Super FD with 8.88% ???

Recently, Public Bank wrest its muscle to attracts depositors to place their money with them. This has becomes an annual promotional event to get as much deposits after Chinese New Year. The reason was simple: CNY Ang Pow money... What is so exciting this round?

The campaign is open to all new and existing Public Bank individual customers from 28 Jan till 30 June 2014. All you need to do by placing a minimum RM30,000 deposit. Then, it will be separated into 2 portions, 80% in Special Fixed Deposit (FD) and 20% in Saving Account (SA). 

Yes. Depositors can get up to 8.88% p.a. interest on a step-up basis on the 12th month. Can you get it? It's 8.88% p.a. on the 12th month ONLY, not the whole tenure.

So, what's the EFFECTIVE rate that I can get?

Please refer to the below picture...

Not bad what... Wait... This is only on the 80% FD portion. If you add in the 20% SA portion to the whole principal that you have placed, it's lower than 4.33% p.a. actually. Anyway, it's still better than most FD rate offered by other banks. Cheers to Public Bank !!!

How about the FD rate after 12 months?

It will be auto-renewed according to the normal 1-month FD rate by that time (3.08% p.a. currently). So, if you don't like the 1-month FD rate offered, remember to uplift your money after 12 months ya ;)

What if I withdraw within 12 months?

You can do so. But, the interest paid (which is more than the prevailing FD interest rate) will be claw back. Please refer to below example.

RHBRI 4Q12 Market Strategy: Stay Defensive And Buy On Dips To Outperform The Market

Given the persistent headwinds from the external sector and general election overhang on the home front, we are of the view that the market will likely be stuck in a range-bound trading pattern in the 4Q. Consequently, we believe investors would still need to accumulate fundamentally-robust stocks on weakness in order to outperform the market, while staying defensive on the core holdings will provide greater stability to the portfolio performance.

In addition, as the search for yield will likely remain a key driver for both retail and institutional investors in the 4Q, high divided-yielding stocks will also continue to outperform the market, in our view. A list of our top picks is reflected in table below, which includes “buy on weakness” tactical stocks.

Which Sector to look at?

Sector-wise, our key overweights are telecommunications and banking, although we also have an overweight stance on the consumer, utilities, gaming and rubber gloves under the healthcare sector (see table below). We expect the high-yielding telecommunications stocks to remain relatively defensive for equity investors under the current market environment.

The banking sector, on the other hand, carries a 34.7% weighting in the bellwether index and, in our view, cannot be ignored, given the better-than-expected recovery in earnings momentum over the last two consecutive quarters. The year-to-date annualized loan growth stood at 11.9%, ahead of our and the consensus forecasts of 10-11% and 8-9% and the pipeline of corporate deals remains healthy. This suggests that banking earnings could continue to surpass expectations in the quarters ahead, which coupled with decent valuations and dividend yields vis-a-vis the FBM KLCI benchmark, would bode well for share price performance in the 4Q, in our view.

Source: RHBRI research report