Friday, November 25, 2011

TDM Good Yield Good Growth

For the latest quarter ended 30.9.2011, EPS equals 21.88 sen. This is indeed commendable. It is 95% better than the previous corresponding period, and 71% better than the preceding quarter. Review of performance of the group reads as follows:

Plantation Division Our Plantation Division reported a 95% increase in profit before tax for the first nine month ended 30 September 2011 compared to the same period last year mainly due to:
i) Higher production of CPO & PK by 12% and 7% respectively. ii) Higher average CPO & PK prices by 32% and 78% respectively:
Healthcare Division Healthcare Division registered higher revenue and profit before tax by 16% and 15% respectively due to increase in number of patients being treated at our hospitals by 8% .
Food Division (Discontinued operation) Food Division recorded profit of RM2.0 million due to increse in average prices of livebird by 20%.

Based on the prevailing CPO and PK prices, the outlook for financial year ending 31 December 2011 remains favourable. Barring unforeseen circumstances, the Group is expected to continue to record satisfactory performance in the current financial year.

Going forward, the group will become more and more profitable as more and more of its lands in East Kalimantan mature. Besides that, its healthcare business is also doing well. The group is cash-rich and has the potential to take opportunity to grow as and when an opportunity arises.

For the year ended 31.12.2011, its EPS is likely to exceed 71 sen. Based on EPS of 71 sen, and on the basis of being traded at 10 times earnings, the stock is worth RM7.10 per share.

At RM3.45, the forward PE works out to be 4.86 which is undemanding. This means the stock is not overvalued.

Disclaimer: As a result of this article, whether you buy, sell or hold TDM, you do so at your own risk absolutely.

Thursday, November 24, 2011

Tit for Tat

Son: Father, I am in love with 3 girls who are all in love with me. I want to marry one of them. They are all from Kampong Lovers, the town in the neighborhood.

Father: Sorry son, but I have to tell you this. You can't marry any of them because they are your half-sisters.

The son was greatly annoyed by this sudden turn of event. He went to his mother and told her what his father had said. Upon hearing it, the mother smilingly said, "Don't worry son. You can marry any of them; you are not his son."

Tuesday, November 22, 2011

Oil palm sector on alert of bud rot disease threat

Monday, November 21, 2011
Oil palm sector on alert of bud rot disease threat

KUALA LUMPUR: Malaysia’s oil palm industry is on alert for the bud rot disease that has killed millions of trees in South America. The disease is estimated to have wiped out some 50,000ha of oil palm estates in South America, said planters from Colombia, the world’s fifth largest oil palm producer in the world.

Although no cure has yet to be found, Malaysian planters should not panic, said Dr Ahmad Kushairi Din, Malaysian Palm Oil Board (MPOB) deputy director-general.

“We’re taking proactive measures from prevention to control, should there be any contamination. Our stringent quarantine controls have always been in place,” he told Business Times on the sidelines of an international seminar held here last Friday.

Malaysia is the world’s second largest palm oil producer and exports from this industry is forecast to hit RM80 billion this year, its second straight record year. The country will soon be sending a team of agronomists to South America to study the disease.

Kushairi, who is also International Society For Oil Palm Breeders president, explained that the bud rot disease is caused by a microbe called phytophthora palmivora. “Based on our initial study carried out more than 10 years ago, we find that the bud rot disease can spread very quickly because this pathogen is able to swim in the water. It thrives in a very humid and cloudy environment,” he said.

MPOB has also signed a research agreement with Cenipalma, the research institute of the Colombian Palm Oil Growers Association.

Colombia, the oil palm hub in South America, has 350,000ha planted with oil palms. It is the fifth largest oil palm country in the world after Indonesia, Malaysia, Thailand and Nigeria.

Jorge Corredor, a Colombian oil palm smallholder attending the seminar, revealed the bud rot disease had wiped out all 3,200ha of his oil palm estates in just two years.

“We tried sanitation, it didn’t work. Even the replanted Dolly Partons we sourced from Malaysia died. Until today, we have not found the cure,” he said.

Malaysia’s oil palms are affectionately called Dolly Partons by planters because the trees are short and produce very big fruit bunches compared to the original palms brought in from West Africa, a hundred years ago. In the last 50 years, our agronomists have been marrying the Dura and Psifera palms (DXP) to get the Dolly Parton hybrids that bear voluptuous fruit bunches.

Corredor said the bud rot disease is not just in Colombia as it has spread to Panama, Suriname, Brazil and Ecuador. "So many of our mills have closed down and many people have lost their jobs. My country and your country is situated along the tropical belt of the globe, we share the same weather. I'm telling you, this bud rot disease is a serious threat."

"I have nothing to gain from talking about what has happened to the oil palm industry in my country. This is something I would not wish upon planters in other countries. This is potentially a global problem," Corredor said. He thinks that the world could face a shortage of cooking oil if the disease finds it way to Southeast Asia.

Thursday, November 17, 2011

Palm oil may rise to RM4,000/ton: Mistry


Malaysian palm oil may rise to RM4,000 per metric ton by June amid rising demand for the commodity, said Dorab Mistry, director of Godrej International Ltd.

Demand for palm oil and biofuels are “buoyant,” he said in a Bloomberg TV interview in Singapore today.

Palm oil supplies will fall as trees enter a “flat” output cycle, he said. -- Bloomberg

Tuesday, November 15, 2011

Buy When There's Blood In The Streets

by Daniel Myers, CFA, CFP (Contact Author | Biography)
Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family, is credited with saying that "The time to buy is when there's blood in the streets."

He should know. Rothschild made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. But that's not the whole story. The original quote is believed to be "Buy when there's blood in the streets, even if the blood is your own."

This is contrarian investing at its heart - the strongly-held belief that the worse things seem in the market, the better the opportunities are for profit.

Most people only want winners in their portfolios, but as Warren Buffett warned, "You pay a very high price in the stock market for a cheery consensus." In other words, if everyone agrees with your investment decision, then it's probably not a good one.

Going Against the Crowd
Contrarians, as the name implies, try to do the opposite of the crowd. They get excited when an otherwise good company has a sharp, but undeserved drop in share price. They swim against the current, and assume the market is usually wrong at both its extreme lows and highs. The more prices swing, the more misguided they believe the rest of the market to be. (For more on this, read Finding Profit In Troubled Stocks.)

Bad Times Make for Good Buys
Contrarian investors have historically made their best investments during times of market turmoil. In the crash of 1987, the Dow dropped 22% in one day in the U.S. In the 1973-74 bear market, the market lost 45% in about 22 months. The September 11, 2001, attacks also resulted in a market drop. The list goes on and on, but those are times when contrarians found their best investments.

The 1973-74 bear market gave Warren Buffett the opportunity to purchase a stake in the Washington Post Company (NYSE:WPO) - an investment that has subsequently increased by more than 100-times the purchase price - that's before dividends are included. At the time, Buffett said he was buying shares in the company at a deep discount, as evidenced by the fact that the company could have "… sold the (Post's) assets to any one of 10 buyers for not less than $400 million, probably appreciably more." Meanwhile, the Washington Post Company had only an $80 million market cap at the time. (For more on Buffett's strategy, read Think Like Warren Buffett and What Is Warren Buffett's Investing Style?)

After the September 11 terrorist attacks, the world stopped flying for awhile. Suppose that at this time, you had made an investment in Boeing (NYSE:BA), one of the world's largest builders of commercial aircraft. Boeing's stock didn't bottom until about a year after September 11, but from there, it rose more than four-times in value over the next five years. Clearly, although September 11th soured market sentiment about the airline industry for quite some time, those who did their research and were willing to bet that Boeing would survive were well rewarded.

Also during that time, Marty Whitman, manager of the Third Avenue Value Fund, purchased bonds of K-Mart both before and after it filed for bankruptcy protection in 2002. He only paid about 20 cents on the dollar for the bonds. Even though for awhile it looked like the company would shut its doors for good, Whitman was vindicated when the company emerged from bankruptcy and his bonds were exchanged for stock in the new K-Mart. The shares jumped much higher in the years following the reorganization before being taken over by Sears (Nasdaq:SHLD), with a nice profit for Whitman. Thanks to moves like this, the Third Avenue Value Fund has earned a market-beating 14.3% return since Whitman founded the fund in 1990.

Sir John Templeton ran the Templeton Growth Fund from 1954 to 1992, when he sold it. Each $10,000 invested in the fund's Class A shares in 1954 would have grown to $2 million by 1992, with dividends reinvested, or an annualized return of about 14.5%. Templeton pioneered international investing. He was also a serious contrarian investor, buying into countries and companies when, according to his principle, they hit the "point of maximum pessimism." As an example of this strategy, Templeton bought shares of every public European company at the outset of World War II in 1939, including many that were in bankruptcy. He did this with borrowed money to boot. After four years, he sold the shares for a very large profit. (To learn more about Templeton and other great investors, see the Greatest Investors Tutorial.)

Putting It On the Line
But there are risks to contrarian investing. While the most famous contrarian investors put big money on the line, swam against the current of common opinion and came out on top, they also did some serious research to ensure that the crowd was indeed wrong. So, when a stock takes a nosedive, this doesn't prompt a contrarian investor to put in an immediate buy order, but to find out what has driven the stock down, and whether the drop in price is justified.

While each of these successful contrarian investors has his own strategy for valuing potential investments, they all have the one strategy in common - they let the market bring the deals to them, rather than chasing after them.

by Daniel Myers, CFA, CFP (Contact Author | Biography)

Daniel Myers has earned the CFA designation, the CFP certification and has managed money for investors since 1998. Read more about him at his company's website, King Capital Management, LLC.

Monday, November 14, 2011

More Singaporeans crossing over for cheaper medical treatment

Sunday November 13, 2011

SINGAPORE: When Goh Chai Gek wanted to deliver her baby boy, she decided it would be cheaper to head across the Causeway.

The total cost of her caesarean section delivery was about RM8,190, including three nights.

It would typically have come up to about S$5,840 (RM14,333) in a hospital here, meaning she enjoyed savings of about 40%.

“I could also claim the amount from Medisave,” said the 30-year-old accountant.

Lured by savings of up to 50%, growing numbers of Singaporeans and PRs are travelling to Malaysia for medical treatment. It comes after the Singapore Government relaxed rules in March last year to allow Medisave to be used to pay for hospitalisation and day surgery treatment in 12 hospitals there.

Those crossing the Causeway for hospital treatment will soon have more choice, when a S$2bil (RM4.9bil) medical hub a joint project between billionaire Singa-pore investor Peter Lim and the Johor royal family opens in 2015.

Before the liberalisation, Medisave could be used only in Singapore, or for emergency treatment overseas.

Health Management International (HMI) and Parkway Pantai Group are currently the only two healthcare groups here accredited to refer patients to Malaysia.

An HMI spokesman said yesterday that 120 patients had used Medisave overseas for their medical treatments to date.

HMI has two hospitals in Malaysia the Regency Specialist Hospital in Johor Baru and Mahkota Medical Centre in Malacca.

Most of the cases are obstetrics and gynaecology. Cardiology, colorectal surgery, ophthalmology and orthopaedic surgery are other commonly sought treatments. - The Straits Times / Asia News Network

Wednesday, November 09, 2011

KL-Singapore high-speed rail project on track

By Sharen Kaur and Zuraimi Abdullah

It is believed that up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM Group to vie for the project.

Kuala Lumpur: The high-speed rail system linking Kuala Lumpur and Singapore could take shape by next year, with three groups leading the early race to win the multi-billion ringgit job, people familiar with the plan said.

The Land Public Transport Commission (SPAD) is expected to start a feasibility study on the project early next year.

The commission had already completed a pre-feasibility study, SPAD chief development officer Azmi Abdul Aziz told Business Times.

SPAD will undertake a feasibility study next, which should take six to 12 months to complete, Azmi added.

If feasible, the project is estimated to cost as much as RM12 billion, with the interested parties offering either European or Chinese technologies.

It is believed that up-and-coming rail tycoon Tan Sri Ravindran Menon has teamed up with UEM Group to vie for the project.

Ravindran controls Skypark Terminal, which recently received an offer from the government to undertake a RM1.5 billion rail project.

The project is to connect the Keretapi Tanah Melayu Bhd (KTMB) station in Subang Jaya, Selangor, to the Skypark Terminal at the Sultan Abdul Aziz Shah Airport.

Business Times understands that the Ravindran-UEM venture made a presentation to the government early this year, specifically on the more than 300km high speed rail line.

Sources said they planned to lay railway lines parallel to the North-South Expressway from Kuala Lumpur, Seremban and Malacca to Johor Baru, before connecting to Singapore.

Others said to be in the running for the job are China Infraglobe Consortium-Global Rail Sdn Bhd and YTL Corp Bhd.

China Infraglobe-Global Rail consortium last made a submission for the job in 2009.

To date, it has yet to make a revised proposal to the government, a company official said.

YTL group managing director Tan Sri Francis Yeoh Sock Ping, who is in New York, declined to comment when asked if the company had made a fresh submission.

YTL, operator of the KLIA Express, first mooted the idea to build a high-speed rail in the late 1990s and again in 2006.

The project was put on hold in April 2008 due to high cost, which was estimated at RM8 billion.

In the middle of 2009, YTL expressed hope that the government would relook at the proposal.

It said it would build the rail line on the coastline of Peninsular Malaysia, rather than that mooted in an earlier proposal of building on the existing track.

Last year, the government said it would revive the project.

It was highligted as a high impact project in the government's Economic Transformation Programme roadmap in a bid to increase economic activities.

Yesterday, the government reiterated that it may go ahead with the project.

Transport Minister Datuk Seri Kong Cho Ha said it would wait for feedback from its Singaporean counterparts as the track would go into its land.

Germany's Siemens had previously offered its solutions to the project.

It proposed the use of its Velaro trains, which have a top speed of 350kph.

Friday, November 04, 2011

Rising tide of China investments in Malaysia

By Bilqis Bahari

Kuala Lumpur: Cash-rich Chinese are splurging their money on Malaysian assets and equities in recent weeks.
The move comes just after Malaysia witnessed a wave of Japanese companies buying up local assets.

During the past couple of months, Japanese investors bought some RM4.48 billion worth of Malaysian assets.

Among the notable acquisitions from them were the purchase of CI Holdings Bhd's Permanis Sdn Bhd for RM820 million, Motor Trader and Autocar Asean magazines for RM109.7 million, Khazanah Nasional Bhd's 30 per cent stake in Integrated Healthcare Holdings Bhd for RM3.3 billion and HPI Resources Bhd for RM258 million.

Now the new trend seems to be originating from China and to a lesser extent, Taiwan.

"Investors from China accumulated a lot of cash in the last couple of years and they are looking for a place to put their cash to work," said Pong Teng Siew, Jupiter Securities head of research.

Indeed, Malaysia has seen many Chinese investors, be it from mainland China, Hong Kong or Taiwan, aggressively investing in local stocks, properties and projects.

"Some people think that it is because these investors are worried that the booming China market will fall, and that is why they are moving their funds to other markets, including Malaysia," an industry observer said.

Chinese companies invested some RM3.1 billion in recent period. They include investments made by Wenzhou Foreign Trade and Economic Cooperation Bureau in the East Coast Economic Region (ECER)'s special zone in Kuantan, Zhuoda Real Estate Group in an Iskandar Malaysia project, as well as a Chinese firm, which partnered Mah Sing Group Bhd in the Icon Residence Mont' Kiara project, to name a few.

On Bursa Malaysia, Chinese investors purchased shares in several listed companies. They include Hong Kong-based Christian Kwok-Leun Yau Heilesen, who today controls some 24 per cent of GPRO Technologies Bhd.

Heilesen also bought a combined 19.9 per cent shares in DVM with Raymond Yip Wai Man in August this year. However, he sold his stake in less than three weeks.

This month, two Chinese nationals - Xu Sheng and Jiang Chuan Yi - have emerged as substantial shareholders in Envair Holdings Bhd, controlling some 13.5 per cent of the company.

They each bought eight million shares in Envair at between 27.3 sen a share and 35 sen apiece.

In August, Fong Shu Cheong, a Chinese national in Hong Kong, became a subtantial shareholder of Cybertowers Bhd by buying 12.11 million shares, or 12.11 per cent, of the company last Friday.

Analysts said Chinese firms or businessmen investing in Malaysia is not unusual since it is only natural for them to forge links with foreign businesses.

"The primary motivation for them to invest in other countries is to establish linkages with overseas businesses. They could tap into the market by importing or exporting their products or our products," Pong said.

Edmund Tham, head of research at Mercury Securities, said the reason for the Chinese to invest depends on the value of the business or investment.

He added that as long as Malaysian businesses relate to their core business and there is value in the investment, they will come to Malaysia.

"The question of why Malaysia (being a preferred destination) depends on the business opportunity whether it is suitable for their business, if there is high risk for them and if the returns are good.

"They evaluate this on a case-to-case basis. Therefore, they don't just invest only in Malaysia, but other countries as well," Tham added.

With the influx of funds from Japan and China buying into Malaysian assets, properties in Malaysia will appreciate and continue to appreciate.
Investors should pay attention to property counters now.

Thursday, November 03, 2011

Investors leave Singapore office empty-handed


SINGAPORE: Retail investors in Singapore trying to salvage their doomed investments from the local MF Global office were left frustrated and empty-handed yesterday after they were told their trading positions were closed and their funds were frozen.

Dozens of worried local investors lined up at the MF Global office throughout the day seeking to recoup their money, but all they received was a form to complete after being told no money would be disbursed until liquidators wound down the bankrupt US brokerage.

"Of course I'm afraid I may not get back anything, that is why I am here," said Andre Chia, a 32-year-old pilot. "I'm waiting for the liquidation, MAS (Monetary Authority of Singapore), maybe I'll end up at the Speakers' Corner," he added, referring to the only place in Singapore where protesters can gather without a permit.

In the wake of the collapse of Lehman Brothers in 2008, hundred of Singaporeans gathered at Speakers' Corner to protest their losses from mini-bonds linked to the failed US bank.

Liquidators from KPMG have assured MF Global customers in Singapore that they are working to ensure all money in client accounts is returned to them.

However, several investors vented their anger that they were closed out of trading positions at a loss, with no option to wait for the market to turn. "I feel uneasy, I don't know how much I will lose. If I have to cut losses, I have to know how much I will lose," said 57-year-old John Wong, who had invested around S$8,000 (RM19,680) with the brokerage.

Around 20 investors went to the office yesterday afternoon, while local media reported that at least 60 people converged on the premises that morning. - Reuters

Dealing with a foreign broker firm you are not familiar with can be disastrous.
Luckily for Malaysians, MF Global has not been in Malaysia.