Recently, one of my friend published a very interesting 3-books-series called “259 Trillion vs 5 Trillion”. I invited him to post an article “What will Happen if Gold is Used as Money?” last December.
The books aim to describe the workings of our economy, banking system and paper money. It contains a lot of illustrations, charts and detail explanations. He is not an economist by education (in fact, he is an engineer!). As such, he tried to explain the details in a very easy manner so that it can be easily understood by anyone.
By knowing him for a few years, I can say that he has depth knowledge in the subject he presented in his book series. The titles of the book series are,
- The Conundrum of Assets And Money (published in November 2011)
- Paper Money and the Banking System in Action (published in December 2011)
- (Will be published in February 2012)
Below are the books summary
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OSK maintained NEUTRAL on the construction sector despite expectations of stronger contracts in 2012. The elevated portion of the MRT SBK line would already make up for all domestic jobs awarded
last year.
Given that the construction sector has a relatively high beta, OSK advised to remain cautious for now. In the last three major market down cycles in 1997-98, 2000-01 and 2008-09, the KLCON Index underperformed the KLCI by 11-15%. OSK’s top large cap pick is Gamuda (BUY, FV: RM3.94) while for the small caps is KimLun (BUY, FV: RM2.15).
Below are the target price, market capitalization and rating for selected stocks in construction sector.
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5th January, 2012
in Gold
For the past decade, the gold price increases tremendously from merely USD270 (RM1,026) per ounce (oz) in early 2002 to USD1,560 (RM4,956) per ounce (oz) at the end of 2011. That was 480% increase in US Dollar or 383% in Malaysian Ringgit. However, the current all-time high was recorded at USD1,913 (RM5,685) per ounce (oz) on 23rd August 2011.
The most important factor on why gold price accelerates so fast is due to gold is perceived as a safe haven during uncertainties or economic crises, and it is also used as a hedge against inflation and fluctuations in the US dollars. Another important reason is due to limited supply of gold.
I made a compilation table to show the annual gold price changes for the past decades in both US Dollar and Malaysian Ringgit as below.
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OSK has a Neutral outlook on the Malaysian market going into 2012 as the combination of uncertain growth outlook in the US and Asia coupled with a possible recession in Europe cloud the prospects for strong earnings growth locally.
OSK advises investors to stay cautious into mid 2012 and focus on Defensive sectors such as Consumer, Telco, Healthcare and Media with KLCI fair value of 1466 pts.
Investors are advised to Trade on Cyclical sectors such as Banks, Oil & Gas and Construction as the market dips or rallies strongly. The trading strategy to adopt is, buy when the KLCI falls towards the 1300 pts and sells when the KLCI rises towards the 1500 pts.
The tables below are OSK’s top Big/Mid/Small Caps Stocks with the target price & rating for 2012.
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As highlighted during 2012 budgets, employers’ statutory contribution rate for Employees Provident Fund (EPF) will be increased from 12% to 13%. However, the increase is only applicable to the workers who earning less than RM5,000 a month. The employees’ contribution rate remains at 11%.
For employees of 55 years old and above (up to 75 years old), the new employer’s share contribution rate is 6.5% from 6.0% previously. The employees continue to contribute at 5.5 per cent.
Kindly refer to “Employees & Employers EPF Contribution Rate since 1952” for historical employees & employers rate.
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