How to select a Medical Plan?

While celebrating Father's day, I have a meaningful story to share with you. I visited a hospital in KL recently and to my surprise, I came across a little boy who was diagnosed with leukemia. More surprising, his age was only 8 years old. Oh my god, this little boy doesn't even know what leukemia was, and he had to suffer from such a young age!!! Through these torturing times, I believe his father's love is what he needed the most. God bless him.

Do you know that almost 9/100 Malaysians aged above 35 suffer from diabetes?

Do you know that over 1/5 are expected to get cancer in their lifetime?

The fact is, because of the stressful and unhealthy way of life today, lifestyle diseases are on the rise. Do you have any real example from your own little circle?

We can, however, spare our self and our loved ones a lot of anxiety with comprehensive medical plans, which provide a financial cushion in times of need. Although these plans cannot prevent illnesses, it can help us to go through those rough times - financially.

Most Malaysians are unprepared for the rising cost of medical care

It was a fact. The Government spent a huge proportion of the public's bill with health expenditure which runs into billions of ringgit yearly. Luckily, more and more people are aware of the importance of insurance. I know you do, right? Insurance not only makes healthcare affordable, but also offers access to better and more timely medical attention at private and public institutions.

If you have medical insurance, you have the option to selected the hospital of your choice to enroll in. If not, you can only surrender yourself to government hospital. With a plan in hand, you have the peace of mind to focus on recovery. Do you want yourself worrying on medical bills while laying on the bed?

Things to take note of on Medical plan:

• Is it Guaranteed Renewable?
• How much is the Room & Board rate allowable?
• Any co-insurance / co-payment? How was it calculated? If any, are there any maximum limit for your part?
• What is the annual limit and lifetime limit?
• Renewable until what age? 70 or 80 or 100 years old?
• Lastly, ensuring that the above answers were written clearly on the quotation or policy. Please DO NOT trust the words spoken by insurance agent. See for yourself to prove it.

Basically, all of the medical plans offered in Malaysia have annual limit. However, some insurer may waive the annual limit, subject to certain condition or with a rider. With an additional rider, it commensurate with a higher premium. There is pros and cons to this. And, you should be able to justify the increase charges just to waive the annual limit. If the extra premium is high, you may consider taking up a higher annual limit medical plan, or buying another standalone medical card to supplement it.

Post-Japan Disaster: After Timber, it's Glove Sector?

As per our previous posts (How Should Investors trade after the Japanese Disaster?), we wrote about timber counters, and it's proven the right sector investors should look at. And, below is the performance of those mentioned counters.

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All of them outperformed KLCI, which recorded -2.20%. Why WTK outperformed its peers? Simple answer is its cheaper share price and better liquidity. In fact, TaAnn and WTK is the main focus because they export 80-90% of their products to Japan. This puts them in the limelight of stocks investors should look at for the moment.

Why should you look at Glove sector next?

After timber, glove sector should outperformed the generally weak market sentiment. Investors are scared. Those who already bought was stuck-in there. Those who already sold was staying sidelined. And, those who dare to buy now is focusing on timber stocks only - and today glove.

Main reasons were:

1. Demand for medical glove is expected to increase substantially. After the disaster, Japan should be facing another problem - outbreak of diseases. Because of the wet and dirty condition after tsunami, diseases tends to spread easily and this could intensify the demand for gloves being used by medical personnel and public in general.
2. Stronger USD. One of the setback for our glove makers is weakening of USD which could harm the export market to US. Post-Japan disaster, USD was expected to strengthen in line with "flight to safety" strategy employed by global investors. This is an advantage, or in fact, the turning point for our glove makers.

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With these two important factors, glove sector should be on investors' radar in the near future. Indeed, you do not have much choice in this kind of market where everything seems going down hill. Either you stay sidelined, or brace the storm to invest in these counters. And, my personal stock-picks would be Supermax due to its attractive valuation and good liquidity.

Finance Malaysia urged all Japanese to stay strong, and we will support you from afar. We are living in the same planet. We are 1 actually.

Analyzing Latexx Partners' takeover offer

Just before CNY, Latexx surprisingly announcing that the company had accepted a non-binding takeover offer by two private equity funds. However, the deal looks unattractive with limited upside given the offer price of RM3.10 only. For your information, it is only 10.7% above the last trading price of RM2.80 only.

About the offer:

• The offer values Latexx at 8.2x P/E only versus sector's average of 11.7x
• The takeover offer needs to secure a 75% shareholders' approval as lay out by the new rules
• With RM3.10 per share, the offer was valued as RM 852.03 million (inclusive of 55.03 million warrants)

Would the deal materialize?

Finance Malaysia doubt the deal will go through, given the unattractive valuations attached. Please take note that Latexx was one of the largest medical examinations gloves producers globally. By taking over at a mere 8.2x P/E, it would be a very good buy, but not a good sell at all. Another issue which sparks our interest was that the background of the two private equity funds being the acquirers.

Navis Asia VI Management Company Limited (Navis), a wholly owned unit of Navis Capital Partners, a US$ 3bn investment firm. Meanwhile, Mettiz, a holding company owned by Michael Tang Vee Mun, was the provider of equity financing for KNM Group's failed management buyout early last year. (CIMB research)

Would it be another "failed" buyout by Mettiz? A repeat of the dramatic KNM's tumbling version? Finance Malaysia really can't predict the outcome from the EGM to be convened soon on the offer. It's all depends on Latexx's shareholders to decide.

But, judging from the "not so performing" share price the day after the said announcement, most probably the outcome is already been factor-in... which was "failed". Anyway, we may heed the advise from the independent adviser appointed by Latexx's board of directors -- Hong Leong Investment Bank -- before voting.

After all, I like Supermax and Kossan for its lower P/E and larger players in the same industry.

Related Posts:

2011 Malaysia Outlook: Sunshine to Sunset

Brighter outlook for Glove Sector?

Special Credit Cards for Hospital? Worth it?

Before checking into a hospital, make sure that you bring your favorite hospital linked credit card next time. Due to stiff competition in credit card industry, special cards which linked to hospital services became a "think out of the box" thing here. Below highlights some of the features for such credit card:

• 2% cash rebate on all expenses at the hospitals
• 20% savings on all hospitals' suites
• 10% savings on all hospitals' charges during admission (excluding doctors' fees)

Fortunately, I had never stay in a hospital before. And due to this, I never experienced the service provided by a particular hospital.

Do we really need such a card?

For me, I will use credit cards to shop, if credit cards can gave me discount /  rebate. Going for shopping can be anytime anywhere as long as I like it. However, going to hospital was not a leisure event, which I do not like to do, and I believe you feel the same. Instead, we should buy a Medical Card for hospitalization.

I think this kind of credit card is meant for those who always visiting hospital, or those old forks. Besides getting discount, cardholders are entitle to fast-admission and earn points for various usage. Good?