consultant will tell you that you must not put your eggs in one basket. The risk averse will follow, blinkered eyed, to fixed deposits no matter how low the interest regime.

Granted, then what other baskets must one consider? The usual happens to be in properties and land purchases, stocks, bonds, unit trusts and for the braver ones- futures, commodities such as gold and silver and the money market. Then, there is always that other alternative-buying insurance policies.

So, what do you have right now? All of the above,some of the above or none of the above which is unlikely.

In Malaysia, for those who do not trusts stocks, bonds of any nature are acceptable. We used to have the Malaysia bonds for senior citizens but so far there has been none in the past year or so. Then there is the sukuk bonds which is good. There hasn't been any lately, too.

Many were carried away by buying unit trusts. Except for those unit trusts run by the Amanah Saham Malaysia which offers good returns but not many can buy as most are under the bumiputra affirmative programme. Some unit trusts have shown to be good at one time or another. There were good ones but not many. Ask any Joe or Jane and they will tell you that there are more misses than hits!

What next? Go into Bursa KL but in cautious mode. What can be considered conservative stocks? Definitely not derivatives. You will lose trousers and all here if you are not in the money!

The best bet are real estate investment trusts (reits). Question is, most are too expensive except for Stareit and Pavreit. You may also want to look at Al Aqar reits as it owns most of the KPJ premises and Johor Corp will be selling more of their properties to the trust as they are currently cash-strapped. The issue is are you entering at the right price. Some do distribute good dividends. You must study the dividend track and the price if you want to dabble in reits as returns are often slow. Most market players consider reits highly uninteresting.

Assuming if you want to get into stocks, you may want those that pay good dividends. Look no further than Mesiniaga and Maxis at their current prices.

For the brave ones, just keep your money aside and buy blue chips when they fell like tenpins on bad market days. There were a couple or two the last year and many got good bargains. Good stocks to follow are Genting Berhad, Sime Darby and Maybank.

Properties are great investment. However, as always you must buy property in the right location or you will be stuck with this non-liquid asset for a very long time as they are really hard to dispose off. True, there are many who buy land but they do not tell you the sad stories; only the good ones.

I would not go into the money market but those who bought Aussie dollars did make it good.

Commodities can be dangerous though those who bought gold are so far still smiling all the way to the bank.

Then, there are the insurance policies to contend with. While providing coverage, they are also instruments of finance. There are many types of insurance policies on offer these days for investment purposes. The most obvious on is the endowment policies with its regular returns. Such policies though tend to be expensive. The others are life policies hooked to unit trusts, bonds, indices and derivatives. Some are good.

Well, do look at the resources you have under your pillow and do not be all risk averse like the person who was entrusted to 'grow' the talents but hid it in his garden as we know from the parables. No pain, no gain!

No risk-taking-no money! No money, no talk!

Digi:Speeding Through

Rallying F1 style?

Was it a nearly self-fulfilled prophecy?

The analyst's conjecture underpinned by some technical mumbo-jumbo may have been catalytic. So, if they are oraclers, will Digi go to the next Rubicon crossing at RM4.40? And soon?

So from the word 'go', like in an F1 rally, Digi speed off, though on small volume, to touch RM4.18 before reality sets in. It then floated at RM4.06 while those who sold at RM4.10 and above gloated to the bank.

So, when I expected it to hit RM4.00 before the Chinese New Year, it went into slumber mode.

Before the market closed, big flurries came and push Digi up to finish at RM4.10.

Grabbing the Action at RM4.10

So it is now 30 sen from the next Rubicon of RM4.40.

Good one, Digi.

Colmar Tropicale-My Next Holiday Destination

What I have heard it is now quite rundown and not as pristine as what the webpage tells you. My eldest sister tells me that there are two roads going up to this holiday destination but sadly the shorter one has been shut as it is now a soil erosion and landslide threat to motorists. So add more time, as much as 45 minutes by using the longer route.

As for me- it is action station before it the holiday resort gets worse.

I intend to go there possibly in February of March.

Now what can I expect?

From the way it has been advertised Colmar is resplendent in century old Alsace charm. The medieval French village and picturesque surroundings lures one back to a past era steeped in culture and romance. Colmar Tropicale, at an altitude of 2,700 feet above sea-level sits with enchanting grace and hospitality amidst 80 acres of rainforests.

Let us look at some of the photos of the touristy destination.

Wonderland

Medieval Adventure

Quaint

Medieval?

Tea for Two

Dining Splendour

For accomodation, there are 260 units of rooms as well more luxurious suites. One is encouraged to feel the cobbled- stone avenues and bask in the enchantment of Colmar Square. The beauty rainforest in the distance from the high altitude of Bukit Tinggi will be surrealistic and entice the nature lover in you.

One can dine in the Japanese restaurant and savour the wonderment of Japanaese cuisine. Expensive I have been told by a 'little bird'.

Japanese Restaurant

Japanese Hospitality

You can also avail yourself to a cool bath in one of the ponds or go horse-riding if you should fancy it.

Cool Dips

I think Colmar could be that home-away from home though you may have to cough out some money for that indulgence.

Well, there is this shuttle bus I am told that we can take from Berjaya Times Square at 9.30 a.m. and 2.30 p.m.to get to Colmar.

Riding School

Coming home from Colmar-the shuttle will start going down the hill at 12.30 pm and 4.30 p.m.

Fares are RM25.00 one way and RM40.00 for a return ticket.

Enquiry and reservation: 03 3343 2884

Gotta do my booking very soon. Ahem...

The Ex MOH Chinese New Year Get Together 2012

This is possibly the third time in so many long years since 1986 that the ex-buddies from the Ministry of Housing met. We had one way back when I had my 50th birthday in 2002 at the Woo Yok Hin Restaurant in Damansara Uptown.

Then, perhaps in the late 90s we had one again-this time at the Summer Palace at Damansara Utama, sponsored by See.

Subsequently about three or four years back we had one at the Royal Golf Club Subang (KGNS) sponsored by Chew Sang Peng.

Today, the 1st of February 2012, in the year of the Water Dragon, we met again to strengthen our bond and camaraderie. See played host once more. At the lunch were Francis, Loi, Peng Seng,Cheng, Mrs Chen, Joyce, Cheng Hong, Leana Goh, Kooi Meng, See and Hedy and yours truly.

We had a great time and hope to meet again soon.

This time around, we missed the late Eng Chor who passed on in December 2009. We also spoke of those no longer with us such as the late Teng Fooi and Soo Peng.

Similarly, we prayed for wealth,health and longevity for all of the fellowship at lunch as well as those who could not make it such as Chee Mee Chan.

The memories of this day are captured in the following adorable photos.