Portfolio Investment Management

Portfolio Investment Management

The Ajiya Berhad is a non-financial company that is found in Main Market Bursa Malaysia. It encompasses a group of organizations which take part in manufacturing, process and distribution of building construction resources. Initially, the company began as a metal roll forming organization using a brand name of “AJIYA” in 1990. Six years later, the group ventured into the manufacture of the great value-added safety glass products. Lately, the Ajiya Berhad companies are involved in large scale production of a variety of these products. Its products are used for the needs of industrial building up to the common residential houses.

Ajiya has increased its geographical strategies over the twenty-eight years since its establishment. The regions include Segamat, Johor, Northern, Southern, Eastern and Eastern Malaysia. In the recent era, there is stiff growing competition in the building construction market. As a result, Ajiya established its overseas presence in Thailand in 2007. Its network becomes more spread. Thus, it covered 19 warehouses and factories with offices all through Malaysia and Thailand. Afterwards, Ajiya established businesses into the one-stop manufacture of industrialized Building System (IBS) which involved the Ajiya Green Integrated Building Solutions (AGiBS). The AGiBS involves a modern method of construction. Therefore, it improves productivity and construction site quality which aligns with the CIBD’s initiatives.

The Ajiya Berhad companies has a great existence in the Malaysia Bursa. As a result, Ajiya was recorded in the second position of Bursa Malaysia in 1996 and in 2003 it got moved to the Main Board. Also, since the company’s inception in 1990, Ajiya got itself committed into the formation of long-term shareholder’s value. Achievement of this occurred by providing both sustainable and profitable development. Under the umbrella of Ajiya Berhad the into two structured categories which included the Ajiya Metal Group and Ajiya Glass Group. The first group creates a verity of metal frame and roofing products while the second group is involved in the manufacture of the many kinds of safety glass. Thus, in Ajiya, each challenging encounter is taken as a lesson learns and for every success gives a cause for celebration.

The company is supported by its efficient network of factories across Malaysia. It produces an extensive and comprehensive wide range of innovative products. The quality of its service is analyzed as high and it also has continuous improvement with prompt delivery. The Ajiya company employees a range of 765 to 800 employees. Thus, in a month the company makes revenue of 321.59million and a net income of 7.14million. Achievement of this mainly made through their vision which ensures that there is constituency and customers satisfaction. However, for the last three months from February 2020, Ajiya Berhad company has had a decrease of 5% on its revenues to RM 77.5M. The net income has improved from a RM 1M to RM 3.1 million. Due to the unfavorable market conditions as a result of a decrease in the company’s product reflects the revenue reduction. Also, the net income shows the operating expenses decrease of 7% to RM73.7M. The other income improves to 60% to RM1.1 million, and interest incomes improve with 43% to RM1.1 million.

Ajiya Berhad company monthly stock prices in 2019 are as follows;

As a result, the company in 2019 registered the highest price as 0.575 in the month of April and lowest price as 0.395 in the month of October. The difference between them is calculated as (0.575 – 0.395) = 0.180, average among the prices is 0.475 and the percentage change is -19.048.

Month return for Ajiya Berhad Company is computed as follows;

Formula = (Closing price of Current Month / Closing month of the previous month – 1) ×100

Feb 28, 2019 = (0.535 / 0.535 – 1) × 100

= (1 -1) × 100

= 0%

Mar 31, 2019 = (0.535 / 0.535 – 1) × 100

= (1 -1) × 100

= 0%

April 30, 2019 = (0.545 / 0.535 – 1) × 100

= (1.019 -1) × 100

= 1.9%

May 31, 2019 = (0.500 / 0.545 – 1) × 100

= (0.917 -1) × 100

= -8.26%

Jun 28, 2019 = (0.500 / 0.500 – 1) × 100

= (1 -1) × 100

= 0%

Jul 31, 2019 = (0.470 / 0.500 – 1) × 100

= (0.94 -1) × 100

= -6.00%

Aug 30, 2019 = (0.425 / 0.470 – 1) × 100

= (0.9042 -1) × 100

= -9.57%

Sep 30, 2019 = (0.400 / 0.425 – 1) × 100

= (0.9412 -1) × 100

= -5.88%

Oct 31, 2019 = (0.415 / 0.400 – 1) × 100

= (1.0375 -1) × 100

= 3.75%

Nov 29, 2019 = (0.415 / 0.415 – 1) × 100

= (1 -1) × 100

= 0%

Dec 31, 2019 = (0.425 / 0.415 – 1) × 100

= (1.024 -1) × 100

= 2.4%

Computation of the Average return of stock in Ajiya Berhad company is as follows;

Step 1: Calculation of the total return

Total return = (Return on Dec 31, 2019 – Return on Feb 28, 2019)

= (0.024 – 0) = 0.024 × 100

= 2.4%

Step 2: Calculation of the average monthly return

Average return = total return / number of months

= 0.024 / 11

= 0.00218 per month

= 0.218%

Standard deviation of Ajiya Berhad Company

Formula =

Step 1: Computation of  = Total Prices in 2019 / number of months

= 5.70 / 12

= 0.475

Step 2. Calculation of the standard deviation = Formula =  = (0.035175 / (12 – 1))

= (0.035175 / 11)

= 0.0031977

Risk = Net Profit / Price

=8.9367 / 0.475 = 18.815

Additionally, the Adventa Berhad is also a holding company in Bursa Malaysia main market. In 2004, the company was created and its investment involved glove making and providing management to subsidiaries. Thus, in 2012 the Adventa Berhad deprived the glove business into an Aspion. The company acquired the Electron Beam and Lucenxia which resulted in them to have a health care business.  As a result, the company has been involved in a variety of business. For instance, it has the responsibility of generating and supply energy and electricity from the use of biomass technology. Also, there is manufacture of the health care products, home dialysis products, sterilization provider and corporate segment. The healthcare products segments encompass the manufacture, distribution and trading of these healthcare products. Moreover, its sterilization provider segment enables the provision of both the industrial and commercial sterilization, handling and warehouse services. For the home basis dialysis products, the company produces the enable machines that enable easy pumping of the patient’s blood and dialyses through the dialyzer. The corporate segment consists of team level corporate services, treasure operations and providing of controlling services to its subsidiaries.

Adventa Berhad Company is top listed among the large-sized organizations in Malaysia. Thus, the number of employees working in the company ranges from a 1, 273 to 1, 500. It has a mission of making delivery of high-quality products and goods. The company makes a RM1.75 during the high days and an RM1.63 at lows days. Thus, its volume ranges to 6,644,800 and its average volume add up to 9,167,585. In a great year the amount adds up to RM 2.28 and during a year with low earning the total amount ranges to RM 0.28. According to the first quarter results presented recently, Adventa Berhad company has a revenue of 17, 717, profit of 364 and a loss -384.

Adventa Berhad company monthly stock prices in 2019 were recorded as follows;

As a result, the company in 2019 Adventa Berhad company recorded the highest price as 0.605 in the month of August and lowest price as 0.350 from the month of June to December. The difference between them is computed as (0.605 – 0.350) = 0.255, average among the prices is 0.444 and the percentage price change is at 24.138.

Month return for Adventa Berhad Company is computed as follows;

Formula = (Closing price of Current Month / Closing month of the previous month – 1) ×100

Feb 28, 2019 = (0.365 / 0.375 – 1) × 100

= (0.9733 -1) × 100

= -2.67%

Mar 31, 2019 = (0.355 / 0.365 – 1) × 100

= (0.9726 -1) × 100

= -2.74%

April 30, 2019 = (0.350 / 0.355 – 1) × 100

= (0.9859 -1) × 100

= -1.41%

May 31, 2019 = (0.375 / 0.350 – 1) × 100

= (1.0714 -1) × 100

= 7.14%

Jun 28, 2019 = (0.400 / 0.375 – 1) × 100

= (1.0667 -1) × 100

= 6.67%

Jul 31, 2019 = (0.595 / 0.400 – 1) × 100

= (1.4875 -1) × 100

= 48.75%

Aug 30, 2019 = (0.490 / 0.595 – 1) × 100

= (0.8235 -1) × 100

= -17.65%

Sep 30, 2019 = (0.505 / 0.490 – 1) × 100

= (1.0306 -1) × 100

= 3.06%

Oct 31, 2019 = (0.450 / 0.505 – 1) × 100

= (0.891 -1) × 100

= -10.89%

Nov 29, 2019 = (0.522 / 0.450 – 1) × 100

= (1.16-1) × 100

= 16%

Dec 31, 2019 = (0.540 / 0.522 – 1) × 100

= (1.0345 -1) × 100

= 3.45%

Computation of the Average return of stock in Adventa Berhad company is as follows;

Step 1: Calculation of the total return

Total return = (Return on Dec 31, 2019 – Return on Feb 28, 2019)

= (0.0345 – – 0.0267) = 0.0612 × 100

= 6.12%

Step 2: Calculation of the average monthly return

Average return = total return / number of months

= 0.0612 / 11

= 0.005564 per month

= 0.5564%

Standard deviation of Adventa Berhad Company

Formula =

Step 1: Computation of  = Total Prices in 2019 / number of months

= 5.322 / 12

= 0.4435

Step 2. Calculation of the standard deviation = Formula =  = (1.97618475 / (12 – 1))

= (0.035175 / 11)

= 0.179653

Risk = Net Profit / Price

=7.3966 / 0.444 = 16.66.

Comparison of the two companies

Let stock 1 be Ajiya Berhad Company.

Let stock 2 be Adventa Berhad Company.

Stock 1 has an average monthly return of 0.218% while stock 2 has a monthly return of 0.5564%. Since stock 2 displays a higher percentage of average monthly return it produces higher profit compared to the of stock 2. In addition to that, stock 1 displays a mean of 0.475 while stock 2 has a mean of 0.4435. That shows that stock 1 has a greater mean which means that its expectation will be higher compared to that stock 2. The risk value in stock 1 is higher at 18.815 compared to stock 2 at 16.66 Also, stock 1 has a standard deviation of 0.0031977 while that of stock 2 is 0.179653. Thus, stock 2 has a higher standard deviation compared to the stock 1. In stock 2 the price points are far from the mean showing an increased range out of the data resulting to the higher standard deviation. For the stock 1, the prices point values tend to be closer to the mean value displaying a decreases range of the data leading to a lower standard deviation.  In this analysis the stock 1 which is the Ajiya Berhad Company is more preferred. It has a positive revenue of 0.0218, higher risk value of 18.815, higher mean of 0.475 and a lower standard deviation of 0.003197.

In conclusion, The Ajiya and Adventa companies are non-financial companies listed on the Main Market of Bursa in Malaysia. Their 2019 stock prices differ whereby the Ajiya company records average price of 0.475 while Adventa records an average price of 0.444. In addition to that the return of shares in Adventa is higher at 0.5564% while that of Ajiya is lower at 0.218%. The risk in Ajiya is higher compared to that of Adventa. Thus, the Ajiya Berhad Company shows to be more preferred than that of Adventa.