Category Archives: Research

Euro Is Depreciating Big Time

Since mid-March 2014, the Euro has been depreciating steadily against Ringgit. There is no sign for the down trend to stop. According to news that I could find, the Europe need a lower currency to boost its economy, especially for its export driven growth. “A weaker Euro for a stronger Europe” as the news goes.

Euro is depreciating

Euro is depreciating

Over 6-month period, the EUR/MYR has dropped from its high of 4.57356 till current low of 4.10920, a total of 10.15% drop. It is quite a significant drop for a strong currency like Euro. I still have part of my saving in Euro. So I feel the impact.

Euro won’t be able to gain strength anytime soon. Given a clear trend like this, it should be a good opportunity to take advantage of by shorting the Euro. I need to hedge the Euro as an insurance to protect my saving in case the Euro continues to depreciate. This is the time to put my Forex account into use.

Let day dream a bit: using a Forex account with 1 to 50 leverage margin and a starting balance of RM 100, you can sell RM 5000 (Initial Balance x Leverage = RM 100 x 50) worth of units in the currency pair that you trade. If the currency pair dropped 10%, it means you earned  RM 500 (RM 5000 x 10%). That’s a 500% (Return / Initial Balance x 100% = RM 500 / RM 100 x 100%) return on investment! The good thing is, it is scalable. You can increase the initial balance to RM 1000 or more and generate even more cash. Ha, this is only possible in dream and it always seem easy but in fact it is not if you ever tried.

Resources

A weaker Euro for a stronger Europe

ECB relying export driven growth through euro depreciation

EUROPEAN QUANTITATIVE EASING

Euro Hedging Starts to Work in 2014





Binary Radix Sort

Exploring radix sort. Radix sort has the reputation of being the fastest algorithm to sort through millions of integers in the computing literature. It has a complexity of \mathcal{O}(nk) where n is the number of elements, and k is the element’s length.

I modified the version on the Wikipedia to use binary representation to sort the unsigned integers. Here is my version in C#:

 

If I Bought These Blue Chip Stocks 5 Years Ago

What would be the return if I bought and held the blue chip stocks that constitute the Kuala Lumpur Composite Index (KLCI) 5 years ago or to be precise since July 2009?

Let find out.

Note: There are 30 companies in KLCI, but I can only find data longer than 5 years for 22 of the blue chip companies. That is why you only see 22 companies here. Also, over last 5 years, the companies that were listed in KLCI had changed. So the list below is only for reference only.

  1. AMMB HOLDINGS BHD – AMBANK (1015)

    Ambank 5 Years

    AMBANK 5 Years

    82.20%

  2. AXIATA GROUP BERHAD – AXIATA (6888)

    Axiata 5 Years

    AXIATA 5 Years

    137.93%

  3. BRITISH AMERICAN TOBACCO (M) – BAT (4162)

    Bat 5 Years

    BAT 5 Years

    51.78%

  4. CIMB GROUP HOLDINGS BERHAD – CIMB (1023)

    Cimb 5 Years

    CIMB 5 Years

    -31.86%
    Update 140720: 阿尧 pointed out that there was a 1:1 split on 21 May 2010. Taking that into account, the return for CIMB during July 2009 – July 2014 would be +36.27%. But I will continue to use the old figure as a way to calculate worst case average return.

  5. DIGI.COM BHD – DIGI (6947)

    Digi 5 Years

    DIGI 5 Years

    154.75%

  6. GENTING MALAYSIA BERHAD – GENM (4715)

    Genm 5 Years

    GENM 5 Years

    44.83%

  7. GENTING BHD – GENTING (3182)

    Genting 5 Years

    GENTING 5 Years

    53.54%

  8. HONG LEONG BANK BHD – HLBANK (5819)

    Hlbank 5 Years

    HLBANK 5 Years

    137.65%

  9. HONG LEONG FINANCIAL GROUP BHD – HLFG (1082)

    Hlfg 5 Years

    HLFG 5 Years

    248.51%

  10. IOI CORPORATION BHD – IOICORP (1961)

    Ioicorp 5 Years

    IOICORP 5 Years

    -3.29%

  11. MAXIS BERHAD – MAXIS (6012)

    Maxis 5 Years

    MAXIS 5 Years

    25.88%

  12. MALAYAN BANKING BHD – MAYBANK (1155)

    Maybank 5 Years

    MAYBANK 5 Years

    52.46%

  13. PUBLIC BANK BHD – PBBANK (1295)

    Pbbank 5 Years

    PBBANK 5 Years

    96.27%

  14. PETRONAS DAGANGAN BHD – PETDAG (5681)

    Petdag 5 Years

    PETDAG 5 Years

    145.21%

  15. PETRONAS GAS BHD – PETGAS (6033)

    Petgas 5 Years

    PETGAS 5 Years

    133.14%

  16. PPB GROUP BHD – PPB (4065)

    Ppb 5 Years

    PPB 5 Years

    8.09%

  17. RHB CAPITAL BHD – RHBCAP (1066)

    Rhbcap 5 Years

    RHBCAP 5 Years

    98.06%

  18. TENAGA NASIONAL BHD – TENAGA (5347)

    Tenaga 5 Years

    TENAGA 5 Years

    88.34%

  19. TELEKOM MALAYSIA BHD – TM (4863)

    Tm 5 Years

    TM 5 Years

    106.91%

  20. UEM SUNRISE BERHAD – UEMS (5148)

    Uems 5 Years

    UEMS 5 Years

    23.53%

  21. UMW HOLDINGS BHD – UMW (4588)

    Umw 5 Years

    UMW 5 Years

    90.16%

  22. YTL CORPORATION BHD – YTL (4677)

    Ytl 5 Years

    YTL 5 Years

    18.01%

Summary For Holding Blue Chip Stocks 5 Years Ago

Company Return (%)
AMBANK 82.20
AXIATA 137.93
BAT 51.78
CIMB -31.86
DIGI 154.75
GENM 44.83
GENTING 53.54
HLBANK 137.65
HLFG 248.51
IOICORP -3.29
MAXIS 25.88
MAYBANK 52.46
PBBANK 96.27
PETDAG 145.21
PETGAS 133.14
PPB 8.09
RHBCAP 98.06
TENAGA 88.34
TM 106.91
UEMS 23.53
UMW 90.16
YTL 18.01
AVERAGE 80.10

The total return would be 80.10% on average if I held these blue chip stocks 5 years ago. That is only 12.48% compounded annually (bear in mind that the dividend incomes are not included yet). This is a no-brainer investment considering that you don’t have to do extensive homework. You only buy and hold these blue chip stocks.

However, it will be a different story if I held the stocks longer. E.G.: the return from MAYBANK would be negative (-17.42%) if I held it for 7 years till now. Based on the observations, MAYBANK is one of the blue chip stocks that was deeply impacted by the financial crisis happened in 2008.

MAYBANK 7 Years

MAYBANK 7 Years

In fact, it was the worst stock among the 22 stocks listed above during 2008-2009. The other blue chip stocks were only mildly impacted by the crisis (considering today’s price). If you are interested, you can find it out yourself using Yahoo Finance.