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Showing posts from October, 2006
World Press Freedom Index 2006
Reporters Without Borders

The countries with the worst record are still North Korea, eritrea, Turkmenistan, Cuba, Burma and China. Bracketed are the positions in 2005.

1 (1) Finland
1 (1) Iceland
1 (1) Ireland
1 (1) Netherlands
31 (34) South Korea
35 (31) Australia
43 (51) Taiwan
51 (37) Japan
53 (44) USA
58 (39) Hong Kong
92 (113) Malaysia
103 (102) Indonesia
108 (90) Cambodia
122 (107) Thailand
141 (115) Sri Lanka
142 (139) Philippines
146 (140) Singapore
147 (138) Russia
155 (158) Vietnam
157 (150) Pakistan
163 (159) China
164 (163) Burma
168 (167) North Korea

Asian countries never rate well in these rankings, and hence these surveys are largely dismissed or ignored by most Asian governments. The press/media is still viewed as a crucial tool to hold onto political power in most of Asia. When will the winds of change arrive ...?? Why are certain countries at the top - well, its simple really, just have the following: no censorship; threats; intimidation; …
Securities Commission Ruling Needs Further Explanation

Subject : SIME DARBY BERHAD - RULING FROM THE SECURITIES COMMISSION IN RELATION TO THE OFFER PRICING OF CONVERTIBLE SECURITIES IN RAMUNIA HOLDINGS BERHAD PURSUANT TO POTENTIAL MANDATORY OFFER FOR SUCH SECURITIES IN THE EVENT AN AGREEMENT IS REACHED ON THE POSSIBLE ACQUISITION OF A CONTROLLING STAKE IN RAMUNIA ("POSSIBLE ACQUISITION")

Contents : Reference is made to the letter by the SC dated 11 October 2006 (which was received on 12 October 2006) in relation to the Possible Acquisition. On behalf of SDB, CIMB Investment Bank Berhad wishes to advise that the Company is currently still in discussions with the vendor in relation to the Possible Acquisition. On 29 September 2006, for the purpose of seeking clarification on the requirement of the Malaysian Code on Take-Overs and Mergers 1998 ("Code") with regards to the pricing of convertible securities pursuant to a mandatory offer, CIMB on behalf of SDB, had writte…
KL, The Cheapest City On Earth According To WSJ
By Stan Sesser, WSJ

From my hotel window I can see one of Asia's tallest buildings -- the dramatic Petronas Twin Towers. My room is spacious and has all the little touches, such as thick terry cloth robes, that you'd expect from a five-star hotel. Downstairs, near the gym, there is a spa with hot and cold whirlpool baths. The breakfast buffet features specialties from Malaysia, China and Japan. All of this, with taxes and service charge, at the Shangri-La Hotel, is costing me US$107 a night. I haven't asked the manager for a discount, nor have I used airline miles to cover two-thirds of the cost. Rather, my room is so inexpensive because I've taken a trip to the world's cheapest major city.

Every three years, Swiss banking giant UBS does a survey of prices around the world, including what a tourist would pay for a typical overnight package of an upscale hotel room, meals, transportation and theater outings. In this year&…
Why So Mad At Turf Clubs??

Just received confirmation that all racing telecast will be stopped from October 20th. Now, why am I so mad with the committee members. Club members hold themselves in close circle of cronyism, I would like to present a few questions to them:

a) who decides who gets to be a member, what God given right does members have it to lord over the paying public?

b) the race course is supposed to move from Sungei Besi to Bkt Beruntung area, as part of comepnsation, why do members ONLY get to buy certain bungalow lots at priviledged prices, when did turf clubs practicse NEP of their own?

c) can we have a breakdown of public patrons and actual club members at race courses - would I be very far off if the ratio is 85-15?? never have so much carried the burden for so few...

d) do the members have the interest of racing at heart of their own??

e) did Tanjong bitch when the Totalisator Board kept losing RM15-30m a year for the longest time, now they are just making a few moves t…
Nextnation
Sounds Like Singapore's New Name For Their Country

A few weeks back I did mention Nextnation as an upcoming stock. The trouble with these stocks is that we don't know the timing of the play. This morning session, Nextnation charged up the volume chart, could be interesting.

Mobile application service provider Nextnation saw its revenues and profits rise in the first quarter ended 31 July 2006. Consolidated revenues totalled MYR 23.5 million, up from MYR 15.2 million in the year-ago quarter. Profit from operations amounted to MYR 5.3 million, up from MYR 4.1 million last year. Net profit rose to MYR 4.8 million, compared with MYR 3.8 million in Q1 1005. Revenues in Malaysia totalled MYR 18.3 million with a net profit of MYR 5.3 million. Revenues from other countries stood at MYR 8.4 million with a net loss of MYR 502,430. The company has credible operations and strategy into India and China.

Recently, NextNation CommunicationBhd has signed a memorandum of understanding …
Sack The Turf Club Committee Members Please!

Barely a month after the launch of live telecast of racing to the homes of Telelink account holders through ASTRO channel 501, the simulcasts have been severely curtailed. The telecasts began in early September, one year after a planned launch was aborted in 2005. Telelink account holders could watch races from Malaysia, Singapore, Hong Kong and Macau "live" in the comfort of their homes. However, no "live" odds and dividends were displayed. On the final week of September, telecast of Hong Kong and Macau ceased with no reason being given by the broadcaster.

Then even the Selangor Turf Club races were cancelled from being broadcasted at the last minute. Now, it is learnt that the three Malaysian turf clubs have withdrawn permission for the live telecasts after suffering huge losses of revenue from gates, parking and rental of corporate boxes in the three weeks of the telecasts. Earlier, the Selangor, Perak and Penang turf c…
IJM & Roadbuilder

Chairman Q said... I am not convinced with the rationale of IJM's purchase of Roadbuilder. There is little to gain from the merger as Roadbuilder is facing with declining order book. IJM is better off focusing on building its own order book or buying concessionary assets from roadbuilder. I suspect Tan Sri Chuah is a nominee and his exit is pre-planned long time ago.

My Take - Let's check and see what overpaid analysts are saying:

IJM
CIMB - Neutral, target price RM5.45
Deutsche Bank - Upgrade to Buy, orderbook all time high, target price RM7.65

Roadbuilder
Kenanga - Buy, target price RM3.50 on the 2 for 1 swap
CIMB - Outperform, target price RM3.29

The funny thing is, CIMB basically has a sell on IJM, based on the swap, even at RM3.00 into RM6.00, Roadbuilder would be a good buy for IJM according to CIMB. Why is Roadbuilder a buy and IJM a sell?? Hmmm ... As usual, you have varying reports on what is fair valuation. It has a lot to do with how many institutional …
The Next Big Thing?
After Puncak, What Can We Hope For?

Puncak gave investors a good boost. RHB Capital was threatening to do the same for a while but held back. I think based on what was reported and transacted, the next best thing will involve Roadbuilder, IJM, IJM-WB and possibly Tronoh.

There was a big transaction at RM2.55 and then at RM3.00 for Roadbuilder. Chua Hock Chin sold 68 million shares @ RM3. Earlier a 12 million shares block was crossed @ RM2.55. These two blocks amounted to 15% of Roadbuilder outstanding shares. The new owner has not surfaced yet but the old owner of Roadbuilder has basically waved goodbye. Roadbuilder is a very well managed company with good asets and projects.

IJM has been trying to woo Roadbuilder for sometime. IJM is in a solid position, order book nearly RM4 billio, and has ventured overseas successfully. Over the next 3 years, IJM should be able to deliver 20% growth p.a. ... Why does it need to buy Roadbuilder?

Construction companies are evolving. T…
Selamat Hari Raya, Puncak Niaga
Watch A Master At Work

Talk about "duit raya", my gosh ...

a) you get the government to approve a water tariff hike

b) the company is effectively giving back RM767.84 million to shareholders

c) you get a 1-for-1 bonus, which is a non event, but nonetheless good in the eyes of many

The timing is not accidental, I tell you. Must do this before Raya la. Plus more importantly, you have the warrants expiring on 20 November 2006, so the better to push share price to facilitate conversion to shares. Warrants that don't get converted means the company will have to pay off the bonds themselves. If the share price encouraged conversion, its the warrant holders who will pay the extra cash for new Puncak shares, and those proceeds will be used to pay off the bonds (a warrant is the detached portion from a convertible bond, after detaching the warrant, the bond becomes a straight bond).

So, how high can it go? Your guess is as good as mine. It would be treac…
101 Economic Wealth

1) Par Value measurement - That's like saying what was your worth 5 years ago or 10 years ago. That's like saying holding one Magnum share has the same economic wealth as holding one Genting share as both have same par value??!! You are trying to measure economic wealth NOW, not 5 or 10 years ago, right or not??

2) GLCs not part of equation - Very simple, just divide according to racial composition of market value of GLCs. Not to include GLCs in economic wealth calculation would be quite ridiculous.

These are just 2 points from the methodology being brought into questioned. If we can find huge faults with the present day calculation, why even bother implementing the 30% NEP, just pick any figure then!!! Hence the government will have to explain clearly how the thing is calculated.
1945 - Isn't That A War Game?

Of course I am refering to the 19% and 45% bumiputra share of economic wealth debate. The government's estimate is of course the lower figure. The ASLI report basically questioned the methodology of the government in coming up with their figure. Naturally, this kind of thing is as significant as finding out that Hang Tuah and Hang Jebat were actual Chinese gangsters (hint... hint..).

In my opinion, the government and UMNO cannot just come out and the ASLI report is rubbish, where is the evidence??!! Malaysians are not stupid. People who refute without any explanation are just "dying chickens kicking the rice pot cover". I am not even going to bother to get both sides to fully explain their methodology YET, ... I would like the government to give the people their course of action should "certain figures" come out. That's because the NEP was continued based on the 19%.

So, say the government and respective bodies agree on an ind…
Jenting & Resorts

sopskysalatsaid...
Well Dali,What really make you so bearish about Genting? It may stand a really good chance of winning the IR in Sentosa. Yes, the investment is huge, but the news may be good to nudge it higher with Merril Lynch being one of the sole house to push the stock.

My Take: i was using the jenting thing as an example, but yes, i am also a bit bearish. i have rarely seen a stock that was bought up on potentially good news, to rise even further on actual good news, have you?? i think jenting did a fantastic job strategically, not with the sentosa thing but with the european takeover, that makes it a global player. the sentosa will be icing. however, the whole thing will burden the company with some debt. the excessive buying prior to actually getting sentosa will ensure mostly sellers should they get it, can u imagine if they do not get it. people should be happier that they got the european thing and not sentosa as the latter has a long drawn out payback,…
Regulated Short Selling Will Fail Dismally

Bursa will not like to hear me on this. They'd probably think I have a deep vendetta against them. First, Bursa is too greedy to try and act as the Central Lending Agency. Brokers, custodians and investors all have to go through Bursa to things done. This creates an unecessary layer which adds to cost.

Secondly, Bursa failed to appreciate why an OTC market would have been better. Not all lenders want to lend shares at 2%, some may only lend at 5% or even 10%. Take Google shares for example, at US$400, probably a lot of people would want to short it, hence the lenders could actually ask for a higher rate before lending out. A transparent and free-market OTC makes for real activity and better returns for bot sides. I am not sure if Bursa even have the mechanism to change the lending rates?? (..what, change the rates... every now and then ... so much work la...).

Thirdly, too much red tape, inteference, scrutiny... blah blah... Having said tha…
NagaCorp IPO In HK
You Have Been Warned, My HK Friends

The institutional order book of Cambodian casino operator NagaCorp's initial public offering is 10 times full, although the retail portion generated a lukewarm response. NagaCorp's initial public offering, which could raise as much as HK$800 million, has attracted orders for about 10 times the number of shares allocated to institutional investors. However, NagaCorp, owned by Malaysian tycoon Chen Lip Keong, generated about HK$306 million worth of margin orders on the second day of the retail share sale. Compared with Beijing department store operator Jingkelong [8245], which was listed on September 25 and which attracted close to HK$1 billion on the second day of its initial public offering, NagaCorp was not very hot.

Its not like CLK (of FACB fame) did not try to list the damn thing in Malaysia or Singapore.... even they rejected the bloody thing. It would have made a lot more sense to list in Thailand as the proximity and i…
Ramunia Again

godzilla said: It was speculated that Sime Darby will offer to buy all Ramunia shares, ICULS and Preference at RM1.20 each and .65 for the warrants, translating to RM750mil total value for the whole company. Given that Ramunia makes approx. 25 mil a year, this translates to a pe of 30x. I think this is too rich for Sime Darby... what do you think ?

It is not cheap, but some buyers may pay more for certain reasons. Sime will be able to pay more as Ramunia has the expertise, crew and order s on hand. Sime also knows that it will be able to throw a lot more jobs Ramunia's way, which will make the current purchase price seem not so expensive. The only troubling thing is that M&As such as the rumoured Esso and Ramunia and even Roadbuilder are taking so damn long. Best global practice in M&A activity is to conclude the deal asap. But Malaysians seem to like to dilly-dally. Why is speed a global best practice - it removes uncertainty, it removes excessive speculatio…
The Departed Infernal Affairs

Allow me to indulge for a moment in movies. I was always amused with movie titles, when Infernal Affairs came out, I thought it was a documentary about ISA. When The Departed came out, I thought it was quick-commercialised cash-in on Thaksin's legacy. There was a time when I thought Waiting To Exhale was a movie about Malaysian public toilets!

Anyways... if there was no IA, The Departed would have been an excellent movie on its own as there would be no comparison. But there is, .... still, TD came out as slightly different but still A rated. When you are Martin Scorcese, you better make it differently. The story has to change a little. Basing it in Boston, the gang initiation thing could not possibly work, hence that initiation thing was kinda lost as to why Matt Damon was so close to Jack. The good twist was that the only girl in the movie was involved in a triangle, instead of the two having differing girlfriends. This was a shrewd rewrite and puts mo…
All Time High / 6 Year High
So What

The Malaysian bourse seems to be just catching up to the highs being registered by Dow Jones, Hang Seng, etc... For all Malaysian dealers and remisiers, stop for a moment and ponder, this is a 6 year high and just look at the market activity, look at your take home pay... does it feel like a 6 year high??? When your market is at a 6 year high and you are still not taking friends and families out for dinner and stuffs, ... can you imagine what it will be like if its not at any kind of highs?? The Bursa and Finance Ministry must take a lot responsibility for the capital markets road map we have taken for the past few years. In all probablity, we have adequate people at the top, but even more obvious is probably the people we have are not good enough. Anyone with the political will to do something??? !! Sometimes, its not enough to have average employees, especially when the stakes are so high. The secondary institutions deemed to be responsible would b…
Why Andy Xie Resigned?
By Steven Irvine

Morgan Stanley's vocal star analyst suddenly resigns. An email he wrote about Singapore may explain why. The market was shocked on Friday when Morgan Stanley announced that its Asia economist, Andy Xie, had resigned. The announcement was brief and mysterious, giving no explanation of why he was going or where he was going. With Morgan Stanley's bonus period only two months away, it looked like a very strange time for the Shanghai-born Xie to leave the firm. The Hong Kong rumour mill quickly began speculating as to why Xie had left. Attentions have focused on an email that Xie penned on September 18. Many copies of the email - which was about Singapore - have since been passed around by the region's fund management and banking community.

The subject line of Xie's email was 'Observations on the IMF/ World Bank conference'. That event was hosted in Singapore, and the email was written just after the conference finished. The e…
Only In Singapore
A True Or False Quiz, Can You Get All Correct?

1) Large sized woks will no longer be sold in Singapore. The size and shape apparently made it easy to convert them to satellite dishes. This may actually imply that the wok must have been invented more than just for cooking purposes. Maybe 500 years ago, the Chinese were already communicating with alien forefathers while making their tummies warm. As usual, the Prime Minister's office decreed that smart and savvy Singaporeans must be protected from undesirable foreign broadcasters. I guess, soon, you cannot place a large order of Sing Chow Chowmein, cause the chef would have cook the bloody thing twice on his smallish wok!!

2) In order to maintain their record of cases won, the Lees have now decided to sue the orangutan from Singapore Zoo. After barring certain foreign publications earlier in the week (the government imposed a rule requiring all foreign publications to place a bond and appoint a local rep, so that they…
Mudslingers by Anwar Ibrahim
As printed in WSJ

The recent spat between former Malaysian Prime Minister Mahathir Mohamad and his successor, Abdullah Ahmad Badawi, is farcical to say the least. Dr. Mahathir has been whining like a wounded lion as he sees some of his policies reversed. But the irony is that Mr. Abdullah's actions have so far been too weak and indecisive to constitute any serious challenge to his predecessor's legacy.

The former prime minister's initial grievance was the government's decision last October to lower tariffs on auto imports, thus threatening the viability of the national carmaker Proton, which Dr. Mahathir has always championed. Then, in April, the Abdullah administration decided to scrap one of Dr. Mahathir's pet projects, a bridge linking Malaysia and Singapore, after the island state demanded concessions on other issues in return for allowing the project to go forward.While we are not privy to the vows exchanged in the throne room when Dr…