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Assignment ASC360 - WRITTEN REPORT ON STOCK

TRADING-
Personal Financial Planning/Personal Finance (Universiti Teknologi MARA)

Studocu is not sponsored or endorsed by any college or university

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FACULTY OF COMPUTER SCIENCE AND MATHEMATICS

DIPLOMA IN ACTUARIAL SCIENCE (CS112)

WRITTEN REPORT ON THE STOCK MARKET TRADING

N4CS1125D

PERSONAL FINANCIAL PLANNING

ASC360

PREPARED BY:

NUR SARAH DAYANA BINTI KAMARUL ZAHRIN 2018444344

SITI NOR BA BINTI BASRI 2018213398

PREPARED FOR:

SIR MUHAMMAD HILMI BIN SAMIAN

DATE OF SUBMISSION: 19thJanuary 2021

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ACKNOWLEDGEMENT

Alhamdulillah, first of all we would like to thanks to our most gracious and merciful god,
ALLAH S.W.T for giving us this opportunity in our lives to gain more knowledge. It is without a
doubt such a joyous occasion for us to be given this chance to learn more about the
speculative world of stock trading in such great detail. We hold by the motto that states;

“Students learn better by real life examples. Be a student as long as you still have
something to learn and this will all worth your life”,

and such an experience it was for us to have gone through the tumultuous waves of profit and
loss in the stock market. For that, we would also like to give many thanks to Sir Muhammad
Hilmi for including this project as part of our academic development as holistic students.

This study is done to fully understand and learn about the stock market stimulation of the
best investing techniques we have learn so far. Underline not only the major complications of
market trades of companies but also learn something that can bringing back success and
huge profits by capitalizing on our losses and reflecting on our current mistakes in stock trading
to overcome the profit and loss and gain better results in the future.

As in general knowledge, the stock market especially in penny stock and small-cap sectors,
this type of market has known with their volatile return rates that would mean higher risk but
also higher returns. This whole problems and occasions further push our capabilities in stock
trading and take them as our future references.

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TABLE OF CONTENTS
ACKNOWLEDGEMENT ..................................................................................................................... 2
1. INTRODUCTION .......................................................................................................................... 4
2. AMBANK GROUP ....................................................................................................................... 5
2.1. COMPANY BACKGROUND .............................................................................................. 5
2.2. FUNDAMENTAL ANALYSIS OF COMPANIES ............................................................. 7
2.3. NUMERICAL EVALUATION APPLICATION ................................................................. 9
3. AL-SALAM REAL ESTATE INVESTMENT TRUST ............................................................ 12
3.1. COMPANY BACKGROUND ............................................................................................ 12
3.2. FUNDAMENTAL ANALYSIS OF COMPANIES ........................................................... 13
3.3. NUMERICAL EVALUATION APPLICATION ............................................................... 15
4. INVESTMENT ANALYSIS........................................................................................................ 18
4.1. ANALYSE INVESTMENT PERFORMANCE ................................................................ 18
5. REFERENCES ........................................................................................................................... 20

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1. INTRODUCTION

The decision to start an investment plan itself is vital step in the whole process to
achieve the goals, which in this case is in long-term. This thing won’t be done unless the
investors decide to do them and in fact, the specifics objectives we want to achieve has to
be the main motivation to support the investment plan as it saying goes by “the more you
make the more challenging your investment goals can be”. Based on the research, the
common assumption in investing is to build one’s wealth where the money will be distributes
to the chosen companies in the expectation of some benefit and financially secured in the
future.

In this report, we will be observing the investment in stocks that are traded in Malaysia on
the daily. The allocation of our given capital which is, RM 1,000 will be displayed for us to
invest in any potential company. We have chosen two company to expand our investment in
order to increase the likelihood of gaining a higher profit. The chosen company are Ambank
Group and Al-Salam Real Estate Investment Trust. The calculation based on the return on
investment on the part of profit and loss from the trading will be at the end of this
assignment.

Before decided on making any investment, the investor will do diversification or

observation about the background of the company, rate of return and the condition of the
investment in the company for the past few years. This is to ensure the company chosen is
worth to be invested and also to minimize the risk of event of a total lost despite of gain
profits.

Furthermore, our report main focus on a broader emphasis of fundamental analysis and
technical analysis. Based on the research of our group fundamental analysis holds more
bearing in the long-term investments differ with technical and which holds more on the short-
term investments. As of that, these two types of technique as we learn on financial planning
will be use in our stock trading as a guide and indicator because the result matches more
convincing than expected. Lastly, we hope that the efforts of understanding the nature of
investments on stock trading today shall be guiding us more in the future.

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2. AMBANK GROUP
2.1. COMPANY BACKGROUND

Figure 1 AmBank Group logo

AmBank Group Malaysia is one of the largest banking groups in Malaysia. AmBank Group
was founded in 1975 as Persian – Malaysian Development Bank by the founder, Hussain
Najadi. On 5 August 1975, Arab-Malaysian Development bank Berhad joint venture between
Malaysian Industrial Development Finance Berhad, with shareholding 55.0%, 33.0%
shareholding for Arab Investments for Asia (Kuwait) and 12.0& of the National Commercial
Bank of Saudi Arabia. It was known as ArabMalaysian Merchant Bank Berhad (AMMB) in
December 1983 until they rebrand it in June 2002. AMMB had became the first merchant bank
to be listed on the Kuala Lumpur Stock Exchange in 1988.

AmBank Group is an investment company despite of being a banking group company which
involves in the supplying any related financial services such as retail banking, wholesale
banking, investment banking, Islamic banking and many other more. It runs through a quite
large of banking segments under a few of the company’s subsidiaries, consists of AmBank
Islamic, AmInvestment Bank and AmGeneral Insurance. Its key brand, AmBank, with the
assists of 175 branches and more than 766 ATM machines in Malaysia and also help in
covering its retail and wholesale banking business.

AmBank Group aims to help individuals and businesses in Malaysia grow and win together.
They are not only transactional only for money but they focus on the relationships between
customers and the bank by acting as a long-term partners financial advisors. Despite they
gain profits from the customers, they also help the customers by being professional, reliable

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and fast in order to earn their trust and loyalty by providing the best possible service. As of
that, AmBank market shares has increase since before in 1975 in Malaysia.

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2.2. FUNDAMENTAL ANALYSIS OF COMPANIES

The fundamental analysis on AmBank Group has been conducted, where we have observed
the growth of the company’s future profits. The figure below displays the revenue for the
second quarter of 2020 is RM 2,137,995 billion. There is a slight fall in revenue of AmBank
group from the second quarter compared to the first quarter of 2021, RM 2,214,615 billion.
From this information, we are able to forecast their expected future earnings in the third quarter
of 2020 will increase as well as company’s stock value.

Figure 2 AmBank Group financial results

Then, we move on the growth of the industry company involved, through The Star on 30th
November shows in the figure below. Based on that, AMMB net profit was higher at
RM791.9mil in the first half of September 2020 with an increase of 11.4% from the previous
season when it included modification losses and provisions regarding to the current global
pandemic that is COVID -19. Its net income was also forecast to expand by 5.3% to
RM2.25bill, driven by higher trading and investment income. Excluding the net modify loss of
RM34.5mil, the underlying income increased by 6.9% and improved to 47.3% of the cost-to-
income (CTI) ratio which leads to a positive JAWS. The group was reported a net
impairment charge of RM382.4mil in 1H compared to RM76.6 last year.

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Figure 3 The Star article about AmBank Group

Besides, on the OPR currently stands at 1.75%, as the country’s economy activity
anticipated to grow further, while they struggling with a break of COVID-19 cases which is
forecasted for the second quarter of net profits. The group is emerging as a new normal
under its refreshed strategy where it focused on creating their digital capabilities and
efficiency through on doing good parallel on the structural changes due to the global crisis
for the future. Hence, we believe that the AMMB group holdings Berhad can bring about
more profits due to the forecast outbreak of COVID-19 pandemic affecting the country’s
economy of Malaysia.

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2.3. NUMERICAL EVALUATION APPLICATION

Items Value(s)

Book Value RM6.43

(based on Wall Street Journal)

Market-to-Book Ratio 0.5121

Earnings Per Share (EPS) RM 0.41

Price-Earnings Ratio (P-E Ratio) 8.05

Dividend Yield 4.04%

Figure 4 AmBank's financial information based on www.malaysiastockbiz.com

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PURCHASING THE STOCKS

We considered to purchase the stock are based on the research that AmBank Group Holding
Berhad is expected on the ringgit’s movement to come under pressure on the ongoing COVID-
19 pandemic. Furthermore, the financial industry that company was involve are still in around
the corner, which there is high expectation on the higher return of stocks as well. Besides that,
the dividend receive by the shareholders are also still in good value. Even though the EPS is
only RM 0.41 but we still believe that this stock will reach its glorious time where it will be able
to increase in price of the EPS over time throughout this pandemic of COVID-19 and the
economic problems. As its P-E Ratio at 8.05, this value is considered as high as it still moving
on the graph and less volatile. Hence, based on the share price movement of the company
(FY20-FY21), we believe that the stock we decided to invest is a good stock even though the
return earn are not too much but still can be manage thoroughly.

AMBANK GROUP

STATUS DATE TIME PRICE PER UNIT TOTAL (RM)

SHARE
(RM)

Buy 30/12/2020 2.30 p.m. 3.26 100 326.00

Sell 15/01/2021 12.30 p.m. 3.29 100 329.00

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Figure 5 Price of purchasing and selling stocks (Wall Street Journal)

Figure 6 Price of purchasing and selling stocks

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3. AL-SALAM REAL ESTATE INVESTMENT TRUST

3.1. COMPANY BACKGROUND

Figure 7 Al-Salam REIT logo

A company which is Al-Salam Real Estate Investment Trust or also known as, Al-Salam
REIT was began back on 29 September 2015 as it was listed as one of Bursa Malaysia’s
Main Market. The company is located in Johor Bahru and other major cities around
Malaysia. The company is currently under the monitor of Dato’ Mohd Redza Shah bin Abdul
Wahid, the Chaiman of the Manager, in which he was appointed to become a part of the
Board on 14th February 2020. The chairman is also assists by Wan Azman bin Ismail, the
Executive Director of the company. Al-Salam REIT is managed as well as administered
under Damansara REIT Managers Sdn. Bhd. (DRMSB) with the objectives to supply a
constant cash distribution to the unitholders of the Trust, with the expectation for a constant
rise in growth as well as boost the Net Asset Value of Al-Salam REIT’s units. DRMSB is a
Johor Corporation’s owned subsidiary.

Al-Salam REIT mainly invest in Shariah-compliant properties as their prime activity. Retail,
Office and Food and Beverage (F&B) are a few of the company’s fund segments whereas
the F&B sector includes restaurant and non-restaurant outlets. On the other hand, their
fund’s property portfolio comprises KOMTAR JBCC, Menara Komtar, @Mart Kempas, KFCH
International College Building, The QSR Properties and Industrial Premises as well as 22
KFC and Pizza Hut restaurant outlets, with the market value for each of the property portfolio
is over RM 1 million.

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3.2. FUNDAMENTAL ANALYSIS OF COMPANIES

The fundamental analysis for Al-Salam REIT has been conducted by obtaining the financial
results of the company. From the figure below, we can observe the future revenue obtain by
the company. The figure below shows an increase of the earning of the third quarter of 2020
from the second quarter of 2020 with both values at RM 17,687 million and RM 15,758
million respectively. Based on the financial results below, I was able to forecast that the
estimated revenue in the fourth quarter of 2020 will increase as well as the overall stock’s
value.

Figure 8 Al-Salam REIT's financial results

Figure 9 theSunDaily article about Al-Salam REIT

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Next, I focused on the industry activity of the company. From theSundaily post on 6th March
2020 from the figure above. Through a proposed private placement, Al-Salam REIT raised
RM 92.8 million to minimize their bank borrowings as well for working capital funding.
According to the manager of Al-Salam REIT, Damansara REIT Managers Sdn. Bhd., the
company’s pro-forma financing is estimated to be decreased through their private
placement. Damansara REIT Managers chief executive officer, Wan Azman Ismail is
confident that through this lead, it will boost Al-Salam’s earnings per unit. On top of that, it is
to be expected that Al-Salam REIT is able to impact their revenues positively from the
decrease of Islamic financing costs that emerges from the current policy rate cuts. In this
post, it also mentioned that the possibility of Al-Salam to continue broaden their property
portfolio by investing more into their major unitholder.

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3.3. NUMERICAL EVALUATION APPLICATION

ITEMS VALUE(S)

Book Value RM1.08

(based on The Wall Street Journal)

Market-to-Book Ratio 0.5372

Earnings Per Share (EPS) RM0.05

Price-Earnings Ratio (P-E Ratio) 12.89

Dividend Yield 5.93%

Figure 10 Al-Salam REIT financial information based on bloomberg.com

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PURCHASING THE STOCKS

The purchase of this stock has been decided through the estimated future revenue of the
company. The estimated future revenue is expected to have an increase in the fourth quarter
of 2020. Al-Salam REIT is trusted to consistently making profits, hence why we chose to
purchase this stock. Although the EPS for this company is quite low, which is RM0.05, we
believe that this stock is able to be increased its value throughout the upcoming years. On
the other hand, the P/E Ratio for Al-Salam REIT is at RM 12.89, it is good enough for the
stocks to be invested. Thus, we believed that we are making the right decision by investing
the stock although the net profit is low.

STATUS DATE TIME PRICE PER UNIT TOTAL

SHARED COST (RM)
(RM)

Buy 3/11/2020 3.00 p.m. 0.505 200 101.00

Sell 3/12/2020 4.00 p.m. 0.600 200 120.00

Figure 11 Price of purchasing stocks

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Figure 12 Price of selling stocks

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4. INVESTMENT ANALYSIS
4.1. ANALYSE INVESTMENT PERFORMANCE

AMBANK GROUP

STATUS DATE TIME PRICE PER UNIT TOTAL (RM)

SHARE
(RM)

Buy 30/12/2020 2.30 p.m. 3.26 100 326.00

Sell 15/01/2021 12.30 p.m. 3.29 100 329.00

CAPITAL GAIN (CAPITAL LOSS) 3.00

AL-SALAM REAL ESTATE INVESTMENT TRUST

STATUS DATE TIME PRICE PER UNIT TOTAL (RM)

SHARE
(RM)

Buy 3/11/2020 3.00 p.m. 0.505 200 101.00

Sell 3/12/2020 4.00 p.m. 0.600 200 120.00

CAPITAL GAIN (CAPITAL LOSS) 19.00

INITIAL INVESTMENT
Item RM RM
Initial Capital 1,000
Purchases:
AmBank Group 326
Al-Salam Real Estate Investment Trust 101
427

Balance 573

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ENDING BALANCE
Item RM RM
Previous Balance 573
Purchases:
AmBank Group 329
Al-Salam Real Estate Investment Trust 120
449

Balance 1,022

Total Return = RM 1,022.00 – RM 1,000.00

= RM 22.00

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5. REFERENCES

• https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=1015
• https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-
profile?stock_code=1015
• https://www.thestar.com.my/Business/Marketwatch/Stocks/?qcounter=AMBANK
• https://www.investing.com/equities/ammb-holdings-bhd-news
• https://www.ambankgroup.com/eng/InvestorRelations/AmBankGroupProfile/Pages/O
urHistory.aspx
• https://www.klsescreener.com/v2/stocks/view/1015
• https://www.ambankgroup.com/eng/Announcements/Pages/pf-i.aspx
• https://www.wsj.com/market-data/quotes/MY/1015/financials
• https://www.bloomberg.com/quote/AMM:MK
• https://www.klsescreener.com/v2/stocks/view/1015
• https://www.thestar.com.my/business/business-news/2020/11/30/ammb-posts-
higher-1h-underlying-net-profit-of-rm7919m#.YAGJdtj92T8.whatsapp
• http://www.alsalamreit.com.my/corporate-profile.php
• https://www.thesundaily.my/business/al-salam-reit-to-raise-rm928m-via-private-
placement-KX2088927
• https://www.morningstar.com/stocks/xkls/5269/quote
• https://www.bloomberg.com/quote/SALAM:MK
• https://www.wsj.com/market-data/quotes/MY/XKLS/5269/financials
• https://www.thestar.com.my/Business/Marketwatch/Stocks?qcounter=ALSREIT
• https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-
profile?stock_code=5269
• https://www.klsescreener.com/v2/stocks/view/5269/al-salam-real-estate-investment-
trust

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