Earn RM134 EVERY MONTH for the RM5,000 invested in the form of dividends. Wow..it means RM134 x 12 = RM1,608. This is a 32% guaranteed return per year!!  (I wished my investment returns is that high)

You can even borrow money to invest where you get RM50 per month instead of RM134. 

So go and buy buy buy!!!

Better than any hedge fund or any gold scams that promises to give like 2% per month (24% per annum))

Launch date is 12 Jan 2012.

Participating banks: Maybank, CIMB, RHB, and Bank Simpanan National. 

When to RUSH to the banks to invest: 30 Jan 2012 --> I bet a lot of  people will queue up at the banks a few day before.

What is it all about?? 

Skim Amanah Rakyat 1Malaysia (SARA 1Malaysia) is a special Scheme initiated by the Government of Malaysia aimed at promoting the participation of the low-income group to save and invest; apart from to assist them in managing the impact of the rising current cost of living. (lowering income tax for middle income would be beneficial too T.T)

The Scheme will be implemented in collaboration with Permodalan Nasional Berhad (PNB) and selected financial institutions.

Through this Scheme, eligible Malaysians will have the opportunity to apply for a RM5,000 loan from participating financial institution to invest in Amanah Saham 1Malaysia (AS 1Malaysia)^Imanaged by Amanah Saham Nasional Berhad (ASNB)*, and will receive attractive incentive payments on their savings and investments.

*ASNB is a wholly-owned subsidiary of PNB responsible for managing the AS 1Malaysia unit trust fund.

SPECIAL FEATURES OF THE SCHEME

A total of RM500 million funding is offered to 100,000 households. Allocation is based on first-come-first-served basis. Application is opened for a duration of one year from the date the application is opened to the public or upon full subscription, whichever is earlier.

The distribution of funds is opened to all Malaysians based on the allocation of Amanah Saham 1Malaysia (AS 1Malaysia)^I, i.e. Bumiputera – 50%; Chinese – 30%; Indian – 15%; Others – 5%.

Through this Scheme, monthly incentives shall be paid to the participants in the form of additional AS 1Malaysia units.

Participants need to pay only minimum monthly payments for 5 years.

What are the eligibility criteria to apply for this Scheme?

a.	Application is open to all Malaysians aged between 18 and 58 years old;
b.	Applicants must have a combined gross household income of between RM500 and RM3,000;
c.	Applicants must not be declared bankrupt at the point of application and throughout their participation in the Scheme;
d.	Applicants must not be a participant or beneficiary of any ASNB-related government programme such as "ASW2020-Bandar", "Program Pembangunan Rakyat Termiskin" and "ASB Sejahtera";
e.	Applicants do not have any investments in ASNB unit trust products OR if there is, applicants and/or spouse(s) (household) have a combined aggregate investment of less than RM10,000 in all ASNB products.

Main Documents 

• Application form to participate in Skim Amanah Rakyat 1Malaysia (BPPSARA1M)
• Loan Form from the participating financial institutions
• Registration form of Unit Amanah Akaun Dewasa ASNB P1
• Additional Investment Form ASNB 21
• Redemption Form ASNB 31
• Investment Book Renewal Form BS3
• Risk Disclosure Statement (RDS)

Supporting Documents 

• Original and 2 copies of Mykad of applicants
• Original and 1 copy of Mykad of spouses (if applicable)
• Certified Income document
  • For applicants and/or spouses, please provide original and copies of the latest three months' Pay Slips or Bank Statements.
  • For applicants who do not have Pay Slip or Bank Statement, the income declaration stated in BPPSARA1M Part C will be applicable.
  
  
  * BPPSARA1M MUST be signed before a WITNESS - either the Employer/Penghulu/Official at the Department of Orang Asli Development/Government Official in a Managerial Position /Member of State Legislative Assembly/ Member of Parliament
  
  
  
  
  • Participation will be disqualified in the event of:

  1. The participant misses three consecutive monthly payments;
  2. The participant provided false information during application;
  3. The participant is declared a bankrupt; or
  4. The participant dies.

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I saw an article from a blog, RobustMind on a potentially good idea to grow money with a good return with minimal start up capital. It is utilizing the ASB Financing Scheme by Maybank. Maybank provides 2 type of financing for this scheme aka conventional type and Islamic. The differences are some technicality between how they calculate the interests and rebates. See my earlier posts on Islamic Financing.

Eligibility

• Individuals who are between the ages of 18 and 60 years old
• Bumiputera

Loan Amount

• Min loan amount : RM10,000
• Max loan amount : Up to RM400,000 per borrower, at any one time including the balance outstanding of the existing ASB loans (if any), or up to the maximum investment amount allowed by ASNB, whichever lower

Margin of Advance

For loan amount up to RM200,000

• Up to 100% of nominal value of ASB units
• Up to 105%, inclusive of the GASBRTA

For loan amount above RM200,000, at any one time

• Up to 95% of nominal value of ASB units
• Up to 100%, inclusive of the GASBRTA

Loan Tenure

• Up to 25 years or
• Up to age 60, whichever is earlier

Pricing

• Loan below 30,000
  BLR - 1.35 % (for 1st 3 years)
  BLR - 1.30 % (thereafter)
• Loan RM30,000 & above
  BLR - 1.65% (throughout loan tenure)

View the monthly instalment repayment schedule

Repayment Frequency

• Monthly

Repayment Option

• Single installment only

Mode of Installment Payment

• Standing Instruction (SI)

ASB Income Distribution & Bonus Earned

• Automatically credited into the respective ASB unit holder's account
• ASB financial year ends December 31

So RobustMind's idea is that ASB dividend's has never fallen below 8.55% for the past 20 years. (need to check the accuracy of this fact though). So he has made a calculation that given with the current BLR-1.65% (6.3-1.65=4.65%), the 1st year's dividend is enough to cover the cost of the repayment for the 2nd year.

He is basically trying to earn profit between the BLR-x% (currently at 6.3-1.65 = 4.65%) loan rate and the presumed average return of ASNB , lets say 7%. Thus the spread is like 2.35%. This is basically, like the FD rate available in the market.

For example, for loan amount RM40,000 for 25 years

1st year installment is RM227 (monthly) * 12 = RM2724. (Total amount yearly)

Assuming full year dividend given by ASB is at modest estimation 7% , (RM50,000 * 7% = , you will get RM3500.

Here you can take the dividend and roll it on as the payment for the 2nd year. Continue rolling until the end of tenure and you can redeem the ASB at RM1.00 per unit. Meaning that the RM50,000 is capital protected BUT surely not inflation protected. Conclusion, after 25 years, you get back the Rm50K (sell 50,ooo worth of units) and extra left over-dividend when you roll the money.

Here is my take on it, I prefer to use an shorter tenure to demonstrate potentially some easy money to be made. However, shorter tenure means higher monthly repayment, and the dividend may not be sufficient to roll into next year's payment. The point i want to highlight is that some low risk and easy money can be gained, judging from the predictability of dividend rate given by ASB.

The strategy:

The below assumption is true, IF only BLR and ASNB remains the same throughout the tenure,

(table at website shows RM937 per month repayment for 5 year tenure).

So assuming, RM50K loan for 5 years, the total repayment at 4.65% interest loan will be 56113.91.(the table is build using principal reducing loan) And assuming ASNB gives you 7%, you will get 70127.59. This will net you 14013.68.

This is a 28% gain of profit in 5 years with quite low risk. Although some people out there can more than in just a few month :P

Next step, is in another scenario, you make the same RM50K loan at the same 4.65%, and dump in in FD and managed to get 2.35% for 5 years. You will get 56157.69. This is to show that in general it does not make sense to take up a personal loan and try to get any benefit from putting in low interest yielding account.


However, i see the following possible cons..

1. What is the additional unseen fee if you decide terminate the loan earlier..

2. What is somehow late/delay payment? Is there a penalty..This bank is notorious for its heavy penalty, lets say you miss a few payment on the 1st year, then your remaining years..your interest might get BLR+2.2%!!! If you dont believe me, ask them about this on their housing loans package.

3. Avoid, getting very high loans. The reason is that in case in the future you need to buy a RM200-300K house, you might have problem getting a housing loan if you are stuck with this loan and you cannot terminate.

Thus, the moral is keep tenure short and monthly repayment affordable but you don't have the ability to roll your money using a small capital.

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Woot!! Amanah Saham 1Malaysia is the top google search word in Malaysia!!!

TO BUY OR NOT TO BUY - That is the question lingering on the mind of potential investors.

A lot of my "1st timer" friends that wanted to buy Amanah Saham 1Malaysia are either very confused or scared to buy it because of the rumor that is not capital guaranteed and the 1% service charge.

After reading some blogs and using some common sense minus the enormous fear factor. Below are my opinion:

1. Most funds under ASNB is not capital guaranteed per se but it a fixed price fund. Meaning you buy RM1 you sell RM1. The price does not fluctuate. BUT...there is always a but, the dividend may vary from year to year. Thus, if the return is less that fixed deposit, you lose out the opportunity cost to get higher yield elsewhere.

2. The 1% service charge is only after the offer period and it depends on the discretion of the fund manager. Basically, this is a cover you ASS clause, if the administration costs starts to become too high for the participating banks in the future. According to my sources in the industry, the banks earn peanuts serving/spending their own resources to horde of queueing customers.

3. Since this is a government issued and backed investment, it is relatively safe. Low risk because if one day (touch wood) the government collapsed, do you think you have the chance even to withdraw your Fixed deposits in the local bank!!

Fear and confusion is a good thing so that the queue is so short that if you want to buy , you don't need to queue for a long time :P

Since Amanah Saham 1Malaysia is a new thing, it is natural that people are suspicious about it. Heck , no one ever bothered checking out Amanah Saham Malaysia or Amanah Saham Wawasan 2020's prospectus. They were snapped out like hot cakes , fresh from the oven. Typical human nature in the works.

So the decision is up to you all, readers.

Historical dividend given out by Amanah Saham Malaysia

Amanah Saham 1Malaysia Mad Rush

Amanah Saham Malaysia New Subscription

RM980 Million ASW 2020 Sold In 4 Hours!!

RM999 Million in 1.5 Days :ASM Quota Taken Up

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Tomorrow will be another fund launching by the Malaysian Government which truly and deeply needs tons of cash to bail the economy out. Amanah Saham 1Malaysia is a RM10 Billion fund.

The only possible catch here is that the potential 1% surcharge when you buy in the funds. Note that this fine print never existed before for the previous hot selling Amanah Saham Malaysia & Amanah Saham Wawasan 2020.

I don't think there another mad rush and queue to buy into this fund due to the following reasons.

1) The general populace minus the super rich (super rich people usually don't buy into this type of investment which usually has lower returns than stocks, properties, etc. Eventhough it is has much lower risk) must be running dry of cash after a few successful series of government funds such as ASM, ASM2020, Islamic Bond Sukuk.

2) The fund size is quite substantial.

3) The 1% surcharge is a turn-off .As the stock market is rallying, people are more willing to pour money into equities for higher returns.

I think that this Amanah Saham Series is a bubble by itself. At one point, people will no longer be interested in it anymore. Potentially because of over-supply, the returns might not be attractive anymore in the coming years. The clear sign of a bubble is the seller's greed to generate more sales with the assumption that buyers will rush to buy because of the so-called early bird discount.

P.S : I will find time to tabulate how much cash has flowed into the govt coffers just this year alone.

Below are the detail info from the ASNB website.http://www.asnb.com.my/english/as1msia.htm

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