Wednesday, December 30, 2009

What can we expect from CarlsBerg in 2010 ??

Let assume the buy over of Carlsberg Singapore run smoothly and the crunching of estimated figures are as follows :-
On assumption profit for years 2009 & 2010 remain the same as in 2008 for Carlsberg (M) & Carlsberg (S)……..

Total acquisition = RM 370m
Carslberg (M) Cash Balance = RM 231m
Borrowings to finance the acquisition = RM 150m
Gearing ~ 150/370 = 0.4 times (acceptable to me)
***Note : Borrowings may not occur as it may accumulate sufficient fund before 2009 end.

Carlsberg (M) Net Profit (Year 2008) = RM 76m
Singapore to contribute est 50% net profit to Carlsberg (M) in 2010
= 76 + (76 * 0.5) = RM 114 m

Conservatively 50% of the net profit will be used to pay dividend = 114/2 = RM 57m

1000units holding of Carlsberg will get a dividend of = 57m/308m = RM185

This represent a dividend percentage of = 185/4600 x 100 = 4% for year 2010 still better than 2009... :)

EPS = 114m/308m = 37sen

PE = 4.6/0.37 = 12sen (Not bad)

Compare to its peer GUINNESS stood at PE 14sen.

Fair value for Carlsberg (M) = 14 x 0.37 = RM5.18 ... :)

Beside what you get for above, do consider the following cost saving measure as well :-

1) The operational synergies where it would shift sourcing back to Carlsberg (M).
2) Advertising and promotions would enjoy double tax deduction.

I own some Carlsberg shares while writing this, join me if you want…. :)

Tuesday, December 29, 2009

How to calculate Brokerage fee for newbies........??

Greenleaf // December 28, 2009 9:33:00 PM GMT+08:00

Hi hng and horse,

Now, I understand why you mention buy high, sell low. Currently, I am holding BJTOTO which I bought at 4.28 and buy again at 4.2 cost average to become 4.22. I think that this is the way you mentioned, buy high sell low. :) Now, I have made some profit but I will not sell it yet because I think it will rise more again.
For the tax claim back, I have not done it because I really lazy to go to open the account and take the money. Because the money is quite little, I think not more than RM20 because last time, I buy very little amount of stock to try my trading techniques. So, I will claim it when I start working around June or July 2010 if I manage to graduate properly. :)
Thanks for the great guide. I am a bit confused about the fees and charges, if I buy at high price(eg: 4.28) and I buy again at low price(eg: 4.2), how to calculate the total fees and charges?


How to calculate Brokerage fee for newbies effectively ........??

Greenleaf, i suggest you to setup a table (spreadsheet) to calculate your brokerage fee and as a measure to your profit and loss or breakeven point for a particular stock that you purchase. This will give you exactly how much is your intraday or normal (T+1 onward) profit/loss.

Normal online brokerage is 0.4% (T+1 onward) negotiable and 0.1% for intraday.

Lets take 0.4% for your example and assuming you buy 1000units each on 4.28 & 4.2 respectively. Both transactions on the same day. Average price will have to take for calculation of brokerage as these two transactions are on the same day.

For Purchase :-

1) Average price = (4.28 + 4.2)/2 = 4.24

2) Total proceed = 4.24 x 2000 = 8480

3) Clearing Fee = 8480 * 0.0003 = 2..544 (RoundUp to 2 decimal) = 2.55

4) Stamp Duty = 8480/1000 = 8.48 (RoundUp to 1 digit) = 9 (subject to minimum RM1)

5) Brokerage(0.4%) = 8480 * 0.004 = 33.92 (subject to minimum brokerage whichever is higher)

6) Nett Purchase ( 2+3+4+5 ) = 8480+2.55+9+33.92 = RM8525.47

For Sales minus proceed with charges instead :-
1) Nett Sales ( 2-3-4-5 )
Greenleaf, with the above Puchase & Sales calculation you will be able to setup one table for your own to gauge your profit & loss..... :)

Thursday, December 24, 2009

Will PUBLIC BANK pay share dividend this time round ??

Can PBBANK still afford to pay share dividend in the coming 4Q in Jan 2010 like what she did early this year ?? Tough question isn’t it ?? Lets work out some math here…again need to stress here the figure provided below is base on my best knowledge and information gathering through all sort of channels possible. I do not hold responsibility for the accuracy of the figure provided and it all works out to be approximation and estimation. If someone out there can enlighten the correct information will be more than welcome. Do your home work as well dude, no free lunch in this world.

Just take below figure as good, am too lazy to verify, after all it is just estimate and work out of my own imagination…

Total shares issued = 2,472,348,084

Total shares in treasury (before 1:35 share dividend) = 163,849,950

Shares dividend of 1:35 = 2,472,348,084 / 35 = 70,638,516

Note: just whack the figure in as accuracy is not important here.

Estimated balance shares in treasury (After 1:35 shares dividend)
= 163,849,950 – 70,638,516
= 93,211,433

Do you see what I see ?? Assuming no shares buyback this year, the balance shares left in treasury still remain high at 56%.

I for one still remain confident and optimistic that PBBANK can still afford to dump out some shares dividend if they want to of course at their own discretion, if they choose not to, you are still be rest assured of 25sen dividend in the coming 4Q 2010…. ;>

Wednesday, December 23, 2009

61% return in investment !! But i just lose it....

I stand a chance to manage a private fund from a group of my friend about a year ago. Of course, this work out is purely due to friendship and have no single intention of personal benefit in it. I was given the full control of the fund and only to agree to report to them on a half yearly basis.

I've just finalized a simple account to all the “unit holders” so call, and to my surprise I managed to garner a return of 61.04% since inception of this fund. This is far too good compare to my own personal investment in which I merely get about 16% this year.

Sound pretty impressive right ??? Of course, in bull market this return is nothing to shout about. Many can achieve much higher than this I believe. What if bear is coming to town ??? Would you be able to sustain the same kind of growth ??? Frankly, i don’t know but what I have adopted is the same method I used to do all this while, by long term investing to quality and dividend stocks solely. Except that this fund I added some recipe in it where I traded some of the stocks by buying and selling and keep repeating them but limited only to the same group of quality stocks. Simple method, buy high sell low, buy high sell low and again buy high sell low on the same old stocks. Transaction traded not very high about 2 – 3 at most per month….  May be this is luck that just comes this year and you may not be that lucky next year. hahaha

Obviously, why is there such a big different comparing my personal return, 61% versus against 16% ?? A complete opposite ?? I notice that I dare not risk my own fund too much while dealing with trading, so I trade less, on the contrast, I trade more on people’s money… see the difference…AHA!! Who cares !! after all is not my money that I am dealing with. I lose nothing. So, who win this round ?? The psychology wins and wins real BIG this round. Dealing with people’s money tends to be fearless, aggressive, risk taking and determine. Of course, with these elements in me, I don’t just invest blindly, still stick to my rule of thumb, only quality & dividend yielding stocks.

Till then happy trading, may the best price be yours.

Tuesday, December 22, 2009

Genting SP a steal at current price ????

Everyone know Genting Resorts World Sentaso is starting its debut sometime in January 2010. Lets do some "lazy" calculation by working out the projection earning that it may bring in in year 2010. Of cource one just don't swallow what i bring to you here, it may all just turn out to be a crab for goodness sake. Again do you homework and find out all facts by yourself, no one you can really trust when come to real $$$ and invesment. I wish to mention here, the figure that i work out here is an estimation and largely possible a fictitious figure because as told before i am just a lazy guy. Trust at your own risk.

Fund raising of S$1.63b through RI of 2.04b shares at S$0.80 has just been concluded.
Let say this represent 25% of total share issued of GSP. Which mean 2.04b x 5 will give new total share issued of = 10.2b shares. Just take it as good for now, just too lazy to find out... :(

Estimated revenue for year 2010 is USD3b, this represent S$4.25b+-. Take the whole revenue as net profit...:) who knows ?? the figure might be higher.... :)

That will give us, an estimated EPS of 4.25b/10.2b = 41.67sen.......

Lets talk about PE, at current price GSP is trading a PE of 1.17/0.4167 = 2.8sen...
WOW, believe it or not, so low ???? Basing the industry gambling PE say.... 5sen is the worst i can think off, that will represent a fair value of S$2.08.... almost can deliver double of investment at current price. Guys, don't believe me this is just work out from imagination. If you choose to believe, at current price is a steal..... :)

FYI, i took in 2 batches of GSP at price of S$0.70 and S$1.11 respectively, also exercised partial of RI.

Recent News of GSP :-

Malaysian gambling concern Genting Bhd. is on track for a partial opening of its Singapore casino-resort by Christmas, stealing the lead on a competing project by Sheldon Adelson's Las Vegas Sands Corp.
Officially, Genting hasn't strayed from its target date of early 2010 for the opening of its US$4.4 billion Resorts World on the holiday island of Sentosa. But despite its cautious public projections, the developer has quietly been preparing for an earlier ramp-up, and a consensus is emerging among market-watchers that Resorts World will open ahead of Sands' Marina Bay Sands project in the heart of Singapore's business district.
Beating Sands to opening day would allow Resorts World to capitalize on the excitement around Singapore's long-awaited entry into gambling. Singapore's government for decades resisted allowing casinos, but reversed that policy in 2005. Morgan Stanley estimates Singapore's gambling industry could generate between US$3 billion and US$3.7 billion of revenue in its first year of operation.
Singapore's casinos are also well-placed to tap a deep reservoir of interest in Southeast Asia, and could take business from Macau casinos.
An earlier opening by Genting would be a setback for Sands, which won approval from Singapore's government to open a casino six months ahead of Genting and had for years been widely expected to open as Singapore's first casino.
Under Singapore law, local residents will be required to pay an entrance fee of 100 Singapore dollars (US$72) per casino visit or an annual membership fee of S$2,000 for each casino. That gives whoever opens shop first a chance to stake out a strong position in the marketplace, according to Praveen Choudhary, a Morgan Stanley analyst.
A spokesperson for the Sands' Marina Bay Sands project declined to comment on Resorts World's timetable, but maintained its stated position that the Marina Bay project was "targeting to open" in the first quarter of 2010, though with only about 1,000 of its 2,600 hotel rooms ready, as well as most of the convention center, the casino and up to half of the retail shops completed. "The rest of the attractions will open progressively throughout the year," the spokesperson said.
Since Sands won its bid in May 2006, construction delays and high-level management changes have bedeviled the ambitious $5 billion project. As the credit crunch threatened Sands' financial health last fall, Mr. Adelson issued several news releases to reaffirm the company's commitment to the Singapore project.
One particularly challenging feature of the Sands project is its SkyPark, a 7,000-ton cantilevered floating garden that perches atop the project's three 55-story hotel towers. Sands says the public observation deck will be longer horizontally than the Eiffel Tower is tall.
In its official statements, Genting is delicate about the timing. Lim Soon Hua, who is marketing Resorts World in four mainland Chinese cities as well as Taipei and Hong Kong, said in an interview Wednesday in Hong Kong that the project was "moving very fast," with rollercoasters and rides at the casino project's Universal Studios project undergoing testing.
"We are on time, and [Sands has] said that they are delayed," Mr. Lim said. "As to which will be first, that's the $100,000 question—no one knows yet." But, he added that anyone who went and "took a look" would see the difference.
Over the summer, Genting announced a three-day charity benefit concert for mid-December at Resorts World, which analysts say indicates a late 2009 "soft opening" of the casino-resort.
Aaron Fischer, who covers the Asian casino business for CLSA Asia-Pacific Markets, said he believed Genting "is well on track for a late December opening," though he expected the opening to be restricted to high-rollers and loyal Genting clients ahead of grand opening in mid-February 2010.
Genting, which has a gambling monopoly in its home market of Malaysia, bought a 3.2% stake in MGM Mirage Inc. in June.

Thursday, December 17, 2009

How To Assess REIT.....My Way

REIT also known as Real Estate Investment Trust. With the concept like Unit Trust by gather pool of money from all sizes of investors. REIT companies will invest, manage and distribute rental as dividend back to the investors.

Above are some of the useful information about REITs sector. One may assess them by looking at thier dividend yield (DY column) or the NAPS/NAV value to a particular REITs. Particularly, by looking at these two fields will somehow gauge whether it is worst investing but of course the dimension would not limit upto here. There maybe other factors affecting the value of REITs, one most important and particular factor is the sustainable rental income, as this will directly impact/contribute to your Distribution Per Unit (DPU)/Dividend you  received at the end of the day. REITs major incomes is rental income and it is required to distribute most of its profit as dividend to its holders. Malaysian REITs have a tendency to distribute at least 90% of its taxable profit as DPU/Dividend. If you are trying to find a good investment tool for your long term retirement plan. Do consider REIT. REIT will be attractive with a fair risk to be tolerated in compare to Fixed Deposit.
I am a lazy bum, i look for the most yield in term of dividend. So, take a look at the table, at one glance ATRIUM seem to provide the best DY and trading about 15% discount of it NAV. It provide good indicative for a longterm investment. There, at point of writting this, i possess some cake of this counter at a price of 76sen, coincidentally same price as my HEKTAR that i bought them since a year ago. here
If you are lazy as me, just take some time to calculate at what discount price the REITs are currently trading with it NAV and pick the DY that you are more comfortable with. There you go buy them and lock them in your safe.

Wicked Sick !!! Trader with >17K intraday profit.... :)

Can some trader beat this guy ?? Master of trader. Just a day trade with 17K profit in pocket. Further more it is traded in bearish market. Please also find his portfolio here for your trading idea. If you can't beat him then learn from him.

hng said...

Sold off all TM at 3.00, realize few hundred intraday gain :). In summary, portfolio realize intraday gain on Dijaya+TM and T+1 GENM, totalling more than 17k
Portfolio also manage to buyback more Dijaya at 91-92sen to further average down holoding cost from 95.5sen to 93sen (excluding earlier intraday gain). Dijaya has become top holding in portfolio.
Core portfolio

Dijaya 69.4%

Protasco 44.5%

Lonbisc 29.4%

Hingyap 18.1%

Wednesday, December 16, 2009

42% Return in REIT Investment on HEKTAR

Phew, a year just flown and we are coming to year end now.

Being dividend player, i always source for good company that offer high dividend yielding. On 16/12/08 when KLCI reaches its lowest point at around 800+-, i decided to lock in some REIT investment, after much consideration, finally pick up some HEKTAR that having some retail shopping mall assest type under thier wings. At that time, i bought them at a price of 76sen. It has been slightly over a year since i first picked them up, i have so far received total of 4 dividends/distribution per unit(DPU) and amounting to 10.2sen for year 2009. The break down is as follows :-

1) 11/03/09 - 3sen
2) 18/06/09 - 2.4sen
3) 16/09/09 - 2.4sen
4) 08/12/09 - 2.4sen

Basing the total DPU on my purchase price, i would have now garner a total of 13% return, couple with the appreciation of share capital a total of 42% return !!!
wow, isn't it is much much better off than Fixed Deposit for a mere 2% to 3 % !!?
I always aiming something that would give me 10% in return p.a either through dividend or share appreciation i would be very much happy then but this yield is far much better than my yearly target.
Investment in REIT has now entice me to be more focus in this area, no doubt share appreciation is slow at time but the consistent DPU is good enough to compensate your goal.

The above do not recommend a buy call from me, as Hektar stand to be very high in gearing about 50%-60%  if not mistaken. It could turn out to be a risky one if one do not play well in keeping it in well shape but it could also be a fruitful venture though.

Below are Hektar REIT's property portfolio :-
1) Mahkota Parade

2) Subang Parade

3) Wetex Parade

Tuesday, December 15, 2009

Thanks For being a great Friend - hng,mike,toto,elmo1988,et,velo& all cyber friends :)



A young man learns what's most important in life from the guy next door.

It had been some time since Jack had seen the old man. College, girls, career, and life itself got in the way. In fact, Jack moved clear across the country in pursuit of his dreams.
There, in the rush of his busy life, Jack had little time to think about the past and often no time to spend with his wife and son. He was working on his future, and nothing could stop him.

Over the phone, his mother told him, "Mr. Belser died last night. The funeral is Wednesday." Memories flashed through his mind like an old newsreel as he sat quietly remembering his childhood days.
"Jack, did you hear me?"
"Oh, sorry, Mom. Yes, I heard you. It's been so long since I thought of him. I'm sorry, but I honestly thought he died years ago," Jack said.
"Well, he didn't forget you. Every time I saw him he'd ask how you were doing. He'd reminisce about the many days you spent over 'his side of the fence' as he put it," Mom told him.
"I loved that old house he lived in," Jack said.
"You know, Jack, after your father died, Mr. Belser stepped in to make sure you had a man's influence in your life," she said
"He's the one who taught me carpentry," he said. "I wouldn't be in this business if it weren't for him. He spent a lot of time teaching me things he thought were important...Mom, I'll be there for the funeral," Jack said.
As busy as he was, he kept his word. Jack caught the next flight to his hometown. Mr. Belser's funeral was small and uneventful. He had no children of his own, and most of his relatives had passed away.
The night before he had to return home, Jack and his Mom stopped by to see the old house next door one more time.
Standing in the doorway, Jack paused for a moment. It was like crossing over into another dimension, a leap through space and time The house was exactly as he remembered. Every step held memories. Every picture, every piece of furniture....Jack stopped suddenly..
"What's wrong, Jack?" his Mom asked.
"The box is gone," he said
"What box?" Mom asked.
"There was a small gold box that he kept locked on top of his desk. I must have asked him a thousand times what was inside. All he'd ever tell me was 'the thing I value most,'" Jack said.
It was gone. Everything about the house was exactly how Jack remembered it, except for the box. He figured someone from the Belser family had taken it.
"Now I'll never know what was so valuable to him," Jack said. "I better get some sleep. I have an early flight home, Mom."
It had been about two weeks since Mr. Belser died Returning home from work one day Jack discovered a note in his mailbox. "Signature required on a package. No one at home. Please stop by the main post office within the next three days," the note read.

Early the next day Jack retrieved the package. The small box was old and looked like it had been mailed a hundred years ago. The handwriting was difficult to read, but the return address caught his attention. "Mr. Harold Belser" it read. Jack took the box out to his car and ripped open the package. There inside was the gold box and an envelope. Jack's hands shook as he read the note inside.
"Upon my death, please forward this box and its contents to Jack Bennett. It's the thing I valued most in my life." A small key was taped to the letter. His heart racing, as tears filling his eyes, Jack carefully unlocked the box. There inside he found a beautiful gold pocket watch.
Running his fingers slowly over the finely etched casing, he unlatched the cover. Inside he found these words engraved:
"Jack, Thanks for your time! -Harold Belser."
"The thing he valued most time"
Jack held the watch for a few minutes, then called his office and cleared his appointments for the next two days. "Why?" Janet, his assistant asked.
"I need some time to spend with my son," he said.
"Oh, by the way, Janet, thanks for your time!"
"Life is not measured by the number of breaths we take but by the moments that take our breath away,"
Think about this. You may not realize it, but it's 100% true.
1. At least 15 people in this world love you in some way.
2 A smile from you can bring happiness to anyone, even if they don't like you.
3 Every night, SOMEONE thinks about you before they go to sleep.
4.. You mean the world to someone.
5. If not for you, someone may not be living.
6. You are special and unique.
7. When you think you have no chance of getting what you want, you probably won't get it, but if you trust God to do what's best, and wait on His time, sooner or later, you will get it or something better.
8. When you make the biggest mistake ever, something good can still come from it.
9. When you think the world has turned its back on you, take a look: you most likely turned your back on the world.
10. Someone that you don't even know exists loves you.
11.. Always remember the compliments you received.. Forget about the rude remarks.
12 . Always tell someone how you feel about them; you will feel much better when they know and you'll both be happy .
13. If you have a great friend, take the time to let them know that they are great.

Monday, December 14, 2009

Tan CHong From Tidur to Hero

AmEesearch Sdn Bhd has strengthened its "buy" call on Tan Chong Motor Holdings (4405) stock and revised upwards its fair value to RM4.30 from RM3.70 a share after meeting the company's management.

The research house upgraded its valuation of Tan Chong's motor division to 13 times its forecast 2010 earnings from its historical mid-cycle price-earnings of 12 times, noting major structural changes that could elevate Tan Chong's competitive positioning.
AmResearch said it came out of the meeting with Tan Chong's management and identified three developing themes which could be catalysts in lifting its share price.
The themes are its structural regional expansion, wider model mix and plans for property redevelopment.

Tan Chong has said that it intends to become an integrated Asean automotive supply chain manager, that is, turning the company into a borderless manufacturer and one with a higher level of autonomy from its principals.
Succeeding in this goal could see an expansion of its assembly and distribution rights in the region.
Acquisitions are on the cards involving markets such as Indonesia, Cambodia and Laos, after similar moves in Thailand and Vietnam last week.
The move would involve a total investment of RM1 billion over the next four years, it said.
AmResearch projects Tan Chong's strategy of widening its model mix on the Malaysian scene to bring about robust growth in its market share.
At present, Tan Chong is not represented in three major vehicle segments - A, B and D - which account for 61 per cent of total industry volume in the country.
Its management expects earnings to double in 2012 from 2009 levels with the introduction of A and B segment models.
Around RM250 million has been allocated for Phases 2 and 3 capacity expansion at Tan Chong's plant in Serendah, Selangor, over the next two years, which would more than double the annual capacity to between 50,000 and 60,000 vehicles.
At the same time, a property redevelopment theme is unfolding at its Segambut land.
AmResearch said the catalysts are revaluation of its property in Segambut; conversion of the land to commercial real estate; and value enhancement from development of the land.

Friday, December 11, 2009

Major Corporate Development/ News

•LCL Corp defaults on loans

•Petra Perdana to dispose of Petra Energy stake

•Kencana targets RM4bn in contracts

•Nestle to enter FBM KLCI, Parkson will be dropped

•GBH aims to raise RM74m from right issue

•Puncak consortium fails to pre-qualify for Kimanis power

plant project

•Astro’s 3Q10 net profit jumped to RM133m

•Genting Malaysia to buy Wisma Genting

•Lion Corp’s Parkson targets 15% retail space growth

•TA Enterprise 3Q profit falls

•AirAsia to grow Indian network

•Maxis may increase leverage

•ECM Libra 3Q profit in at RM7.3m

•PNB’s new property group will not include Mah Sing, SP


•BAT estimates impact from Ministry of Health ruling

•JCY International’s 2nd attempt at IPO

•KPJ plans RM100m expansion

•Green Packet secures 3 European contracts

•Sime Darby subsidiary in groundwater venture with

Perak government

•Yoong Onn to target overseas expansion

Thursday, December 10, 2009

The Master of all Traders' Portfolio - hng

Core portfolio

Protasco 49.3%
Hingyap 34.2%
Lonbisc 16.8%
Crestbld 2.2%

Trading portfolio
Axiata 41%
GENM 15%
Bjtoto 15%

Monday, December 7, 2009

Hektar REIT in talks to buy new assets

By Chong Pooi KoonPublished: 2009/12/07

Most of the potential acquisitions are located in Peninsular Malaysia, says Hektar Asset Management chairman

Hektar Real Estate Investment Trust (REIT), an investor in shopping malls, says it is in talks to buy new assets and plans to sell more units to fund future purchases.

"We are in the midst of negotiating for new acquisitions, but cannot divulge any more details at this time," Hektar Asset Management Sdn Bhd chairman and chief executive officer Datuk Jaafar Abdul Hamid told Business Times in an interview.

Most of the potential buys are located in Peninsular Malaysia, he said, adding that it was in talks with township developers and other asset managers.

"The typical shopping acquisition is quite significant, starting from RM100 million and above, and will definitely require us to raise equity-financing to place that acquisition in the REIT."

While there was no firm plan yet to place out additional units, Jaafar said he was pleased that the capital markets had rebounded substantially in the past few months.

"Hopefully the timing would be conducive (for us to sell new units) when we close any acquisitions," he said.

Units of Hektar REIT have risen 36 per cent this year to end-November, but still trails the 44 per cent gain in the benchmark FTSE Bursa Malaysia KLCI in that period.

Hektar REIT owns the Subang Parade shopping centre in Subang Jaya, Selangor; Mahkota Parade in Malacca; and Wetex Parade in Muar, Johor. The fund's gearing ratio was 41 per cent as at end-June, quite close to the 50 per cent limit set by the regulator for a REIT.

Although a unit placement exercise will pare down its gearing and raise more cash for potential acquisitions, Jaafar said it was careful not to dilute the dividends received by existing unitholders.

"We believe it is important to deliver steady growth in the form of dividends to our unit-holders. We hope to establish a track record as an asset manager that delivers stable returns. So if we were to do a placement, it would be to acquire productive assets which would support the REIT's income and dividend growth."

While rival Axis REIT has garnered more investor attention after converting into an Islamic REIT, Jaafar said that Hektar had no plans to follow in Axis' footstep.

"We have studied the Islamic REIT model since before our initial public offering and will continue to monitor the feasibility of the model," he said.

"(But) we realised it was not a simple proposition for retail properties because it meant that we would eventually, over time, have to eliminate various types of tenants, such as conventional banks, conventional insurance branches, health clubs, cinema, to name a few.

"This is a challenge, especially for a shopping centre, to remain relevant without these amenities for consumers."

Thursday, December 3, 2009

REIT managers team up to form association

Published: 2009/12/03

THE managers of 11 Malaysian real estate investment trusts (REITs) have teamed up to set up the Malaysian REIT Managers Association (M-REITMA), allowing players in the sector to work closer with the authorities to grow the industry.

"For the purpose of registration with the Registrar of Societies (ROS), we have proceeded to form a protem committee comprising seed members from Am ARA REIT Managers Sdn Bhd and Axis REIT Managers Bhd when we handed in our application to register the association to the ROS on September 4," said protem committee chairman Steward Labrooy of Axis REIT in a statement.

"Without an official association representing members of the local REIT industry, it soon became apparent to all of us that we were unable to have effective dialogues with the regulators and the Ministry of Finance in order to communicate the issues facing the industry and to propose changes," it added.

The association, currently pending approval from ROS, will comprise AmFirst REIT, AmanahRaya REIT, Atrium REIT, Axis-REIT, Al-Hadharah Boustead REIT, Al-Aqar KPJ REIT, Hektar REIT, Quill Capita Trust, UOA REIT, Tower REIT and Starhill REIT.

The REIT sector is now over four years old, with the first REIT having listed in August 2005. Today, there are 13 listed REITS with a market capitalisation of RM5.4 billion.


Wednesday, December 2, 2009

How to diversify investments during this time of crisis

Personal Investing - By Ooi Kok Hwa

AS a result of the financial crisis, even though most commodities have not been performing well, gold has outperformed the conventional asset classes like equity and bond.
This has prompted some investors to consider commodities as one of their investment asset classes. In this article, we will look into how to invest in commodities.
Bruno H. Solnik and Dennis W. McLeavey in their book titled “International Investments” classified commodities in three major categories – agricultural products, energy and metals.
Examples of agricultural products are fibres (wood, cotton), grains (wheat, corn, soybean), food (coffee, cocoa, orange juice) and livestock (cattle, hogs, pork bellies). Energy products can be crude oil, heating oil and natural gas whereas examples of metal products are copper, aluminum, gold, silver and platinum.
The main reason behind investing in commodities is that they have negative correlation with stock and bond returns. This will provide a good way to diversify portfolio risks. Besides, given that commodities are positively co-related to inflation, they can help investors hedge against inflation.
Investors can consider investing directly in commodities or indirectly by buying into futures contracts, bonds indexed on some commodity price as well as stocks of commodity related companies.

Some companies will invest in commodities that are extensively used as raw materials in their production processes. High commodity prices or raw material prices will affect those companies’ performance. However, if they have invested in their raw materials, even though their profitability might be affected by high raw material prices, the gains from their investment in those commodities will offset the losses in their operations.
Some investors will consider buying into commodity futures, such as crude palm oil (CPO) futures as this is one of the easiest and cheapest ways to get exposure to commodities.
However, investors need to understand that futures trading requires a high level of trading skills as most commodity players are well-equipped with the required market information, like total world supply and demand of CPO as well as the weather conditions in those producing countries. Some financial institutions may offer unit trust funds that invest directly in those commodities or indirectly through buying into commodity futures. In the United States, investors can buy into commodities via exchange traded funds (ETF) that are invested in commodities futures.
An ETF is a special type of fund that tracks some market indices and it is traded on a stock market like any common share. Given that the world economy may recover further and oil prices may go beyond US$100 per barrel again, buying into oil or other commodity related ETFs may provide retail investors an alternative to get exposure into commodities.
Since commodity cycles and the general business and stock market cycles are usually different, investing in commodities provides a good way of portfolio diversification.
Besides, investors can consider buying into collateralised futures funds (sometimes they are referred as structured products). A collateralised futures fund is a portfolio that takes a small long position in commodity futures and invests the rest of the money in government securities. Normally, it is capital guaranteed as the yield generated by government securities will be used to cover for the cost incurred for the futures contracts.
Lastly, investors can consider buying into listed companies that are commodity related. In Malaysia, if investors wish to gain from higher CPO prices, they can consider buying into plantation companies.
Given the current gold prices of more than US$1,150 per ounce, some investors are eager to know whether there are any further upsides to the gold prices. Some analysts and fund managers have predicted that the gold prices may go beyond US$1,200 to US$1,300 per ounce. Investors will rush into gold during a financial crisis, like the current financial crunch and the Great Depression in 1929-32, because gold can keep its value during those periods.
We believe that gold is a cyclical product. Even though nobody knows how high the gold prices can go, given that the world economy is showing signs of recovery, the upside potential for gold investing may be limited.
● Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting.

Tuesday, December 1, 2009

Dubai impact on corporate names

What happened on 25th November?
A state-owned investment conglomerate - Dubai World Group, announced that they want to restructure its debt of US$59 billion including its property subsidiary, Nakheel. This sudden news caused a shudder in the financial markets and concerns about the ability of the UAE banking sector and foreign banks have on businesses related to Dubai World Group. Worries on how this would also affect the fledgling US real estate sector were evident as the Dow Jones U.S. Real Estate Index fell 2.9 percent, nearly twice the decline of broader U.S. market indexes on Friday 27th November.

Background of Dubai World and Nakheel
Dubai World, whose majority stakeholder is the emirate’s ruler, Sheikh Mohammad bin Rashid Al Maktoum, borrowed from more than 70 lenders to buy assets ranging from stakes in Las Vegas casino company MGM Mirage to upscale retailer Barneys New York through Istithmar. Their property arm, Nakheel is also perhaps best known as the developer of Dubai's palm-shaped islands, also carries the Mandarin Oriental and W hotels in New York in its portfolio, and has a 50 percent stake in the Fontainebleau Miami Beach resort. Dubai World's holdings go far beyond real estate. It has a 20 percent stake in Canada's Cirque du Soleil, and also invests in the global bank Standard Chartered Plc and New York boutique investment bank Perella Weinberg Partners.

Market reactions
The market over-reacted on Friday but over the weekend, the UAE showed support to Dubai's debt, and provided some assurances. Today, the global markets and banking shares are rebounding. In Hong Kong, shares of HSBC and Standard Chartered rebounded overnight as investors viewed Friday's reaction and fears of exposure to Dubai as overdone. However, stocks in the United Arab Emirates, trading for the first time (after a 4 day Hari Raya Haji holiday), fell with Dubai's index down 6.9 percent and Abu Dhabi's share benchmark 8.1 percent lower. Overall, the MSCI index of Asia Pacific stocks traded outside Japan rose 2.8 percent. Reflecting some of the calm, U.S. stock futures are up 0.4 percent pointing to a firm start at Wall Street, which had already started showing some signs of a recovery on Friday having erased some of the losses toward closing time. European stock index futures also point to a higher open, futures for the Eurostoxx 50, German DAX and French CAC gaining 0.3-0.4 percent.

Investors' Nerves Soothed
Investors were also placated by authorities' moves on Sunday (29 Nov) to prevent any major fallout from the looming debt default by Dubai World. The United Arab Emirates offered banks emergency support to ease fears in financial markets and to inject liquidity into Dubai's banks by the central bank, together with promises by neighboring city-state Abu Dhabi to provide selective support. The Central Bank of the United Arab Emirates said they would support domestic banks and foreign banks and would give banks a channel access to special liquidity which is tied to their current accounts at the Central Bank. This amount can be withdrawn at rates higher than 0.5% above the 3 month local inter-bank interest rate benchmark.The benchmark three-month Emirates interbank offered rate was at 1.919 per cent on Nov. 25, the last working day before the Raya Haji religious holiday.This is a very reassuring move by the central bank to limit the risk of any run on Dubai-based banks as it will alleviate any liquidity concerns by foreign banks about the banking system, mostly those based in Dubai.

What should we do ?
As usual, do not panic. For some reassurances, Asian markets rebounded sharply today. The Middle Eastern markets are down as today is their 1st trading today after a long public holiday. Investors should wait for the markets in the Middle East to calm down. You may want to do a portfolio review on your middle eastern positions (if you have any) after the storm subsides, hopefully by end of his week and realign them to more Asia centric positions
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