Financial planning for children's education

While children are a tremendous joy, they are a big responsibility. Financial planning can help manage the costs, from childhood through university.

For most young couples with little children, events such as university seem far into the future. It's easy to believe there is plenty of time to save for university - or even the cost of private schools. And with so many other expenses to cover, it's easy to delay getting started on planning and savings.

The reality is, time flies, and before you know it the expense is upon you. The sooner you start to invest, plan and save, the better your chances are of enjoying a pain-free (from a financial perspective) experience when your children enter university.

And, you may be pleasantly surprised at how little you need to put aside - if you start early.

Take for example one simple comparison: Opening an education investment instrument and contributing just RM514 per month starting when your child is two can reap returns as high as RM160,195 by the time he or she is 18 and ready to enter university. Placing that same amount into a savings account over the same period of time would yield just RM126,929.

And, depending on the particular tax codes in a country, many of these education investment tools can benefit from low or no tax treatment on the capital gains.

For most people, major life events such as marriage or having children prompt them to start thinking more seriously about planning for the future. These happy events represent a tremendous opportunity to begin taking positive steps to ensure you can maintain your lifestyle while also saving for the future.

In the most recent 2010 AXA Retirement Scope survey, when asked "what events in your life triggered or will trigger you to start saving for your retirement?," having children consistently ranked as number one or number two on the list.

Among respondents from China, 45 per cent named having children as a key factor in starting to plan, the same as India. Among Hong Kongers, 52 per cent cited it as the main trigger, while in Malaysia it was 55 per cent.

Things to consider can include how much will you need for your children's education - especially if considering sending them overseas for part of their education or even university.

These can be expensive propositions, but manageable with planning - and often well worth the additional investment in terms of your children's future opportunities.

For many people - especially those who married and had children later in life - the need to pay for university expenses may come close to the time parents are approaching retirement. Having worked work hard all their lives and planned for a comfortable retirement, will the high cost of higher education come as an unpleasant surprise?

Not if while you are planning and investing for retirement, you are also saving for your children's education - and taking into consideration the rising cost of education.

These days, you cannot estimate what your children's education will cost by recalling what you paid for yours. Especially with governments facing increasing fiscal challenges, some of the government subsidies or loans that were once available may not be in future.

Professional planners can help you create the right mix of investment options, and offer guidance on how much is enough - or will be enough once your children reach university age.

Read more: Financial planning for children's education http://www.btimes.com.my/Current_News/BTIMES/articles/saxa1/Article/#ixzz18QXQPTyz

Gamuda 1Q net profit up 19.6% to RM88.53m

KUAL A LUMPUR: GAMUDA BHD []’s net profit rose 19.6% to RM88.53 million for the first quarter ended Oct 31, 2010 from RM74.02 million a year ago, underpinned by higher contributions from the CONSTRUCTION [] and property divisions.

It said on Friday, Dec 17 revenue rose marginally by 1.6% to RM634.20 million from RM623.96 million a year ago. Earnings per share rose to 4.35 sen from 3.67 sen, while net asset per share was RM1.75.

Gamuda declared a first interim dividend of three sen per share less 25% income tax and three sen per share single-tier (exempt from tax).

On its prospects, Gamuda with the existing construction projects progressing on schedule and the strong performance of the property division, the group expected to perform better in the next few quarters of the current financial year.

“The group is also expected to benefit from the roll-out of projects earmarked in the government’s Economic Transformation Programme such as the Klang Valley MRT project,” it said.

It also said work on the Yenso Park and sewage treatment plant in Gamuda City, Vietnam remained on track.

Work on the sewage treatment plant was at an advanced stage and was expected to be substantially completed in the current financial year.

On the property division, it said the group’s property developments in Malaysia achieved stronger sales on the back of a buoyant economy, improved consumer sentiments as well as an attractive mortgage environment.

“Unbilled sales reached RM760 million as a result of good sales performance. The property division’s financial performance is expected to be better in the next few quarters of the current financial year,” it said.

Gamuda said strong buying activity was evident, particularly in matured locations and well-regarded developments such as Bandar Botanic, which attracted significant demand for its semi-detached houses and bungalow homes, Horizon Hills and Jade Homes.

It added that its flagship development, Gamuda City in Hanoi, was gearing up for its maiden launch with several thousands of interested purchasers having registered their interest in this development.

The group’s second development, Celadon City in Ho Chi Minh City, was also ready for its maiden launch in the first half of 2011. These two developments in Vietnam are expected to be the key drivers of revenue and earnings growth for the overall property division.

Source: The Edge Malaysia. Friday, 17 December 2010 19:31

Bursa Malaysia: LCL to be suspended from Dec 23

KUALA LUMPUR: LCL Corp Bhd, which was badly impacted by the Dubai financial crisis, faces suspension with effect from Dec 23 after it failed to come up with a regularisation plan.

LCL said it had on Wednesday, Dec 15, received a letter from Bursa Malaysia Securities Bhd about the suspension and the delisting of its securities.

It said the securities would be de-listed on Dec 27, unless an appeal is submitted to Bursa Securities on or before Dec 22, which is the appeal timeframe.

'Any appeal submitted after the appeal timeframe will not be considered by Bursa Securities,' it said.

Source: The Edge | Publish date: Wed, 15 Dec

BURSA: Stocks to watch:* Top Glove, Xingquan, MMC, Tenaga

KUALA LUMPUR: Blue chips are expected to see rangebound trade on Thursday, Dec 16 with limited upside following the U.S. stocks suffered a third straight late-day sell-off on Wednesday.

On Wall Street, the Dow Jones industrial average slipped 19.07 points, or 0.17 percent, to 11,457.47. The Standard & Poor's 500 Index shed 6.36 points, or 0.51 percent, to 1,235.23. The Nasdaq Composite Index dropped 10.50 points, or 0.40 percent, to close at 2,617.22.

Earlier, the Dow hit a fresh 52-week high intraday at 11,519.04.

Stocks to watch are Top Glove Corp Bhd, Xingquan International Sports Holdings Ltd, MMC Corp'' Bhd, Tenaga Nasional'' Bhd and LCL Corp Bhd.

The Edge FinancialDaily reports analysts saying the 44.7% decline in the earnings of Malaysia's largest glove producer, Top Glove Corp Bhd, is not a sign of things to come for the other glove manufacturers.

Top Glove's earnings fell 44% to RM36.05 million for the first quarter ended Nov 30 from RM65.21 million a year ago as it was impacted by the high latex prices and a weak US dollar.

The Edge FinancialDaily also reported funds managers, notably foreign ones based in Europe and the US, have been buying into China-based shoe and shoe sole maker Xingquan, according to its corporate finance chief Ooi Guan Hoe.

TENAGA NASIONAL BHD [] plans to maintain its capital expenditure (capex) at between RM4.2 billion and RM4.5 billion for financial years ending Aug 31, 2011 and 2012.

However, capex was expected to rise by between RM1 billion and RM2 billion in 2013 with the additional three power plants.

In MMC Corp, Ahmad Jauhari Yahya has resigned as director of the company effective Wednesday. He was the prime mover in running Malakoff Corporation Bhd, a unit of the company.

His resignation from MMC followed his resignation as MD and CEO of Malakoff.

LCL Corp Bhd, which was badly impacted by the Dubai financial crisis, faces suspension with effect from Dec 23 after it failed to come up with a regularisation plan.

It said the securities would be de-listed on Dec 27, unless an appeal is submitted to Bursa Securities on or before Dec 22, which is the appeal timeframe.

Source: The Edge | Publish date: Thu, 16 Dec

MTD Capital surges to record high of RM8.50

Shares of MTD CAPITAL BHD [] rose to a fresh all-time high of RM8.50 on Thursday, Dec 16 as it stands to gain RM150m annually from a proposed Philippine toll hike in South Luzon Expressway.

At 3.52pm, it was up 50 sen to RM8.50 with 205,400 shares done. The year low was RM2.75 on Jan 21.

However, the FBM KLCI was down 10 points to 1,499.10. Turnover was 966.70 million shares valued at RM1.19 billion. Losers beat gainers 487 to 218 while 258 stocks were unchanged.

The Edge FinancialDaily reported on Dec 1 that MTD Capital, Malaysia's second largest highway operator and owner, could rake in at least some RM150 million in annual toll revenue from the South Luzon Expressway (SLEX) in the Philippines next year if higher toll rates there are implemented in January 2011.

The Philippines' business paper BusinessWorld, quoting Julius G Corpuz, an official with the Philippines Toll Regulatory Board (TRB), reported that the implementation of higher toll rates could happen in the first week of January next year.

Adapted: The Edge

TA - Exciting prospects for TA Enterprise

TA - Exciting prospects for TA Enterprise

Stock Name: TA
Company Name: TA ENTERPRISE BHD
Research House: HWANGDBS

TA Enterprise Bhd
(Dec 15, 77 sen)

Maintain buy at 76 sen with revised target price of RM1.25 (from RM1.30): The Greater KL Plan under the Economic Transformation Programme (ETP) aspires to transform the city into a vibrant economic hub and place it in the Top 20 most livable cities in the world. And TA Enterprise (TAE), which owns seven acres of prime land in KL, is one of the key beneficiaries given the scarcity and rapid rise in prime land prices. TAE's plan to launch projects with potential RM2.6 billion gross development value (GDV) in the KL prime area is intact.

Average daily trading value and volume soared to RM1.5 billion (+36% quarter-on-quarter) and 1 billion (+40%), respectively, in 3Q10, and almost doubled TAE's broking income in 3QFY11. Income from hotel operations grew 84% driven by strong occupancy rates at Swissotel. However, 9MFY11 net profit of RM49 million fell short of our estimate as we were too bullish on its hotel and property divisions. Hence, we cut FY11/13F earnings per share by 26% to 42%. Our forecast for the broking division is intact, and we believe trading momentum is sustainable given the slew of structural changes taking place at Bursa Malaysia that are aimed at improving trading interest and liquidity. Bursa's year-to-date-November 2010 average daily trading value of RM1.4 billion was ahead of our CY10F assumptions of RM1.2 billion.

We reiterate our 'buy' recommendation with our sum-of-parts-based target price reduced to RM1.25. Our TP is based on a SOP value, that is earnings before interest and tax for broking based on FY12F and overall launch pipeline still intact in spite of some deferment. Consolidation in the broking industry could stir interest in TAE. It has a strong retail franchise with 7% market share of trading volume. Its current valuation is attractive at 0.8 times book value. The market is assigning zero value to its cash-generating broking business, plus a 24% discount for TA Global given its implied market cap of RM1.7 billion against TAE's RM1.3 billion. ' HwangDBS Vickers Research Sdn Bhd


Adapted: The Edge Financial Daily, December 16, 2010.

Top Glove earnings not a trend

KUALA LUMPUR: Analysts say the 44.7% decline in the earnings of Malaysia’s largest glove producer, Top Glove Corp Bhd, is not a sign of things to come for the other glove manufacturers.

According to analysts and industry players, the existing headwinds may indicate tougher times for Malaysian glove manufacturers, but not all earnings profiles are the same.The financial performance of manufacturers will hinge on their respective product mix and raw material cost structures, the analyts say. They add that based on historical numbers, Top Glove was the most affected among the six listed glove manufacturers in Malaysia due to its portfolio of mainly natural rubber or latex gloves.

“The others are less affected due to their different product mix comprising latex and nitrile gloves,” JF Apex Securities analyst Ng Keat Yung told The Edge Financial Daily yesterday.Other listed glove manufacturers in the country include Supermax Corp Bhd, Kossan Rubber Industries Bhd, Hartalega Holdings Bhd, Latexx Partners Bhd and Adventa Bhd.

Although volatility in commodity prices and the weakening US dollar will continue to impact the industry, we are optimistic that Top Glove will sustain its profitability. — Tan Sri Lim Wee ChaiAlthough Top Glove’s first quarter net profit and revenue which were released yesterday came in below analysts’ estimates, Ng said the results were not necessarily an indication of how other players will fare in the current environment of costlier latex and a weakening US dollar.“Glove players will have less bargaining power [to dictate prices] as there is no shortage of supply,” said Ng who is “underweight” on Top Glove but has a “neutral” call on others.

Demand for gloves will, however, still be there but not the “extra demand” seen during recent outbreaks of disease, Ng added.Top Glove is most exposed to the rising price of latex as some 90% of its revenue is from gloves made from latex. The other producers tend to have a larger proportion of nitrile gloves, which use synthetic rubber as their core raw material.A report by MIDF Amanah Investment Bank shows that nitrile gloves make up about 7% of Top Glove’s revenue. In contrast, nitrile glove sales make up 83% and 38% of the revenue of Hartalega and Kossan, respectively.

In a statement to Bursa Malaysia yesterday, Top Glove said its first quarter net profit fell in annual and quarterly terms as the world’s largest rubber glove producer incurred higher operating expenses. This comes against the backdrop of costlier natural rubber and a weakening US dollar which have squeezed its top and bottom lines.Its net profit declined 44.7% to RM36.05 million, or 5.83 sen a share in the quarter ended Nov 30, from RM65.21 million or 10.76 sen a share a year earlier. Operating expenses rose 16.3% while revenue was up 4.1% to RM491.5 million from RM472.3 million.

In quarterly terms, first quarter net profit fell 20% from RM45.06 million in the preceding fourth quarter while revenue was down 9.2% from RM541.39 million.“The first quarter just ended proved to be a challenging one for Top Glove. Although volatility in commodity prices, in particular latex prices, and the weakening US dollar will continue to impact the industry, we are optimistic that Top Glove will sustain its profitability,” Top Glove chairman Tan Sri Lim Wee Chai said in a statement accompanying the company’s latest numbers.The firm has a cash pile of RM346.95 milllion versus debt obligations of RM3.97 million, hence, a net cash position of RM342.98 million or 55 sen a share.

The company has an issued base of 618.3 million shares.Looking ahead, the company foresees normalisation of glove demand in the short term, but expects business to pick up in the long term. This will be helped by demand from emerging markets and the global healthcare industry.Apart from demand normalisation the manufacturer, capable of producing some 34 billion gloves annually, said the industry also had to contend with excess capacity. Another crucial concern is that buyers are opting to delay purchases and keep inventory at a minimum as they wait for glove prices to decline.“Nevertheless, this adverse situation will possibly lead to further consolidation among the industry players and Top Glove is in a good position to further enlarge its business when the opportunities arise,” the company said.

Top Glove plans to dedicate more production lines to manufacture synthetic rubber or nitrile gloves, which fetch higher margins and are not subject to the volatility in natural rubber prices. Synthetic rubber is made from butadiene, a by-product of crude oil.Top Glove’s first quarter revenue and net profit came in below JF Apex’s annualised numbers of RM2.35 billion and RM200 million, respectively, for the current financial year ending Aug 31, 2011.

Adapted: The Edge Financial Daily