What if US failed to increase Debt Ceiling? (31 July 2011)

Deadline gets closer and closer, yet US have not come out a concrete solution to calm the world. Whether tax increases should be included in a deficit reduction agreement or not, both Democrats and Republicans are standing firm without compromise. Republicans insist that any deal to cut deficits should involve spending cuts only while Democrats have been demanding both spending cuts and tax increases.

Although Finance Malaysia reckons that the Congress would pass the bill to increase debt ceiling, let us analyzed and prepare for the unfortunate outcome. What if the debt ceiling limit is not raised by 2nd August?

US Debt Ceiling: What is that exactly?

Time is running out. We still have 3 more days to the very decisive day of 2nd August 2011 for US politicians to reach an agreement to increase the US debt ceiling. Everyday we heard this word "Debt Ceiling" repeating be it via TV, radio, newspaper and social media, but do we exactly know what does it mean?

Once again, Finance Malaysia blog strive to provide the knowledge to public regarding the most discussed economic issue now. So, what is debt ceiling?

New Fund: AmAsia Pacific REITs

Despite the current high level of share market globally, especially in Asia, there is still hanging fruits waiting for investor to grab. One of it was REITs, which lags behind its share market peers in terms of valuation. With this, AmMutual launched their latest fund which focuses on REITs investment on 18th July 2011.

The fund aims to provide regular income and to a lesser extent capital appreciation by investing in REITs. To achieve the investment objective, 70% to 98% of the fund's NAV will be invested in REITs listed in Asia Pacific region, which includes but not limited to Australia, Hong Kong, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. In addition to country diversification, the Fund will also diversify into different REITs sectors such as residential, commercial and industrial. The fund will hold between 2% to 30% of its NAV in liquid assets.

Strategy Employed...

New Fund: HwangDBS China Select Fund

The Fund is a wholesale feeder fund that aims to achieve capital appreciation over the long term by investing in a collective investment scheme, namely the China Select Fund, a Cayman Islands-domiciled sub-fund of Citi Investment Trust (Cayman) II managed by Citigroup First Investment Management Limited (the "Target Fund"). Being a wholesale fund in nature, this Fund is open for sale to Qualified Investors only.

The Manager will invest a minimum of 95% to maximum of 99.8% of the Fund's NAV in units of the Target Fund and a maximum 5% in deposits. The base currency of the Target Fund is US dollar.

3 reasons to invest in this fund:

New IPO: Bumi Armada

Bumi Armada Bhd (BAB) is seeking a listing on 21st July 2011 with an enlarged share capital of 2.93bn shares of RM0.20 each on the Main Market of Bursa Malaysia. Based on the retail IPO price of RM3.03 per share, BAB will have a market capitalization of RM8.87bn. It expects to raise gross proceeds of about RM1.95bn from the flotation. Some 38% of the proceeds will be used to pare down bank borrowings while 29% and 28% will be used for capital expenditure and working capital respectively. The balance 5% will be used to pay listing expenses.

Company Profile

Bumi Armada Berhad is the largest owner and operator of offshore support vessels in Malaysia and is an established and trusted service partner in the oil and gas industry. It had established a strong position in FPSO systems, a growing Transport & Installation business and competency in management of large projects.

With head office in Kuala Lumpur, Malaysia and shore-bases in several countries around the globe, BAB currently serve clients in South East Asia, Congo, India, Mexico, Africa, Venezuela and the Caspian Sea region

Principal Activities