马 到 功 成. Success is when the horses come. Success goes only to those who dare and act, it seldom goes to the timid. The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.
Tuesday, March 13, 2012
EPF Takes Profits
The Star Online > Business
Tuesday March 13, 2012
EPF goes on selling spree
It disposes of RM441mil worth of shares on March 7
By CHOONG EN HAN
han@thestar.com.my
PETALING JAYA: The Employees Provident Fund (EPF) sold a whopping RM441.09mil worth of Malaysia-listed equities on March 7 alone, in line with its trend of active disposals over the last two weeks.
Bursa Malaysia filings showed that on March 7, the EPF along with its portfolio managers dumped a total 83.68 million shares on the open market, substantially more than the 7.4 million shares it had acquired the same day.
The number of shares disposed of represents almost half the total volume traded that day, which stood at 173.14 million shares.
Fund managers reckon that the fund was merely taking profit but its aggressive selling had dragged the FBM KLCI down from its all-time high last week.
The FBM KLCI ended 10.47 points lower at 1,574.83 that day from 1,594.74 on Monday.
“It seems that the portfolio managers under EPF are taking a breather after the market climbed to near all-time highs.
“The number is substantial, and definitely the index would be down from the disposal. Filings next week will show whether the fund has continued with its selling spree this week,” said a fund manager.
Under the Companies Act 1965, substantial shareholders need only notify the listed company of the shareholding transaction within seven days.
Among the biggest disposals on March 7 were 11.43 million shares in Telekom Malaysia Bhd, 10.72 million shares in Axiata Group Bhd, and 10.23 million shares in YTL Corp Bhd.
EPF's divestment of shares has been going on for the last two weeks.
Most notably, between Feb 28 and March 1, it had disposed of about 30.3 millions shares in Maybank.
It had also early this month sold 10.7 million shares in UMW Holdings Bhd, 8.5 million shares in CIMB Group, 6.5 million shares in Telekom Bhd, six million shares in DiGi.Com Bhd, 3.7 million shares in IJM Corp Bhd, and 3.2 million shares in IOI Corp Bhd.
Meanwhile, EPF chief executive officer Tan Sri Azlan Zainol is reported to have said that the EPF had not distorted the market.
“It is all unintentional. We transact over three million shares at any one time; of course the market would be distorted,” he said.
In another development, the EPF is expected to start distributing portions of the Rubber Research Institute of Malaysia land in Sungai Buloh by June.
It is leading the development of the proposed prime township development via Kwasa Land Sdn Bhd, a wholly-owned subsidiary of the EPF.
Tuesday March 13, 2012
EPF goes on selling spree
It disposes of RM441mil worth of shares on March 7
By CHOONG EN HAN
han@thestar.com.my
PETALING JAYA: The Employees Provident Fund (EPF) sold a whopping RM441.09mil worth of Malaysia-listed equities on March 7 alone, in line with its trend of active disposals over the last two weeks.
Bursa Malaysia filings showed that on March 7, the EPF along with its portfolio managers dumped a total 83.68 million shares on the open market, substantially more than the 7.4 million shares it had acquired the same day.
The number of shares disposed of represents almost half the total volume traded that day, which stood at 173.14 million shares.
Fund managers reckon that the fund was merely taking profit but its aggressive selling had dragged the FBM KLCI down from its all-time high last week.
The FBM KLCI ended 10.47 points lower at 1,574.83 that day from 1,594.74 on Monday.
“It seems that the portfolio managers under EPF are taking a breather after the market climbed to near all-time highs.
“The number is substantial, and definitely the index would be down from the disposal. Filings next week will show whether the fund has continued with its selling spree this week,” said a fund manager.
Under the Companies Act 1965, substantial shareholders need only notify the listed company of the shareholding transaction within seven days.
Among the biggest disposals on March 7 were 11.43 million shares in Telekom Malaysia Bhd, 10.72 million shares in Axiata Group Bhd, and 10.23 million shares in YTL Corp Bhd.
EPF's divestment of shares has been going on for the last two weeks.
Most notably, between Feb 28 and March 1, it had disposed of about 30.3 millions shares in Maybank.
It had also early this month sold 10.7 million shares in UMW Holdings Bhd, 8.5 million shares in CIMB Group, 6.5 million shares in Telekom Bhd, six million shares in DiGi.Com Bhd, 3.7 million shares in IJM Corp Bhd, and 3.2 million shares in IOI Corp Bhd.
Meanwhile, EPF chief executive officer Tan Sri Azlan Zainol is reported to have said that the EPF had not distorted the market.
“It is all unintentional. We transact over three million shares at any one time; of course the market would be distorted,” he said.
In another development, the EPF is expected to start distributing portions of the Rubber Research Institute of Malaysia land in Sungai Buloh by June.
It is leading the development of the proposed prime township development via Kwasa Land Sdn Bhd, a wholly-owned subsidiary of the EPF.
Thursday, March 08, 2012
Bullish bets on palm oil
By Ooi Tee Ching
bt@nstp.com.my
2012/03/08
OIL palm planters are smiling again this year as price forecast gurus at the Palm and Lauric Oils Outlook Conference (POC) 2012 placed bullish bets on crude palm oil (CPO) prices.
Hamburg-based ISTA Mielke GmbH executive director Thomas Mielke highlighted that for the first time in history, drought has impacted soy bean output in the United States and Latin America at the same time.
"We're likely to see global soy bean output plunge by 20 million tonnes this year," he said.
Mielke, who is also editor of Oil World journal, said "poor weather is also hurting rapeseed yields in Ukraine and the European Union".
He then said Malaysia's palm oil production could touch 19.3 million tonnes this year compared with 18.9 million tonnes in 2011. As for Indonesia, he foresees output to expand to 25.5 million tonnes.
"I still think these rise in palm oil output will not be enough to offset shortage in soya and rape oils."
He stressed that the oil palm industry must continue its focus on yield improvement as a way to overcome limitations of arable land and water so as to retain world market leadership.
Mielke, a well-respected and authoritative vegetable oil analyst, once again, at this POC series rejected calls by green activists for a moratorium on oil palm plantings and encourage adoption of genetically modified technology.
"In order to satisfy the daily oils and fats need of an increasing global growing population, we need to plant more genetically-modified oil crops that are drought tolerant and disease resistant," he urged the 2,000-odd participants at the POC 2012.
He repeated his message to oil palm planters not to be misled by green activists' lobby to limit expansion of oil palm plantations as the world continues to face shortage of edible oils.
The conference, which traditionally focused on price forecasts for palm and coconut oils, had in the last few years, taken a more holistic approach.
Mielke then concluded that palm oil prices is likely to average at around RM3,500 per tonne this year.
LMC International Ltd chairman Dr James Fry was next to take to the stage. He said 2011 was a year of wonder for planters, which saw excellent prices and close to ideal output conditions.
He reiterated his long-held view that palm oil prices would continue to be highly influenced by petroleum prices.
Yesterday, Brent crude oil rose above US$122 (RM366) a barrel after China said it would boost energy imports this year, while concerns persist over supply risks and Iran's nuclear programme despite the country's offer for talks with major powers.
High petroleum prices translates to more demand for biofuel.
This, in turn, means better demand for CPO. On top of this, there is already strong demand for CPO in emerging markets like China and India as their big population consumes more food.
Fry forecasts the CPO price could rise as high as RM3,310 and fall as low as RM2,590 a tonne if Brent crude oil were to settle to a "realistic level" of US$86 a barrel.
"If, however, Brent crude were to go on hovering at current US$125 a barrel, CPO is likely to trade between RM3,140 and RM3,360 a tonne," he said.
Since October 2011, the Indonesian government has widened the export tax gap between CPO and refined products drastically to boost refining capacity and downstream activities. As a result, CPO and crude palm kernel oil became cheaper for downstream producers there.
Fry noted that Malaysian refiners were starting to concede global palm oil market share to Indonesia. This is pushing more palm oil stocks to Malaysia.
As a stop-gap measure, the Malaysian government has allowed duty-free CPO exports amounting to 3.6 million tonnes this year.
At the industry's leading global conference yesterday, London-based Godrej International director Dorab Mistry said CPO prices, now trading around RM3,200 a tonne, can hit RM4,000 in three months due to the threat of war and geo-political tensions in Iran, specifically at the Gulf of Hormuz.
"I'm assuming that Brent crude oil will go on trading at between US$100 and US$120 a barrel but with the threat of geo-political uncertainty in Middle East and North Africa, vegetable oils prices could climb to higher levels," he said at the POC 2012 here yesterday.
Given the high energy prices, tight palm oil stocks and rising demand, the CPO price is due to reach a new high in the next quarter.
"It is conceivable that CPO prices may test RM4,000 a tonne by June," he said.
He reckons that 2012 is a year of two halves, of which palm oil prices remains bullish on tight supply in the first half. As for the latter part of the year, Dorab said early signs of emerging drought could slash palm oil output.
bt@nstp.com.my
2012/03/08
OIL palm planters are smiling again this year as price forecast gurus at the Palm and Lauric Oils Outlook Conference (POC) 2012 placed bullish bets on crude palm oil (CPO) prices.
Hamburg-based ISTA Mielke GmbH executive director Thomas Mielke highlighted that for the first time in history, drought has impacted soy bean output in the United States and Latin America at the same time.
"We're likely to see global soy bean output plunge by 20 million tonnes this year," he said.
Mielke, who is also editor of Oil World journal, said "poor weather is also hurting rapeseed yields in Ukraine and the European Union".
He then said Malaysia's palm oil production could touch 19.3 million tonnes this year compared with 18.9 million tonnes in 2011. As for Indonesia, he foresees output to expand to 25.5 million tonnes.
"I still think these rise in palm oil output will not be enough to offset shortage in soya and rape oils."
He stressed that the oil palm industry must continue its focus on yield improvement as a way to overcome limitations of arable land and water so as to retain world market leadership.
Mielke, a well-respected and authoritative vegetable oil analyst, once again, at this POC series rejected calls by green activists for a moratorium on oil palm plantings and encourage adoption of genetically modified technology.
"In order to satisfy the daily oils and fats need of an increasing global growing population, we need to plant more genetically-modified oil crops that are drought tolerant and disease resistant," he urged the 2,000-odd participants at the POC 2012.
He repeated his message to oil palm planters not to be misled by green activists' lobby to limit expansion of oil palm plantations as the world continues to face shortage of edible oils.
The conference, which traditionally focused on price forecasts for palm and coconut oils, had in the last few years, taken a more holistic approach.
Mielke then concluded that palm oil prices is likely to average at around RM3,500 per tonne this year.
LMC International Ltd chairman Dr James Fry was next to take to the stage. He said 2011 was a year of wonder for planters, which saw excellent prices and close to ideal output conditions.
He reiterated his long-held view that palm oil prices would continue to be highly influenced by petroleum prices.
Yesterday, Brent crude oil rose above US$122 (RM366) a barrel after China said it would boost energy imports this year, while concerns persist over supply risks and Iran's nuclear programme despite the country's offer for talks with major powers.
High petroleum prices translates to more demand for biofuel.
This, in turn, means better demand for CPO. On top of this, there is already strong demand for CPO in emerging markets like China and India as their big population consumes more food.
Fry forecasts the CPO price could rise as high as RM3,310 and fall as low as RM2,590 a tonne if Brent crude oil were to settle to a "realistic level" of US$86 a barrel.
"If, however, Brent crude were to go on hovering at current US$125 a barrel, CPO is likely to trade between RM3,140 and RM3,360 a tonne," he said.
Since October 2011, the Indonesian government has widened the export tax gap between CPO and refined products drastically to boost refining capacity and downstream activities. As a result, CPO and crude palm kernel oil became cheaper for downstream producers there.
Fry noted that Malaysian refiners were starting to concede global palm oil market share to Indonesia. This is pushing more palm oil stocks to Malaysia.
As a stop-gap measure, the Malaysian government has allowed duty-free CPO exports amounting to 3.6 million tonnes this year.
At the industry's leading global conference yesterday, London-based Godrej International director Dorab Mistry said CPO prices, now trading around RM3,200 a tonne, can hit RM4,000 in three months due to the threat of war and geo-political tensions in Iran, specifically at the Gulf of Hormuz.
"I'm assuming that Brent crude oil will go on trading at between US$100 and US$120 a barrel but with the threat of geo-political uncertainty in Middle East and North Africa, vegetable oils prices could climb to higher levels," he said at the POC 2012 here yesterday.
Given the high energy prices, tight palm oil stocks and rising demand, the CPO price is due to reach a new high in the next quarter.
"It is conceivable that CPO prices may test RM4,000 a tonne by June," he said.
He reckons that 2012 is a year of two halves, of which palm oil prices remains bullish on tight supply in the first half. As for the latter part of the year, Dorab said early signs of emerging drought could slash palm oil output.
Monday, March 05, 2012
From Waste to Wealth
From waste to wealth or from trash to cash, both are as good as having the best of two worlds.
Oil palm biomass ( OPB) is formerly burned if not left to rot. This is bad for the environment. Thanks to innovation and technology, OPB has become a valuable asset to the oil palm plantations. No longer is it a concern or something that has to be disposed off with much expenditure.
Nowadays, the product is much sought after as it is capable of being turned into animal feeds, fertilizer, wood products, biofuel, ethanol, biochemical and many other useful goods.
Malaysian oil palm plantations now have zero burning. Everything about the oil palm trees is useful in more ways than one.
Oil palm stocks have been on the rise since the plantation index minor bottom of 6625 formed on 3.10.11. At the time of writing this post, it stands at 8676. The uptrend is likely to continue.
Oil palm biomass ( OPB) is formerly burned if not left to rot. This is bad for the environment. Thanks to innovation and technology, OPB has become a valuable asset to the oil palm plantations. No longer is it a concern or something that has to be disposed off with much expenditure.
Nowadays, the product is much sought after as it is capable of being turned into animal feeds, fertilizer, wood products, biofuel, ethanol, biochemical and many other useful goods.
Malaysian oil palm plantations now have zero burning. Everything about the oil palm trees is useful in more ways than one.
Oil palm stocks have been on the rise since the plantation index minor bottom of 6625 formed on 3.10.11. At the time of writing this post, it stands at 8676. The uptrend is likely to continue.
Monday, February 27, 2012
TDM, a Potential Gold Mine
A revaluation exercise of certain assets of TDM has resulted in a surplus of RM286.7m for the group. This means that its NTA per share has ballooned to RM4.93 from RM3.22 a year ago. Its latest quarterly result of 18.69 sen per share is better than anticipated. Its full year result of 66.32 sen per share when compared to its previous year result of 40.66 sen per share is commendable.
The group which is now focused in plantations and hospitals has lots of growth going forward. Its cash and cash equivalents as at 31.12.11 stands at RM224,424,000. As at 31.12.10, it was only RM176,100,000. The group is cash-rich and asset-rich as well.
Hold on to your shares for more upside. A bonus with a split is a likely scenario as the group is under immense pressure to be more liquid.
The group which is now focused in plantations and hospitals has lots of growth going forward. Its cash and cash equivalents as at 31.12.11 stands at RM224,424,000. As at 31.12.10, it was only RM176,100,000. The group is cash-rich and asset-rich as well.
Hold on to your shares for more upside. A bonus with a split is a likely scenario as the group is under immense pressure to be more liquid.
Monday, February 13, 2012
Spreading Love With Coffee
When spreading love with coffee
Why not try Tongat Ali
Two cups a day, keep you alert for work and play
Economical, good to smell and good to taste
Go, have a cup at your nearest cafe
And buy some for your love on Valentine Day.
Tongkat Ali, now known as Power Root, is presently traded at around 53 sen. I think this is good value for the stock.
Why not try Tongat Ali
Two cups a day, keep you alert for work and play
Economical, good to smell and good to taste
Go, have a cup at your nearest cafe
And buy some for your love on Valentine Day.
Tongkat Ali, now known as Power Root, is presently traded at around 53 sen. I think this is good value for the stock.
Sunday, February 05, 2012
Stock Market Wisdom
Stock prices move in trends.
A trend in motion is assumed to continue.
Buying in a downtrend is unwise.
Selling in an uptrend is not advised.
To be intelligently involved in the stock market you need to have stock market wisdom.
What is stock market wisdom? It is simply the knowledge to apply knowledge for beneficial returns.
What is the best way to approach the market?
The best way to approach the market is to invest in the market. In the words of Benjamin Graham, the mentor of Warren Buffett, "An investment operation is one which, upon through analysis, promises safety of principal and satisfactory return. Operations not meeting these requirements are speculative." Most people approach the market wrongly. They like to trade and speculate. No doubt, trading is much more interesting than investing. Trading provides you with the thrills and excitement. It is one of the most exciting things anyone can do with his clothes on.
But in trading, few have the ability to win. Many end up with disastrous losses. If you are about to speculate in the stock market, it behooves you to ask yourself whether you have the mental power and ability to cope with the ablest money getters in the world. If you do not, then perhaps it's better for you to restrict yourself to investing only.
How do I invest intelligently in the market?
Insist on value when you buy stocks. A stock has three values. They are the market value, the net tangible value and the intrinsic value. The first two values are easy to understand. The intrinsic value needs some explanation.
Intrinsic value includes the tangible and intangible factors as well. Brand names, patents, copyrights, the business moral, and the competency and integrity of the management must all be factored into the calculation. It all boils down to earnings power. The more a company earns, the higher its intrinsic value. There are times when these three values are at different levels. When the market value is much lower than the intrinsic value, the stock is undervalued. This does not mean that you should rush in and start your buying. An intelligent investor will have a look at its chart first before he does anything. If the stock is in a downtrend, he will wait until the trend shows some sign of a reversal. Timing the stock is not easy but you should do it nonetheless. Upgrade yourself; study technical analysis, and over time your skill will improve and you will save a lot of money.
What is a good stock to buy?
A good stock must have good prospect. Present earnings are important but it's the prospective or future earnings that count. A company with a gearing of more than 0.5 has a greater risk than one that has less borrowings. All companies that folded had high borrowings. Therefore, companies with high borrowings should be avoided. Earnings are the lifeblood of a company. Without earnings, a company cannot survive. When you look at earnings, look at earnings per share (EPS).
The most important aspect of a company is its management. Not only must its management be smart, capable and competent, it must have integrity. Without integrity, no matter how capable it is, the money will not come to you. Some of the attributes of a good company are: Consistent higher EPS year after year; good cash flow; good dividend payout and growth, low borrowings or no borrowings.
Investing in a stock takes a lot of research. Fundamental analysis is a must. What is fundamental analysis? Simply put, it means that you must know what the company has and what it owes others. A look at the balance sheet will show you the information.
There are always two sides to a gamble. On one side ,we have the winners and on the other side we have the losers. If you are in the side of the winners, it is difficult for you to lose. If you are in the side of the losers, it is difficult for you to win.
Look at the lottery operators, and the casinos. They always win because you play the games according to their rules which they set up to favor them.
In the stock market, to ensure success and make money, you can also set up your rules to favor you so that you will win.
As with everything, planning is paramount. To develop a piece of land, you must have a plan. To go into business, you must have a plan. And if you want your children to be well-educated, you must have a plan as well. Thus, you should plan out your strategy if success is what you want.
A trend in motion is assumed to continue.
Buying in a downtrend is unwise.
Selling in an uptrend is not advised.
To be intelligently involved in the stock market you need to have stock market wisdom.
What is stock market wisdom? It is simply the knowledge to apply knowledge for beneficial returns.
What is the best way to approach the market?
The best way to approach the market is to invest in the market. In the words of Benjamin Graham, the mentor of Warren Buffett, "An investment operation is one which, upon through analysis, promises safety of principal and satisfactory return. Operations not meeting these requirements are speculative." Most people approach the market wrongly. They like to trade and speculate. No doubt, trading is much more interesting than investing. Trading provides you with the thrills and excitement. It is one of the most exciting things anyone can do with his clothes on.
But in trading, few have the ability to win. Many end up with disastrous losses. If you are about to speculate in the stock market, it behooves you to ask yourself whether you have the mental power and ability to cope with the ablest money getters in the world. If you do not, then perhaps it's better for you to restrict yourself to investing only.
How do I invest intelligently in the market?
Insist on value when you buy stocks. A stock has three values. They are the market value, the net tangible value and the intrinsic value. The first two values are easy to understand. The intrinsic value needs some explanation.
Intrinsic value includes the tangible and intangible factors as well. Brand names, patents, copyrights, the business moral, and the competency and integrity of the management must all be factored into the calculation. It all boils down to earnings power. The more a company earns, the higher its intrinsic value. There are times when these three values are at different levels. When the market value is much lower than the intrinsic value, the stock is undervalued. This does not mean that you should rush in and start your buying. An intelligent investor will have a look at its chart first before he does anything. If the stock is in a downtrend, he will wait until the trend shows some sign of a reversal. Timing the stock is not easy but you should do it nonetheless. Upgrade yourself; study technical analysis, and over time your skill will improve and you will save a lot of money.
What is a good stock to buy?
A good stock must have good prospect. Present earnings are important but it's the prospective or future earnings that count. A company with a gearing of more than 0.5 has a greater risk than one that has less borrowings. All companies that folded had high borrowings. Therefore, companies with high borrowings should be avoided. Earnings are the lifeblood of a company. Without earnings, a company cannot survive. When you look at earnings, look at earnings per share (EPS).
The most important aspect of a company is its management. Not only must its management be smart, capable and competent, it must have integrity. Without integrity, no matter how capable it is, the money will not come to you. Some of the attributes of a good company are: Consistent higher EPS year after year; good cash flow; good dividend payout and growth, low borrowings or no borrowings.
Investing in a stock takes a lot of research. Fundamental analysis is a must. What is fundamental analysis? Simply put, it means that you must know what the company has and what it owes others. A look at the balance sheet will show you the information.
There are always two sides to a gamble. On one side ,we have the winners and on the other side we have the losers. If you are in the side of the winners, it is difficult for you to lose. If you are in the side of the losers, it is difficult for you to win.
Look at the lottery operators, and the casinos. They always win because you play the games according to their rules which they set up to favor them.
In the stock market, to ensure success and make money, you can also set up your rules to favor you so that you will win.
As with everything, planning is paramount. To develop a piece of land, you must have a plan. To go into business, you must have a plan. And if you want your children to be well-educated, you must have a plan as well. Thus, you should plan out your strategy if success is what you want.
Thursday, February 02, 2012
Myths or Truths
The more frequent you trade, the faster you are heading toward your financial ruins.
Odds are in favor that the shares you sell do better than the shares you buy. So be extra careful when you make changes in your portfolio.
Knowing how to manage risk will go a long way to mitigate your losses.
Having only stocks with strong balance sheets, good growth and good dividend yields in your portfolio will go a long way to ensure that your risk is kept to the minimum.
If you overpay even for a great stock, it will be a long time before you see your money back. Best to insist on value when you buy.
Patience is a must. Take no action when you don't have a good reason to buy or sell.
Approach the market with humility if you don't want to be humbled by it.
The market is bigger and stronger than you. Follow it rather than try to lead it.
Avoid the herd instinct. Safety in numbers is not applicable in the stock market.
Short-term gains will not make you rich.
Odds are in favor that the shares you sell do better than the shares you buy. So be extra careful when you make changes in your portfolio.
Knowing how to manage risk will go a long way to mitigate your losses.
Having only stocks with strong balance sheets, good growth and good dividend yields in your portfolio will go a long way to ensure that your risk is kept to the minimum.
If you overpay even for a great stock, it will be a long time before you see your money back. Best to insist on value when you buy.
Patience is a must. Take no action when you don't have a good reason to buy or sell.
Approach the market with humility if you don't want to be humbled by it.
The market is bigger and stronger than you. Follow it rather than try to lead it.
Avoid the herd instinct. Safety in numbers is not applicable in the stock market.
Short-term gains will not make you rich.
Wednesday, January 18, 2012
Happy New Year 2012
Here's Ben wishing all the members and readers of this blog a very Happy & Prosperous New Year.
May God bless your every trade.
My new year message is:
Remember your laughters.
Forget your tears.
What matters is the present.
It's here; its real.
Enjoy! It's Happy New Year.
Tuesday, January 17, 2012
Iskandar set to reach tipping point
Tuesday January 17, 2012
By THOMAS HUONG huong@thestar.com.my
PETALING JAYA: Iskandar Malaysia is set to reach its tipping point in the next 24 months after the completion of key catalyst developments and infrastructure improvements, according to HwangDBS Vickers Research.
The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.
It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.
“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.
Since 2006, Iskandar has received RM77.8bil worth of committed investments.
The region had also recently seen property launches setting new price benchmarks, the research house said.
“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”
It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).
For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.
Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).
HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.
By THOMAS HUONG huong@thestar.com.my
PETALING JAYA: Iskandar Malaysia is set to reach its tipping point in the next 24 months after the completion of key catalyst developments and infrastructure improvements, according to HwangDBS Vickers Research.
The research unit believed that prospects for the economic growth corridor in Johor would be boosted by the successful bilateral talks during the recent Malaysia-Singapore Leaders' Retreat, the entry of more property developers as well as spillover demand for properties in Iskandar due to Singapore's latest stamp duty hike and high property prices.
It was noted that the recent bilateral talks had resulted in fruitful discussions on topics such as the construction of an undersea tunnel linking Johor Baru and Singapore, sale of electricity to Singapore (possibly from Pengerang), co-operation in aviation and airport services between Johor's Senai International Airport and Singapore's Changi International Airport, and the formation of a work group on industrial co-operation to promote Iskandar and Singapore.
“The industrial co-operation work group may be a springboard for more investments by Singapore in Iskandar, and could be a key re-rating catalyst,” HwangDBS Vickers Research said.
Since 2006, Iskandar has received RM77.8bil worth of committed investments.
The region had also recently seen property launches setting new price benchmarks, the research house said.
“We were pleasantly surprised by the strong 65% bookings for UEM Land Holdings Bhd's Imperia@Puteri Harbour condominiums, which were launched in Nov 2011 at a record RM725 per sq ft.”
It was also noted that UEM Land's Impiana@East Ledang condominiums had seen brisk sales with two blocks almost fully sold within six months at RM480 per sq ft (compared with RM300 per sq ft for the adjacent Ujana apartments launched in 2009).
For SP Setia Bhd, Johor is also a core market (accounting for 29% of its sales) with sales surging 57% in its financial year ended Oct 31, 2011.
Meanwhile, land values in Johor's Southern Industrial and Logistics Clusters continued to appreciate with the latest transactions hitting RM35 per sq ft (compared with 2010's RM25 per sq ft).
HwangDBS Vickers Research said its top stock picks, for exposure to Iskandar, were UEM Land, SP Setia, Eastern & Oriental Bhd and Genting Plantations Bhd.
Friday, January 13, 2012
Pos seen making RM2b revenue
2012/01/13
KUALA LUMPUR: In the article headlined “DRB-HICOM sees RM2b Pos profit” published on January 11, it should have read “DRB-HICOM sees RM2b Pos revenue”.
DRB-HICOM Bhd has also clarified that Pos Malaysia Bhd is expected to generate RM2 billion in revenue by 2015 and not as reported.
KUALA LUMPUR: In the article headlined “DRB-HICOM sees RM2b Pos profit” published on January 11, it should have read “DRB-HICOM sees RM2b Pos revenue”.
DRB-HICOM Bhd has also clarified that Pos Malaysia Bhd is expected to generate RM2 billion in revenue by 2015 and not as reported.
Wednesday, January 11, 2012
DRB-HICOM sees RM2b Pos profit
Cheryl Yvonne Achu (Business Times)
2012/01/11
DRB-HICOM has identified 17 areas of new businesses that can be tapped through Pos Malaysia including collaborating with Bank Muamalat Malaysia
KUALA LUMPUR: DRB-HICOM Bhd expects Pos Malaysia Bhd to generate RM2 billion in earnings by 2015, said DRB HICOM's managing director Datuk Seri Mohd Khamil Jamil.
DRB HICOM owns 32.27 per cent of Pos Malaysia, the country's largest postal company. It acquired the stake from Khazanah Nasional late last year for RM622.79 million or RM3.60 per share.
For the year ended December 31 2010, Pos Malaysia earned RM1.01 billion in sales, while pre-tax profit stood at RM99.06 million. Up to the nine months ended September 30 2011, Pos Malaysia's revenue stood at RM883.98 million, while pre-tax profit came in at RM128.55 million.
Mohd Khamil said that DRB- HICOM had identified 17 areas of new businesses that can be tapped through Pos Malaysia including collaborating with Bank Muamalat Malaysia Bhd.
"The management of Pos Malaysia had put forward more than 39 points of its transformation plans," Mohd Khamil said, noting that Pos Malaysia had 39 points of transformation plan before it was handed over and after being acquired.
Moving forward, DRB-HICOM plans to take Pos Malaysia to the next level of growth despite the postal business being a sunset industry. Worldwide, postal businesses have slowed down as people are moving away from traditional postal mail.
"The margin to improve is tremendous if we concentrate on courier services," he said noting that courier services have about RM1.6 billion worth of business to tap on.
2012/01/11
DRB-HICOM has identified 17 areas of new businesses that can be tapped through Pos Malaysia including collaborating with Bank Muamalat Malaysia
KUALA LUMPUR: DRB-HICOM Bhd expects Pos Malaysia Bhd to generate RM2 billion in earnings by 2015, said DRB HICOM's managing director Datuk Seri Mohd Khamil Jamil.
DRB HICOM owns 32.27 per cent of Pos Malaysia, the country's largest postal company. It acquired the stake from Khazanah Nasional late last year for RM622.79 million or RM3.60 per share.
For the year ended December 31 2010, Pos Malaysia earned RM1.01 billion in sales, while pre-tax profit stood at RM99.06 million. Up to the nine months ended September 30 2011, Pos Malaysia's revenue stood at RM883.98 million, while pre-tax profit came in at RM128.55 million.
Mohd Khamil said that DRB- HICOM had identified 17 areas of new businesses that can be tapped through Pos Malaysia including collaborating with Bank Muamalat Malaysia Bhd.
"The management of Pos Malaysia had put forward more than 39 points of its transformation plans," Mohd Khamil said, noting that Pos Malaysia had 39 points of transformation plan before it was handed over and after being acquired.
Moving forward, DRB-HICOM plans to take Pos Malaysia to the next level of growth despite the postal business being a sunset industry. Worldwide, postal businesses have slowed down as people are moving away from traditional postal mail.
"The margin to improve is tremendous if we concentrate on courier services," he said noting that courier services have about RM1.6 billion worth of business to tap on.
Monday, January 09, 2012
NextNation
NextNation was at 4 sen a share in late Sept 2011. Now it is 13 sen. This is gain of 225% in less than 4 months. Wow! Thank's great.
Many people were badly bitten by this counter and probably angry with it. Looks like the stock is coming back from its ashes. I think it will be big mistake to sell it now.
Many people were badly bitten by this counter and probably angry with it. Looks like the stock is coming back from its ashes. I think it will be big mistake to sell it now.
Tuesday, January 03, 2012
Cresendo Corp Bhd (Stock Code 6718)
Iskandar Malaysia (IM) is accessible by air, land, rails and sea. It is flanked by three important ports. Strategically located, it has all the competitive edges of being developed into a metropolis. IM is twice the size of Hong Kong, and when compared to Singapore, it is thrice the size of the island.
There is now a hive of activity at IM. The Government has allocated RM6.83 billion to develop it. Newcastle Medical University has already started operation, and Legoland will likely open its doors for business towards 2012. Click here to read more.
Crescendo Corp Bhd (CCB) founded in 1989 is a leader in the property development sector in IM. According to its Chairman and CEO Gooi Seong Lim, its Cemerlang Township (562.51 ha) will keep the company busy in the next 12 to 15 years. The key statistics of the company are:
Share Issued: 175,114,000
Par Value RM1
EPS, trailing 9 months: 26.92; diluted 19.33
EPS, latest qtr: 12.48; diluted 8.95
Current Assets: 287,202,000 (Cash 67,514,000)
Current Liabilities: 84,303,000
Total Assets: 776,956,000
Total Liabilities: 233,010,000
NTA: 3.02
Borrowings: 138,704,000
Dividends paid during the 9 months ended 31.10.11: 2 sen less tax paid on 17.2.11; 5 sen less tax paid on 26.8.11, and now it has declared a dividend of 3 sen less tax.
The Business of Crescendo is centered in IM which is a high-growth area in Malaysia. The company has been well-managed. I believe it should have high-growth as well. The stock is last traded at RM1.60. In my opinion, this a property gem.
As usual, buy at your own risk. Happy New Year!
Some extracts from Bursa Announcements:
B1 Review of the performance of the company and its principal subsidiaries The Group recorded a significant increase in revenue and profit before tax ("PBT") to RM219.8 million and RM64.9 million respectively for the nine months of the financial year ending 31 January 2012 as compared to RM158.5 million and RM34.6 million respectively recorded for the previous corresponding financial period in the last financial year.
The 39% increase in revenue is mainly contributed from higher sales in industrial properties. The 87% increase in PBT is mainly contributed by higher sales and improved margin from industrial properties.
B2 Comparison of profit before tax for the quarter reported on with the immediate preceding quarter The PBT for the current financial quarter is RM30.4 million, which represent an increase of RM9.9 million or 48% as compared to the preceding financial quarter ended 31 July 2011. The significant increase in PBT is mainly contributed by higher sales in industrial properties.
B3 Prospects For the financial year 2012, the market conditions are volatile in view of the European sovereign debt concern and a recurrence of the global recession. The Group will continue to focus, with the encouraging locked-in sales, on the development of industrial properties at Nusa Cemerlang Industrial Park ("NCIP") located in Nusajaya in the financial year 2012.
The Board expects the Group's performance to remain good for the financial year ending 31 January 2012.
There is now a hive of activity at IM. The Government has allocated RM6.83 billion to develop it. Newcastle Medical University has already started operation, and Legoland will likely open its doors for business towards 2012. Click here to read more.
Crescendo Corp Bhd (CCB) founded in 1989 is a leader in the property development sector in IM. According to its Chairman and CEO Gooi Seong Lim, its Cemerlang Township (562.51 ha) will keep the company busy in the next 12 to 15 years. The key statistics of the company are:
Share Issued: 175,114,000
Par Value RM1
EPS, trailing 9 months: 26.92; diluted 19.33
EPS, latest qtr: 12.48; diluted 8.95
Current Assets: 287,202,000 (Cash 67,514,000)
Current Liabilities: 84,303,000
Total Assets: 776,956,000
Total Liabilities: 233,010,000
NTA: 3.02
Borrowings: 138,704,000
Dividends paid during the 9 months ended 31.10.11: 2 sen less tax paid on 17.2.11; 5 sen less tax paid on 26.8.11, and now it has declared a dividend of 3 sen less tax.
The Business of Crescendo is centered in IM which is a high-growth area in Malaysia. The company has been well-managed. I believe it should have high-growth as well. The stock is last traded at RM1.60. In my opinion, this a property gem.
As usual, buy at your own risk. Happy New Year!
Some extracts from Bursa Announcements:
B1 Review of the performance of the company and its principal subsidiaries The Group recorded a significant increase in revenue and profit before tax ("PBT") to RM219.8 million and RM64.9 million respectively for the nine months of the financial year ending 31 January 2012 as compared to RM158.5 million and RM34.6 million respectively recorded for the previous corresponding financial period in the last financial year.
The 39% increase in revenue is mainly contributed from higher sales in industrial properties. The 87% increase in PBT is mainly contributed by higher sales and improved margin from industrial properties.
B2 Comparison of profit before tax for the quarter reported on with the immediate preceding quarter The PBT for the current financial quarter is RM30.4 million, which represent an increase of RM9.9 million or 48% as compared to the preceding financial quarter ended 31 July 2011. The significant increase in PBT is mainly contributed by higher sales in industrial properties.
B3 Prospects For the financial year 2012, the market conditions are volatile in view of the European sovereign debt concern and a recurrence of the global recession. The Group will continue to focus, with the encouraging locked-in sales, on the development of industrial properties at Nusa Cemerlang Industrial Park ("NCIP") located in Nusajaya in the financial year 2012.
The Board expects the Group's performance to remain good for the financial year ending 31 January 2012.
Saturday, December 24, 2011
Risk and uncertainty into 2012
The Star Online > Business
Saturday December 24, 2011
Risk and uncertainty into 2012
THINK ASIAN
By ANDREW SHANG
FOR most investors, 2011 must be an annus horribilis a year of losses for most except the short-sellers.
After a year of losses, you can almost believe anything. According to the Mayan calendar that ends 5,125 years on 21 December 2012, cataclysmic events will occur one year from now. Chinese astrologers believe that the Year of the Water Dragon is a year of fundamental change. If you believe euro-sceptics, the euro will collapse next year and a new order will emerge.
Christmas is a time to slow down for reflection. It is a time to get away from daily Blackberry emails to a world where life seems timeless.
Every year, my wife and I go backpacking somewhere East of Bali. Indonesia is an archipelago of 17,500 islands, exotic cultures and the world's fourth populous country. Here, we travel by local buses, shop in the rural markets, speak only Malay and just wander where our spirits take us.
Indonesia is one country where the Blackberry is still growing in usage, although amongst the more affluent, the iPhone4 is in. Inflation seems to have set in everywhere, but even in remote provinces, hot money has poured into gold and coal mines and building construction is ubitiquous. Indonesia is clearly on the move.
My scenarios for the next year are always defined by what books I bring along to read and reflect on questions I missed this last 12 months.
Why did the financial markets behave so dismally in 2011?
For this, I delved into Benoit Mandelbrot and Richard Hudson's 2008 book on The Misbehaviour of Markets A Fractal View of Risk, Ruin and Reward. The late French mathematician Mandelbrot worked all his life in IBM and invented “fractal geometry”, defined as rough or fragmentary geometric shapes that can evolve into great complexity.
In the late 1960s, Mandelbrot started applying his mathematics to the study of markets. The founder of the widely used Efficient Market Hypothesis, Eugene Fama, was in fact a doctoral student of Mandelbrot.
He argued that stock price movements are unpredictable and follow a random walk. His Hypothesis assumes that prices are independent and are normally distributed, namely, they follow the Bell curve.
In contrast, Mandelbrot, who studied the cotton market, argued that market prices are not independent of each other. Their evolution goes through periods of quiet and then extreme volatility. He felt strongly that power laws (curves with long tails) are more common in nature than “normal” statistical bell curves.
The violent market movements since 2008 suggest that Mandelbrot was more right than mainstream finance theory. The Nobel Laureates that founded the hedge fund LTCM (Long-term Capital Management) never expected market movements of more than four times standard deviation, but the Russian crisis in 1998 moved markets so much that LTCM ran out of liquidity before prices reverted back to normal. The lessons of LTCM were forgotten by market players and regulators alike in the run up to 2008.
How do we use Mandelbrot's insights to look into 2012?
First, markets are far more risky than standard theory teaches us. Second, big gains and losses concentrate into a small period of time. We may be exactly in that window of time when the markets are swinging wildly. No one is certain what is the right direction of the market. Third, prices often leap, rather than move smoothly. We see this in the foreign exchange markets they remain stable for a while, but then adjust dramatically. Fourth, bubbles are inevitable.
The fundamental challenge to central bankers and the public alike is whether there is going to be deflation or inflation.
With advanced-country central bankers printing money at near zero interest rates, many people think that inflation is inevitable. At the same time, inspite of the massive monetary creation, the greater fear is that we are entering into a worldwide depression of slow growth and rising unemployment.
Who is right?
Mandelbrot's work has challenged us to think very differently about time, scale and value. Human beings love to have stability, but nature moves in cycles, some short, some long.
Time has different meaning for different markets. Since companies report results quarterly, management behaviour tends toward short-term responses. The 4-5 year election cycle forces politicians to take short-term policies to gain popularity.
We know that 2012 will be an election year for the US, France, Germany, Hong Kong, Malaysia and perhaps India. We have already seen major transitions in Iraq, North Africa, Myanmar and North Korea. At a time where climate changes are adding to volatility, politics and debt deleveraging has become a heady brew for risks.
Strolling through the markets in Bali, the street chatter is about floods, inflation and traffic jams. Even here, there is a mood, even anticipation, of change.
Mandelbrot's true contribution to our understanding of markets is that intrinsic value is meaningless in a world of ever changing prices.
At the height of a bubble, the astronomical prices transacted bear no relationship to replacement cost. After a tsunami, what was valuable real estate had no buyers. Financial markets operate through arbitrage of different prices that can deviate hugely from the average.
Thus, what we want and value is not what everyone wants, but what we judge to be important at the point of decision. Our value systems are determined by our culture and that is today more determined by mother nature, technology and forces that we do not understand.
The volcanic islands in Indonesia provide rich soils for fertile agriculture, but earthquakes, tsunamis, flood and drought are part of the cycle of nature.
What we know for certain is that 2012 will be a year of major change. As Mandelbrot the scientist said, we can forecast the intensity and path of a hurricane, but we cannot predict how much damage it will do.
We have reached an inflexion point when technology no longer has all the answers to our future.
Crisis has a habit of throwing up new leaders who emerge as heros, whilst others are condemned by history as failures.
Be prepared for both in 2012.
Tan Sri Andrew Sheng is president of the Fung Global Institute.
Saturday December 24, 2011
Risk and uncertainty into 2012
THINK ASIAN
By ANDREW SHANG
FOR most investors, 2011 must be an annus horribilis a year of losses for most except the short-sellers.
After a year of losses, you can almost believe anything. According to the Mayan calendar that ends 5,125 years on 21 December 2012, cataclysmic events will occur one year from now. Chinese astrologers believe that the Year of the Water Dragon is a year of fundamental change. If you believe euro-sceptics, the euro will collapse next year and a new order will emerge.
Christmas is a time to slow down for reflection. It is a time to get away from daily Blackberry emails to a world where life seems timeless.
Every year, my wife and I go backpacking somewhere East of Bali. Indonesia is an archipelago of 17,500 islands, exotic cultures and the world's fourth populous country. Here, we travel by local buses, shop in the rural markets, speak only Malay and just wander where our spirits take us.
Indonesia is one country where the Blackberry is still growing in usage, although amongst the more affluent, the iPhone4 is in. Inflation seems to have set in everywhere, but even in remote provinces, hot money has poured into gold and coal mines and building construction is ubitiquous. Indonesia is clearly on the move.
My scenarios for the next year are always defined by what books I bring along to read and reflect on questions I missed this last 12 months.
Why did the financial markets behave so dismally in 2011?
For this, I delved into Benoit Mandelbrot and Richard Hudson's 2008 book on The Misbehaviour of Markets A Fractal View of Risk, Ruin and Reward. The late French mathematician Mandelbrot worked all his life in IBM and invented “fractal geometry”, defined as rough or fragmentary geometric shapes that can evolve into great complexity.
In the late 1960s, Mandelbrot started applying his mathematics to the study of markets. The founder of the widely used Efficient Market Hypothesis, Eugene Fama, was in fact a doctoral student of Mandelbrot.
He argued that stock price movements are unpredictable and follow a random walk. His Hypothesis assumes that prices are independent and are normally distributed, namely, they follow the Bell curve.
In contrast, Mandelbrot, who studied the cotton market, argued that market prices are not independent of each other. Their evolution goes through periods of quiet and then extreme volatility. He felt strongly that power laws (curves with long tails) are more common in nature than “normal” statistical bell curves.
The violent market movements since 2008 suggest that Mandelbrot was more right than mainstream finance theory. The Nobel Laureates that founded the hedge fund LTCM (Long-term Capital Management) never expected market movements of more than four times standard deviation, but the Russian crisis in 1998 moved markets so much that LTCM ran out of liquidity before prices reverted back to normal. The lessons of LTCM were forgotten by market players and regulators alike in the run up to 2008.
How do we use Mandelbrot's insights to look into 2012?
First, markets are far more risky than standard theory teaches us. Second, big gains and losses concentrate into a small period of time. We may be exactly in that window of time when the markets are swinging wildly. No one is certain what is the right direction of the market. Third, prices often leap, rather than move smoothly. We see this in the foreign exchange markets they remain stable for a while, but then adjust dramatically. Fourth, bubbles are inevitable.
The fundamental challenge to central bankers and the public alike is whether there is going to be deflation or inflation.
With advanced-country central bankers printing money at near zero interest rates, many people think that inflation is inevitable. At the same time, inspite of the massive monetary creation, the greater fear is that we are entering into a worldwide depression of slow growth and rising unemployment.
Who is right?
Mandelbrot's work has challenged us to think very differently about time, scale and value. Human beings love to have stability, but nature moves in cycles, some short, some long.
Time has different meaning for different markets. Since companies report results quarterly, management behaviour tends toward short-term responses. The 4-5 year election cycle forces politicians to take short-term policies to gain popularity.
We know that 2012 will be an election year for the US, France, Germany, Hong Kong, Malaysia and perhaps India. We have already seen major transitions in Iraq, North Africa, Myanmar and North Korea. At a time where climate changes are adding to volatility, politics and debt deleveraging has become a heady brew for risks.
Strolling through the markets in Bali, the street chatter is about floods, inflation and traffic jams. Even here, there is a mood, even anticipation, of change.
Mandelbrot's true contribution to our understanding of markets is that intrinsic value is meaningless in a world of ever changing prices.
At the height of a bubble, the astronomical prices transacted bear no relationship to replacement cost. After a tsunami, what was valuable real estate had no buyers. Financial markets operate through arbitrage of different prices that can deviate hugely from the average.
Thus, what we want and value is not what everyone wants, but what we judge to be important at the point of decision. Our value systems are determined by our culture and that is today more determined by mother nature, technology and forces that we do not understand.
The volcanic islands in Indonesia provide rich soils for fertile agriculture, but earthquakes, tsunamis, flood and drought are part of the cycle of nature.
What we know for certain is that 2012 will be a year of major change. As Mandelbrot the scientist said, we can forecast the intensity and path of a hurricane, but we cannot predict how much damage it will do.
We have reached an inflexion point when technology no longer has all the answers to our future.
Crisis has a habit of throwing up new leaders who emerge as heros, whilst others are condemned by history as failures.
Be prepared for both in 2012.
Tan Sri Andrew Sheng is president of the Fung Global Institute.
Thursday, December 22, 2011
Buffett Got Burned on Bank of America
Is Bank of America a Value Trap at below 5.50? In Nov 2006, the stock was being traded at a high of 54.85. It was lasted traded at
5.23. Here's an interesting article by Jeff Reeves:
Buffett Got Burned on Bank of America, and There’s No Bottom in Sight
BAC is a value trap and only fodder for day traders
Dec 20, 2011, 11:35 am EST | By Jeff Reeves, Editor of InvestorPlace.com
Bank of America (NYSE:BAC) is one of the most hated companies in America. Aside from past robo-signings, proposed fees and general shenanigans amid the financial crisis, the company continues to prove all of its critics right with continued missteps and ugly headlines. Its earnings can’t be trusted and its CEO, Brian Moynihan, is completely out of touch.
So it’s no surprise that despite briefly breaking below the $5 mark, nobody came out yesterday and labeled Bank of America stock as a bargain. An intraday low of $4.92 and a close of $4.99 marked the lowest levels for the stock since March 2009 — the bear market bottom that saw stocks rebound with a vengeance.
The S&P was at 676 — now it’s at 1,234. But while the major indices have doubled, Bank of America is just as ugly to investors now as it was during those dark days two-and-a-half years ago.
Very few stocks are at 2009 levels. Some of them deserve to be there — Eastman Kodak (NYSE:EK), for instance, which appears to be doomed for bankruptcy without extraordinary intervention. You simply can’t lose money and have debt that large and expect to stick around.
However, Bank of America is not like Kodak. Aside from a brutal second quarter in 2009 when it took some $20 billion in write-downs, it is nominally profitable. It trades for a paltry 0.25 price-to-book ratio — while Wells Fargo (NYSE:WFC) is at 1.0 and JP Morgan Chase (NYSE:JPM) is at 0.6!
So, BAC shares could be a bargain at $5, right?
Right?
Unfortunately, hardly anyone on Wall Street is buying that argument. It’s remarkable how few people came out of the woodwork yesterday and today trumpeting Bank of America’s bargain potential.
In fact, the biggest talking point I’ve noticed is about how Warren Buffett might be taking a bath on his risky play in Bank of America. BofA gave Buffett warrants to buy a whopping 700 million shares of common stock at $7.14 when the Oracle of Omaha plowed $5 billion into preferred shares of BAC stock. Obviously those warrants don’t really matter when shares are almost 30% under that strike price.
By some estimates, Buffett has lost $1.5 billion on the deal since that August buy-in, when shares were around $6. But don’t weep for Warren — his nice 6% dividend on his shares will keep paying him, and BAC stock has moved up from under $5 today and could keep rising.
But the fact that Buffett could ride in on his white horse with the “smart money,” buying Bank of America at $6 only to see shares hit $5 four months later … that’s enough to make every investor think twice.
As result, Bank of America should be seen as an extremely short-term play for only the most aggressive traders … akin to Sprint Nextel (NYSE:S), Sirius XM (NASDAQ:SIRI) or other big-name stocks that are super cheap and super volatile.
As for the buy-and-hold crowd, sit this out for now. Bank of America is the ultimate value trap.
Plenty of folks think Bank of America is getting what it deserves as some kind of karmic payback for its misdeeds. While there might be some cosmic justice here, the reality is that the only true recovery will see banks recover, too.
Here’s hoping Bank of America turns it around — not for shareholders, but because we simply can’t afford to see another financial behemoth go under.
Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.
5.23. Here's an interesting article by Jeff Reeves:
Buffett Got Burned on Bank of America, and There’s No Bottom in Sight
BAC is a value trap and only fodder for day traders
Dec 20, 2011, 11:35 am EST | By Jeff Reeves, Editor of InvestorPlace.com
Bank of America (NYSE:BAC) is one of the most hated companies in America. Aside from past robo-signings, proposed fees and general shenanigans amid the financial crisis, the company continues to prove all of its critics right with continued missteps and ugly headlines. Its earnings can’t be trusted and its CEO, Brian Moynihan, is completely out of touch.
So it’s no surprise that despite briefly breaking below the $5 mark, nobody came out yesterday and labeled Bank of America stock as a bargain. An intraday low of $4.92 and a close of $4.99 marked the lowest levels for the stock since March 2009 — the bear market bottom that saw stocks rebound with a vengeance.
The S&P was at 676 — now it’s at 1,234. But while the major indices have doubled, Bank of America is just as ugly to investors now as it was during those dark days two-and-a-half years ago.
Very few stocks are at 2009 levels. Some of them deserve to be there — Eastman Kodak (NYSE:EK), for instance, which appears to be doomed for bankruptcy without extraordinary intervention. You simply can’t lose money and have debt that large and expect to stick around.
However, Bank of America is not like Kodak. Aside from a brutal second quarter in 2009 when it took some $20 billion in write-downs, it is nominally profitable. It trades for a paltry 0.25 price-to-book ratio — while Wells Fargo (NYSE:WFC) is at 1.0 and JP Morgan Chase (NYSE:JPM) is at 0.6!
So, BAC shares could be a bargain at $5, right?
Right?
Unfortunately, hardly anyone on Wall Street is buying that argument. It’s remarkable how few people came out of the woodwork yesterday and today trumpeting Bank of America’s bargain potential.
In fact, the biggest talking point I’ve noticed is about how Warren Buffett might be taking a bath on his risky play in Bank of America. BofA gave Buffett warrants to buy a whopping 700 million shares of common stock at $7.14 when the Oracle of Omaha plowed $5 billion into preferred shares of BAC stock. Obviously those warrants don’t really matter when shares are almost 30% under that strike price.
By some estimates, Buffett has lost $1.5 billion on the deal since that August buy-in, when shares were around $6. But don’t weep for Warren — his nice 6% dividend on his shares will keep paying him, and BAC stock has moved up from under $5 today and could keep rising.
But the fact that Buffett could ride in on his white horse with the “smart money,” buying Bank of America at $6 only to see shares hit $5 four months later … that’s enough to make every investor think twice.
As result, Bank of America should be seen as an extremely short-term play for only the most aggressive traders … akin to Sprint Nextel (NYSE:S), Sirius XM (NASDAQ:SIRI) or other big-name stocks that are super cheap and super volatile.
As for the buy-and-hold crowd, sit this out for now. Bank of America is the ultimate value trap.
Plenty of folks think Bank of America is getting what it deserves as some kind of karmic payback for its misdeeds. While there might be some cosmic justice here, the reality is that the only true recovery will see banks recover, too.
Here’s hoping Bank of America turns it around — not for shareholders, but because we simply can’t afford to see another financial behemoth go under.
Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.
Tuesday, December 20, 2011
KSeng Cash Rich & Asset Rich
The bullish run of KSeng on the 14th & 15 Dec 2011 has dismayed many supporters of the stock. After hitting a high of 4.21, the buyers backed off and retreated. What happened? Obviously this question is best answered by the insiders. In my opinion, this retreat is likely to be short-lived.
The company is cash rich and asset rich as well. As at 30.9.2011, it has cash and short-term investment of RM722,422, 000; its total investments in quoted securities at cost = RM188, 271,000, but are now worth RM432,522,000 in market value.
Its land and landed properties in Johor, KL and Singapore are worth very much more than their book value as most of these properties were last valued in 1980.
The present ongoing development in the Iskandar region will greatly enhance the value of KSeng in the forseeable future.
Some key statistics of KSeng as at Sep 30, 2011 are as follows:
Share Capital: RM361,477,000
Par value: RM1
Current Assets: RM1,022,280,000 (Cash & Short-term investment RM720,422)
Total Assets: RM2,043,811,000
Total Liabilities: RM 139,766,000
Short-term borrowings and overdraft: RM39,645,000
NTA: RM4.90 per share
As can be seen from the above figures, KSeng has a very strong balance sheet. This, however, is no guarantee that it share price will move up. So, the best action is to wait until the chart shows some positive signals before you buy again.
If KSeng does not know what to do with its cash, it should return at least some of them to its shareholders.
The company is cash rich and asset rich as well. As at 30.9.2011, it has cash and short-term investment of RM722,422, 000; its total investments in quoted securities at cost = RM188, 271,000, but are now worth RM432,522,000 in market value.
Its land and landed properties in Johor, KL and Singapore are worth very much more than their book value as most of these properties were last valued in 1980.
The present ongoing development in the Iskandar region will greatly enhance the value of KSeng in the forseeable future.
Some key statistics of KSeng as at Sep 30, 2011 are as follows:
Share Capital: RM361,477,000
Par value: RM1
Current Assets: RM1,022,280,000 (Cash & Short-term investment RM720,422)
Total Assets: RM2,043,811,000
Total Liabilities: RM 139,766,000
Short-term borrowings and overdraft: RM39,645,000
NTA: RM4.90 per share
As can be seen from the above figures, KSeng has a very strong balance sheet. This, however, is no guarantee that it share price will move up. So, the best action is to wait until the chart shows some positive signals before you buy again.
If KSeng does not know what to do with its cash, it should return at least some of them to its shareholders.
Wednesday, December 14, 2011
KSeng on track for a Bullish Run
KSeng opened at 3.76 today with 630 lots traded. It commenced trading with a gap in the afternoon at 3.82. From then on the stock was in steady demand throughout the afternoon session. It closed at 3.97 for a gain of 17 sen. The stock appears to have woken up from its slumber. Now that its previous high at 3.86 is breached, the stock is likely to move up stongly. Resistance is seen at 4.20. Hold on to your shares in KSeng for a big new year anypow.
Tuesday, December 13, 2011
Households as clean, sustainable electricity producers
In the mid-1990s, there were only “big” boys in electricity generation such as YTL Corp, Genting Sanyen and Malakoff. They were popularly known as Independent Power producers' or IPPs and were looked upon with envy as it was alleged that they were making big bucks because of relatively high rates they received from TNB.
Fast forward 15 years. Now you and I can also be an IPP (the term “clean and sustainable electricity producer” is preferred) albeit a very much smaller one but with a difference.
Any owner of a link, semi-detached or bungalow house can now be, subject to approval, a small clean and sustainable energy producer by generating green electricity (as opposed to fossil-fuelled electricity by the big IPPs) and distribution licensee (such as TNB) is obliged to purchase it. What all this means is that if you have a solar photovoltaic (PV) generator at home, you can apply to connect this generator to the grid, and get paid for selling the electricity generated to TNB over the next 21 years.
Solar energy is clean, environmentally friendly and has zero emissions. There is no depletion of natural resources and it is one of the fastest growing energy sources in the world.
And yes the rates are very attractive for generating electricity using solar photovoltaic (PV) technology; it is about four times the normal domestic TNB electricity rates (at RM0.40 per kWh). All you have to do is simply to apply and obtain a feed-in approval from the newly-established Sustainable Energy Development Authority Malaysia (Seda Malaysia), sign a renewable energy power purchase agreement (REPPA) with TNB and install the solar PV system on your rooftop.
On the average, the bungalow is able to produce about 1,000 kWh of electricity per month (based on 10kW installed PV capacity). Given this, the owner may earn about RM1,200 per month (based on FiT rate RM1.20 per kWh if the PV system is commissioned by 2012) and recoup his investment within eight to nine years. The earnings may be even higher if the house owner meets other bonus criteria such as installing as a building-integrated PV system. The current cost of 1 kW solar PV system ranges from RM12,000 to RM14,000.
The interesting thing is that for your average household needs, you purchase the electricity from TNB at between RM0.33 to 42.6 per kWh but when you produce the clean electricity, you can sell it at between RM1.20 to RM1.70 per kWh depending on the installed capacity and the qualifying bonus criteria for solar PV.
The longer the sun shines, the more one can “export” electricity to the national grid during daylight hours (when power is urgently needed) and earn income. The downside and risk is that during cloudy days, the income can be reduced significantly when the sun is not shining. If you apply now, you can lock in these premium rates for the next 21 years!
Unlike the huge IPPs which use natural gas or coal as feedstock to generate electricity, the household does not need to pay for any raw material or fuel because sunshine is free. For as long as the sun is shining, the solar PV panels will generate electricity. Another advantage of solar power is that no extra space is required because the panels can be installed on the rooftop. (Suddenly rooftops have income potential. Many factory owners are now contemplating installing solar PV panels on their rooftop to earn extra revenue while others are approaching factory owners to rent them their roofs.)
On Dec 1 2011, Seda Malaysia invited the public including households, small and not-so-big IPPs (maximum size is 30 MW but only 5 MWp rated capacity for solar PV) to apply and book the amount of green electricity they intended to produce to sell it to the distribution licensee. There are fixed quotas for each of the four renewable energy sources namely biomass (including solid waste), biogas (including landfill), small hydro and solar PV. There was overwhelming response to solar PV especially for the non-individuals.
The good news is that bookings are still open for individuals and households intending to install solar PV systems as there is still available capacity for this category. As at Dec 7, Seda reported that the total unfulfilled quota for solar PV is 6,650 kW; 1,650 kW to be commissioned by the first half 2013, 2500 kW each for second half of 2013 and first half of 2014.
Translating these figures into households, it would mean that about 665 bungalow owners can avail themselves to the remaining capacity (assuming their average capacity is 10 kW). If all of the remaining capacity is taken up by semi-detached owners, the number will increase to 1,330 assuming their installed PV capacity is 5 kW. The figure for typical link houses, assuming an installed capacity of 3 kW, is 2,217 households.
The price guarantee for 21 years has been made possible by the Feed-in Tariff (FiT) scheme implemented by Seda Malaysia. This scheme will be financed by the newly-established Renewable Energy (RE) Fund, to which all electricity users (except for those domestic customers consuming less than 300 kWh per month) will be required to contribute an additional 1% of their electricity bill.
House-owners who do not participate in solar PV electricity generation should not begrudge the payment of the additional 1%. Instead they should view it as one of their contributions to a cleaner and healthier environment. This is their social contribution for cleaner air. The public and community must also share in undertaking this heavy responsibility with the Government.
The article above is by Dr Pola Singh who is a board member of the Sustainable Energy Development Authority (Seda), Malaysia. The views expressed are his own. The public can apply for the feed-in approval via efit.seda.gov.my and more information can be obtained from Seda's official portal at www.seda.gov.my
Fast forward 15 years. Now you and I can also be an IPP (the term “clean and sustainable electricity producer” is preferred) albeit a very much smaller one but with a difference.
Any owner of a link, semi-detached or bungalow house can now be, subject to approval, a small clean and sustainable energy producer by generating green electricity (as opposed to fossil-fuelled electricity by the big IPPs) and distribution licensee (such as TNB) is obliged to purchase it. What all this means is that if you have a solar photovoltaic (PV) generator at home, you can apply to connect this generator to the grid, and get paid for selling the electricity generated to TNB over the next 21 years.
Solar energy is clean, environmentally friendly and has zero emissions. There is no depletion of natural resources and it is one of the fastest growing energy sources in the world.
And yes the rates are very attractive for generating electricity using solar photovoltaic (PV) technology; it is about four times the normal domestic TNB electricity rates (at RM0.40 per kWh). All you have to do is simply to apply and obtain a feed-in approval from the newly-established Sustainable Energy Development Authority Malaysia (Seda Malaysia), sign a renewable energy power purchase agreement (REPPA) with TNB and install the solar PV system on your rooftop.
On the average, the bungalow is able to produce about 1,000 kWh of electricity per month (based on 10kW installed PV capacity). Given this, the owner may earn about RM1,200 per month (based on FiT rate RM1.20 per kWh if the PV system is commissioned by 2012) and recoup his investment within eight to nine years. The earnings may be even higher if the house owner meets other bonus criteria such as installing as a building-integrated PV system. The current cost of 1 kW solar PV system ranges from RM12,000 to RM14,000.
The interesting thing is that for your average household needs, you purchase the electricity from TNB at between RM0.33 to 42.6 per kWh but when you produce the clean electricity, you can sell it at between RM1.20 to RM1.70 per kWh depending on the installed capacity and the qualifying bonus criteria for solar PV.
The longer the sun shines, the more one can “export” electricity to the national grid during daylight hours (when power is urgently needed) and earn income. The downside and risk is that during cloudy days, the income can be reduced significantly when the sun is not shining. If you apply now, you can lock in these premium rates for the next 21 years!
Unlike the huge IPPs which use natural gas or coal as feedstock to generate electricity, the household does not need to pay for any raw material or fuel because sunshine is free. For as long as the sun is shining, the solar PV panels will generate electricity. Another advantage of solar power is that no extra space is required because the panels can be installed on the rooftop. (Suddenly rooftops have income potential. Many factory owners are now contemplating installing solar PV panels on their rooftop to earn extra revenue while others are approaching factory owners to rent them their roofs.)
On Dec 1 2011, Seda Malaysia invited the public including households, small and not-so-big IPPs (maximum size is 30 MW but only 5 MWp rated capacity for solar PV) to apply and book the amount of green electricity they intended to produce to sell it to the distribution licensee. There are fixed quotas for each of the four renewable energy sources namely biomass (including solid waste), biogas (including landfill), small hydro and solar PV. There was overwhelming response to solar PV especially for the non-individuals.
The good news is that bookings are still open for individuals and households intending to install solar PV systems as there is still available capacity for this category. As at Dec 7, Seda reported that the total unfulfilled quota for solar PV is 6,650 kW; 1,650 kW to be commissioned by the first half 2013, 2500 kW each for second half of 2013 and first half of 2014.
Translating these figures into households, it would mean that about 665 bungalow owners can avail themselves to the remaining capacity (assuming their average capacity is 10 kW). If all of the remaining capacity is taken up by semi-detached owners, the number will increase to 1,330 assuming their installed PV capacity is 5 kW. The figure for typical link houses, assuming an installed capacity of 3 kW, is 2,217 households.
The price guarantee for 21 years has been made possible by the Feed-in Tariff (FiT) scheme implemented by Seda Malaysia. This scheme will be financed by the newly-established Renewable Energy (RE) Fund, to which all electricity users (except for those domestic customers consuming less than 300 kWh per month) will be required to contribute an additional 1% of their electricity bill.
House-owners who do not participate in solar PV electricity generation should not begrudge the payment of the additional 1%. Instead they should view it as one of their contributions to a cleaner and healthier environment. This is their social contribution for cleaner air. The public and community must also share in undertaking this heavy responsibility with the Government.
The article above is by Dr Pola Singh who is a board member of the Sustainable Energy Development Authority (Seda), Malaysia. The views expressed are his own. The public can apply for the feed-in approval via efit.seda.gov.my and more information can be obtained from Seda's official portal at www.seda.gov.my
Saturday, December 10, 2011
Silver Mining and Exploration Hotspots
November 14, 2011 @ 3:23 pm In Feature Articles,Silver Articles
By Michelle Smith-Exclusive To Silver Investing News [1]
[2]
Silver mining is a diverse affair as the metal is extracted around the globe from a long list of countries. But, despite the number of sources, there are three nations which are silver hotspots because their production volumes exceed the others by great lengths and there are no apparent threats that they will be robbed of their top ranking statuses.
Mexico
Dr. Thomas Chaize, a raw materials specialist, described [3] Mexico and Peru as the two pillars of world silver production. He stated that the countries are to silver what South Africa is to gold [4]and Saudi Arabia is to oil [5].
Of them, Mexico has now become the dominant pillar. The nation's silver production surpassed that of Peru in 2010 according [6] to Sergio Almazan Esqueda, Director of the Mexican Mining Chamber.
Last year's figures [7] credit Mexico with the production of nearly 129 million ounces of silver. In the first half of 2011, Mexico's silver output had reportedly [8] already surpassed 66 million ounces, showing that production has grown and providing support for projections of further growth.
Fresnillo [9] (LSE:FRES [10]) is recognized as a playing a prominent role in the expansion of Mexican silver mining. The company opened the Saucito mine this year, which it now operates in addition to the Fresnillo silver mine, one of the world's largest.
Mexico is considered a location ripe for further growth in silver production. It has an impressive record of attracting foreign investment, especially from Canadian interests. Between 2010 and 2012, over $13 billion in mining investments is expected and a significant portion is projected to be spent on silver mining projects.
Peru
Despite being stripped of its heavyweight title, Peru's silver mining sector would have to experience a severe, almost unimaginable, decline for it to lose its silver hotspot status. Last year, the nation produced 116 million ounces of the white metal. From January to August of this year, Peru's production was reported [11] at approximately 71 million ounces.
In conjunction with being a silver-rich nation, Peru is considered a mining friendly nation, with a pro-mining president, Ollanta Humala. The recent declines in silver mining have been blamed on factors such as bureaucracy, labor strikes and community outlashes against miners. The government recognizes the positive contributions of the mining sector and has announced [12] its commitment to cracking down on violent protests.
Declines were also attributed to reductions from Volcan [13], a mining major, which was busy implementing an optimization program. In post-Q1 2011 correspondence, Volcan said [14] the outcome of these efforts, designed to lower costs and boost efficiency, and the company's investments in production growth were good. Volcan said volume reductions were compensated by higher grades and greater recovery. And, the company also claimed the title of the first Peruvian silver producer to exceed output of 20 million ounces.
Despite the difficulties, Peru has seen healthy investments in mining and optimism for the future appears well warranted. The Engineering and Mining Journal says [15], that in addition to the world class operators that have already been attracted to Peru, others are following developments closely. The publication also says that companies continue to harvest the results of the dollars put into exploration.
China
Feng Jucong, a chief analyst for Beijing Antaike Information Development Company, said [16] China's silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year from 1990 to 2009.
By 2010, China was credited with producing over 99 million ounces, making it the world's third largest producer of mined silver. The nation is considered a silver hotspot because in addition to its production growth, its appetite for the white metal has grown so large that China has converted from a net exporter to a net importer of the metal.
Silver is produced in China largely as a by-product of other mining efforts and as they grow silver production is also likely to grow. For example, CPM Group predicts [17] that Jiangxi Copper [18] (SHA:600362 [19]), which produced 14.8 million ounces of refined silver last year, may supply 15.6 million ounces this year, a production rate exceeding 8 of the top 20 silver producing nations.
There are also projects that are expected to come online in the next few years that will boost China's silver production even further. However, given the size China's appetite for silver products ranging from medals to investment bullion, it's unlikely that the nation's production will gain pace with its demand in the near future. CPM Group says China's production could total nearly 105 million ounces in 2011. However, fabrication demand this year is projected to exceed 177 million ounces.
By Michelle Smith-Exclusive To Silver Investing News [1]
[2]
Silver mining is a diverse affair as the metal is extracted around the globe from a long list of countries. But, despite the number of sources, there are three nations which are silver hotspots because their production volumes exceed the others by great lengths and there are no apparent threats that they will be robbed of their top ranking statuses.
Mexico
Dr. Thomas Chaize, a raw materials specialist, described [3] Mexico and Peru as the two pillars of world silver production. He stated that the countries are to silver what South Africa is to gold [4]and Saudi Arabia is to oil [5].
Of them, Mexico has now become the dominant pillar. The nation's silver production surpassed that of Peru in 2010 according [6] to Sergio Almazan Esqueda, Director of the Mexican Mining Chamber.
Last year's figures [7] credit Mexico with the production of nearly 129 million ounces of silver. In the first half of 2011, Mexico's silver output had reportedly [8] already surpassed 66 million ounces, showing that production has grown and providing support for projections of further growth.
Fresnillo [9] (LSE:FRES [10]) is recognized as a playing a prominent role in the expansion of Mexican silver mining. The company opened the Saucito mine this year, which it now operates in addition to the Fresnillo silver mine, one of the world's largest.
Mexico is considered a location ripe for further growth in silver production. It has an impressive record of attracting foreign investment, especially from Canadian interests. Between 2010 and 2012, over $13 billion in mining investments is expected and a significant portion is projected to be spent on silver mining projects.
Peru
Despite being stripped of its heavyweight title, Peru's silver mining sector would have to experience a severe, almost unimaginable, decline for it to lose its silver hotspot status. Last year, the nation produced 116 million ounces of the white metal. From January to August of this year, Peru's production was reported [11] at approximately 71 million ounces.
In conjunction with being a silver-rich nation, Peru is considered a mining friendly nation, with a pro-mining president, Ollanta Humala. The recent declines in silver mining have been blamed on factors such as bureaucracy, labor strikes and community outlashes against miners. The government recognizes the positive contributions of the mining sector and has announced [12] its commitment to cracking down on violent protests.
Declines were also attributed to reductions from Volcan [13], a mining major, which was busy implementing an optimization program. In post-Q1 2011 correspondence, Volcan said [14] the outcome of these efforts, designed to lower costs and boost efficiency, and the company's investments in production growth were good. Volcan said volume reductions were compensated by higher grades and greater recovery. And, the company also claimed the title of the first Peruvian silver producer to exceed output of 20 million ounces.
Despite the difficulties, Peru has seen healthy investments in mining and optimism for the future appears well warranted. The Engineering and Mining Journal says [15], that in addition to the world class operators that have already been attracted to Peru, others are following developments closely. The publication also says that companies continue to harvest the results of the dollars put into exploration.
China
Feng Jucong, a chief analyst for Beijing Antaike Information Development Company, said [16] China's silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year from 1990 to 2009.
By 2010, China was credited with producing over 99 million ounces, making it the world's third largest producer of mined silver. The nation is considered a silver hotspot because in addition to its production growth, its appetite for the white metal has grown so large that China has converted from a net exporter to a net importer of the metal.
Silver is produced in China largely as a by-product of other mining efforts and as they grow silver production is also likely to grow. For example, CPM Group predicts [17] that Jiangxi Copper [18] (SHA:600362 [19]), which produced 14.8 million ounces of refined silver last year, may supply 15.6 million ounces this year, a production rate exceeding 8 of the top 20 silver producing nations.
There are also projects that are expected to come online in the next few years that will boost China's silver production even further. However, given the size China's appetite for silver products ranging from medals to investment bullion, it's unlikely that the nation's production will gain pace with its demand in the near future. CPM Group says China's production could total nearly 105 million ounces in 2011. However, fabrication demand this year is projected to exceed 177 million ounces.
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