About Sime Darby,Scomi Group,Uchi Tech,Tenaga

Sime Darby




What’s Up? … dated July 2010



PNB has pared down its stake in the country’s largest conglomerate Sime Darby Bhd with the disposal of more than 47 million shares resulting in its direct interest being lowered to 13.87%.



PNB disposed of 5.5 million shares on July 9 2010 to reduce its stake in the conglomerate from 838.90 million shares or 13.96% to 833.40 million shares or 13.87%. Data services indicated that the shares were sold off-market in a number of tranches with prices ranging from RM7.69 to RM7.80 per share.



According to Sime’s July 13 filing, PNB had disposed of 19 million shares on July 7 2010 and a further eight million shares the following day to reduce its stake from 865.90 million shares or 14.41% to 838.90 million shares or 13.96%. The two blocs of shares were sold off-market at RM7.50 per share and drawing a total value of RM202.5 million.



PNB’s shareholding in Sime has gradually been reduced since early July 2010. It had disposed of over 15 million Sime shares on July 1, 2, July 5 and 6 2010.



An institutional investor could have picked up the big chunk of the shares sold by PNB as Sime remained financially strong with contributions from its plantation, industrial, property and motor sectors at satisfactory levels.



Due to provisions to the tune of RM964 million, Sime posted a net loss of RM308.63 million in its third quarter ended March 31, 2010 (3QFY10) versus a net profit of RM150.57 million a year earlier. Its net asset per share stood at RM3.49 as at March 31 2010.



Sime’s recent losses would not impact its 50% dividend payout policy.







Scomi Group



Shareholding of Scomi Group as at May 2010

Kaspadu (including indirect): 15.21%

Axa Investment: 5.35%

EPF: 0%



Shareholding of Scomi Marine as at April 2010

Scomi Group: 52.71%

LTH: 5.11%

Chuan Hup Holdings Bhd: 23.19%

Meer Sadik Habib: 5.84%



Shareholding of Scomi Engineering as at April 2010

Scomi Group: 69.31%



What’s Up? … dated July 2010



Sources say its major shareholder Kaspadu Sdn Bhd is poised to loosen its grip on or even exit from the company. In an exercise that will see a realignment of shareholding at Kaspadu level, it is learnt that Datuk Kamaluddin Badawi will cased to be a substantial shareholder in Scomi but his partner Shah Hakim will remain with the group.



This is why Kaspadu has reduced its shareholding in Scomi by more than half from a year ago (2009). It is not known who bought the shares. Sources say the shares were sold to friendly with Kaspadu. Shah and his partners are still very much in control



In 2003, Kamaluddin had a 36.25% stake in Kaspadu, Shah hakim 36.25% and Nazimah Syed Majid 27.5%. It is understood that under the realignment, Shah Hakim is keeping his interest in Kaspadu while Kamaluddin and Nazimah are selling their stakes, But it is not clear to whom Kamaluddin and Nazimah have sold their shares.



It is uncertain whether the restructuring at Kaspadu level has any link to the events that occurred more than a year ago (2009), whne Scomi came under the spotlight following reports of US sanctions against Shah hakim and several other Malaysian businessmen who were allegedly involved in nuclear proliferation. .



Also, it is believed that Kamaluddin has been keen to exit Scomi.



It is worth nothing that Kaspadu had sold its Scomi shares at 35 sen to 50 sen apiece which is at a 50% to 70% discount to Scomi’s NTA per share of RM1.05. Given the fact that Scomi is undervalued, the divestment at such prices is quite puzzling, especially by a major shareholder. Furthermore, Scomi is main beneficiary of the potential cash dividends that will be declared by its subsidiaries.



Scomi is considered undervalued based on a sum of parts valuation of its subsidiaries, Scomi’s 69.31% stake in Scomi Engineering and 42.71% in Scomi Marine are worth RM475 million. If strip out the RM475 million from current market cap, the group would only be valued at RM35.6 million.



It is worth nothing that Scomi is the largest recipient of cash from its subsidiaries that have been divesting.





Uchi Tech Bhd



What’s Up? … dated July 2010



Its European orders which comprise about 80% of total revenue, are not affected by the sovereign debt crisis in Europe.



Its customers are MNCs most from Europe.



This could possibly due to the Energy Savings Act enacted by the European countries, which was implemented from Jan 2010. The Act would leave customers with no choice but to place orders with Uchi due to lack of alternative suppliers in the market.



It posted a net profit of RM9.95 million for 1Q2010. Its net asset per share stood at 47 sen. In FY2009, the company’s revenue fell and net profit declined to RM26.95 million which was due to 2008 financial crisis.



The company is targeting a 25% to 30% growth in US dollar revenue as compared to 2009. Uchi conducts all its trades in US dollars.



It has taken advantage of its large cash pile and low stock prices to purchase its own shares, and conducted frequent share buy backs throughout July 2010. As at July 2010, the company had a total of 5.11 million treasury shares.



Its other strengths are its huge cash pile of about rm124 million as at March 31, 2010 and is zero gearing. Its net asset cash per share is 33.1 sen.



The large cash would allow Uchi to give high dividends to its shareholders in FY2010 and FY2011. Its dividend policy is to distribute a minimum of 70% of its profit after tax to its shareholders.



Going forward … It plans to diversify away from Europe. It is currently negotiating with China some business deals.



The company is also taking concrete steps to reduce its heavy dependence on the coffee machine modules division by 2010 end.



Its strong cash pile also enable it to fund capex while allocating a targeted 7% of total revenue for R&D to sped up diversification away from the coffee machine modules division.





Tenaga



Sources say The Energy Commission of Malaysia has been given the mandate to call for competitive bidding for the expansion of coal fired plants in Peninsular Malaysia.



It is leant that the regulator for the electricity and gas supply industry is in the process of preparing request proposals and other documents inviting bids for the supply of an additional 1000 MW to 2000 MW of electricity.



A committee under the Energy Commission with representatives from TNB and EPU will call for bids and determine who can give the lowest tariff for new plant up or power plants.



The Energy Commission was roped in because Tenaga will also be bidding for the expansion of its Janamanjung coal fired plant. Apart from Tenaga MMC Corp has also expressed interest in expanding its Tanjong Bin Power plant to supply additional power to the grid.



Besides Tenaga and MMC Corp, the owners and operators of gas plants are also looking to increase their supply of power to the national power grid. Among them are YTL Power and Tanjong plc.



The move to call for bids comes on the back of the need to boost reserve power margins to cope with increasing power in the peninsula.



Meanwhile, Tenaga biggest fear is that if there are too many new power plants, it would result in excess reserve margins, which will impact its bottom line. Which is why the utility is pushing for a gradual increase in capacity.



The government is also initiating discussions with the first generations IPPs on the possible extension of their services, subject to supply of natural gas from Petronas and pricing for the IPPs’ electricity.

REIT growth is key to capital gains

KUALA LUMPUR: The Edge Financial Daily yesterday wrote on the weak price performance of the two newly listed REITs, Sunway Real Estate Investment Trust (SunREIT) and CapitaMalls Malaysia Trust (CMMT).

It highlighted the fact that while capital gains for REITs may not be strong, the total returns for shareholders is very decent after adding back dividends or distribution per unit.

All Malaysian REITs, even those now trading below IPO prices, have given positive total return to shareholders.

While high yields are likely to keep REIT investors contented, the key to capital growth in REITs is in raising overall yields and asset value, usually through yield-accretive acquisitions.

The lack of such yield-accretive acquisitions, or value enhancement propositions, is one of the key factors behind the lacklustre price performance of many REITs.

It is not surprisingly REITs are often viewed as one-off exercises to realise the value of a developer’s assets. “REIT growth is key, because unlike a company which can undergo business expansion, REITs are often injected at the height of their potential. And unit-holders still want to see a growth in returns,” said an analyst.

Generally, returns can grow through increasing the REIT’s net profit, changing the distribution policy or through property acquisition. The acquisition may be funded through internal cash reserves, a rights issue or a new issue of shares.

According to a study by The Edge Financial Daily, the earnings per unit (EPU), on average, for the 11 Malaysian REITs (excluding SunREIT and CMMT) have dipped 4.5%, from 15 sen to 14.4 sen, during the FY07 to FY09 period.

Starhill REIT stands out from the pack, having grown its EPU by 339%, from 6.9 sen in FY07 to 30.2 sen in FY09. The movement was mostly due to increases in fair value from property revaluations of RM274.4 million during June 2009.

AmFirst REIT also has a high growth rate of 73%, from 7.3 sen to 12.6 sen over the same period, largely due to property revaluation of RM23.5 million during the year ended March 31, 2010.

Al-’Aqar KPJ REIT, the most active REIT acquirer, is another REIT which has enjoyed higher EPU growth, totalling 49% from 7.5 sen to 11.1 sen from FY07 to FY09. In FY08 and FY09, Al-’Aqar KPJ REIT, the sixth largest REIT by capitalisation, introduced 14 more properties into its portfolio, comprising hospitals, an office building and a nursing college at a total cost of RM451.6 million. On July 6, Al-’Aqar added a further seven medical properties as well as a hotel for a total of RM383.4 million, raised partially by cash and a new issue of shares. It remains to be seen how this will affect the unit-holders in the coming financial year.

In contrast, Quill Capita REIT and UOA REIT appear to have suffered lower EPU over the years, falling by 68% (from 26.3 sen to 8.5 sen) and 48% (40.7 sen to 21.3 sen), respectively, from FY07 to FY09, mainly due to a slowdown in property appreciation gains. Based on annual reports, Quill Capita’s net appreciation in fair value of properties was RM57.1 million in FY07 compared to a total of RM3.5 million in FY08 and FY09.

Likewise, UOA REIT’s properties appreciated RM29.1 million in FY09 compared to RM78.8 million in FY07. In order to increase their current yields, REITs should consider the future values of each new asset in their portfolio. A manager should consider the net effect of a new acquisition on portfolio yield. For example, funding the acquisition with borrowings charged at an effective interest rate higher than the yield will lead to a fall in the portfolio’s overall return.

For the two new listings, SunREIT and CMMT, the prospects for acquisition look bright.

SunREIT had said it aims to double its asset base in five to seven years, whereas CMMT has the first right of refusal to acquire CapitaMall Asia’s properties.

CapitaMall Asia is one of Asia’s leading shopping mall developers, managers and owners. However, valuation of any new asset acquired will be key to the REIT’s value and yield.

This article appeared in The Edge Financial Daily, July 27, 2010.

Recommended Stocks From Research Houses

Stocks To Watch For 13th General Election …


CIMB, MRCB, IJM, UEM Land, Hong Leong, Scomi, Proton, Sapura Crest, Proton,

Wah Seong, MMC Corp, DRB-Hicom, Zeland, Hiap Teck, George kent, Hong Leong Ind, Johan, Mamee, Nylex, Paramount Corp, Delloyd Ventures, Daiman, Symphony, Malaysia Smelting, Tradewinds Corp, Tower REIT, Trdaewinds Plantations, Dijaya, HLG Capital, Bolton, VS Industry, Ancom, PadiBeras, YHS, Winsun Tech, TH Group




Target Price(s) Set By Research Houses After Greece 's Debt Crisis Erupted ... 2010



1. Tan Chong: 3.95 (MIDF), 7.05 (CIMB)

2. Proton: 4.67 (MBB), 5.60 (CIMB), 5.80 (MIDF), 4.85 (HDBS)

3. APM: 4.20 (Inter-Pacific), 5.40 (AMResearch)

4. Kulim: 7.32 (Inter Pacific), 7.92 (MIDF)

5. Axiata: 3.77 (ECM), 4.02 (OSK), 4.52 (Inter Pacific), 4.95 (CIMB)

6. Sime Darby: 6.74 (OSK)

7. Maxis: 5.86 (OSK)

8. BStead: 4.48 (ECM), 4.40 (AMResearch)

9. RHB Capital: 5.77 (MBB)

10. Airasia: 2.20 (OSK)

11. Evergreen: 1.43 (RHB)

12. SapCrest: 1.95 (RHB), 3.02 (CIMB), 3.12 (AMResearch), 2.90 (InterPac)

13. BJtoto: 4.37 (OSK), 4.80 (UOB Kay Hian), 4.75 (MIMB)

Genting Malaysia

· The Case Against The Acquisition

· The Case For The Acquistion

Genting Malaysia Bhd (GenM) is acquiring Genting Singapore PLC’s casino operations in the UK (Genting UK) for £340 million (RM1.67 billion) cash.

Genting UK’s operations consist of four companies — Nedby Ltd, Palomino Star Ltd, Palomino World Ltd and Genting International Enterprises (Singapore) Pte Ltd. The acquisition was in line with its strategy to grow its core businesses of leisure, hospitality and entertainment internationally, beyond Malaysia.

Genting UK’s operations have the largest number of casino properties in the UK with 44 casino properties, including five located in London. They come with established gaming brands such as Crockfords, Colony Club, Maxims, Circus, The Palm Beach and Mint.

As at Dec 31, 2009, the four companies had a total revenue of £194.1 million and a net profit of £6.7 million. This means, at the acquisition price of £340 million, the transaction is priced at a historical price-to-earnings ratio (PER) of 51 times. The four companies had collective net assets of £288.9 million as at March 31, 2010, implying an acquisition price-to-book ratio of 1.2 times.

GAB Record High

The impending dividend in the coming q of GAB would likely to spur the price higher couple with good result expected about 15% increase due to the World Cup season recently. The actively acquisition of GAB shares by Aberdeen, MUFG & Credit Suisse have certainly added some spike in price as well. Approximately about 30% shares floating in the market, up surge of price is just make simple even with relatively small volumn of shares transacted. No sign of pausing as yet, how high will it go ??

Bought QCAPITA

Bought myself QCAPITA at RM1.02. Aiming for DPU for the coming Q on 29th July 2010, expected to be around 3.8sen. NAV stood at RM1.21, so there is 18% discount there, not a bad deal.

Strategy Of REITs Investment

elmo said...

I don’t know if LaBrooy, the CEO of AXREIT is speaking for himself or for the general REIT market.

REIT is rather new in this country and most of us have no experience in handling them. I have some AXREIT shares at low entry cost. The return at that entry price is around 12-13%. But tread carefully don’t get euphoric when the index shoots beyond 1300 like today when we can boast about our “gain” in both the dividend income as well as property appreciation.

Let me take you back to some one and half years ago when the market was down. AXREIT being one of the toughest guy in the block was hammered down from above RM1.70 to a bare RM1.00 per share. As we know, market index, like tides floats up and down. We should rebalance our portfolios when the tides are high lest one fine day when the tide goes out we realise that none of us have our pants on!

Now lets question ourselves here. Shall I get into AXREIT at RM2.10 now (KLCI>1300) or am I going to take a chance for the chips to go down (which may not happen for a long long time) and lost the dividend income before I jump in?

Just my 2 sens. When you are confused like I often was, take youself down the path of Zen..."Patience". Trust your instinct. Pick your choice. Lastly, Remember the phrase "Margin of safety".

July 21, 2010 9:01:00 AM GMT+08:00

horse said...

elmo,

probably LaBrooy has tonned on hand waiting to dispose ?? haha

anyhow personally i think REITs investment should not treat as normal share, we should adopt/embark DCA strategy if one really serious of investing in REITs. No right or wrong, just sharing my view. coz, dealing with REIT our ultimate goal is to earn regular interest (DPU) higher than FD.

Ok. this exactly how it work....

1) first set your target of DPU return rate, say anything more than 8% DPU, you will invest else u will not trigger any purchase on REIT.

2) investment time frame should be fairly long (5 to 7 years)

3) invest at regular intervals (1 a month, 1 a quarter or 1 a year)

4) invest at each of those intervals in equal amount or size of lots

5) these regular investments should continue through all kind of market conditions – good, bad and indifferent

e.g say you've 60K, you gradually invest 60K for 5 years. You can opt for 1K a month, d remaining put in FD. 1K a month for REIT that give > 8%, drawdown from FD every month untill it turn ZERO.

You will notice the advantage of having the actual "True Average Cost".

So, this is something for us to consider in future since the REIT industry is gradually bigger in size in M'sia.

elmo - i think above will addressed your hesistation in REIT investment whether to carry out now or later or scare of lost of dividend income.

Anyone else have any better method ??

July 21, 2010 10:08:00 PM GMT+08:00

elmo said...

I sort of liken investment in REIT as to purchase a small unit of Rental Business Property. As usual, the prices of this property in a long run will just appreciate if it’s location remains in the prime business area. O.K. location of a premise is static but the center of activity migrates with time. That’s point number one.

Two, the market prices of any REIT floats with the market sentiment as a whole. As I have mentioned, take AXIS for example (I am more familiar with this one) before the subprime crisis Axis worked it’s way up to RM1.70 per share but sinks to just less than RM1.00 /share! Such a variation has happened and I bet it will happen again.

We all have limited Cash so we have to work it out where is our entry point for taking up REIT investment. I think you will agree with me not anytime is the best time for entry. Definitely not any price is a good price to take up the investment. Why buy a shoplot for RM1 million at KLCI 1300 when you may be able to get one for RM750,000 some 3 years down the road when KLCI say sinks below 900?

Having said that I think of all, yes ALL the REITs counters, AXIS is the best bet at this point in time. … so long as this CEO (LaBrooy) is running the show. BUT do keep an eye (or two) on their policy. AXIS is very aggressive, keep acquiring more and more properties over a short period of time. Good and bad. The gearing mustn’t be too high and when economy slides, even a very little bit, the strain will show. Here the Market Interest Rate is very important to this sector. (Our monetary policy is upward pressure on interest rate so far). They, AXIS, do not have much reserve. 90% of rental income distributed quarterly. To expand, they raise more money!

Also, one thing I hate about AXIS is that when the company raise money to acquire new properties, they do not offer the new shares to the existing share holders. I never was offered. Then when the “deal” is done, there is an increased in the number of total shares in the company with each new acquisition! How was the shares sold? A big question mark?

 

July 22, 2010 10:07:00 AM GMT+08:00

Why REITs should be the choice of investment

KUALA LUMPUR: Real estate investment trusts (REITs) offer many advantages to investors who are keen to invest in the property market.

Axis REIT Managers Bhd chief executive officer Stewart LaBrooy said what was important now to REIT players was to educate them on the benefits on investing in REITs.

“We need to educate them as most of them are not really aware of the advantages, such as having a higher yield compared with some other investments,” he said yesterday at the Investor Insights into Malaysian REITs in 2010.

As a result of the lack of awareness on REITs, he said, the participation from Malaysians in REITs was still small compared with other countries.

“We have 13 REITs now listed on Bursa Malaysia that cover all types of industries. With a high dividend yield of about 7% annually, low entry cost and support with higher corporate governance, REITs should be the choice of investment,” he said, adding that the size of assets of Malaysian REITs was now about RM16bil.

In REITs, a pool of money from investors is invested in properties such as office buildings or shopping malls and the investment is managed by REIT managers.

LaBrooy said another advantage of investing in REITs was the tax efficiency where investors were taxed only once.

“Apart from that, it is easy to invest in REITs as you can buy it today and sell the unit tomorrow, similar to equity stocks. Plus, REITs are a hedge against inflation,” he said, adding that they were low risks and a passive type of investment.

He said the way REITs did its business was to make sure about 90% to 100% of its retained earnings before tax were given back to investors.

“Last year, despite facing a global economic crisis, Malaysian REITs were still giving back about 70% to 80% of its retain earnings to investors,” he said.

Meanwhile, touching on the outlook of residential and office market in Malaysia, CB Richard Ellis (M) Sdn Bhd executive chairman Christopher Boyd said overall, both markets were still stable.

“For the residential market, we are still in the safe net as in Malaysia, developers are still using the method of sell-first-before-build. If you build first then sell like what is done by some other countries, then you will risk yourself of not getting buyers if suddenly problems arise, such as the economic downturn, ” he said.

Our Information Being Sold

Many times often we would received unknowing promotion calls from some corporate with number withheld usually, mostly insurance promotion which collaborate with Banks/TelCo giving special promotion on insurance coverage. Most of the common phrases as below :-

a) hi, you name has been picked by our computer......

b) congratulation !! you are the few being selected in line with our company anniversary....

c) hi sir, we can offer personal loan with special interest rate...

so on and so forth....

When asked, where did you get my contact number ? The common answer would be "from my superior".

This left me in doubt that my information could has been sold to many companies by some unscrupulous people out there. This people have nothing better to do but hacked into million accounts and sell them in bundles of 1000 for some money. What the hack !!!

Many have get conned or scammed by this kind of marketing trick. That include my brother being victimised where he got realise after a few months of transactions in direct debit of credit card, lost few hundreds buck there.

How would you deal with this kind of "crank" calls (i would named it) ?? as this bunch is obviously being trained and strikingly play on words to deceive you.

I would usually returned with "This is police station you are calling"......

Public Bank

Steady As It Goes

Highlights  2QFY10 results (likely on 19 Jul) expected to be +4-5% qoq while 1HFY10 yoy expected to be in mid-teens.

This will be largely in line with our forecast and consensus.

Expect interim dividend but unsure about quantum.

However, full year payout policy of 50-55% intact.

Loan growth on track to hit its +14-15% full year target.

NIM to show slight improvement as benefit of two OPR hikes filtering through and intact mortgage pricing discipline.

Non-interest income to continue benefit from Public Mutual and transaction fees.

Asset quality largely stable.

Partly offset by slightly higher provision due to absence of huge recovery and initial sequential improvement from Hong Kong as well as continued loan growth (based on FRS139 transitional provision).

Not overly concerned about Basel III given that recent G20 suggests more flexibility and time will be given. Worst case is cash call of RM3.5bn in 2012 but amount may be lower with full adoption of FRS139 and grandfathering.

Catalysts  Earnings growth.

 Watered down Basel III with more time given, relieving concerns about potential cash call.

Risks  Unexpected jump in impaired loans and lower than expected loan growth.

 Impact from Basel III on capital.

Forecasts  No changes.

Rating HOLD

 Positives –

 Above industry asset quality, loan growth and yield;

 Excellent track record in delivering guidance.

 Negatives –

 Dividend payout lower than previous years and potential cash call in 2012.

Valuation  RM12.34 based on Gordon Growth with ROE of 23.5% and WACC of 9.1%.

Source from : HLIB

Citigroup second-quarter earnings fall 37%

 

NEW YORK: Citigroup Inc posted a $2.7 billion quarterly profit, down 37% from the same quarter last year, hurt by lower revenue in its investment banking business.

The third-largest U.S. bank posted second-quarter profit of 9 cents a share, compared with $4.28 billon, or 49 cents a share, a year earlier.

Analysts on average expected 5 cents a share before special items, according to Reuters Estimates.

Through Thursday's stock market close, the company's shares had risen 26 percent this year, while the broader U.S. banking sector had risen 17 percent. - Reuters

Some Good Thaught From The Cyber Friends

elmo said...

If one follows the market calls everytime an "analyst" barks, one is no better than a donkey being pulled right,left and center. I do my own judgements, if I think, yes "think", the price is right for me to sell, I sell. And walk away from the market and don't let the bull runs off "hurt" your ego. The other reason I sell is when I need some cash. That necessity I got recently and I sold off all my Genting last week 9/7/2010 at 7.46. May be I'll regret if the market price runs up to 8.00 or 9.00. But at KLCI 1340 you can't be far wrong the downside risk is far greater than the upside gain. Again, that's my 2 sens opinion.

 

July 14, 2010 12:01:00 PM GMT+08:00

 

K C said...

Analysts normally have more information about companies than others. They obtain advance information and insight of companies from managers and do a lot more research. Well that is their rice bowl. However, there always arise the conflict of interest in the investment bank concerned whereby the analysts are always succumbed to pressure into always having to write favorable report about a company which they have dealing with. Enron in 2001 was one of the classic case which no analyst dared to write a true negative report about the predicament Enron was in, fearing of losing millions of fees from Enron. Many analysts very often just follow the tide. How dare they write a sell report when the share keep on going up? They just change their recommendation from sell to buy when it happens just to avoid being branded a fool. In short, there is no integrity and professionalism. For an interesting reading, read the book, 'Wall Street Meat' by Andy Kessler. I believe the other 'culprit' who recommend buy and one day later sell is the technical analyst, looking at the chart on historical price and volume and decide on the calls. In summary, I do not just ignore the reports because analysts are supposed to have more information than us but I also will not take their advice on face value. I will do my own analysis and check the basis of their recommendation is correct or not. (sigh) I still have not made a lot of money yet though.

July 14, 2010 5:27:00 PM GMT+08:00

 

horse said...

elmo & KC,

i believe all of us came from a long way in term of investment in stock. i myself came from a speculator more than a decade back and got myself burn badly then, we all learn from mistake & hope not to repeat the same silly mistake again, that make me a longterm and dividend player now. Is the experience change people & people learn from mistake, shape ourselves better in time of bullish & bearish market. We adapt to the market & grow wiser along with the market, so experience really count. Market force us to do our own analysis, learn to be patient and invest wisely.

Both of you share the same common point where own decision and analysis is upmost important. Invest in yourself is what we ought to do and trust nobody or hearsay except your own decision. Once this is in placed & sharpen the skill that possess in you then making money is just that simple in stock market.

One most important factor people must learn is avoid and never touch loss making companies, coz this can really kill. Just this simple rule you will never wrong badly even if you do.

July 14, 2010 8:50:00 PM GMT+08:00

 

elmo said...

Quote K C ..."I still have not made a lot of money yet though."

--a lot of money. what do you mean by a lot of money. How many of us here have? How much is a lot? haha. Never mind that. We are all here to make money. Looking at KLCI at 1341 (today's closing)I bet all of us here if we got in early have make some money. Some less some more. Some in between. I set my target to get out when it touches 1450 but have to get out on some counters when I desperately needs some cash. I honestly don't trust analysts as you said. They are paid to write. What do you expect?

Horse. Greetings. In the years 2007-2008, I tried my hands on speculation. Honestly I made some money, before that I just buy and keep. Dividend stocks, some makes money some loose. PBBank makes may day. Looking back, I think it's the bull market that speculation makes money 2, the amoount made isn't very much. The bank makes even more! 3. It's tiring stressful but you get the kick out of it. There after I just buy and keep again...plan to clear everything after KLCI 1450 or more! Still waiting.

 

July 14, 2010 9:09:00 PM GMT+08:00

 

horse said...

in fact i make when i speculate but that was super bull then, i lose it back and even double my loses when the greed get over me, a bear turn caught me to vomit back and even more... :(

 

July 14, 2010 9:46:00 PM GMT+08:00

 

elmo said...

Horse,

yea, I too feel it's in the bull markets that one can makes money from speculation.

BUT if during the bull market one were to buy and keep. The return would be far higher.

Now it's during the bear markets how are we to play the ballgame?

July 15, 2010 8:26:00 AM GMT+08:00

 

K C said...

elmo,

I agree with you and horse that one can only make money in a bull market and I also agree with you that if one is to buy and hold in a bull market, he will also make more. In a bear market, I believe more than 90% of retail investors lose money. The simple and straight forward explanation is the transaction costs involved. Let's share some opinion here. You said it is a bear market now, why do you say so? As how to play the ball game whether it is in the bull or bear market, here are my thoughts:

1) Look for economic moats

2) Exploit Mr. Market in pricing inefficiency due to herd emotion

3) Buy at reasonable price

4) Insist on margin of safety

5) Know your limits

6) Invest only in companies with credible management

7) Avoid quick flipping strategies

8) Learn, read, study, share investment knowledge.

9) Listen to rumours but confirm and satisfy yourself completely based on 8 above before taking actions.

10) There is no free lunch, no short cut to success.

Cheers

July 15, 2010 11:29:00 AM GMT+08:00

 

ccdev said...

hi guys! horse, you say last time you speculator kena burn. but now with your more advanced knowledge and experience, have you considered short term trading? not that i want to play devil, since you are a secure long term /dividend player but you are more matured now and can better control the risk factors involved.

and yeah, i also have bitter experience with analyst report. bought stock when analyst say is the stock is "shooting star" (yes, he actually put that as the title) but i forgot that 'shooting star' can shoot downward also. cialak! i bet half the time they are 'controlled' reports, the other half is the analyst hoping they don't get it too far wrong (so don't look like too much of a fool). and no doubt they have more 'info' than us, but how much of that info is actually usefull, i don't know. plus, they also cannot buy the kuci-rat stocks (before it become big) like us retailers.

 

July 15, 2010 12:04:00 PM GMT+08:00

 

elmo said...

Hi KC,

sorry I did not make it clear. I don't mean it's bear market now. Looking at history, KLCI at 1340 is about to peak. We are now playing with fire. The index will not go up forever. May be it will peak at 1450; may be 1550; or may even be 1700. It's anyone's guess. But if it were to buy and keep. I won't play it this way now. In fact I am "disposing" along the way. But greed got me again. I am still holding on to some of the stocks which I bought during the low tide and hold for some 2 yrs now. Makes money BUT want to make more. that's why still keeping. If any I am now playing a bit of trading in one or two counters e.g. BJTOTO in-and-out. As a whole we are still on the bull side of the market. If not mistaken every big bull is going to end up with an even bigger bear. So I'll still stick to my plan. Watch out.

 

July 15, 2010 12:35:00 PM GMT+08:00

Genting rises on 'overweight' call

Company news really drive people crazy, a minute was rated "SELL" and the next minute can turn 180 degree to 'OverWeight". What can you expect from this overnight turn ?? Up or down ?? One suggestion from me, don't bother. What the hack, just keep till the cow come home........toto, hng,  & KC are you all agree ??

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Genting Malaysia Bhd, the country’s sole casino operator, rose the most in three weeks in Kuala Lumpur trading after Morgan Stanley initiated coverage of the stock with an “overweight” call and RM3.05 share forecast.

The stock rose 1.1 per cent to RM2.69 at 9:05 a.m. local time, set for its biggest gain since June 18. -- Bloomberg

SUNWAY REIT

First day debut on 8/7/2010, drop from reference price of 90sen to 88.5sen, not a bad start indeed. There will be a refund of 9sen after readjustment of IPO price from 97sen to 88sen for retailer.

Sunway REIT covers retail business of 53%, hospitality 40% and office 7%. Is the largest REIT in Malaysia so far, with properties valued at RM3.73b as of Feb 2010.

Initial portfolio of properties comprises of real estate in the retail, hospitality and office sectors in Malaysia, namely:-

a) Sunway Pyramid Shopping Mall

b) Sunway Carnival Shopping Mall

c) Suncity Ipoh Hypermarket

d) Sunway Resort Hotel

e) Spa Pyramid Tower Hotel

f) Sunway Hotel Seberang Jaya

g) Menara Sunway

h) Sunway Tower

As Sunway REIT 86% of properties is located in SUnway Integrated Reosrt, one of Malaysia leading tourist attractions, this would mean that the mix of properties and attractions would generate higher rental & occupancies for its properties. Sunway REIT intends to leverage on its competitive strengths to optimise results and further seek properties that are yield-accretive and have growth potential in its DIV/DPU or NAV per unit contribution.

Market Snippets

Genting Malaysia sole surviving bid for NYC racino project

The company is the sole surviving bidder for the license todevelop and operate a video lottery facility in NYC’s Aqueduct project following the disqualification of 2 otherproposals.

Kencana wins RM201m job

Kencana said it won a contract worth RM201m from Newfield Peninsula Malaysia Inc. The contract is one-off in nature and is expected to contribute positively to the company’s earnings for the next 2 financial years (ending July).

Buyout offer for M3nergy extended

The takeover offer for M3nergy has been extended again from 25 June to 3 Aug. Adamus Avenue is seeking to take the company private for RM1.85/share.

MTD ACPI land sale for RM8.23m

The company announced that it had entered into a SPA to dispose of a 1.39ha piece of freehold land zoned for commercial development in Sepang for RM8.23m. The company will realize a net gain of RM1.33m from the sale.

Axiata announced new appointments

Axiata announced the appointment of Donald James Rae as its new SVP for Group Business Development. Donald James Rae has had 20 years of experience in telecommunications. Axiata also appointed Eric Chong, as Hello Axiata’s Chief Marketing Officer and Suresh Sidhu as Sri Lanka’s Chief Officer.

 

Genting clarifies RM1.66bil casino plan

PETALING JAYA: Genting Malaysia Bhd yesterday replied to Bursa Malaysia queries on the proposed acquisition of the casino businesses in Britain from sister company Genting Singapore plc for £340mil (RM1.66bil).

Genting Malaysia said that as at June 30, the total outstanding advances owed by the acquiree group (Britain casino business) to Genting Singapore plc was about £336,457.

Such outstanding advances owed by the acquiree group would be settled and/or waived prior to the completion of the proposed acquisition, it said.

It also said JPMorgan Securities (Malaysia) Sdn Bhd had based its valuation of the equity value of the acquiree group on a variety of intrinsic and public-market based methodologies, which included conducting a discounted cashflow valuation and an analysis on trading comparables.

The valuation of equity value was between £310mil and £370mil.

In arriving at the said valuation, JP Morgan had also, among others, reviewed certain publicly available business and financial information concerning the acquiree group and the industries in which they operate.

Bursa has asked Genting Malaysia to furnish it with the total amount of outstanding advances owed by the acquiree companies to Genting Singapore as at the latest date.

It also wanted to be informed of the salient features of the valuation of the equity value of the acquiree group as conducted by JPMorgan Securities (Malaysia) .

The plan, a third-party transaction, has drawn its fair share of criticism from analysts who said the investment was pricey for a risky market, provided little growth catalyst and may require more capital injection in the future

A PRO For GenSP but A CON For GenM

What an act from Genting Malaysia !!?? Many view it a negative proposed acquisition to Genting UK by GenM but an all positive for GenSP no matter how you view it. GenM a net cash rich reserved company with approximately RM5.2b cash soon will see big chunk of this go to GenSP through another so call "RRPT" !! wow, this is not the first case and believe that more to come. The previous RRPT was the acquisition of Walker Digital Gaming from Genting Group which saw a RM250mil "invested" or better know as "free bank loan" to Genting Group. This time round a bigger chunk of RM1.6bil "free bank loan" is given to GenSP. Hello, Tan Sri LKT this is so call "Good Corporate Governance" ?? What shareholder or investor's preference is for a better utilisation of GenM RM5.2bil cash reserve NOT through RRPT. What's good does it bring to GenM shareholder by engaging RRPTs to only benefit one party ?? Not sure how to better utilising it ? better off by investing in strong growth potential business opportunity company not low level of profitability or losing company like Genting UK else return it back to shareholders by declaring higher dividend or capital return......

More CON for GenM:-

1) Genting UK casino is a low profit business, minimal profit contribution of only 6.6mil pound in FY09. Subject to a hefty 50% tax bracket.

2) Net cash shrink by 32% to RM3.6bil after RRPT. An inefficient use of resources.

3) Acquisition is pricey, a RM1.67bil may result further impairments.

4) There is a high probability of further capital injection as Genting UK may be at a heavy capex stage.

5) Intense competition in British market.

6) Low Growth catalyst.

7) Special dividend is no way to be seen, likely to weigh down on its share price performance.

PRO for GenM:-

1) Assuming earnings surge in UK casino operation, economy recover and lifting asset but is a long haul of minimum 5 years and above.

2) Assuming tax bracket reduce by half. Regulatory change in Britain.