UDA- an alternative to putting money in FDs

If you are tired of earning only 3.25% per annum from putting your money in FDs but you are not ready to take a plunge into the stock market due to the high volatility, I may have something for you to consider.

I would recommend that you take a look at a property stock named UDA, which Khazanah is taking private at RM3.00 per share. Since the proposal was announced on June 30, UDA has been trading at a range between RM2.81 and RM2.85 (see the Chart below). It closed at RM2.81 yesterday (July 20). I expect the entire privatization exercise to be completed within 6 months’ time. What kind of return are we looking at? Assuming that you manage to buy UDA at a price of RM2.81, then your gross return is about 6.76% (or net of 5.76%, after deducting 1% for brokerage, stamp duties & clearing fee). Since the holding period is only 6 months, your return is actually higher at 13.52% (gross) or 11.52% (net) per annum.

















Chart: UDA's weekly chart as at July 20