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1.0 Introduction 1.1 Background REM Investment is one of the reputable financial house in Kuala Lumpur.

It was founded in 1999. The firm gives financial services to its clients comprises of individual and institutional. REM aims to recommend for the best and most profitable investments to its clients by having experienced consultants and focusing on key pillars like strong management, operational excellence, optimal capital structures and sound, long-term growth strategy. REM is earning the profit from the investment made by clients on the stock market.

Mr. Kareem Syukuri, an expatriate has consulted REM on financial and investment advice. He was interested to invest RM20,000.00 in the Malaysian Stock Exchange but lacks the necessary knowledge on the performing stocks. He is a first time investor and his personal goal in this investment is for capital in his new business. The firm chose two of the best performing companies in the Malaysian Stock Exchange based on previous analysis and future activities.

1.2 Purpose of the report The report aims to provide Mr Karim with the progress and potential of the shares and recommendation on what action should be taken.

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1.3 Scope and limitations This report will focus on progress of the shares of the two companies over a period of 9 weeks starting from 3rd May 2010 to 2nd July, 2010.

1.4 Authorization Mr. Karim Syukuri authorized the company to invest and submit a report on the progress of the shares chose.

1.5 Cost of Investment In order to calculate the profit or loss or brokerage fee of the investment made in Malaysia, the calculation is as follows:

Calculation of Value of Shares Value of Shares is the price over the number of shares bought. =price x number of shares

Brokerage Fee Brokerage is payable by both buyer and seller. Effective 2 January 2008, Malaysian brokerage fee rate is at 0.70% of the value of total shares traded, account type and trading type. The rate is one of the lowest in the region. =0.7% x value of shares

Clearing Fee This fee is charged by Bursa Malaysia as the clearing house. The fee is 0.03% from value of shares but subjected to maximum of RM1,000.00.

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Stamp Duty Stamp duty is charged by Government and will be collected by broker on their behalf. Investors must pay RM1.00 for every RM1,000.00 of value of shares to a maximum of RM200.00.
(source: 1.http://bursa-malaysia.blogspot.com/2009/09/klse-brokerage-trading-cost-and-break.html 2. http://www.bursamalaysia.com/website/bm/trading/equities/transaction_costs.html 3. http://1-million-dollar-blog.com/how-to-calculate-profit-loss-and-brokerage-fees-in-stockmarket-trading/)

2.0 Reports of companies invested 2.1 Company A 2.1.1 Company name and description Chemical Company of Malaysia (CCM) has been a public listed company since 1966. CCM operates its businesses through four subsidiaries namely CCM Chemicals, CCM Fertilizers, CCM Pharmaceuticals and CCM Duopharma Biotech. CCM is among Malaysias largest chemicals, fertilizers and healthcare companies. It manufactures, supplies, and markets the products locally and overseas. CCM has 3 manufacturing sites located in industrial areas of Pasir Gudang, Shah Alam and Bangi for producing various chemical products. It has established business presence in Malaysia, Singapore and Indonesia with 30% of the sales revenue is derived from outside Malaysia. CCM substantial shareholders are established Malaysian institutions such as Amanahraya Trustees

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Berhad, Permodalan Nasional Berhad, and Employees Provident Fund Board.


(source: http://www.ccm.com.my)

2.1.2 Amount invested A total of RM11,100.00 was invested 3rd May 2010. The balance was invested in the company B. The price of CCM per share is at RM2.22. The total number of shares bought was 5,000. Table 1 Company Name CCM Type of Share Industrial Number Bought 5,000 Price Per Share RM2.22 Total Value RM11,100

2.1.3 Brokerage Rate The brokerage charged is calculated as below: Brokerage Rate=0.70% x Contract Value =0.70% x RM11,100 =RM77.70
Table 2

Company Name CCM

Type of Share Industrial

Number Bought 5,000

Price Per Share RM2.22

Total Value RM11,100

Brokerage +0.70% RM77.70

Total RM11,177.70

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2.1.4 Trend Over Table 3 below shows the movement of the price of share and volume over the 9 weeks. It clearly shows that the share has dipped below the purchased price for 6 weeks. The high and low price is as Table 4. Table 3 Date CCM price per share (RM) 2.22 2.17 2.25 2.17 2.17 2.18 2.26 2.15 2.15 Table 4 High & Low Period High Low Date 14/6/2010 21/6/2010 28/6/2010 Price 2.26 2.15 2.15 Volume 19,000 12,400 33,200 Volume

3/5/2010 10/5/2010 17/5/2010 24/5/2010 31/5/2010 8/6/2010 14/6/2010 21/6/2010 28/6/2010

275,500 23,000 7,000 8,000 6,000 1,000 19,000 12,400 33,200

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The movement is also shown as per graph below. Figure 1

2.1.5 Current worth What is the value of investment? It can be explained using hypothetical calculation as below, if we sell it at week 9: Net Profit / (Loss) =Sell settlement Buy settlement
Total Buy Settlement=Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty Total Sell Settlement=Value of Shares - Brokerage Fees - Clearing Fees - Stamp Duty

Total Buy Settlement= RM11, 100+RM77.70+RM3.33+RM11.11=RM11, 192.14 Total Sell Settlement=RM10, 750-RM75.25-RM3.225-RM10.08=RM10, 661.445 Net Loss=RM10, 661.445 RM11,192.14 =RM530.695
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.:. As shown from calculation above, if we sell the shares at week 9 at RM2.15, the investor will incur loss amounted to RM530.695.

2.2 Company B 2.2.1 Company name and description Maxis Bhd. is a leading mobile phone service provider in Malaysia and is the second largest. It was founded in 1995 by Ananda Krishnan. Maxis offers variety of mobile communications such as prepaid plan, postpaid plan, global roaming and broadband internet plans. As of June 2010, it has 11.4 million subscribers. Maxis was privatized in 2007 in preparation of international expansion to Indonesia and India. The initial public offering was made in 2009, which is the biggest in Asia. The IPO constituted 30% of the company to raise RM11.7 billion. 25% of the shares are bought by Saudi Telecom Company.

Maxis strength is in the product innovation offerings, excellence customer service. These are proven by the many awards it has received over the years:

Malaysia's Top Ten Companies: Ranked 1 Asia's 200 Most Admired Companies, The Wall Street Journal Asia, 2006

Asian Mobile Operator of the Year Asian Mobile News Award, 2007 Fourth Most Valuable Brand in Malaysia Brand Finance, 2008 and 2009
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Service Provider of the Year (Malaysia) Frost & Sullivan, 2008 Mobile Data Service Provider of the Year (Malaysia) Frost & Sullivan, 2009

Recipient of the Asia Pacific Super Excellent Brand Award Asia Pacific International Brands Summit Malaysia, 2009

(Source: http://www.maxis.com.my/main.asp)

2.2.2 Amount invested A total of RM8,512 was invested 3rd May 2010. The price of Maxis per share is at RM5.32. The total number of shares bought was 1,600. Table 5 Company Name CCM Type of Share Industrial Number Bought 1,600 Price Per Share RM5.32 Total Value RM8,512

2.2.3 Brokerage The brokerage charged is calculated as below: Brokerage Rate=0.70% x Contract Value =0.70% x RM8,512 =RM59.584

Table 6

Company Name Maxis

Type of Share Telco

Number Bought 1,600

Price Per Share RM5.32

Total Value RM8,512

Brokerage +0.70% RM59.584

Total RM8,571.584

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2.2.4 Trend Over Table 7 below shows the movement of the price of share and volume over the 9 weeks. Over the 9 weeks of observation, the price moved within the range. The high and low price is as Table 8. Table 7 Date Maxis price per share (RM) 5.32 5.30 5.32 5.17 5.22 5.29 5.26 5.32 5.30 Table 8 High & Low Period High Date 3/5/2010 17/5/2010 21/6/2010 24/5/2010 Price 5.32 5.32 5.32 5.17 Volume 2,204,400 1,369,300 5,575,500 5,224,200 Volume

3/5/2010 10/5/2010 17/5/2010 24/5/2010 31/5/2010 8/6/2010 14/6/2010 21/6/2010 28/6/2010

2,204,400 3,091,700 1,369,300 5,224,200 7,745,600 1,337,700 2,827,100 5,575,500 1,631,900

Low

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The movement is also shown as per graph below. Figure 2

Maxis price per share (RM)


5.35 5.3 5.25 5.2 5.15 5.1 5.05 Maxis price per share (RM)

Figure 3

Maxis Stock Volume


9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0

Volume

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2.2.5 Current worth As previously done in Company A, we calculated the gain or lose of the investment if we sold it at the end of week 9. Net profit / (Loss)=Sell settlement Buy settlement
Total Buy Settlement=Value of Shares + Brokerage Fees + Clearing Fees + Stamp Duty Total Sell Settlement=Value of Shares - Brokerage Fees - Clearing Fees - Stamp Duty

Total Buy Settlement= RM8,512+RM59.582+RM2.5536+RM8.512=RM8,582.69 Total Sell Settlement=RM8,480-RM59.36-RM2.544-RM8.48=RM8,409.616 Net Loss=RM8,409.616 RM8,582.69 =RM173.074 .:. As shown from calculation above, if we sell the shares at week 9 at RM5.30. the investor will incur loss amounted to RM173.074.

3.0 Conclusion In analyzing the investment of the two companies over 9 weeks period, it can be concluded that: i) The price of CCM at the end of week 9 decreased by RM0.07. But looking at the volume, it was increased indicating there were more investors coming in. This could push the price in the future. ii) The price of Maxis was reduced but again picking up to the price in the week 1. The volume seen a going up trend indicating more investors bought this share.

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4.0 Recommendation Based on points 3.0 above, REM Investment recommendations to Mr. Karim Syukuri are as follows: i) It is recommended to hold the shares of both CCM and Maxis as the indicators such as volume pointing to an increased in price in the few months to come. ii) iii) The fundamentals of both companies are strong and attracted more investments. The coming out of recessions for Malaysian and international economies will be an advantage to both companies as both are actively operating in domestic and international markets. iv) It is recommended that Mr. Karim sell the Maxis shares when it reaches RM5.60 and above and CCM shares when it reaches RM2.35 and above.

5.0 References 1. http://www.ccm.com.my 2. http://bursa-malaysia.blogspot.com/2009/09/klse-brokerage-trading-cost-andbreak.html 3. http://www.bursamalaysia.com/website/bm/trading/equities/transaction_costs.html 4. http://1-million-dollar-blog.com/how-to-calculate-profit-loss-and-brokerage-fees-instock-market-trading/) 5. http://www.maxis.com.my/main.asp)

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