A TIP for successful stock investment: it pays to invest in and hold on to a good company.
Take the case of Malayan Banking Bhd (Maybank). Investors who had bought and held on to 1,000 shares in Maybank since 1990 will have seen their initial investment in the countrys largest banking group grow to 9,000 shares, yielding a net gain of nearly RM60,000!
And Maybank was not cheap at the time; 1,000 shares cost RM13,200. In addition, there was a 1-for-2 rights issue at RM5 a share in 1990, which required an additional capital outlay of RM2,500 to subscribe to the entitled 500 shares. The rights issue was made concurrently with a 1-for-2 bonus issue.
But shareholders have since been handsomely rewarded. The bank has declared four bonus issues since 1990, which have swelled the original 1,000 shares to 9,000 shares.
Apart from capital appreciation, Maybank also rewarded shareholders with good dividends, which amounted to RM8,375 over the 13-year period.
But holding on to Maybank shares for 13 years is no mean feat if one traces the banks history to its listing on Jan 17, 1962.
Over the course of the years, the bank has achieved some firsts in commercial banking.
According to its official website, Maybank2u.com.my, the bank was the first to embark on a computerisation programme, the first to implement the use of automated teller machines (ATMs) and establish a shared ATM network, the Automated Banking Consortium with its subsidiaries.
It also pioneered phone banking, the implementation of electronic terminal banking, and the first to introduce Internet banking services in the country.
Currently, it owns and operates the largest ATM network in Malaysia with over 900 ATMs within the Maybank group. It is also a member of the Malaysian Electronic Payments System (MEPS) network with access to 2,500 ATMs.
To date, Maybank has more than four million deposit accounts and over 500,000 loan accounts.
Besides commercial banking, Maybank also offers services in the areas of finance, nominee and trustee, insurance, merchant banking, leasing, offshore banking, venture capital, hire-purchase, discount house business, factoring, stockbroking, property trust fund management and unit trust fund management.
The bank has 441 branches in the country and 22 more in Singapore, Brunei, Hong Kong, London, New York, Phnom Penh, Hanoi, Port Moresby, Yangon, Tashkent, Beijing, Papua New Guinea, the Philippines and Jakarta.
In line with the banking merger and consolidation exercise, Maybank has over the past few years acquired Pacific Bank Bhd, PhileoAllied Bank (M) Bhd and Sime Finance Bhd.
Today, Maybank has total assets of nearly RM150bil, while deposits from customers stood at RM102bil at June 30 last year.
The group made a pre-tax profit of more than RM2.3bil, while shareholders funds stood at RM11.7bil in its financial year ended June 2002.
Maybank is also a favourite of local investors, and a must have stock for any serious foreign funds investing in Malaysia.