Wisdom and foolishness — Lim Mun Fah

July 14, 2010

JULY 14 — Singapore has a rather complicated unique historical relations with our country, and the unpredictable but tolerable relations have often changed to accommodate the contemporary situation.

During the era of Tunku Abdul Rahman, just like a newly-wed couple, the two countries were originally passionately in love. Unfortunately, the happiness was short-lived, with the marriage turning sour and ending in a divorce.

During the eras of Tun Abdul Razak and Tun Hussein Onn, each country lived its own life, minding its own affairs, with little interactions. The bilateral relations increasingly became lukewarm.

During Tun Dr Mahathir Mohamad’s era, there were many controversies over issues like water supply, railways, crooked bridge, territory and the Singapore Central Provident Fund (CPF). The two countries were literally involved in a dog-and-cat fight, even to the extent of going to the courts.

When Tun Abdullah Ahmad Badawi was the prime minister, he was eager to pick the low-hanging fruits. However, he faced great internal resistance and caused the improvement for the cross-strait relations seemed to be limited only to the diplomatic level with little progress.

When Datuk Seri Najib Razak took over as Malaysia’s chief executive, the two countries have begun a new romance.

They have reached an agreement on the relocation of the Tanjong Pagar railway station which has been delayed for 20 years. The agreement has brought hopes that several historical issues would be resolved.

Najib had visited Singapore several times to show his goodwill and, at the same time, promote his New Economic Model (NEM).

In the area of economy, Najib seems to be very ambitious and very eager to achieve some fast results. But, many plans are yet to be implemented.

Najib obviously has to face both internal and external pressures in his decision-making of several major plans, including the 1 Malaysia concept, the NEM, and the 10th Malaysia Plan (10MP). These plans and programmes will be costly if they miss the opportune time to be implemented.

Nowadays, the international competition has become more and more intense and the world no longer allows us to tightly embrace protectionism.

In fact, the more privileges and self-protections in economy, the more extreme conservative views will be spread and the more foreign investors will be scared away. It may even lead to the outflow of domestic funds to other more liberal and open markets.

When tycoon Tan Sri Robert Kuok Hock Nien, one of the five advisers of the Iskandar Development Region Authority (IDRA), abandoned his title of the “Sugar King of Malaysia” to acquire Sydney-based CSR Ltd’s sugar business for RM4.73 billion and develop some 200,000 hectares of sugar cane plantation in Indonesia, shouldn’t we take a good look as to why?

When the Genting Group’s funds were taken into Singapore to build the republic’s first casino, shouldn’t we ask why?

Why did the IDRA, which was custom-made for Singaporean investors, fail to bring the desired results?

Najib, apparently worried about some reckless and rash local politicians making some foolhardy remarks, has reminded Umno leaders not to express views that are inconsistent with the government stand and undermines his efforts in attracting Singaporean investors to invest in Iskandar Malaysia.

“It was the age of wisdom, it was the age of foolishness... we were all going direct to Heaven, we were all going direct the other way — in short...” Aren’t these famous words of Charles Dickens written 150 years ago still very inspiring today? — mysinchew.com

* This is the personal opinion of the writer or the publication. The Malaysian Insider does not endorse the view unless specified.

The Fool Makes An Excellent Point

http://www.fool.com/investing/general/2010/09/17/5-companies-that-doubled-earnings-while-their-stoc.aspx

Morgan Housel
September 17, 2010

I couldn't for the life of me track down the actual quote, but Peter Lynch once said something along the lines of, "The biggest mistake an investor can make is buying the right company at the wrong price. Because then the company does well, but the stock goes nowhere."

How right he was! Most investors have lost money over the past few years. But what really caused these losses? Was it a deterioration of companies and their earnings power, or just a reevaluation bymarkets? There's a major difference between the two.

Consider these five companies, all of which have doubled (or nearly doubled) earnings in the past four to six years while their stocks went nowhere.

1. Microsoft (Nasdaq: MSFT)
In 2004, Microsoft earned $0.75 a share. Over the past year, it pulled down $2.10 per share. That's 18.7% earnings growth per year. Extraordinary. Yet Microsoft shares trade lower today than they did for all of 2004. Dividends provided some return, but shareholders have essentially been handed a donut for a company that's blown the lights out on earnings.

2. Google (Nasdaq: GOOG)
Google shares have gone precisely nowhere since late 2006. The company, however, has been on a tear. Revenue has more than doubled since 2006. Ditto for earnings per share, which have jumped from $9.94 to $23.03. That's 23% annual earnings growth, for which investors were rewarded with bupkis.

3. Wal-Mart (NYSE: WMT)
Wal-Mart's business has famously done well during the recession as consumers flock toward frugalism. Earnings per share have nearly doubled since 2004, from $2.03 to $3.91. Yet during this same period, shares have flatlined.

4. Johnson & Johnson (NYSE: JNJ)
In 2005, J&J earned $2.74 per share. Over the past year, it nearly doubled that, to $4.84 per share. The company also almost doubled its dividend payout during this period. Its shares? They trade lower today than they did for most of 2005.

5. WellPoint (NYSE: WLP)
WellPoint is the strongest example of this group. In 2006, the company earned $4.82 per share. Over the past 12 months, it's made $11.23 per share. Yet during this four-year period, the company's shares have fallen 28%. Incredible.

I made a point here of staying within a four-to-six-year timeframe. Stretching this exercise out to 10 years brings you back to dot-com bubble territory, where examples of companies growing earnings while their stocks pooped out becomes the norm.

Why does this happen? There are three explanations for why a company's earnings can explode while its stock languishes:

1. The current valuation is too low.
2. The starting valuation was too high.
3. Future growth prospects have suddenly taken a nosedive.

The recent period of dismal returns probably owes somewhat to all three factors. But the first two -- the valuation issues -- deserve the lion's share of your attention.

At a conference I recently attended, value investor Vitaliy Katsenelson made a great point: History shows that the single most important statistic in determining market returns is not GDP growth, interest rates, or even earnings growth. It's starting valuations. Start with high valuations, and future returns will be poor, even if companies and the economy boom. Start with low valuations, and future returns can be great, even if companies simply trod along. That's the point Lynch was making as well.

So where are we now? It's not hard to make the case that current valuations for these companies -- and most large caps, for that matter -- are indeed low. Microsoft, for example, trades at about eighttimes earnings after backing out its cash hoard. Johnson & Johnson's dividend yield is 3.5% -- far higher than 10-year Treasuries -- and it's grown that dividend payout by more than 12% per year for the past 30 years. Wal-Mart trades at 12 times forward earnings, despite having the most powerful retail moat known to mankind. There's no way to describe these numbers as anything other than outrageous. They're simple reflections of investors extrapolating previous poor results into the indefinite future.

There are two important parts to successful investing: finding the right company, and finding the right price. In any market, singling out good companies isn't terribly difficult. They're usually well-hyped. But finding the right price can be painfully elusive. Thankfully, the pool of good companies selling at good prices today is about as deep as it's been at any time during the past decade.

For past 10 years, strong companies provided abysmal stock performances. Over the next ten, I have a feeling that mediocre companies will start providing strong stock returns. These things move in cycles.

Signals of Concern

It pays to pay attention to signals. Dark cloud signifies rain; smoke signifies fire.

Thirst means your body needs more water. Discomfort means there is irritation.

Below are some signals that have great implications for stocks:

1) Negative Cash Flow: When money outflow is more than money inflow, the company is in trouble

2) High Debt to Equity Ratio: Above 0.5 is a concern

3) Interest Coverage Ratio: Below 1 means that the company is not able to meet all of its debt obligations

4) Share price keeps drifting lower. This probably means distribution by some major shareholders

5) Profit Warnings: When a company warns that its profit won't be good, take it seriously.

6) Insiders selling heavily means trouble ahead, while their heavy buying means the opposite

7) Resignation of key personals need scrutinization (can be bad or good)

8) SEC Investigation: an ill omen

9) Litigation: Whether the company is suing somebody or somebody is suing the company is not a good sign

10) Right Issues: When the company ask you for money, be skeptical about it.

Be Smart From The Start

Beginner Investing

Featured Blogs: Wise Investing

I’m ready to start investing. What's the first step?

by Jane Bryant Quinn

Don’t go near a broker or commissioned planner if you’ve just come into a lot of money (an inheritance, an insurance settlement, a lump sum retirement payout) and don’t know what to do with it.

Clients with loose cash and weak convictions are fresh meat, ready for roasting. A self-interested planner may urge you to buy high-commission investments that serve his or her objectives better than yours.

Because you don’t know much about investing, you won’t know what’s going on. Before you set foot in the office of a stockbroker, insurance agent, or financial planner, learn the basics yourself. Sock your money into bank certificates of deposit or a money market fund, then study up. Read books. Work out your priorities. Take all the time you need to understand the tried-and-true principles of successful investing. Six months, one year, the wait doesn’t matter. During that time, your money will quietly earn interest with no risk of loss and no risk of slipping into bad hands. The only expert that a novice can safely visit is a certified public accountant, for tax advice. That is, provided that the accountant doesn’t sell financial products.

When you’re ready to launch, try investing yourself, a little in this mutual fund, a little in that one. Give it a year, see how it feels, and then invest some more. Don’t worry about “missing the market.” There’s a new market every day. Once you’ve had some experience, you might discover you like it and keep going. Or you might decide that you want professional advice.

Excerpted fromMaking the Most of Your Money Nowby Jane Bryant Quinn

Copyright 1991, 1997, 2009, by Berrybrook Publishing, Inc. Reprinted by permission of Simon & Schuster, Inc

Buy the Book

The Highest So Far

RM2 firm creates land deal history By Vasantha Ganesan vasantha@nstp.com.my 2010/09/17 Urusharta Cemerlang (KL) pays RM210 million, or RM7,209.80 per sq ft, to a company controlled by Singapore's property tycoon Kwek Leng Beng for a vacant land in Jalan Bukit Bintang, Kuala Lumpur A RM2 company is the buyer of the country's most expensive piece of land. On Wednesday, Millennium & Copthorne Hotels plc (M&C), a company controlled by Singapore's property tycoon Kwek Leng Beng, sold 29,127 sq ft of vacant land in Jalan Bukit Bintang, Kuala Lumpur, to Urusharta Cemerlang (KL) Sdn Bhd for RM210 million, or RM7,209.80 per sq ft. The previous record in a reported land sale was RM2,588 per sq ft for Wisma Angkasa Raya in Jalan Ampang in 2008. A search at the Companies Commission of Malaysia revealed that Urusharta Cemerlang (KL) is owned by Tan Sri Zainol Mahmood and Shazni Sulaiman. The two have been its directors since 2006. Zainol is the chairman of Urusharta Cemerlang Sdn Bhd and Pavilion Kuala Lumpur Sdn Bhd. Urusharta Cemerlang owns the Pavilion Kuala Lumpur shopping mall, which is also located in the Bukit Bintang area. Urusharta Cemerlang is 51 per cent owned by Urusharta Cemerlang Development Sdn Bhd and 49 per cent by the Qatar Investment Authority(QIA). Not much is known about Shazni. In the financial year ended December 31 2009, Urusharta Cemerlang (KL), which is described as a dormant company, had current liabilities of RM5,010 and posted a net loss of RM1,305. Real estate agents are describing the latest deal as "dizzying heights" and reckon that it could take many more years to surpass the figure. But observers are wondering how and who will finance the acquisition given that the buyer is a RM2 company. They also questioned whether QIA will later participate in the deal and what will be built on the land - an extended retail mall or luxury residences. A mall would make sense given the land's proximity to Pavilion. However, at such a price, there is no doubt it could take more than the usual eight to 10 years to see a return on investment should a shopping complex be built. It might recoup the investment faster if it built and sold high-end residences. After all, the land had been initially slated for the RM500 million Millennium Residences project. In a statement issued in Kuala Lumpur on Wednesday, M&C said a 10 per cent deposit had been paid to its wholly-owned unit, CDL Hotels (Malaysia) Sdn Bhd, which owns the land. The deal confirms a Business Times report early last month that a land deal was being negotiated by CDL Hotels which could fetch a record price of over RM3,000 per sq ft. The latest deal is nearly three times the price paid per acre in several private sales of nearby land, and the highest ever in the country's history. "This transaction has obviously set a new benchmark in the local property market. I view the transaction as a special transaction as it is a special purchaser - an adjoining property owner who probably places more value on the asset than others," said a real estate agent, who declined to be named. It is understood that the YTL group, which owns the nearby Starhill Gallery, Lot 10 Shopping Centre and JW Marriott Hotel, had also been eyeing the land. The deal is expected to be completed no later than the second quarter of 2012. M&C's carrying value of the land was RM42.8 million. Based on this, the sale is expected to result in a pre-tax profit of RM164.1 million after taking into account transaction costs.

Intelligent Investing Best Way To Riches

Human nature seldom changes. When it comes to investment, value buying is still the best strategy. Fundamentals & values really matter eventually.

All bubbles are bound to burst. What is a bubble? Everything has a fair value. When the price of a stock exceeds its fair value, a bubble is formed. As the price moves higher and higher, the bubble becomes bigger and bigger. At the height of any bull market, someone will say, this time it's different. In reality, it will not be different. All bull markets will end in a speculative binge. When newbies enter the market in droves, when IPOs become more and more popular, and when people are throwing cautious to the wind, becoming more and more greedy, you may rest assure that the bubble is about to burst.

The FBM KLCI closed at 1, 472.95 yesterday. Is there a bubble? Yes, I believe there is a bubble. Blue chips are trading at high PE. Prices are moving ahead of growth.

Is the bubble going to burst anytime soon? I don't think so. A meaningful correction is the likely scenario as the above-mentioned characteristics at the top of a bull market is not seen yet. When rubbish shares have also moved up to a high level, then I think, is the best time to sell everything. For now, buying better-class 2nd liners is the best option.

The gap between the blue chips and the 2nd liners have grown wider. This reflects that foreigners are buying into the market. Foreign fund managers are only interested in liquid big-capped blue-chip stocks. Foreign buyings can push up the index fast, but when they leave, it can plummet just as fast.

The stock market is always governed by hope, greed and fear. Hope is what keeps an investor or trader holding on to a failing stock. Greed causes you to buy late in a bullish run. It also causes you to hold onto a stock that has become overvalued. As for fear, there is fear of missing out an excellent opportunity, fear of not protecting a profit, and fear of losing everything. Fear can cause you into joining a panic sale and taking small profits.

Emotions play a great part in the stock market. We have to understand these emotions and control them, otherwise other people will control us.

Do not buy anything you do not understand. If you buy on a hot tip without understanding the fundamentals, a little outside noise can derail you from your track and causes you to sell out with a loss on an investment that is profitable.

Always do a due diligence before you buy. If you are not convinced that the company is solid, if you are not convinced that the company has growth and that it has much potentials to become a great company in the future, simply avoid it.

We do things for a reason or a combination of reasons, The next time you are about to buy a stock, write down all the reasons for buying it. Be it a whispered tip from your remiser, friends or a bullish article in the papers, just write them down. You will be amazed to read them some time later. You will then know how smart or foolish you have been.

There is no short cut to riches. If you want to be a savvy investor and be fully independent financially in your golden years, intelligent investing is an excellent way.

Cheers and happy investing!

Why Investors Stick With Failing Stocks

by Brian Bloch (Contact Author | Biography)

For many investors, nothing is stronger than the stubbornness that emerges when making a new decision means admitting that an earlier one was a mistake. Such an admission comes at a high psychological cost in terms of self-image. As a result, many people avoid disappointment and regret by clinging to the wrong decision.

Of course, this only makes things worse financially, but the investor gets to delude himself that the disaster is not really so bad or will come right over time. Such behavior is referred to as "negative perseverance" or "regret avoidance", and is also likened to "effort justification". Whatever the name, this behavior needs to be avoided.

The concept of cognitive dissonance will be familiar to those who have studied marketing. Buyers often rationalize that they bought the right product after all, even when, deep down, they know it was a mistake. For instance, a buyer may seriously regret buying a manual car, but kid himself that it was great idea because of the lower gas bill.

The field of investment is particularly prone to this kind of mind game. (To learn more, check out our Behavioral Finance Tutorial.)

Why Do People Behave This Way?
Basically, the investor unwittingly has a greater fear of admitting to himself and perhaps to others, that he made a mistake, than of the consequences of keeping a bad investment. This very dysfunctional form of behavior, caused largely by pride or stubbornness, leads either to total passivity or to selling too late.

Individuals strive for harmony and consistency, hence the notion "if I just leave it alone, it’ll be ok". The problem is that when investments go wrong, particularly horribly wrong, radical and above all rapid action is generally essential. Taking losses or a major portfolio restructuring often causes the mental conflict of cognitive dissonance. This is a singularly unpleasant state of mind and can be resolved very unsatisfactorily, by collecting arguments to justify the original mistake that has now manifested itself in the form of big losses. (For more, see Words From The Wise On Active Management.)

With respect to investment, this means, for instance, clinging to an all-equity portfolio which is in the process of plummeting, rather than selling out in order to minimize losses and putting the money into something else that is likely to go up right now. Or at least, something that is likely to rise a lot sooner than the bear market turning bullish.

The Nature of Cognitive Dissonance
On the buyer side, what makes the process particularly problematic in the investment field, is that there is a lot one can regret. You can fret and sweat over losses caused by taking excessive risk, or lost opportunities caused by not buying a great asset in time. You can also torture yourself about selling too late or not buying enough, or listening to your advisor or friends, or indeed not listening to them. In short, you can be sorry about so many things in so many ways.

On the selling side, people who do not treat their customers well still generally want to believe that they are honest. But at the same time, they want to make the sale. So they solve the contradiction with self delusion along the lines of "I have no choice, I will lose my job if I don’t make the sales quota" or "if he agrees to it, it's his decision and his problem". Or "it’s a perfectly standard portfolio", even when it is totally unsuitable for the investor in question and/or the timing is inappropriate.

In extreme cases, the Bernie Madoffs of this world get accused of suppressing their emotions and ethics altogether. Indeed, this is how many intrinsically honest people cope with dishonest environments. (Learn more in How To Avoid Falling Prey To The Next Madoff Scam.)

Preventing Cognitive Dissonance
A sensible, diversified portfolio is a great way to prevent this problem. If you do not have too much or too little of anything, the odds are you will feel all right about your investments. Of course, if you take big gamble and it pays off, you will feel wonderful, but if it goes sour on you, there will be a lot of misery and rationalizing, which is just not worth it for most people. Balance, prudence and a good mix is the only sensible approach for the average investor. And as always, shop around and inform yourself fully before you buy. Do not rely more on other people than you have to. (For more on this topic, see Diversification: Protecting Portfolios From Mass Destruction.)

Be sure that you understand what you are doing and why. No self-delusion up front will help prevent the "need" for it later on. Never try to fool yourself or anyone else. We all make mistakes and the only thing to do is get them right. The worst thing you can do is pursue a lost cause, to continue flogging the proverbial dead horse. It is important to take a step back and consider the whole process objectively.

On the selling side, the same basic principles apply. Resist the temptation to sell things that should not be sold. It may be a good idea to offer a fee-only service, which yields no commission at all. Your customers will be grateful and there will be no nasty comebacks and complaints. Everyone will sleep better, the world will be a better place and over time, this will surely pay off financially as well. (For more, see Paying Your Investment Advisor – Fees Or Commissions?)

by Brian Bloch (Contact Author | Biography)

Brian Bloch started his career as a business academic and moved into management journalism in the late '90s. His experiences as an investor with the financial industry led him into the personal finance area a few years ago, and he finds this line of work particularly rewarding and fascinating. As part of his personal finance work, Brian assists investors who have claims against brokers or firms. See his homepage at www.brian-bloch.com

10 facts about China

Published on Investing Answers (http://www.investinganswers.com)

Home > 10 Facts About China You Won't Believe (But You Should)

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10 Facts About China You Won't Believe (But You Should)

By Casey Scudder

Created 09/01/2010 - 13:37

China has recently surpassed Japan to become the world's second largest economy, and many wonder what this could mean for the United States. We compare business as usual in the world's two economic powerhouses. Some of these facts may seem truly unbelievable, but we promise they're all true.

China has been the topic of much conversation lately. Some Americans fear the great dragon of the Orient, while some are optimistic about a strengthening relationship with the U.S. Either way, there's no ignoring this global powerhouse.

Here are 10 interesting facts about China, its economy and its people.

1. China's GDP has multiplied tenfold since 1978. Currently, China has the second largest economy in the world, following the United States. While customers of Chinese exports aren't complaining about this growth, economists have a bevy of issues to take up with China, including currency manipulation, exploitation of labor and environmental pollution.

2. There are twice as many cell phones in China than there are people in the United States. In late August, Reuters reported that there were 794.7 million cell phone subscribers in China, nearly two-and-a-half times the size of the entire U.S. population. Even still, those subscribers make up only 60.8% of the country's total population. China Mobile (NYSE: CHL) is the world's largest cellular service provider, with a total of 558.9 million mobile subscribers.
#-ad_banner-# 3. China is crawling with KFC's. In 2009, Yum! Brands (NYSE:YUM) opened more than 500 new restaurants in mainland China. Yum! Brands is an American company that owns Taco Bell, KFC, Pizza Hut, Long John Silver's, A&W and WingStreet. But in China, KFC has been the big winner -- there are currently close to 3,000 KFC's in mainland China. Yum! claims that it opens nearly one new KFC in mainland China every day.

4. China is the largest foreign holder of U.S. Treasury securities. Currently, Chinese lenders hold over $840 billion worth of U.S. Treasury securities. That is equal to nearly 10% of the total Treasury debt held by the American public. As China ostensibly moves toward a floating exchange rate, they may be forced to unload some of that debt, which could really put the United States into a bind by restricting our debt financing ability.

[China could be changing how it deals with the U.S. dollar. Understanding basic economic theory can help boost even the most diversified portfolio. Read more about how China's policy changes will likely have an impact on every American in this educational article, How Money Manipulation on the Other Side of the World Could Affect American Portfolios.]

5. Nearly a third of Chinese adults live with their parents. But not for a lack of space; according to Bloomberg, urban construction is up more than 16% while rural construction is up almost 14% year-over-year. According to a 2000 world marriage pattern study by the United Nations, the average marrying age is 24 and 22 for men and women, respectively. In Chinese culture, people usually live in their parent's homes until marriage. According to the same study, Americans marry about four years later than Chinese and culturally embrace living alone before then.

6. China is the source of more than 77% of the U.S.'s pirated goods. According to the U.S. Government Accountability Office, China is responsible for 77% of pirated goods seized in the United States, with Hong Kong accountable for another 7%. In a recent Los Angeles crackdown, approximately $12 million of contraband was confiscated, including cigarettes, iPhones and yet-to-be released DVDs.

7. More than 75% of the Chinese population supports the "one-child" policy. Even though its workforce has been able to produce stunning results over the past two decades, the Chinese government seeks to restrict its growth through the so-called one-child policy. This prohibits many Chinese families from having more than one child. Although seemingly despotic, the policy is supported by over 75% of the Chinese population according to a study by the Pew Research Center.

8. More than 135 million people in China live on less than $1 a day. This is extreme poverty and it means families are not able to afford the most basic necessities to ensure survival. Even though China has the world's second largest economy, it is still considered to be a developing country by the World Bank.

9. Only 43% of Chinese Citizens live in cities. More are urbanizing every year. Reuters expects the urban population to have doubled to a whopping 700 million city-dwellers by 2015. Bear in mind, "rural" is not American suburbia. Rural Chinese towns generally lack running water and reliable transportation.

Also, rural towns still rely on the strength of their young boys to pass on the family name and care for the parents when they age. They're so prized, Time Magazine reports, that in some rural populations 80% of kids between ages 5-10 are boys.

10. Starting a business takes 38 days. Capitalism is a touchy new subject in socialist China. Though the central government is slowly releasing its grip as the planner of the economy, it is not yet as encouraging to entrepreneurship as many western nations. To start a business costs 130% of the average worker's income and taxes eat up a whopping 64% of profits.

Casey Scudder does not own shares of any security mentioned in this article

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Source URL: http://www.investinganswers.com/a/10-facts-about-china-you-wont-believe-you-should-1666

2010 should be an excellent year for planters

Asia to stay hungry for palm oil By Ooi Tee Ching bt@nstp.com.my 2010/09/10 ASIA’S robust economic growth and hunger for vegetable oils will continue to drive demand for palm oil and keep prices buoyant at around RM2,600 per tonne. In an interview with Business Times, Malaysian Palm Oil Council chief executive officer Tan Sri Yusof Basiron said Asia is expected to consume more palm oil, particularly countries with a high population such as China and India. South Korea for example has started to buy more from Malaysia in a big way, thanks to a free trade agreement (FTA) that led to tax-free palm oil shipments. Following are excerpts from the interview: QUESTION: Last year, crude palm oil prices averaged at RM2,250 per tonne. In the first eight months of this year, it averaged higher at around RM2,500 per tonne. Where do you see palm oil prices heading for the rest of the year? Why? ANSWER: This year, global vegetable oils supply had been rather tight. Malaysia’s palm oil production until July 2010 has only seen a slight 0.7 per cent increment, due to the El Nino effect at the end of last year. Latest data from Indonesia show palm oil output may fall 10-15 per cent from last year's volume. While the US foresees huge soyabean crop coming into the market from mid October, rape seed oil supply is badly affected by dry spell in Europe, Canada and China. According to Oil World, this year’s rape seed output is likely to fall 5 per cent to 56.9 million tonnes. With less vegetable oils supply in the global market, stock-usage ratio (SUR) will go down. The lower the SUR, the more bullish the prospects for vegetable oil prices. We must remember that petroleum prices also has an influence on palm oil pricing. Continued robust economic growth in India and China, and higher usage of vegetable oils in Europe and South America’s energy markets will keep palm oil prices buoyant. Assuming petroleum hovers at US$80 per barrel (RM248), we see palm oil trading in the RM2,500 to RM2,700 range. Q: Malaysia started exporting palm oil to China in 1985. Since then, shipments have continued to grow. Is the trend likely to continue this year, from palm oil exports to China of 4 million tonnes in 2009? A: As the largest vegetable oil consumer in the world, China’s palm oil usage makes up 15 per cent of global consumption. Palm oil is the second most consumed there, after soyaoil. This year, China has started to import more soyabeans instead of soyaoil. This is because the Chinese government wants more crushing activities domestically and more soyameal to feed its pig, cattle, dairy and poultry farms. According to Oil World, China’s January-July 2010 oilseed imports went up 12 per cent to 32.15 million tonnes. On the contrary, imports of oils and fats fell 9 per cent to 5.38 million tonnes. Although we see this situation prevailing, we’re not too worried. China has a big appetite for palm oil. According to Oil World, palm oil shipment from Malaysia, in the first seven months of this year, surged 17.2 per cent to 2.34 million tonnes. This was due partly to Indonesia raising tax on palm oil to as high as 4.5 per cent. In August, it was lowered to 3 per cent but raised to 6 per cent, this month. As a result of Indonesia’s tax regime, Malaysia’s palm oil shipment to China expanded. Judging from this trend, we’re hopeful of achieving 5 per cent growth to 4.2 million tonnes this year. Q: Malaysia’s FTA with Pakistan, which came into effect January 2008, has expanded palm oil shipments. Will Pakistan’s demand from Malaysia exceed 2 million tonnes this year? A: Last year, we achieved a record high of 1.76 million tonnes in palm oil exports to Pakistan. Apart from the FTA, Malaysia’s investments in Port Qasim’s bulking and refinery facilities have helped secure steady demand. The recent unfortunate flooding catastrophe in Pakistan have, somehow, compounded the need to balance its oils and fats requirement. In the first seven months of this year, Malaysia exported 1.2 million tonnes of palm oil to Pakistan, up 11 per cent from 1.08 million tonnes a year ago. I believe we can achieve the 2 million-tonne export target, this year. Q: After a 10-year decline, India bought more palm oil from Malaysia last year, surpassing the 1.35 million tonne level. From January-July of this year, however, the pace slowed dow. Do you expect to see palm oil exports to India exceed the 1 million-tonne level? A: India is now the world’s largest vegetable oils importer. There’s tremendous potential for higher imports considering its relatively low per capita consumption of just 14 kg. Palm oil already make up 75-80 per cent of its import basket. Last year, India’s 1 million tonne-import from Malaysia was exceptional. Poor domestic crush margins, rapid consumption growth and a stronger Indian rupee against US dollars fueled the surge in imports. To date, India has bought around 700,000 tonnes of Malaysian palm oil. I’m optimistic that exports will, once again, exceed the 1 million-tonne level. Q: South Korea is buying more palm oil from Malaysia. Any changes in vegetable oil tax regime brought on by bilateral trade agreements? A: South Korea’s oils and fats consumption grew at 2.6 per cent in the past 10 years. Going forward, it will have to rely on imports as it is not able to grow enough oil crops for its own use. Apart from conventional usage in the food and oleochemical industries, South Korea’s biodiesel sector has started to use palm oil as feedstock since 2007. With higher blending ratio of 2.0 per cent this year from 1.5 per cent in 2009, South Korea needs to import 100,000 tonnes more. In 2007, South Korea signed a FTA with the Association of Southeast Asian Nations, resulting in tax-free palm oil shipments from 2009.

Plenitude Bonus Issue 1 for 1

As at 30.06.2010, the key statistics of Plenitude were as follows:

No. of shares issued: 135m of RM1 each

Net tangible assets: Rm 5.37 per share

Earnings per share: 62.36 sen

Current Assets: 517, 783,000 (Cash & Bank balances: 326,292,000)

Current Liabilities: 149,448,000 (Bank overdraft: 1,239,000)

The company declared a tax free dividend of 15 sen per share and a bonus issue of 1 for 1 yesterday. At the time of writing this post, the share has shot up 38 sen to $4.26. At this price the price earnings ratio is 6.831. This is undemanding and I am of the view that there is more upside for the stock. The company has developments in Penang, KL, Puchong, Johor & Sg. Petani.

Will this September be different?

HOME > STOCKS
The Most Punishing of All Market Months (October? Think Again)
Will September Live Up or Down to Its Past?

By Robert Jay Mon, 23 Aug 2010 15:15:00 ET	Email | Print | RSS | My Updates	BOOKMARK AND SHARE IT!

Most investors know that famous stock market crashes have struck in October: 1929 and 1987 immediately come to mind.

Some may recall the "mini-crash" on Friday the 13th in October 1989. More recently, the Dow Industrials lost 18% the week of October 6, 2008.

All of that said, October is not even the second-worst month for stocks (it ties for fourth-worst with June).

More than 100 years of data show that the worst month for stocks is September.

Mark Hulbert of MarketWatch recently noted that since 1896, the average gain in the Dow Industrials in September is -1.2%, which underperforms all other months by far. The Stock Trader's Almanac also reports that September is the month when the leading U.S. stock indexes perform most poorly.

Of course, historical averages are no guarantee that this September will be the worst month of 2010. But realize this:

"The stock market continues to work lower, with declining legs unfolding...Momentum is set up to fall again with stocks."

August 20, Short Term Update

So with the above analysis in mind -- and considering that the worst average month for stocks is just days away -- may we suggest that it's wise to be prepared for this September before it arrives.

History and the Wave Principle alike are saying, "Look, look -- pay attention to this!"

So stay on top of the market with analysis you cannot get anywhere else. Click here for a 30-day no obligation look at the Elliott Wave International Financial Forecast Service.

TAGS: STOCK MARKET CRASHES, MARK HULBERT, MARKETWATCH, THE STOCK TRADER'S ALMANAC, ELLIOTT WAVE

Rating: - based on [139 rating(s)]

Silver Uses (This is a extract from the SilverInstitute) Demand for silver is built on three main pillars: industrial and decorative uses, photography, and jewelry & silverware. Together, these three categories represent more than 95 percent of annual silver consumption. In 2007, 455.5 million ounces of silver were used for industrial applications, while over 128 million ounces of silver were committed to the photographic sector, 163.4 million ounces were consumed in the jewelry market, and 58.8 million ounces were used in the silverware market. Why is this indispensable metal in such demand? The reasons are simple. Silver has a number of unique properties including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to and high reflectance of light and the ability to endure extreme temperature ranges. Silver’s unique properties restrict its substitution in most applications. Choose from the following list to learn more about some of the various applications of silver: Traditional Coinage Photography Silver Jewelry Silverware and Table Settings Industrial Batteries Bearings Brazing and Soldering Catalysts Electronics Emerging Medical Applications Mirrors & Coatings Solar Energy Water Purification

Best Under a Billion

Friday September 3, 2010

Nine M’sian firms make it to Forbes’ Best under a Billion

SINGAPORE: Nine Malaysian companies made it to the Forbes Asia’s Best under a Billion list this year compared with eight companies last year, according to Forbes Asia.

Glove maker Hartalega Holdings Bhd, which made it to the list for the first time, was also profiled in the September issue of Forbes Asia.

Other Malaysian companies that made it to the list are CBS Technology Bhd, Coastal Contracts Bhd, Hai-O Enterprise Bhd, KKB Engineering Bhd, Latexx Partners Bhd, Mudajaya Group Bhd, My E.G Services Bhd and Willowglen MSC Bhd.

CBS Technology specialises in RFID (radio frequency identification), e-security and e-procurement services; Coastal Contracts is involved in marine services and vessels while Hai-O is a multi-level marketer of herbal care products.

Besides steel fabrication, KKB manufactures steel pipes and LPG cylinders as well as hot-dip galvanising. Latexx manufactures rubber gloves, Mudajaya is involved in civil engineering and construction services, My E.G is an e-government service provider and Willowglen is a computer-based control system provider.

According to Forbes Asia, more companies are making their maiden appearance on Forbes Asia’s Best under a Billion list this year.

“In all, 151 firms are new on the list, compared with 136 last year, while 49 are returnees. Firms in information technology, healthcare and electronics sectors accounted for close to half of the 200 companies on the list,” Forbes said in a statement yesterday.

The annual Best under a Billion list picks the top-performing 200 firms from close to 13,000 publicly listed Asia-Pacific companies with actively traded shares and sales between US$5mil and US$1bil.

Forbes Asia said the selection of the final 200 was based on earnings growth, sales growth and shareholders’ return on equity in the past 12 months and over three years.

This year, China and Hong Kong have once again outdone the rest of Asia-Pacific with the most number of small and midsize firms represented on the list.

“This is the third consecutive year that both economies have dominated the list with 71 firms making the cut, down from 78 last year,” it said.

India is in the second place with 39 entries, 19 more than last year, thus making it the biggest gainer while South Korea is in the third position with 20 companies, followed by Taiwan with 19 and Australia with 13. Malaysia tied with Thailand for the sixth most number of entries.

The 200 winning companies will be honoured at an award ceremony and dinner in Hong Kong on Nov 23
.

I Just Saw the Greatest Gambling Spectacle in History

I Just Saw the Greatest Gambling Spectacle in History By Frank Curzio, editor, Phase 1 Investor August 27, 2010 "The only thing Macau needs to create is a way for gamblers to go to the bathroom without getting up from the tables." I thought my friend Leung was joking. Leung is one of my contacts I met with in Hong Kong. Hong Kong is my first stop in a six-city, 10-day China trip with my Phase 1 colleague Larsen Kusick. Our goal is to find small companies with huge growth potential. We'll keep Growth Stock Wire up to date as we travel to Shenzhen, Shanghai, Xi'an, Beijing, and Macau, our second stop... Leung is an executive for one of America's largest financial companies (he asked me not to disclose the name). He knows a lot about China and buys distressed debt all over the country. But as he pointed out, there are no signs of distress in Macau. Macau is a tiny island on the southern coast of China. And it's the gaming capital of the world. It brings in more revenue per year than Las Vegas. Last month, gaming revenue totaled $2 billion, a new record. Macau is the only area in China where gambling is legal. For 40 years, Macau's casino industry was a monopoly controlled by Stanley Ho, the richest person in Asia. This changed in 2002, when Macau granted licenses to three American gaming companies... Today, Las Vegas Sands, Wynn Resorts, and MGM Resorts are operating Macau casinos. Most of MGM's properties are located in the states. But Wynn and Las Vegas Sands are benefiting from the massive Macau trend, which is showing no signs of slowing down. I think that's a big part of the reason these stocks have held up so well in an otherwise depressed market. To get to Macau from Hong Kong, you must take a one-hour ferry. They leave every 15 minutes. I counted at least 10 boats at the port before boarding my ferry. Each boat can carry 250 to 300 passengers. I got a late start, leaving at 7:30 on a Monday. The boat was packed. So was the Venetian Macau, which is owned and operated by Las Vegas Sands. At over 10 million square feet, it's the fifth-largest building in the world based on floor space. When you walk inside, it seems even larger. The ambiance was similar to most Las Vegas hotels – large chandeliers, fountains, and such. But there was one major difference... I've been to nearly every major casino in Atlantic City and Las Vegas. The Venetian's casino space was about three times the size of anything I've seen. And nearly every table was full. Leung later told me the hotel had to close some restaurants to make more space for gamblers. The area across the street from the Venetian is also owned by Las Vegas Sands. The company is building three more hotels to accommodate the huge demand. Based on the construction site in the picture below, it's clear Las Vegas Sands is betting big on Macau. Our next stop was the Wynn Macau resort, which caters to high-end clients. The casino floor was smaller, more like a Las Vegas casino. And while it wasn't as packed as the Venetian, it was still crowded. There was a line of two-dozen cabs picking up tourists from the hotel. Most were dressed for a night on the town. The Venetian and Wynn also have high-end malls. Store names include Louis Vuitton, Gucci, Chanel, Dior, and Prada. At both casinos, the stores were crowded. Many people were carrying bags, not just sightseeing. Easily One of the Safest Ways to Invest in China How to Trade One of the World's Great Legal Monopolies Based on what I saw, the growth in Macau is real. It's no wonder Las Vegas Sands and Wynn Resorts have trounced the market this year. If these stocks do pull back, I'd use the opportunity to buy. Good investing, Frank Curzio

PN17

Do you know what PN17 stocks have in common? There are all debt-ridden. So, be careful when you buy into a company that has high debt.