Coffee with Raymond Ng: 8.5% yield? Don't play play.

UPDATE (18 Jan 17):
The Singapore dollar climbed to a new record high against the Malaysian ringgit early Wednesday morning (Jan 18), reaching as high as S$1 to RM3.1474, showed Bloomberg data. Source: TODAY.
--------------------------





Raymond is a very diligent investor who regularly makes very sensible and balanced comments in ASSI and on my FB wall.

In relation to my last blog post, he made a series of comments on my FB wall with attachments that we had trouble transferring to the comments section here.





Hence, this guest blog which is a compilation of Raymond's comments on my FB wall and more:

Don't play play with Malaysia G fund..... the G is bankrupting soon.

"The more than US$11 billion (RM38 billion) debt-ridden 1MDB, claiming it has assets worth more than RM48 billion, has twice failed to settle only RM2 billion in loans? 

Common sense, what does that tell you? 

Why would potential investors want to risk their money on such a super heavy debt-ridden 1MDB?"  

(1MDB = 1Malaysia Development Berhad)
Source: http://theantdaily.com/Main/Zeti-led-BNM-to-go-after-1MDB-Don-t-joke





The 8.5% yield is not attractive if we compare to MY FD rate.

In 1990+, the FD is 7~8%, so the yield spread is less than 2% but with lots of uncertainty. 

Even for 2010+, its FD rate is ~3.5%, so the spread is slightly attractive.

MY FD Rate from 1980~2009

Another consideration is SG/MY exchange... MY ringgit is depreciating against SG. 

You will lose out if you use SG dollar to invest.

Source: Yahoo Finance.

Tony Pua spoke about the Malaysia G poor handling of Malaysian Sovereign fund. 
That's why I said MY G is bankrupting soon.
Good 40 mins. 
MY bond is not like SG AAA rating.





Raymond has certainly provided us with much food for thought.
Related post:
A steady dividend payer with yield of 8.5% since 1990.