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.

Small stocks, big yields

SOME of the high dividend yielding stocks can be found in the small capitalised (small cap) stocks universe. A good number boasted steady earnings over the past year, and have built up a reputation as generous paymasters with regular distributions to shareholders.

They are decent defensive bets in an unpredictable environment, although investors have to be prepared to stomach volatile price swings, often amplified by the lack of tradable shares in the market.

A stockbroker recently took 13 small and mid-cap companies for a roadshow to meet fund managers. There were a few interesting soundbites from a report by conference organiser CIMB Research.

For instance, it noted that the event provided the opportunity for some fund managers to meet the management of CI Holdings Bhd (CIH) for the first time. The maker and distributor of soft drink and fruit juices has had a long relationship with PepsiCo that started in 1973.

It has moved on from its torrid years in the early part of the decade. Over the past three years, profits have been on a rising trend.

CIMB Research analyst Norziana Mohd Inon has forecast that CIH’s earnings will hit a new high of RM35mil in fiscal year ended June 30, 2010.

A projected 10 sen dividend payout would give a decent yield of 4.3%. This will match the 12-month yield of Nestle (M) Bhd, which has a market value of RM8bil. CIH’s market capitalisation stands at RM340mil.

Another company, Daibochi Plastics & Packaging Bhd, offers an interesting mix of earnings growth and a steady dividend rate that comes at a relatively cheap entry price, particularly after a recent decline in its share price. Records show that the company has been paying dividends twice a year for over a decade.

At RM3.08 a share, the stock offered a hefty dividend yield of 7% and good upside potential for capital appreciation.

Daibochi’s current market value is about RM235mil, but average daily volume transacted is less than 100,000 shares.

High payouts

Meanwhile, a quick search on the Bloomberg terminal revealed that a number of recently listed companies are already promising high payouts.

Telco giant Maxis Bhd and computer hard disk maker JCY International Bhd are the big companies with decent yields, but these are actually mature businesses that recently went public.

A small firm with a big dividend yield is rubber hose maker Wellcall Holdings Bhd. The Ipoh-based firm went public in 2006 and had been paying dividends to shareholders every year since.

At the current market price and based on analyst estimates, its total dividend payout for this year will be a massive 12%. That is triple the return compared to putting cash in the safety of fixed deposits.

Investing in small cap stocks, however, can be treacherous. But companies with healthy track records are investors’ best bet in navigating for bargains in the small cap universe.

To help investors make informed investment decisions, the exchange provides free investment research on certain listed companies under its CMDF-Bursa Research Scheme. The research coverage is paid for by Bursa Malaysia and the listed company itself.

A stockbroker that is big on promoting small-cap stocks is OSK Research. For the past five years, it had published an annual book compiling write-ups on a selection of small-cap companies. This is on top of regular updates issued to clients.

This year’s edition was launched in May and featured a list of 50 companies dubbed the “50 Jewels.’’ It is a gold mine for investors looking to invest in so-called undiscovered gems.

Meanwhile, CIMB Research issues its Small Cap Monitor to clients on a regular basis, which provides reviews on selected companies that usually fly below the radar of most investors.

Sunway REIT IPO may be fully covered

Applying IPO just became much more easier nowaday. I used to do it over the ATM machine but not any more until i decided to apply for Sunway REIT IPO via M2U. By just merely clicking some buttons and my application just went through without much hassle in seconds i believe, everything done electronically, no form, money order or bank draft required. This is just ease so much comparing previously where we have to grab forms for good IPO. Not any more. :) Thanks God that Technology help to fasten the process, tighten the security and easing the application.

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The institutional segment of the initial public offering of Malaysia’s largest real estate investment trust, Sunway REIT, has been “fully covered" at above 90 sen per unit, two sources with direct knowledge of the matter said.

But Sunway REIT may have to price its IPO at the lower end of its indicated range because of deteriorating market conditions, the sources told Reuters on Thursday.

“The book is fully covered. It’s oversubscribed by about 1.2 times now. It’s quite an achievement given the current market conditions,” said one of the sources, who asked not to be named because he is not authorised to speak to the media.

The company last week set the indicative price range for the sale of 1.6 billion units of the REIT at between 90 sen and 98 sen per unit.

This means the IPO could raise between RM1.44 billion to RM1.57 billion.

BJTOTO - Issuance of Medium Term Notes

Saw below announcement, an issuance of MTN by BJTOTO's subsidiary STMSB. The drawdown from MTN will be used to facilitate BJTOTO Groups existing bank borrowings and for working capital. I would expect more dividend to be given in future...hahaha. That's how VT used to play his game using others people money to fund his companies and his own pocket. Way to go, my firends. HAHAHA

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1562 BJTOTO BERJAYA SPORTS TOTO BHD

ISSUANCE OF MEDIUM TERM NOTES

ISSUANCE OF MEDIUM TERM NOTES (MTNs) PURSUANT TO A MEDIUM TERM NOTES PROGRAMME OF UP TO RM800.0 MILLION IN NOMINAL VALUE BY ITS WHOLLY-OWNED SUBSIDIARY, SPORTS TOTO MALAYSIA SDN BHD (STMSB)

The Board of Directors of Berjaya Sports Toto Berhad (B-Toto) is pleased to announce that STMSB proposes to undertake a MTN Programme of up to RM800.0 million in nominal value (the MTN Programme) and has received the approval of the Securities Commission. STMSB has appointed Maybank Investment Bank Berhad as the Principal Adviser, Lead Arranger and Joint Lead Managers together with AmInvestment Bank Berhad.

The MTN Programme is akin to a revolving credit facility where-in the tenure for the MTNs shall be above one (1) year and up to ten (10) years as STMSB may select in consultation with the Joint Lead Managers.

The anticipated initial drawdown of the MTNs is expected to be sized approximately RM500.0 million, the proceeds of which will be principally utilized towards the refinancing of the B-Toto Groups existing bank borrowings and for working capital.

The MTN Programme is an efficient and cost effective avenue to manage the B-Toto Groups funding requirements.

Malaysian Rating Corporation Berhad, had in its press announcement dated 14 June 2010, assigned a AA rating with stable outlook on the MTN Programme.

Bought More KFIMA

Bought more Kfima at a price of RM0.92 after disposing Genting at RM7.27 the other day. This purchase happen when i manage to salvage some extra money out of the disposal of Genting. I believe there will be more upside for Kfima especially when time draw nearer for its 5sen dividend around August or so. This definitely serve as an attractive catalyst beside the good earnings that they have garner so far.

Low valuation is where making Kfima attractive, with EPS of 22.32sen with just price at RM0.95 currently is some how quite safe to buy in. Of course many good financial figures recently should somehow justified that Kfima would at least trading at PE of 5 and above. I maintain my target price of RM1.10 in short term of 3 months time. We will just have to wait patiently and accumulate more if it dip and we are playing around dividend time which i think is a safe heaven period to buy as the dividend of 5% or more is good enough to serve as a cushion after all.

Again, this of course does not represent a buy call from me. Buy at your own risk.

GENTING - Sold at RM7.27

Finally, gotten rid of my Genting all at RM7.27. As mentioned earlier, needed some money for early settle of car loan and to foot some operation medical bills :( 

Things just come unexpectedly, so, have to dispose some to raise those fund, as i am almost 80% invested and Genting being the heavyweight that can realise my fund instantly. Thus, have decided to dispose all of them. Nevertheless, I still retain most of my other shares for dividend.

Recently, have added some high dividend yielding counters in my watchlist. You can probably take a look of them as follows:-

PIE, NCB, BSTEAD & AJIYA.

I believed those counters mentioned above are very solid, strong in fundamental, aiming for growth, dividend and long term keeping. Till then happy trading. :)

Good Bye ! My Friend.

Have not been getting a real sweat for the past 3 weeks ever since i injured my leg during one of the badminton session. Still limping a bit when walking even though has been recovered quite a lot though not fully. Probably age is catching up so recovery process is a bit slow just like stock market, still feeling dizzy and floating cause did not get a proper sweat out through exercise. Hmmmm…

Human is just too weak, when I got home from work last Thursday, I’ve been told that one of my friends just passed away after coming back for a business trip from south Africa, suspected due to either H1N1 or malaria. Real sad after hearing that, he is still in his prime of 36 years of age and just too bad his life journey came to an end in such a way, leaving loves one behind. No one would know why this happened to him but we trust that God has His purpose when such a thing showered. May God bless his family. Amen.

Trading Idea : Berjaya Sports Toto Bhd 3 June 2010

Recommendation: BUY ON WEAKNESS

Current Price: RM4.24 (Issued shares: 1351.03m; Marketcap: RM1.41bn)

Technical Target: RM4.68 (3-month)

Catalysts:

(1) Defensive play amid external volatility;

(2) Although only getting a small boost from the agent fees (rather than running the book), the sports betting business is a risk-free revenue straight to bottom-line. Malaysia’s sports betting revenue may reach RM20b, based on 1.5% GDP (as seen in Singapore and Hong Kong);

(3) Potential Vietnam NFO licence may be next earnings growth drivers;

(4) Agency fees from sports betting to partly mitigate 4D’s matured growth and loss of lotto market share to Magnum; and

(5) There is a possibility that BJTOTO may declare higher or special dividends to help BJLAND fund redemption of the latter’s RM711m bonds maturing in Aug 11. Major risk is the recent ban on sports betting by three states.

A defensive and high yield play

Source : HLG Research

Quick Look At Carlsberg

1Q net profit for CARLSBERG is 37.8millions, increased by 77%. This is the first synergy result after acquired Carlsberg Singapore for RM370mil in the fourth quarter last year.

Assuming :-

1Q EPS = 12.38sen

2Q EPS = ??

3Q EPS = ??

4Q EPS = ??

Forecast the future growth by simply multiply 3 of the remaining Q,

Estimated Total EPS = 12.38 X 4 = 49.52sen

Estimated PE = 9.79sen

Estimated Div Yield = 9%

Estimated Div Payout Ratio = 90%

 

Estimated FV = 11 X 49.52 = RM5.44

 

Significantly improved earnings from the synergy effect, likely to make CARLSBG even more appealing. However the forecast maybe just too loose but have given great discount in FV by just merely a low enough figure of 11 times of eps.

 
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Carlsberg Malaysia a 'buy': Maybank

Carlsberg Brewery Malaysia Bhd, the nation’s biggest brewery, was raised to “buy” from “hold” at Maybank Investment Bank Bhd, after first quarter profit jumped 77 per cent from a year earlier.

The share price estimate was increased to RM5.50 from RM4.60, Maybank Investment said in a report today. -- Bloomberg

KFIMA Continue Its Robust Earnings Indeed

KFIMA has just release its 4Q result, giving an EPS of 4.68sen comparing to its corresponding Q of 6.39sen which is about 26% decline but however the total financial year ended 31/3/2010 increased by 27% giving total of an impessive EPS of 22.32sen.

Simple FV calculation :-

PE = 0.89/0.2232 = 3.98sen

FV = 5 x 0.2232 = RM1.11

Have not gone into detail study of its 4Q result, briefly, the revenue increased by over 50% but the profit declined by 26% ??? Something missing someway ?? Will do an update once i got the detail information of its 4Q. No matter how, its total fiscal result is still an impressive one as it registered first time above 20sen per share, which is the highest thus far and the propose 5sen dividend is 2sen higher than previous 3sen, that represent a total increase of 67% in dividend and represent a 5.6%p.a DY, much much higher than FD right ? The dividend payout ratio is only about 22% in which i think is relatively low, hopefully, they might increase the dividend payout ratio in future if the remarkable result is continue to be attained.

Update : Have just gone through the report. The decline in profit for this quarter is due to it income tax expense where they get a deferred tax benefit in prior quarter and a higher tax rate this time round. Other factor could be due to its higher cost of sales by additional 12%.

Equity market outlook – Déjà Vu

The global noise emanating from Greece and the United States is a bit unnerving, but it is comfortingly familiar at the same time. The similarity was of course in broad strokes; with the teetering Greece economy threatening to drag down the European Union (EU) growth prospects - seemingly like the US housing bubble knee-capping the US economy. Similar noises were made then and they are being echoed now.

In respect to this, the EU will be dragged down for the next few years whereby the contagion effect and austerity drives will make European assets less attractive and the EU banking system will be under pressure from their loose lending standards to emerging Europe.

Similarly, the SEC investigation into Goldman Sachs’ sales practices sounds like the one made by the Government on the banking system 2 years ago and comes very close to emulating the Lehman’s mini-bonds saga.

The reassuring part of the equation stems from the "been there, done that" approach and how policymakers and markets are viewing these situations. The difference between now and 2 years ago was that markets know the ending, having seen the script before. We could call it global financial crises redux, or v2 if you may.

The announcements over the weekend underlined the EU’s actions on similar lines. We expect comparable measures to be implemented as they have worked before, as there is no point reinventing the wheel. Hence we expect government bailouts to continue (of other governments, not banks) and low interest regime to continue in the EU and in the UK.

Looking at this situation, what does it mean for the rest of the world? The low interest rate regime in the EU and the Fed continue holding low rates means that assets may underweight EU countries due to perceived currency weakness, thus benefitting emerging markets and the US. In the near term, we see these markets and currencies rallying from the movement of capital to better performing economies. This will add pressure to central banks to reconsider hiking rates, which will further fuel painful currency appreciation.

In this environment we believe the US markets and USD may be strong for several reasons. Firstly, the safe haven status of the USD. Secondly, the US bond market is the most liquid asset class globally and is capable of absorbing the billions of assets from rebalancing global portfolios.

Hence, in this scenario, the US market may not underperform emerging markets. This is actually perversely positive for emerging markets, as these markets would have been unable to absorb all the flows from Europe. These flows could have caused emerging markets to spike, and then endure a significant correction.

As the Chinese authorities’ tightening stance adds up to medium term bullishness for equities, we are not changing our view on equity allocations. While we are cognisant of the possible volatility as these events play out, we believe these aftershocks do not have the potential to drastically change the course of the economic recovery. However, in light of the volatility we are lowering the beta of the portfolio to shield it from unnecessary volatility.

Sunway woos REIT cornerstone investors

Largest REIT in Malaysia, save some money for it IPO....:)

KUALA LUMPUR: Sunway City may place out about a fifth of its planned IPO of a real estate investment trust (REIT) to cornerstone investors who have greater holding power for the shares, sources with direct knowledge of the deal said.

The country's sixth-biggest property company by market value is in talks with seven local funds in the hopes of getting some of them to become cornerstone investors in the IPO which is expected to raise around $500 million, Reuters reported on Monday, May 24, quoting the sources.

The Sunway REIT, with a fund size of 2.78 billion units, is set to become Malaysia's largest when it is listed in the third quarter of this year.

Sunway's planned REIT offering has received positive response from investors so far due to its size, steady income source and good growth prospects, a source said.

"This is something significant that investors would not want to miss. The interest is definitely there, the question is pricing," said the source.

The sources could not be named because they were not authorised to speak to the media.

The Sunway REIT will feature some 1.65 billion units for public subscription, of which 1.5 billion are for institutional and selected investors, the company said earlier this month.

"They are talking to seven funds, which consist of insurance funds, unit trust funds, government-linked investment companies, and a few pension funds," said a second source.

Sunway is looking to place out about one-fifth of the offering to cornerstone investors, one of the sources said.

Cornerstone investors normally commit to buy shares before a public listing and promise to hold them until a later date.

Sunway City declined comment.

The issue price of the Sunway REIT will be determined in a book-building process.

Earlier this month, Sunway City said it would receive 2.7 billion ringgit in cash and about 1.0 billion units in the REIT for the eight PROPERTIES it will inject into the unit.

The properties, comprise of shopping malls, office towers, and hotels, have a combined market value of about 3.7 billion ringgit.

Sunway City Group, controlled by Malaysian businessman Jeffery Cheah, will own about 38 percent of Sunway REIT after the listing, which the company said may be completed mid-July. -Reuters

Adverlets Has Finally Paid Me

For once, i've given up hope on Advertlets and decided to withdraw their advertisement but today i finally received the cash out payment from them which have been long waited for. The only thing that they need to do is to beef up the payment process, as it is just take far too long for that. Many has deemed feel cheated including me for once. They protrait the picture that they are non-paying advertising network by delaying payment, i am not sure for what reason. This will drive publisher away. Somehow i think it is not a good sign to company image if this delaying payment keep on remain an issue and unresolved over a long period of time. Hopefully future payment is a smooth one.

EON Capital's board accepts Hong Leong offer

As what i've expected earlier in my post that, the take over would likely to go through between HLBANK & EONCAP. HLBANK would likely to offer right issue to raise fund for the acquisition, in my opinion RI for such an exercise is worth taking up for those existing HLBANK shareholders.

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KUALA LUMPUR: EON Capital Bhd's board of directors has accepted Hong Leong Bank Bhd's offer to acquire the former's assets and liabilities for a cash consideration of RM5.06bil or RM7.30 per share.

MIMB Investment Bank Bhd said on behalf of the board that this was after taking into consideration Credit Suisse Securities (M) Sdn Bhd's opinion that the offer was not fair from a financial perspective.

Credit Suisse was appointed as the independent adviser for the deal.

MIMB also said EON Capital's board member Ng Wing Fai's views would also be included in a circular to shareholders for the upcoming EGM.

Ng, whose Primus Pacific Partners (HK) Ltd held a 20.2% stake in EON Capital, has expressed disagreement with the board over the offer.

The investment bank said after taking into consideration Credit Suisse's opinion, the advice of the international adviser Goldman Sachs and all relevant aspects of the offer, the board has resolved that the proposed disposal was in the best interest of the bank.

It said the board would table a resolution at the EGM on the proposed disposal as well as the proposed distribution of the cash proceeds to shareholders.

MIMB said the proposed distribution of the cash proceeds arising from the disposal would be done in two parts - a special dividend estimated to be about RM3.30 billion based on EON Capital's audited financial statements as at December 31, 2009 and, a capital reduction exercise amounting to RM1.76bil.

Free Seats From AIRASIA

Million of free seats given by AirAsia but the problem is this is what i get while trying to search for information.

The response is just overwhelming from the Free Seats Promotion, i've tried since the 1st day on the 18/5/2010 but all i get is above page. :(

Giving a try again today thinking that the traffic could be slowed down but in actual fact the overwhelming response just don't seem to subside. I was just wondering, by time you get to access the site, the good dates & free seats would have gone and grabbed. !! ha ha

Was told by one of my friend, he weaks up as early as 5am in the morning to get to AirAsia site and obviously the traffic is much lesser compare to normal hours. He got it done within minutes. Wow, i don't think i want to do that as i just don't like sacrificing my sleeping time for that coz i hardly have enough sleep already. ha ha

HLBANK to takeover EONCAP ?

My gut feeling telling me that the deal will go through eventually no matter how. The reasons are simple, there being no other bidder on the table and the big boys are eagerly wanting to liquidate.

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Credit Suisse says HLB's offer price for EON Cap too low

PETALING JAYA: Credit Suisse Securities (M) Sdn Bhd has deemed Hong Leong Bank Bhd's (HLB) offer price for the assets and liabilities of EON Capital Bhd (EON Cap) too low.

This has put the board of directors of EON Cap in a quandary, sources said. EON Cap's board met yesterday to discuss Credit Suisse's opinion on the offer.

The board had requested for its shares to be suspended from trading, pending an announcement related to the offer.

EON Cap said late yesterday evening that its board meeting had been adjourned “pending further clarification from independent financial adviser Credit Suisse.”

But a party familiar with the deal said with Credit Suisse telling the board that the offer was too low, the board has been put in a tough spot as to what to tell shareholders.

“The board had already said it was going to present the offer to shareholders. Does it now also tell shareholders not to accept the offer?” Sources say the situation is tenuous because HLB has no intention of raising its bid.

From its due diligence of EON Cap, HLB may be inclined to ask EON Cap to make some additional provisioning as a condition to the deal, stemming from what it (HLB) deems as unrecoverable loans.

This could mean that the price HLB is willing to pay for EON Cap may be lower than the RM7.20 per share it last made.

EON Cap is said to be disappointed that HLB has not recognised certain deferred tax assets in its valuation of the former, sources say.

HLB's offer is also priced at around 1.4 times the book value of EON Bank, which some analysts deem as low in light of other banking merger and acquisitions done at higher multiples.

The bottom line is that at present, HLB's offer is the only one on the table for EON Cap's shareholders.

Current market conditions are likely to make it difficult for other bidders, such as Affin Bank Bhd, to raise funds to acquire EON Cap.

If this deal falls through, the next bidder for EON Cap may no longer have the luxury of having a lower threshold of shareholder approval for the deal to go through.

Advertlets Is A Scam !!!

Picture Source from : imDavidLee.com

I wonder is this Ads carry weight? "make more with your blog"

BEWARE bloggers out there. You may end up with a non-paying advertising company if you’ve signed up with Advertlets. All your advertisement effort in your blog may well ran into vain. Obviously, whoever dealing with Adverlets has really found their doom destination and decided to call it quit. All you need to do is simply perform a mere google search of “Adverlets Scam”, you may well serve with ton of complaints from blogger out there crying out for non-paying issue. Of course, a click fraud blog site is deserved to be punished for non-paying but punishing the innocent one for their hard work is way too much to swallow unless they did it ONLY for one reason, Advertlets existence is to Scam advertising money from genuine companies making advertisement through them.

“Payments are processed 30-45 days from the end of the month which you cashed out”.

Yeah yeah !! Clear and understood. So, cash out being make on Feb 2010, waited for another 2 months but no payment made. Sent numerous emails unanswered until a recent one asking for Bank Account details. Furnished the information on the same day but no response after that.

Have finally giving up hope and treat this as a lesson learned, however, decide to blog it up here to warn those that dealing with Advertlets in anyway either by advertising their ads in your blog or direct business dealing with them.

My same advice goes to you from imdavidlee.com :-

“

My Point of View

If you’re still feel hardly to make decision whether to continue displaying Advertlets ads or remove them. Then, please take my last advice: Quit It Now !!! Go For Nuffnang !!! Reason: Will you stay with a company where the boss doesn’t pay for the 1-year work you have done?

“

Be more extra careful, you may get CON. Ha ha.

 

P/S - I have received payment from Advertlets finally. Here

A quick look at GENTING SP

The result for GEN SP 1Q has just been announced yesterday.

I have briefly glanced through the GEN SP financial statements for the 1Q ended March 2010. Lets briefly works out the figures :-

1Q Revenue = S$460 millions

1Q Gross profit = S$180 millions

Est. 1Q Net profit = S$82 millions (Omit the impairment loss on intangible assets and comprehensive loss for time being)

Let’s forecast that the coming growth would remain unchanged for the rest of the Qs.

So, just simply multiply the figures above by 4, that will work out as bellows :-

Full year Est. Net profit = S$82 X 4 = S$328 millions

Total number of issued share = 12,161,880,457

EPS = 328/12161 = 0.027sen

PE = 1/0.027 = 37sen (wow, relatively high!!!)

If you were to factor the impairment loss in, the figure is damn ugly for GEN SP but impairment loss is something worked out base on market value, the accuracy is always questionable. So, over the long run this impairment loss will be recovered over time no matter how either by ways of external or internal sources. Giving the brand name of “GENTING”, recoverable of impairment loss within a year or two is just that easy.

If the forecast figures are what were turned out to be, then, GEN SP 1Q result is indeed a moderate figures overall. Also note that this 3 months quarterly earnings is not a full Q as its actual operation only started on 14 February 2010.

Lets assume the full operation is what it should work out for eventually, then, the calculation will have improved a lot as follows:-

Assuming 1Q 82million profit cover only half of 1Q, then rightfully this figure will need to multiply 2.
Estimated 1Q net profit = 82 x 2 = S$164 millions

Full year Est. Net profit = S$164 x 4 = S$656 millions

EPS = 656/12161 = 0.054sen

PE = 1/0.054 = 18.52sen (wow, this is far much better !!)

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Genting Singapore reports 12-fold loss in Q1


Genting Singapore, which operates one of the city-state’s two mega casinos, reported its losses rose 12-fold in the three months to March, hurt by impairment losses on its UK casino operations.


Genting Singapore, a unit of Malaysia’s Genting Bhd, reported late on Thursday a net loss of S$396 million (US$286.5 million) for the first quarter, widening from S$32 million a year ago.


Resorts World at Sentosa, its US$4.8 billion Singapore casino resort which opened on February 14, achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of S$109 million.


Resorts World is being opened in stages and currently comprises a casino, four hotels, a few restaurants and shops, and a Universal Studios theme park. When fully completed, the complex will have another two hotels, spas and a maritime park with one of the world’s largest aquaria.


Rival Marina Bay Sands, owned by U.S. casino firm Las Vegas Sands, opened partially on April 27.


Las Vegas Sands CEO Sheldon Adelson has said he expects the US$5.5 billion Singapore property to generate EBITDA of over US$1 billion in its first full year of operations. -- Reuters

BToto earnings could rise 10.4pc: OSK

Assuming earnings rise 10.4pc in year 2011, what would this represent to BJTOTO ?

Current Estimated earnings = 410 millions

With 10.4% rise in 2011 = 410 X 10.4% = 452 millions

Estimated EPS = 33.5sen

Estimated PE in 2011 = 13.67

Simple FV would be = 15 X 33.5 = RM5.02 (almost 10% discount from current price)

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BToto earnings could rise 10.4pc: OSK

Gaming company Berjaya Sports Toto Bhd (BToto) could expect to see a 10.4 per cent rise in earnings in 2011 with the possibility of a sports betting licence on board.

 

In its research note, OSK Research Sdn Bhd said the earnings projection was based on the legal sports betting market which was equivalent to 50 per cent of the upper end of the unofficial estimate of RM20 billion for the illegal sports betting market.

 

The earnings projection premised on BToto gaining from a realistic 0.5 per cent agency commission rate, said OSK Research Sdn Bhd.

 

It said that the payout structure for sports betting is much higher at about 90 per cent versus traditional numbers forecast operations (NFOs) games' 64 per cent to 66 per cent.

 

"This, coupled with a similarly high tax structure, indicates that the agency commission rate charged by BToto is unlikely to be too lucrative in order to maintain the profitability of the sports betting business which is expected to reside at Ascot Sports Sdn Bhd (potential 51 per cent subsidiary of Berjaya Corp Bhd)," it said.

 

Earlier, Berjaya Corp had requested for a halt in trading today pending an announcement of an acquisition from a related party of the company and a capital-raising exercise.

 

With the acquisition of Ascot Sports, Berjaya Corp will gain if the government decides to legalise sports betting in the country as Ascot Sports will become one of the beneficiaries of the move.

 

Over the longer term, it said all the NFOs will benefit if the government eventually liberalises the sector by leveraging on all the NFOs to expand the distribution network for sports betting to take away market share from illegal operators.

 

"This will be positive for the industry as it will provide a strong leg up on earnings growth given the relatively mature legal NFO gaming market in Malaysia," it said.

 

The research firm said given the limited distribution channels and the fact that the illegal market will continue to thrive given its key advantages of convenience and credit facilities granted, the legal market is unlikely to overtake the illegal market, at least over the immediate to medium term. -- Bernama

 

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Berjaya Sports raised to ‘Buy’ at HwangDBS

Berjaya Sports Toto Bhd had its stock rating raised to “buy” from “hold” at HwangDBS Vickers Research Sdn Bhd after the company’s parent agreed to buy a 70 per cent stake in a sports betting company.

Berjaya Sports will benefit because its outlets will be used for the sports betting game, according to HwangDBS, which set its price estimate for Berjaya Sports shares at RM5.20. - Bloomberg

GUINNESS vs CARLSBERG

GUINNESS

1Q EPS = 8.85

2Q EPS = 14.5

3Q EPS = 15.38

4Q EPS = ?? take previous 4Q as guide = 9.07

Estimated total EPS = 47.8sen

Estimated PE = 14.47sen

Div Yield = 6%

Div Payout Ratio = 41/47 = 87%

CARLSBERG

1Q EPS = 7.00

2Q EPS = 4.28
3Q EPS = 7.1
4Q EPS = 6.57
Total EPS = 25.02sen
Estimated PE = 19.58sen
Div Yield = 5%
Div Payout Ratio = 92%

Obviously on paper, GAB provide a better deal than CARLBG. GAB give a better earnings as well as DY, probably due to its better market shares captured in Malaysia but certainly we cannot discount CARLSBG's potential in catching up especially we have yet to see the actual synergies contribution from CARLBG (S) as yet. Further development on both would be very interesting on the coming World Cup 2010 as i believed not only GAB will get a lift on this event. CARLSBG would also benefited from it. After all preferences & flavour still lie on individual interest no mater how.

World Cup 2010 to give Guinness Anchor a lift, says OSK Research

KUALA LUMPUR: OSK Investment Research has maintained its buy call on GUINNESS ANCHOR BHD [] (GAB) at RM6.91 with target price RM7.35, and said the company's earnings were within expectations, with the bottom line figures to date accounting for 76.5% and 78.3% of OSK Research's and consensus estimates.

 

Moving into 4Q10 (April-June), it said sales would remain firm on intensified promotion activities in view of the 2010 World Cup Soccer season.

Since the Malaysian brewery industry rides on seasonal and event factors, the World Cup has been a positive factor for the industry every four years, it said.

The research house expects GAB to see robust numbers in the next quarter, although strong competition from its closest competitor means the risk of downside to earnings will persist.

"We see the stronger earnings on the 2010 World Cup soccer season lifting earnings in 4Q and meeting our earnings forecast.

"As we are making no changes to our earnings estimates or valuation parameters, we maintain our discounted cash flow-derived target price for GAB at RM7.35, with our buy recommendation intact," it said.

Excellent Customer Service

Yesterday just make a call to Dell technical support reporting my faulty USB port on my laptop which still under warranty and today engineer came to my door step to get the whole motherboard replaced. Wow superb & speedy service. This is the kind of customer service i like. Thumb up !!

1. Make a report to dell center and she ask for a thorough diagnostic check over the phone. Confirmed it is faulty and assigned with case number.

2. Engineer call me the next day and arrange a time to get my laptop fit.

As simple as just 1, 2 and done !

When come to stock tradings, there are five things that every successful trader needs to know how to do:

1. Have a method to trade.

2. Have the discipline to follow your method.

3. Have the mental fortitude to accept the fact that losses are part of the game.

4. Have the mental fortitude to accept huge gains.

5. Find a mentor.

Carlsberg to cost more next month

"the impact of the price increase on Carlsberg’s earnings, if any, would be marginal."

"We don’t foresee earnings being bumped up"

==> It seem earnings would be stagnant/marginal increase.

Asked about prospects, Ravn said the company had a “good feeling” about this year. “We think the industry will grow by about 2% after contracting last year.”

For Carlsberg, it would ride on the synergies it would continue to create with Carlsberg Singapore Pte Ltd as well as further develop new products to capture higher sales,

==> The "good feeling" worth a growth rate of 2%. Huh... finally, new products is the right way to do to capture higher sales. Keep up the good work. !!

Managing director says company playing catch-up with increase in raw material prices

KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd will increase the prices of its beer and stout products by an average of about 3% next month, says managing director Soren Ravn.

“We are trying to play catch-up with the rise (in price) of raw materials such as malt and hops which have increased 10% on average over the past five years,” he told reporters after a shareholders’ meeting yesterday.

Ravn said the company had last year increased prices only “slightly”, taking into consideration the economic downturn of 2008 and its flow-through effect on consumers last year.

It is understood that the average annual increase on Carlsberg products over the past five years is about 2%.

We are trying to play catch-up with the price rise says CARLSBERG BREWERY MALAYSIA BHD MD SOREN RAVN ON THE 3% INCREASE NEXT MONTH

The price increase would be industry wide, according to Ravn.

OSK Research Sdn Bhd analyst Vincent Lim, who covers the company, said the impact of the price increase on Carlsberg’s earnings, if any, would be marginal.

“They have been doing this historically, it’s just simply to pass on costs to consumers. We don’t foresee earnings being bumped up,” he said.

Asked about prospects, Ravn said the company had a “good feeling” about this year. “We think the industry will grow by about 2% after contracting last year.”

For Carlsberg, it would ride on the synergies it would continue to create with Carlsberg Singapore Pte Ltd as well as further develop new products to capture higher sales, Ravn said.

Carlsberg Malaysia, which is a 51%-owned unit of Denmark-based Carlberg AS, acquired Carlsberg Singapore for RM370mil in the fourth quarter last year.

Carlsberg Malaysia has a profit guarantee of S$24mil from the acquisition for the financial years ending Dec 31, 2009 (FY09) and FY10.

Chairman Datuk Lim Say Chong said the company, which enjoys the lion share of the local beer market, was expected to pay out 50% to 70% of distributable profits this financial year.

The group distributed 69% of its FY09 net profit to shareholders.

For FY09, Carlsberg reported a net profit of RM75.9mil against RM76.1mil in FY08.

Among its most popular brands are Carlsberg Green, Skol, Royal Stout, Carlsberg Gold and Carlsberg Special Brew, which accounted for 95% of the company’s total sales last year.

A More Detail Look At KFIMA

Most of the time we look at figures and neglected the growth prospect of a company but nevertheless this is the most direct and easiest way to look at as it implies the healthiness of a company, because the figure never lie and is the easiest to obtained.

It is worth mentioning KFIMA again when May 2010 is approaching; because it is the time KFIMA will announce it 4th Q result. Presuming the rolling 4 qtrs will sum up to below :-

4Q EPS (03-2009) = 6.43

1Q EPS (06-2009) = 7.01

2Q EPS (09-2009) = 3.75

3Q EPS (12-2009) = 6.88

4Q EPS (03-2010) = ??

We take 4Qs of above and sum up will give a total EPS of 24.07sen. Wow, this is fantastic figure as mentioned in the previous post. Though, we do not know what will turn out in the coming 4Q result but taking it previous 4Q figure is just good enough as everything work out here is based on estimation and forecast. So, this in turn will represent a PE of 4.28sen. One must think it is low enough to spur the price up ? Yes, indeed it does make sense to trade at higher valuation at a minimum of PE 5X at least. Lets study in-depth other figures to substantiate what I said.

1) Dividend

This is what I most concerned as my first criterion is dividend. KFIMA has a tendency of average dividend payout ratio of 17% of net profit. Estimated dividend to be declared this time round is 24.07 x 17% = 4.1sen. This represent a 4.1/1.03 = 3.98 % on current price @ RM1.03. Much higher compare to FD.

2) ROE

Company has to make money to continue it operation. Judging previous figure, a ratio of ROE is around 13.8%, this is a very good margin so to speak, not many companies can meet that.

3) Gearing

In order to stay healthy with comfortable operation cash flow, my own figure of a company gearing should not go beyond 70% of it total asset. KFIMA at this level only stay around 30% debt which is very healthy in my opinion.

Another good figure for KFIMA is, it is in high ability in meeting interest expense where KFIMA has power to service interest expense on debt easily.

The only setback is KFIMA relatively consider under a low cash flow ratio.

4) FV

As usual, my way of FV = 5 x 24.07 = RM1.20. Represent a 20% discount on current price at RM1.03.