Exchange Rate and National Competitiveness Nonsense

The only way a country can sustain higher exchange rate compare to others is through harnessing the national competitiveness in industry sector that is non-replaceable by other countries, like what US and Singapore did. This mean, has a well functioning financial market that will invested in technology start-up , has a policy that promote entrepreneur and start-up, has a pool of talents, and most importantly, an environment with good universities,  company who provide internship opportunities that keep on attracting the talents. 

You can see why so many countries stuck at the so called middle-income trap, where one of the examples will be Malaysia. This happened when our country is relying on cheap exchange rate instead of technology advantage to compete in global market. Hence, we dare not raising our exchange rate, making import (like car and electronic goods) cheaper to raise the overall living quality of our citizens. 

We might still have competitive edge in, 

i. perhaps one of the most stable political environment in the trade road between east and west, 

ii. abundance of young cheap graduates with english speaking ability

iii. "First Person" advantage in some of the chips industry. 

However, if we continue seeing our best graduates go after the doctorate profession or busy helping the O&G companies digging the black gold out from underground, you would wonder what will happened to Malaysia when the oil rush finished, whether we will fall into the resource curse.

Just nonsense. 

My Investment Record (9) - 1st June 2014

I decided to change the evaluation frequency of my portfolio to monthly evaluation to match GIPS requirement. Seeking compliance to GIPS means i will need to credit the share dividend during the ex-dividend date as well to my portfolio.
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Market Overview
For the past two months, KLCI gained about 22.5 points. The index broke its historical high of 1887.07 at 19th May 2014, but slowly retreated back to its current level.

Current Return and performance

The holding period return for KLCI in the past period (1st April 2014 - 31st May 2014) is 1.75% (with dividend included). Holding Period return for my portfolio, is 4.64%. Total holding period return for my portfolio since the inception is 16.16%, annualized to be 8.94%, this had more than doubled the Fixed Deposit rate of 3.2-3.8%, but still below KLCI return of 20.86% (annualized, 11.43%). 

Trading Activities

i. Disposal of all TROP (5401). The main reason is that it seems Tropicana Corporation lost its earning growth momentum shown in its lackluster 1st Quarter earning. This coupled with the fact that the current board of directors are paying themselves a huge remuneration package and asking for approval of ESOS again, make me worry that the company had simply became a tool for its major shareholder to accumulate wealth. Thus it would be best if i disposed it while i still earn a profit. 

ii. Disposal of Harrison (5008). The company had been in disputed with Custom over excise taxes which settled recently. However, the settlement will results in one off loss of RM 40 million plus for current financial years. Hence i figure it would be better to sell when the price is high at RM3.40 and bought it back when investors react to the loss later. 

iii. Addition of MNRB (6459). The company posted a strong 4Q result which add up to EPS of about 70 sen for last financial year. With an anticipated minimum 45% dividend payout, and current price about RM4, this translated to dividend yield of close to 8%. Making it a good investment.