Sunday, August 24, 2008

Gold Investment Options in Malaysia


Investing in Gold in Malaysia, what are the options and how?

Gold investment in Malaysia has not been very big and is not as popular as Unit Trust, which has taken Malaysia by storm, some earning big time, some not in Unit Trust. For people like me, I made a little in the initial days of Public Ittikaal, but with most of the funds launched in recent years, have lost much.
Notice that eventhough Public Mutual claims that it has won awards again and again, most of the awards are for 'older' funds. The newly launched once do not fare that good, even in the 1 year category.

So now what? There's a couple of options I guess, but let's talk about investing in Gold. Some sources say gold is a good hedge against inflation. Doing some more detailed research, it seems this might not always be true, as price of gold also does go down. Would a price of a Roti Canai ever go down? Well that's my 2 cents.

Anyway, gold is always gold. What we call precious metal, and I would think currency might devalue by so much during financing crisis, but Gold would still have value right?

From my research, among others there are 3 main ways to invest in gold so far.

Option 1: Kijang Emas Gold Bullion Coins

The Kijang Emas Gold Coin


The Malaysian gold bullion coin, the Kijang Emas issued by Bank Negara Malaysia launching in 2001.

From Bank Negara's Press Statement

Malaysia is the 12th country in the world to issue its own gold bullion coin. The Kijang Emas now joins the ranks of other international gold bullion coins.

The design of the obverse of the Kijang Emas depicts a barking deer ("kijang") in its natural habitat in the Malaysian jungle. The reverse side features the hibiscus, the national flower of Malaysia.

The detailed specifications of the Kijang Emas is as follows:

SizeFace valueWeight (grams)Diameter (mm)Gold purity
1 troy ounceRM20031.10537.099.99%
1/2 troy ouncesRM10015.55028.099.99%
1/4 troy ouncesRM507.78022.099.99%

The purchase and reselling price of Kijang Emas is determined by the prevailing international gold market price. The daily market price will be posted on the BNM web site.

The Kijang Emas is minted by the Royal Mint of Malaysia and distributed by Maybank Berhad and Bumiputra Commerce Bank Berhad, which will also entertain further enquiries.

For details on buying from Maybank, click here. In Penang Island, you can only transact at the Main Branch at
Cons: PENANG MAIN OFFICE SSC
9, Lebuh Union,
10200 Penang,
P.O. Box 297,
10730 Penang


Price based on last traded day of blog entry
International Gold Price : USD 837 per ounce
Kijang Emas Daily Prices
SIZE (oz)
SELLING (RM)
BUYING (RM)
ONE
2949
2857
HALF
1502
1428
QUARTER
765
714
This is a very very important link that is not easy to google, Bank Negara Malaysia's (BNM) link to see daily trading prices, and also to compare prices since 1997 till-date.
http://www.bnm.gov.my/index.php?ch=12&pg=141

Cons:
You can only buy and sell your Kijang emas at certain branches.
You have to physically store the gold.

Pros:
You have a physical gold, and it should carry it's own value.

Option 2 : Maybank Gold Savings Passbook Account GSPA
This is more like a savings passbook, but you 'buy' gold instead. You do not get the physical gold, but just a passbook to state the current grams you own.

From Maybank Website :

Maybank GSPA Features

Eligibility
Individuals
Joint account - maximum of 4 persons.


Features & Benefits
999.9 Gold


Minimum purchase
5gm for opening GSPA.
Subsequent deposit/investment must not be less than 5gm. To maintain a minimum balance of at least 1gm at all times.


Trading unit
Minimum 5gms in multiples of 1gm



Withdrawals
The withdrawal of gold from GSPA will be converted into Ringgit Malaysia at prevailing gold price.

GSPA account holders are allowed to withdraw the gold in below format:

Physical gold
Gold Wafers @ 10, 20, and 50 can be withdrawn at selected branches. A conversion charge to cover the shipping and insurance will be charged for the physical gold withdrawal.

Cash
The amount of gold holdings can be converted to Ringgit Malaysia equivalent at the prevailing market (gold) price. The amount in RM will be credited into a Maybank deposit account of customer.



Record / Passbook
A GSPA passbook will be given to the account holders upon complete the procedure of opening the GSPA account.

The passbook is for deposit and withdrawal purposes. Deposit, withdrawal and closing of GSPA are available at any of the Maybank branches.


Fees and Charges
Withdrawal of physical gold is subject to conversion charge to cover the shipping and insurance. The fee is various and depending on total physical gold to be withdrawn.

Questions? Our FAQ may help.

Current price per gram based on GSPA
Gold Savings Passbook
DATE
SELLING (RM/g)
BUYING (RM/g)
22 - Aug - 2008
94.51
87.42


Option 3 : Public Bank Gold Investment Account

The concept is pretty similar to that of Maybank. Some excerpts from their website:

Gold Investment Account

Key Benefits

  • To earn potentially higher return from appreciation in gold price.
  • Convenience of investing in gold as trading is carried out through a passbook.
  • Small difference between selling and buying prices.
  • Affordable initial purchase and subsequent investment.
  • Invest in gold without having to keep the gold physically.
  • Gold is the best possible hedge against inflation.
  • Alternative investment avenue to build up personal gold portfolio which is cheaper compared to invest in gold jewellery as the latter will incur additional cost on workmanship.

What is a Gold Investment Account?

  • Gold Investment Account is an account which allows individual customers to purchase the purest available gold commodity in 99.9% fineness at daily prices for 1 gram in Ringgit Malaysia (RM).
  • A passbook will be provided to the account holders and every purchase/sale order will be recorded in the passbook.
Eligibility
Individuals (resident or non-resident) aged 18 years and above.
Personal or joint
Minimum Initial Purchase
20gms
Minimum Balance in the Account
2gms
Minimum Subsequent Purchase/ Sale
5 grams and must be in multiple of 1 gram
Gold Purchase
Gold purchase will be based on the Bank's prevailing gold SELLING price quoted in RM per gram.
The mode of payment accepted for purchase of gold are :
- cash
- debiting of account
- house cheque
No physical gold deposit is allowed.
Gold Sale/ Withdrawal
Gold sale will be based on the Bank's prevailing gold BUYING price quoted in RM per gram.
Withdrawal options available are :
- Cash
- Crediting of account
- Physical gold withdrawal*
Account Opening Requirement Customer is required to maintain either a savings account or current account prior to opening a GIA to facilitate the debiting of service fee, if any.
Service FeeAn annual fee of RM10 will be levied on the designated deposit account on the first day of the calendar year if the account balance is below 10gms as at year end.

Don't miss out on this golden investment!

The returns of Gold Investment Account are subject to prevailing market conditions. Terms and conditions apply.

Note:
* This option is currently not available until further notice.

For more information, please visit your nearest Public Bank branch or call free phone at 1-800-88-3323 during normal working hours.



Summary:
As you can see, it seems over short term, there is still the buy low sell high challenge as gold prices fluctuate significantly just between days.
You will also always bear the 1st day losses of and when you purchase, as Bank's Selling Price is higher then Buying Price.
Personally, if I could afford it, I'd buy some for a long long term investment
An interesting Malaysian blog specifically on gold investment, options and types I have come across is http://jutawanemas.com/

All the best.

ADDED on 25th Feb 2010:

Dear readers, as many have been asking about the many gold investment taking companies in this blog, and also many have been promoting certain schemes or companies, I advice you to be very careful in making your decision. I do not endorse any of the comments here either. In fact I reject some comments that I find rather dubious. Recently I received the below comment :

"hi guys..im raziman frm BNM. fyi as for today gold label sdn bhd is an legitimateorganization that are registered under bnm and mof. pls take notetq
Posted by Anonymous to For Your Information at February 24, 2010 1:26 PM"

Being cautious, I sent an email to BNM (Bank Negto double confirm, my email being

"Dear Sir/ Madam,I have received the below comment from a user, would like to confirm thevalidity if BNM first"for today gold label sdn bhd is an legitimate organization that areregistered under bnm and mof. pls take note". If yes, thank you for the confirmation. If it is not registered, pleaseadvice."

BNM's reply as below
Thank you for your e-mail dated 24 February 2010.

Please be informed that Bank Negara Malaysia (Bank) never gives licence or approval to the abovementioned company to collect deposit from members of the public. For your information, if the investment scheme clearly offers an investment opportunity by collecting deposits from the public and investors are promised investment returns within a certain period of time, whereby the original investment will be refunded, it maybe contravene Section 25(1) Banking And Financial Institutions Act (BAFIA). This investment activity is against the law and you are investing at your own risk. Please invest only with licensed financial institutions only.

An easy way to identify and verify whether or not a company is licensed by the Bank, you can refer to the licensed institutions list on our website by following this URL http://www.bnm.gov.my/index.php?ch=17&pg=54&ac=57 If the company is NOT LISTED on our list on the website, it simply means that the company is NOT LICENSED NOR APPROVED by the Bank to offer any financial services or products.

You may also cross check with Securities Commission's (SC) licensed/alert lists on their website :1. http://www.sc.com.my/eng/html/licensing/licenseMain.html
2. http://www.sc.com.my/eng/html/licensing/investors/Alert_list.html
3. http://www.sc.com.my/eng/html/licensing/investors/IApg_other.html

You may also refer to the Financial Fraud Alert site in our website that aims to enhance public awareness on the dangers of falling prey to illegal financial schemes by providing access to vital information on these schemes at http://www.bnm.gov.my/index.php?ch=232 If you have any information pertaining to illegal deposit taking activities or illegal foreign currency dealings (forex) or a victim of such activities or scams you can send details of such information or complaint together with the documents to the Bank as follows:

Special Investigation Unit Bank Negara Malaysia
Jalan Dato' Onn 50480
Kuala Lumpur
Fax: 03-26987467

I have yet to check with MOF (Ministry of Finance). So finally are these companies legal? Well, please do the due checkings as adviced by the above reply. I would also like to say syabas to BNM on their quick reply, (in ~2 working days) and also that their website offers options to the Rakyat to gain advice and f/back.

Happy investing.

22 comments:

Fong said...

Hi El,

I found your article in google about "buying gold in Malaysia" very informative. I'd like to ask about our own Malaysian "kijang emas" bullion coin.

1) Is the coin recognized at other countries. If I want to sell it at other countries (eg. US), does it follow international gold rates? Since it is .999 fine, i guess it should be on par with other coins internationally.

2)Do you have any information regarding buying silver in Malaysia? I can't seem to find any articles about it.

Thanks for your great article.

Fong

Anonymous said...

I'd also like to know where to buy some silver here in Sarawak. Lots of goldsmiths but cannot spot any silversmiths lah

el the man said...

let me find out on silver and your other questions. Seems a lot of people interested in silver. Why so?

Anonymous said...

Hi, El,
Two points to ponder:
1. Gold price quote transparency: There is no published fixed equation for price determination.

2. High transaction costs: The buy/sell spread on the quoted price is about 8%!!! Therefore, the total transaction cost is 16%. Tooooo high.

Cheers!

Regards/Chang

el the man said...

Here's my Q&A recently with BNM Telelink to address readers questions:

My Email :
Subject: Kijang Emas Query

Dear Sir/Madam,
1) Is the coin recognized at other countries. If I want to sell it at other countries (eg. US), does it follow international gold rates? Since it is .999 fine, i guess it should be on par with other coins internationally?
2)Do you have any information regarding buying silver in Malaysia?

BNM Telelink Reply
Your e-mail dated 13/12/2008 refers.

Please be informed that the Kijang Emas, gold bullion coin is one of 12 bullion coins that has been issued by central banks and private mints world-wide, therefore it would be recognized in other countries as a bullion coin. The purchase and reselling price of Kijang Emas, which is of .999 fine quality, is determined by the prevailing international gold market price. However, as there are no agents which deal with the Kijang Emas outside Malaysia, banks at other countries may not buy the Kijang Emas at the prevailing price. The only appointed agent in Malaysia to sell the Kijang Emas is Malayan Banking Berhad.

We regret to inform you that we do not have any information required in your question number 2.

Thank you.

BNMTELELINK
Bank Negara Malaysia
No Tel : 1-300-88-5465
No Faks : 03-21741515

----
Syabas to BNM for the prompt and detailed reply.

Gold IRA said...

Some excellent ideas here I don’t have a news blog as such but there are some great tips that I plan to use. I get many good information for gold investment in Malaysia.
Watch a free video on Gold IRA.

Anonymous said...

Hi,

Just want to know is this website or company legal? Is it safe like the public bank, the website is thegoldlabel.com. Its like more attractive.

el the man said...

Hi Anonymous, Sorry I am not familiar with the website or company you mentioned. Personally I would check with Bank Negara, Securities Commisssion and KDNHEP before making big financial decisions.

NORSEC said...

Hi,

How much the risk for gold investment for the current situation? I understand that it is good for long term investment, but what do you think the return rate in this coming years? Kindly advise me your opinion. Thx.

Therrysa Ooi

Anonymous said...

Please advise on THE GOLD LABEL Gold Bar Investment which GUARANTEES 18% per annum Returns payable every THREE MONTHS.
It is located at K.L.

el the man said...

Sorry I am not familar with the Gold Label. They can leave a comment and provide some kind of information or sample and I can review it.

Gold Coins said...

You can save wealth in recession if you have gold bullion.Thanks for the great reading, we buy gold coins in a recession. I will pass this on to our Ira clients to read.

Anonymous said...

Hi, I find this blog usefull. I'd appreciate it if u could check for us The Gold label Sdn Bhd. It is a product of Sovereign Wealth Management Sdn Bhd. A consumer buy gold and keeps it and later sell it with the same price to the company. in return the buyer gets 2.5% of rebet. transaction wise: a month contract, buyer issue a cheque, once cheque is cleared, a buyer gets 2.5% and the gold bar. nearing the due date, the buyer buy back or renew.

my question is this legal? is the company registered with SSM n SC?

tq

lady gaga

Currency Rates said...

Thank you for providing helpful information about Gold Investment Options in Malaysia

Anonymous said...

Bank Negara Malaysia Investigates The Gold Label Sdn Bhd http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=2038

Anonymous said...

hi, i wan ask that which listed bank has provided gold investment except maybank and public bank....

Dzul said...

hello there,

this morning, i suddenlly had an idea of investiing in something. and after searching the most suitable investment, i found out that investing in gold is very promising investment indeed.

after consulting a friend, he gave me this website

www.nubex.com.my

in this website, u can buy physical gold.

i just want to ask you whether or not this is a legitimate business and how can i confirm the authenticity of the gold that they sell to me

really need your help on this. like they often said, masa itu emas. i need to know about this as soon as possible.

thank you

Joseph said...

hi el the man,

recently i've come across "genneva sdn bhd / samudra-gv sdn bhd" on gold trading. Is this company legal?

can i invest? ur advise is truly appreciated. thank u.

joe

Joseph said...

hi el the man,

recently i come across the company "genneva sdn bhd / samudra-gv sdn bhd" on physical gold trading/investment.

is this company legal? can i invest?

ur advise on investing in this company is highly appreciated. thank u.


joe.

Rong said...

Gold investment accounts> So far i know of MBB, PBB, CIMB, UOB and KFH which have

Physical gold> Can get from my friend at:

Buy Gold In Malaysia

Wing said...

My friend is selling physical gold on his website, Buy Gold In Malaysia

You may want to take a look!

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