CHAP AYAM "THE STOCKAHOLIC" RESEARCH (Kuala Lumpur Stock Exchange)

For the sake of gatai tangan.. terbeli MHB..

2011-12-30T02:34:00.002+08:00

2011-12-28T18:39:00.003+08:00

WE ARE BACK... heh heh

Sime Darby: Audit Of Energy Arm Finds Breach Of Duty,

2010-09-20T22:12:00.001+08:00

Sime Darby Bhd. said Monday that its investigations into losses amounting to MYR1.3 billion at its energy and utilities arm have found "breaches of duties and obligations and inappropriate conduct."

The company didn't provide further details, saying it had been advised by its legal counsel to keep confidential the details of the report and the nature of the proceedings for now.

"The board has resolved to initiate legal proceedings and where appropriate, to lodge reports with the relevant authorities," the world's largest listed plantation firm by acreage said in a stock exchange filing.

In May, the state-controlled firm had asked its then president and chief executive, Ahmad Zubir Murshid, to go on a leave of absence after an internal task force revealed significant losses from cost overruns in several key energy and utility projects, including civil work for the Bakun hydroelectric dam in east Malaysia and a contract for Maersk Oil in Qatar.

The company then appointed a legal firm "to independently conduct follow-through investigations to determine culpability" for the losses at its troubled energy projects.

Accounting firm PricewaterhouseCoopers was also tasked with carrying out forensic audits on the projects in conjunction with the legal review.

An investigation by Malaysia's anti-graft agency is also ongoing, and the general manager of its unit Sime Darby Marine, Zamri Mohamed Ideruswas, was charged with corruption in August. - DOW JONES NEWSWIRE

Axiata & MHC

2010-09-13T23:35:00.003+08:00

Click on image to get better view

Selamat Hari Kemerdekaan

2010-08-24T00:46:00.002+08:00

BAHAWASANYA NEGARA KITA MALAYSIA mendukung cita-cita hendak :

* mencapai perpaduan yang lebih erat di kalangan seluruh masyarakatnya ;
* memelihara satu cara hidup demokratik ;
* mencipta satu masyarakat adil di mana kemakmuran Negara akan dapat dinikmati bersama secara adil dan saksama ;
* menjamin satu cara liberal terhadap tradisi-tradisi kebudayaannya yang kaya dan berbagai corak ; dan
* membina satu masyarakat progresif yang akan menggunakan sains dan teknologi moden.

MAKA KAMI, rakyat Malaysia, berikrar akan menumpukan seluruh tenaga dan usaha kami untuk mencapai cita-cita tersebut berdasarkan atas prinsip-prinsip yang berikut :

* KEPERCAYAAN KEPADA TUHAN
* KESETIAAN KEPADA RAJA DAN NEGARA
* KELUHURAN PERLEMBAGAAN
* KEDAULATAN UNDANG-UNDANG
* KESOPANAN DAN KESUSILAAN

Malaysians use social media to bypass censorship

2010-08-18T11:46:00.000+08:00

by Romen Bose

KUALA LUMPUR, Aug 18, 2010 (AFP) - Malaysia bumps along the bottom of international rankings for press freedom, but the explosion of social media like Twitter and Facebook is revolutionising how journalists work.

Dissenting views, which for decades were screened out of the government-linked mainstream media, are now everywhere, including the blogosphere and mobile SMS messages, making repression extremely difficult.

One veteran reporter with one of the country’s leading newspapers said that for most of his career it was virtually impossible to write about the opposition or any issues deemed off-limits by authorities.

“But today, government MPs are forced to engage and debate their counterparts across the aisle in social media like Twitter and Facebook, allowing us to report on the opposition and avoid much censorship,” he says.

“Where previously we had to accept at face value a minister’s version of events or policies, today their disgruntled aides and opponents are already tweeting or leaking details on Facebook, giving us uncensored access.”

“Although the restrictions and controls are still in place, it’s become much harder to censor what the opposition or rights groups say in the media,” says the journalist who, due to the sensitivity of the issue, declined to be named.

Malaysia was ranked 131st out of 175 countries in the 2009 Reporters Without Borders (RSF) press freedom index, because of its tight controls on print and broadcast media.

The watchdog says Malaysia prevents journalists from properly covering sensitive subjects such as corruption or human rights abuses, using a publishing permit system which allows it to shut down media outlets at will.

After decades of such policies, self-censorship became rife and political leaders hardly even needed to make the much-feared phone call to the news room.

But the seeds of change were sown in 1996 when the government pledged not to censor online content as part of a campaign to promote its information technology sector.

Despite occasional raids, bans and government criticism, the web and online media remain relatively free.

Suddenly Bastardisation became Famous

2010-08-18T00:42:00.003+08:00

How close we are with US. I think we are quite close, if not really really close.. huh!. Before this we heard our Gavenor Dr Zeti said about "NOOORMALISATION" and Chairman of the United States Federal Reserve, Ben Shalom Bernanke also mentioned that word few times.. "Nuurrrmalizationn".

Now Datuk Seri Nazir Razak, mentioned about BASSSTARDDISATION. That came on Aug 17 when he said the NEP was bastardised, it meant exactly that. Instead of giving birth to legitimate offspring, it has given rise to bastards.

ANDDDD guesss what!!!!! US President Barrack Obama also used that word la bro... today the Obama Administration will host a conference on the future of housing finance - Home Ownership: A Bastardization of the American Dream‎. Is it a coincidence???

So after this, don't shy to use the word lor. When u meet friends just said it, "Hi bastard, how r u, long time no see, where hv u been?" or "Bro, hv u been bastardize today?".

Or u can tell tourists - "Dude! Our country is very unique. When all the countries in the world busy thinking about GLOBALISATION, we busy with BASTARDISATION."

Highest Paid Directors

2010-08-17T16:28:00.003+08:00

KUALA LUMPUR – Listed companies paid out higher remuneration to their directors in 2009 compared to 2008.

Malaysian Business in its annual survey of the ‘Highest Paid Directors’ reveals that the top 10 companies in terms of total payouts forked out nearly RM300 million last year. Out of the more than 600 companies surveyed, close to 240 directors drew more than RM1 million in remuneration in 2009 despite the cautious economic environment.

The survey appears in the Aug 16 issue of Malaysian Business.

Not unlike last year, a large part of this increase comes from Genting Bhd, which topped the list with a big payout of RM92.11 million to its board. The company also had the highest remuneration band of RM87.6 million – RM87.65 million for a single director. However, the company did not name who the director was. The top executive listed is its executive chairman chief executive Tan Sri Lim Kok Thay.

Other companies with the highest remuneration bands for a single director were Genting’s subsidiary Genting Malaysia Bhd which paid out RM37.25 million & above to its top executive. These payouts, however, might have been paid to the same person taking into view the possibility of double counting.

In third place is IOI Corporation Bhd, which paid out a remuneration band of RM25 million – RM30 million to its highest-ranking director. However, this is less than the RM41.10 million – RM41.150 million it paid out in 2008. We assume that the recipient was IOI Corp director and founder Tan Sri Lee Shin Cheng.

The survey lists a total of 628 companies with a remuneration band of above RM300,000 as stated in the company’s annual report. Of these, only about 7% of the companies were transparent in stating the exact remuneration of their top executive. Interestingly, several companies with huge losses still rewarded their directors with huge payouts.

The survey also reveals director remuneration from a sectoral perspective and what government-linked companies (GLCs) dish out to their head honchos. It also gives readers a peek into the ACE Market‘s top executive earners.

Malaysian Business, the country’s premier business magazine published by Berita Publishing Sdn Bhd, also features yearly the country’s 40 Richest Malaysians and the MB100 comprising the choicest companies on Bursa Malaysia.

Eastern & Oriental Bhd, E&O-LB

2010-08-13T22:23:00.002+08:00

Technically, E&O well supported at 1.1o - 1.12. Now on the rebound to test the 1.29-1.30 resistance. Same goes to E&O-LB, supported at 1.09, expected to test the 1.19 resistance.

Background: Eastern & Oriental Berhad is a Malaysia-based investment holding Company engaged in the provision of management services to its subsidiaries. The Company has interests in three business activities: hospitality and lifestyle, property development, and property investment. The Company operates in three major business segments: properties, which is engaged in the development and investment in residential and commercial properties; hospitality, which is engaged in the management and operations of hotels and restaurants, and investments and others. The Company's subsidiaries include E&O Property Development Berhad, Dynamic Degree Sdn. Bhd., E&O Developers Sdn. Bhd., E&O Ventures Sdn. Bhd., Eastern & Oriental Hotel Sdn. Bhd. and E&O Leisure Sdn. Bhd. On March 25, 2009, the Company completed the disposal of its entire interest in Puncak Madu Sdn Bhd to Damansara Developments Sdn Bhd, owned through the Company's subsidiaries, Galaxy Prestige Sdn Bhd and Major Liberty Sdn Bhd.

Ramadan uplifting time for stock markets

2010-08-12T00:26:00.001+08:00

Reallyyyyy arghhh... that what they said lahhh...

(Reuters) - Ramadan, the holiest month of the Islamic calendar marked with fasting and prayer, is also an uplifting time for stock markets in predominantly Muslim countries, according to a study by the University of New Hampshire.

Stock markets in Oman, Turkey, Kuwait, United Arab Emirates, Qatar, Pakistan, Jordan, Egypt, Morocco, Tunisia, Malaysia, Bahrain, Indonesia and Saudi Arabia generated average returns of 38 percent during the month of Ramadan over the years 1989 through 2007, according to the report compared with their average 4.3 percent returns the rest of the year.

Ahmad Etebari, a professor of finance at the university in Durham, New Hampshire, who was lead researcher on the study, said he was surprised by the finding.

"Fasting is quite an ordeal during those long summer days in the Middle East," said Etebari, who was born in Iran. "I expected to see the opposite."

Since Ramadan is determined by a lunar calendar, its starting date varies from year to year. Etebari found that the markets he analyzed performed strongly, regardless of the timing of Ramadan.

Etebari concluded that the rally resulted from greater optimism during Ramadan. "This is behavioral," Etebari said. "It stems from psychology."

Observance of Ramadan is expected to start on or about Aug. 11 and finish on or about Sept. 10.

In the Middle East, Dubai's main index and Abu Dhabi's benchmark are both down so far this year, while stocks in Indonesia, an officially secular country that has the world's largest Muslim population, are up about 20 percent.

"The implication of our find for investors is obvious," Etebari said. "Investors seeking fast profits in the Muslim world should try to profit from the fast."

(Reporting by Scott Malone)

Reasons FoolCus Point deferred listing

2010-07-27T23:40:00.002+08:00

Kuala Lumpur, 27th July 2010 - Focus Point Holdings Berhad (“Focus Point” or the “Company”), Malaysia’s largest chain of professional eye care centres, had been notified by the regulatory authorities and its Principal Adviser, OSK Investment Bank Berhad (“OSK”) on the evening of Friday, 23 July 2010 that a letter from an unidentified source had been sent to the authorities on three (3) points of allegations, being:

(i) Some of the Company’s professional eye care centres do not have either a qualified optometrist or optician;

(ii) There are instances at some of the Company’s professional eye care centres whereby contact lenses are prescribed and/or dispensed by personnel who are not qualified to do so.

(iii) As stated in the Company’s Prospectus dated 30 June 2010, there are only 27 units of K-metres keratometers, compared to the number of professional eye care centres operated by the Focus Point group.

The Company had subsequently responded to the allegations on the morning of Monday, 26 July 2010. The following sets out the key points of the Company’s response:

As at the last practicable date of 1 June 2010 as stated in the Company’s Prospectus dated 30 June 2010, all the 144 professional eye care centres of the Focus Point group are adequately serviced by 152 optometrists and opticians.

All sales of contact lenses that require fresh prescriptions are carried out in the presence of a qualified optometrist or optician, who will provide the prescription. Contact lenses will only be prescribed or dispensed in Focus Point professional eye care centres which have either a qualified optician or optometrist.

All the professional eye care centres under the Focus Point group have all the necessary optical equipment required to carry on its operations.

The Board of Directors of the Company (“Board”) believes that the above allegations are adequately refuted and that the allegations were made with malicious intent to derail the Company’s listing plans and damage the Focus Point group’s business operations. In this regard, the Board wishes to assure the public that the group’s business operations are sound and that its fundamentals are intact.

The Company is currently awaiting the deliberations of the regulatory authorities pursuant to its response.

Earlier response

Kuala Lumpur, 27th July 2010 - Focus Point Holdings Berhad (“Focus Point” or the “Company”), the largest chain of professional eye care centres, said in an official statement today:-

1. The Company’s listing date has been deferred pending an announcement.
2. The Company wishes to apologise for any inconvenience caused and expects to provide further details in due course.
3. The Company wishes to inform the members of the public that business is as usual in Focus Point and all its outlets, and the deferment of the listing date has no impact on its business operations.
4. The Company is the largest chain of professional eye care centre in Malaysia with strong fundamentals and solid financial standing (as disclosed in its prospectus dated 30th June 2010).
5. The Company wishes to assure investors that all monies are currently securely held by both the Placement Agent, OSK Investment Bank Berhad, as well as Malaysian Issuing House Sdn. Bhd.

Statement issued by Focus Point Holdings Berhad dated 27th July 2010.

Petronas Prince Court another Sime Darby?

2010-06-28T00:16:00.004+08:00

CEO asked to on leave?

Bung Moktar & Ibrahim Stupidity - BNM Affin Issue

2010-06-16T14:35:00.002+08:00

They gave Bumiputera a bad name bringing up the non issue of BNM rejected Affin proposal to take over EON Capital. Whart wrong with u guys? Do the background check la. I'm Bumi also, don't has any problem with BNM approaches.

Bank Negara Malaysia is reponsible for the stability and soundness of the financial system as a whole. Individual financial institutions are expected to operate with strong financial conditions, management capabilities and corporate governance.

This objective is paramount in the Central Bank's conduct of its regulatory and supervisory functions.

It was understood, In the context of Affin-Eon Capital, any merged entity is expected to have the necessary financial and operational capabilities to meet the more challenging and competitive financial landscape. Furthermore, the merged entity should also lead to a more strengthened and resilient entity, having the necessary resources, talents and solid focus as well as business directions.

It was understood also, Bank Negara Malaysia has communicated to Affin Holdings Berhad explaining,among others in the following manner ...Affin Holdings dan pemegang-pemegang sahamnya perlu akui yang cadangan pengambilalihan di atas akan menambahkan beban kewangan masing-masin dan ini akan mengehadkan keupayaan untuk menyuntik modal yang diperlukan oleh entiti gabungan di masa hadapan bagi menghadapi persekitaran operasi yang lebih kompetitif dan standard pengawalan modal antarabangsa yang lebih mencabar.

The various perceptions that the Central Bank has not provided the basis for its decision is therefore not correct. In this matter, Affin Holdings Berhad could have been transparent..

Bung go play with ur wife la & Brahim just concentrate on NEM la. Jgn kacau2 stock market and banking.

Proton-VW Collaboration Called Off

2010-06-07T01:32:00.001+08:00

News Release by Proton:
Subang Jaya, 6 June 2010 – As one of the largest OEM in the industry, Volkswagen would be an interesting collaboration partner for PROTON. Nevertheless, during preliminary talks between the parties, Volkswagen confirmed that it currently has other priorities and that a potential collaboration with PROTON could not be pursued.

THE TRUE STORY OF SIME DARBY

2010-05-27T14:12:00.001+08:00

Sent to us by Dr Mubarak Chan Chin Cheung
Sime Darby Berhad Director 1974 to 1992

Poor Datuk Seri Ahmad Zubir Murshid, I sympathise with his present predicament. He was not the first executive of Sime to be mired in circumstances which went beyond his control - the force of historical circumstances which dated back to November 1976.

All these began on 2 January 1972 when I proposed to a high Government official that Malaysia would be well-placed to have a conglomerate of its own at the inception of the New Economic Policy conceptualised by the team led by the Father of Development, Tun Abdul Razak, a statesman. At that point, I had not the faintest idea what it was all about.

All I knew was that my Malay contemporaries were very keen to do business. They grew up with me in the environs of higher education in the United Kingdom in the 1950s. We were all fired up with the things we could do in a socio-economic way.

Eventually, we all returned and I by force of circumstances became a planter. Then, I could see my Malay friends were quite poor compared with myself. Also, I realized the British dominated the banking, the plantation and tin mining sectors because the biggest rubber estate owned by a Chinese then, was only 7,000 acres and the non-Malays from the urban areas did all the menial business and the hard and unrewarding work at the leading edge of the early ‘independent’ Malaysian economy.

The change came with the NEP which promised to give all Malaysians a new beginning.
I thought without a huge business entity controlled by the Malays with the co-operation of the non-Malays, we, the Malaysians, would be mired in unhealthy competition socio-economically amongst ourselves which would lead to self-destruction because 70 percent of the Malaysian economy at that point was still controlled by the British, not the Chinese.

We would be getting at each other’s throats for third class assets. Without Sime Darby which eventually became the flagship of the Permodalan Nasional Berhad, non-Malay billionaires, some of them foreigners, would not be created during the NEP period.

Hence, I proposed that a Malaysian owned and managed conglomerate should be established or acquired. By chance in October 1973, Sime Darby was involved in its first scandal concerning its chief excecutive and Pernas Securities moved in with the tacit support of the Minister of Finance and the Prime Minister who both had this great foresight to do what was best for Malaysia on free market terms. This was their finest hour to agree to take-over a British conglomerate at fair market prices. Arising from this proposal, Tan Sri Taib Andak, the Chairman of Maybank and myself were appointed as non-executive directors of London-based Sime Darby PLC in October 1974.

But, at that time, there was not much money available for the Bumiputras. Without informing anyone, I managed to garner the support of important investors residing in a neighbouring country who entered the fray and helped us to win against all odds by November 1976. During this period the British were at their weakest being beset with political turmoil, by the weak pound and a dis-interested City in ex-colonial assets. Malaysian control was achieved with a few million ringgits, about RM 23 Million.

Unfortunately, at the crucial moment, our Prime Minister, Tun Abdul Razak passed away. Then, my view was who pays the piper calls the tune. In other words, Malaysians should be put immediately in place to steer this great ship with a purpose what some national sovereign funds only set out to do in the 21st century. But from this point onwards, no one asked me for my views and this was the theme of the executive management to the day I was asked to resign 18 years later by the executives who benefited from my concept. It was all fine and dandy if there were no financial mishaps.

The executive management reigned supreme over the Board to this day. This anomaly must now be rectified in the interests of the shareholders. This is not ethical and more.

The management was not Malaysianised until 1982. By 1982, the best assets of Sime were sold in haste e.g.
1. the beverages firm Shaw Wallace of India, an Indian monopoly, with the valuable Assam frontier tea-estates. It is believed the son of the purchaser became a billionaire of India and owns the Kingfisher Airline.

2. the two Orchard Towers, Singapore which are still standing even though the management urgently advised with photos that these would collapsed any moment
and had to be sold back to the contractor for S$ 23 Million quickly.

3. the Amoy Canning land in Hong Kong which Sime tried to auction off but failed due to the fact that only the Hong Kong Government auction-off lands to balance its books. Eventually, a joint venture was formed with a member of the property syndicate operating there. This property became the MRT terminus !

And only the 200,000 acres of plantation remained. Lastly, Wisma Sime Darby does not belong to Sime because the company had no money at its completion in early 1980s as the Board was told.

In 1981, a foreign business paper reported that I was instrumental in helping the sale of Benta Berhad to a well-known gentleman. Unfortunately, I took legal steps too late to clear my name. The famous Singaporean lady lawyer told me that I was a non-starter.

In 1982, as a Director of Consolidated Plantations Berhad I proposed that Sime should enter the China palm oil market. But only a small palm oil refinery was established at Port Said, Egypt. In fact, in 1972, at another institution I was urging my colleagues to take note that eventually, palm oil would overtake petroleum in the years ahead for Malaysia. By the early 1990s, all the vital port facilities in China were controlled by other Malaysian palm oil producers but not Sime.

We went west instead of east. And sometimes, Sime’s physical stock of palm oil was sold to traders who were caught short.

In 1990, I heard in the market place and from friends who gave me a quizzical look that the well-known gentleman who purchased Benta in 1982, acquired a parcel of plantation land from Consolidated Plantations known as Bukit Berutong for RM 4 Million.

I asked the executives in charge why this sale was not presented to the Board for approval and was told that since the sale was so minuscule, less than 2 percent of the total assets of the Company, there was no necessity to do so. From the gentleman, this property was warehoused in a public-listed company and finally sold at the top price of RM 88 Million.

Ironically, the Edge expose’ of Sime dated May 17 2010 also carried the story of the disgraceful state of affairs at Bukit Berutong. I also asked the executives why the valuable property was not sold to Sime-UEP. There was no answer.

In 1992, I was requested to sign a Board resolution authorizing the purchase of an oil palm estate in Sabah which no one wanted for many years, for a sum of RM 32 Million. This money was used to purchase the Sabah Shipyard for RM 22 Million. I refused to sign because as I was knowledgeable about the plantation industry and was aware that this plantation was hawked around for much less for many years previously.
I was asked to resign the following day by the executives. In 1974, the late Tun Abdul Razak and Tengku Razaleigh supported me not Tun Tan Siew Sin who had died in 1989.

Thereafter, the Sandestin Golf Resort, Florida was purchased for US$ 72 Million and it was reported in the press that the purpose was to train Malaysians to manage hotels even though the MARA college was already founded in the 1960s, After the crash of 1997, Sime announced that the resort was sold for the same sum in ringgits arising from a depreciated ringgit. The loss in US dollars was not announced.
A bankrupt British refrigerator company was purchased and an attempt was made to revive it in the Philippines. I believe it was written off together with an investment in Mindanao.

And then came the cataclysmic events of 1996.
In the early 1990s, I traveled across the Atlantic by Serendipity Air and sat next to a German gentleman who claimed to be the head honcho of the family business of Hitler’s chief spy. I asked him why he did not travel by Lufthansa. He told me that for every US $100,000 he spent with this airline, he got a kick-back of US $30,000. His comment struck a bell in my mind as I noticed that someone was always encouraging the top executives to fly by Serendipity Air. And Sime through its benevolence followed the executives of the travel division overseas where it has become a favourite watering place for privileged Malaysians connected with Sime.

I heard they are doing great things via Hong Kong and other parts of Australia without fanfare. It is a small world ! Sime Darby was unfortunately caught by the historical circumstances which surrounded its early promise at the beginning. From November 1976, to the present, its leadership was provided by the executive management which enjoyed its magnificent perks.

It takes a company to develop its own culture over a period of at least 10 years. Sometimes, this did not succeed as in Sime. Apart from its beautiful advertisements, Sime’s real core business is in its plantations with attempts at financial engineering from one company to another to create profits. Thus, Consolidated Plantations was hollowed out and had to be sold as a shell for whatever the reason !

Any analysis of Sime will show it did not do anything since 1976 but was embroiled in scandals of seismic proportions after 1992 !

The real substantial shareholders had no say. Because of this, once anything goes wrong in Sime, it goes very wrong. It pays to have a look at divisions where it is difficult to control usage, buying and selling or overseas. The travel business is one of the most difficult to manage and control because it is a cash business in which Sime should keep clear and has no reason to sully its reputation.

The real purpose and the contribution Sime could make to the corporate life of Malaysia are that it could have acquired worthwhile international companies overseas during the 1970s and 1980s. It was alleged that 10 percent of Harrisons Crosfield was available for Sime to control this conglomerate world-wide which would have provided valuable expertise in engineering and other fields for training and transfer. But somehow, we ended up owning the Golden Chersonese estates in Kelantan for a similar price. The lucky person who was involved, retired to the Scottish Highlands to shoot pheasants.

In my wildest dreams, I did not expect Sime to undertake directly such stupendous engineering works and before this, owned a commercial bank which went bankrupt.
As a born optimist, I say Sime Darby is still the valuable company which the late Tun Abdul Razak and Tengku Razaleigh envisioned it to be – a major flag bearer of Malaysia overseas. It must undertake to do the right business tasks with the right business personnal eg. round pegs for round holes, square pegs for square holes.
The business focus of the company has to be reviewed in line with the socio-economic environment at its base and its colourful historical past, nothwithstanding the vital and living world in which we do business to make money. To take a quantum step in catching up, Sime has to co-operate with others or own specialist companies without losing sight it has to contribute to the up-lift of all Malaysians in terms of transfer of knowledge, jobs and a reasonable return to its shareholders in a business like manner with transparency. It definitely should not compete with local business entities as far as possible eg. property development, motorcars, travel, vegetable gardens, etc. This was not my vision at all times from 1972. Sime has better businesses to do overseas.. And greenfield projects should be avoided because many shareholders are Trusts. Decisions should not even reach the risk management stage as information is readily available in today’s world.

By this normal approach, Sime Darby will be recognized world-wide unlike now, a bull-frog in a small pond which only has a feel-good feeling by its wonderful advertisements expounding maybe non-existent overseas businesses which should all be closed down !

In passing, the chief executive of another conglomerate rang me up and said, ‘ Doc, I think we should buy a yacht to entertain our principals,’ I replied, ‘ Sorry, Tommy, I am not into yachts for self-entertainment But if the other Directors agree, I have no objections.’ I did not hear from him again.

Not too long afterwards, I was standing by the Star Ferry, Hong Kong, one winter in the early 1990s. A huge yacht berthed beside me. Two young expatriate families disembarked with an Indian butler and matron in attendance. At the aft, below a huge Hong Kong flag, I saw the words ‘Sime Darby’. I did not know Sime had a yacht. Later, I asked the management why we have a yacht in Hong Kong and I was told this was one way to make the expatriate staff happy. The question logically arose in my mind what did the management do to make the Directors and the shareholders happy ! In the 1980s, it was alleged that the governor of Hainan Island and two local Hong
Kong employees went to jail for illegal business activities.

It is never too late for Sime Darby to do serious business to support, contribute and work within the policies of our Perdana Menteri Y.A.B. Dato Seri Najib Tun Abdul Razak and his 1Malaysia Concept for the good of the country and the company’s shareholders. It can be done if Sime is focused on its responsibilities to the Nation and its shareholders.

Vincent Tan make money out of thin air?

2010-05-13T01:03:00.002+08:00

Yup, seems like Uncle Tan did it again... make money out of thin air like always.
His private company Ascot got the football gambling license, then he sell it to Berjaya's shareholders.

Here's da news:
BCorp To Acquire 70 Per Cent Stake In Ascot Sports For RM525.0 Million Cash

KUALA LUMPUR, May 12 (Bernama) -- Berjaya Corp Bhd (BCorp) is set to acquire the 70 per cent majority stake in Malaysia's first legalised sports betting operation, Ascot Sports Sdn Bhd, for RM525.0 million in cash.

The company has entered into a conditional sale and purchase agreement with Tan Sri Vincent Tan Chee Yioun, a major shareholder of BCorp for the 56.0 million shares in Ascot Sports.

Tan owned 70 per cent of Ascot with the balance held by his son, Datuk Robin Tan Yeong Ching, BCorp said in a filing to Bursa Malaysia Wednesday.

To underscore the value of Ascot Sports, Tan has agreed to guarantee that the company will make cumulative profit after tax of at least RM375.0 million for the first three years of operations.

To back this profit guarantee, Tan has offered to deposit RM81.25 million worth of listed securities and Berjaya Corp will withhold RM125.0 million cash from the total consideratiom of RM525.0 million, which will be released annually upon achievement of profits proportionate to the guarantee.

Hence, the initial consideration will be RM400.0 million.

BCorp is also proposing to undertake a renounceable rights issue up to RM614,455,933 nominal value of Irredeemable Convertible Unsecured Loan Stocks (ICULS) on the basis of one RM1.00 nominal value of ICULS for every eight BCorp shares held on an entitlement date to be determined later.

The proposed rights issue is to part finance the proposed acquisition and/or for working capital requirements and bank borrowings.

A portion of the funds raised will be used to pay the initial consideration of RM400.0 million with the remaining to be deployed for working capital of the group.

Tan has undertaken to subscribe to his and his private companies' entitlements in full which would amount to at least RM400.0 million and Tan will not net in any cash as he will reinvest the entire initial consideration to be received to honour his rights issue obligations.

Ascot Sports has a paid-up share capital of RM80.0 million comprising shares of RM1.00 each and based on the sale price, the price per share is RM9.375.

Ascot has been re-issued the sports betting license by the Finance Ministry which was first issued in 1987.

Ascot Sports has the first-right-of-refusal in the event the government decides to allow sports betting which it has now in view of the rampant illegal book making activities being conducted.

-- BERNAMA

Greek Debt Crisis Turns Deadly

2010-05-08T02:33:00.000+08:00

So what’s provoking the madness?

It’s the stiff austerity measures the rest of the European Union and the International Monetary Fund want Greece to enact. Officials are forcing Greece to slash public sector wages, freeze pensions and boost taxes before they’ll start disbursing the $143 billion in bailout money.

But Greek citizens are sick of bearing the brunt of the pain. They don’t want to see their wages, salaries, and standard of living collapse. And they’re stark raving mad, especially because the measures are being crammed down their throats at a time when unemployment is already running at a six-year high of 11.3 percent.

Borrow and Spend Madness Sparks a Greek Tragedy

I hate to see things come to this. At the same time, I believe there is a serious (and potentially valuable) lesson coming out of this mess — one that I hope governments elsewhere will learn!

You see, this terrible Greek tragedy stems from a simple fact: The country lived way beyond its means for far too long! Politicians borrowed and spent like mad, assuming the day of reckoning would never come.

Then on September 24, 2009, creditors decided they’d had enough. I don’t know why it was that day. I don’t think anyone does now — and I doubt anyone ever will. But that’s when Greek debt prices started declining and Greek bond yields started rising.

That was when creditors decided to FORCE the government to get its fiscal house in order. They didn’t do so with guns. They didn’t do so with bombs. They did so by picking up the phone and uttering a four letter word: “Sell.”

That simple move set in motion a process that eventually drove interest rates sky-high. And that has now turned a simmering economic problem into a major political and social crisis.

So what’s the lesson?

Don’t Wait for Disaster to Strike — Head It Off While You Still Can!

If Greece had tried to get its house in order BEFORE interest rates surged, it probably would have avoided the disaster unfolding before our eyes. If Greek officials had demonstrated a little foresight — a little proactive thinking and policymaking —they could have prevented a huge tragedy.

But instead, they chose the easy way out. And now they’re paying a huge price.

What I hope — in my heart of hearts — is that policymakers in Lisbon … Madrid … London … and most importantly, Washington, are listening. I hope they’re all sitting in front of their televisions and watching the chaos in Greece. I hope they’re going to learn their lesson and take PROACTIVE action to get their own fiscal houses in order.

What I fear is that they won’t.

Heck, not a day goes by without some television anchor or government official saying something like: “Look at the 10-year Treasury Note yield. If investors were worried about our debts or our deficits, they wouldn’t be buying our bonds at these low rates.”

But you know what?

They were saying the same thing in Athens … right up until September 24, 2009.

Until next time,

SPEECH TUN DR MAHATHIR AT 7TH IFSB SUMMIT

2010-05-04T17:03:00.001+08:00

SPEECH BY
TUN DR MAHATHIR BIN MOHAMAD
AT THE 7TH ISLAMIC FINANCIAL SERVICES BOARD SUMMIT
IN MANAMA, BAHRAIN,

3 MAY 2010

ISLAMIC FINANCE – NEW HOPE FOR THE FUTURE
OF THE MUSLIM WORLD

Firstly I would like to thank this conference of the Islamic Financial Services Board Summit for the invitation to speak on “Islamic Finance - New Hope for the Future of the Muslim World.”

Before proceeding I would like to point out that I am neither a financial man nor even an economist. So please forgive me if what I say is unconventional or I suggest something that you are already doing.

We all know that finance plays a big role in the creation of wealth in human society. Financing enables businesses to grow and wealth to be multiplied in the process. Where finance is not available even the countries with rich natural resources can remain poor.

In the distant past financing was undertaken by money-lenders. But their capacity was limited because they dealt mostly in cash in the form of coins of precious metals. There were other constraints which prevented the money-lenders from making available enough money to finance big transactions.

It was a money lender, Mayer Amschel Bauer who founded the House of Rothschild in mid-eighteenth century, which started the modern banking industry. This was followed by the adoption of fiat money, initially by the banks issuing banknotes. With this development it became possible for very large amounts of money to be issued by banks and made available for the financing of wars in Europe and big business transactions.

When banks were allowed to issue banknotes, they could create more money than the cash and assets they held. Governments apparently did not control the amount of banknotes issued. In fact Governments actually borrowed this money. Businesses too benefited as they could finance all their transactions through big loans, practically unlimited, by the banks. In some countries the banks still issue currency notes but mostly Governments now issue currency notes.

The result was the rapid economic growth of the European countries. Their people become more and more prosperous as money rather than landed assets became the basis of wealth.

To facilitate financing further the banks invented cheques. Any amount of money can be written on the cheques and they can be used for payments without need for banknotes or currency notes. With this, all kinds of transactions including international trade was increased further. The economic strength of the countries with banking facilities grew and along with it their military strength.

It seems to have taken a long time for the Muslims and their countries to appreciate the role of banks in wealth creation. This must be because of the injunction against usury which prevented the Muslims from simply adopting the Western banking system. Nevertheless as their dealings with the Western countries grew they were forced to use the usury-based banks of the west. In fact many Muslim countries decided to set up their own usury-based banks despite the injunctions of Islam.

To assuage their conscience some Muslims decided to forego the interest earned from their use of the Western banks. This actually means that they were increasing the profits and helping the growth of the usury-based banking.

Almost 300 years passed before the Muslims could think of setting up banks which conforms to Islamic teachings on rejection of interest. By this time the people who invented and utilised the interest-based banking system had drawn far ahead of the Muslim countries in terms of wealth, economic development and military power.

Now that we, the Muslims, have our own banking system can we use it to prosper our country the way the European countries had? Can we catch up with their development? True our banking system is constrained by the injunction against interest. But still the system can provide funds for more and bigger wealth-creating businesses and other economic activities.

It is to be admitted however that despite the availability of Islamic finance and banking the Muslim world has not shown the kind of progress the western countries have. In fact till today the Muslims have not produced even a single country which can be classified as developed. Why is this so?

The Islamic finance system has in fact grown tremendously. The figures show this. Total Islamic assets worldwide have exceeded US$1 trillion. Islamic assets under management by Islamic banks and conventional banks offering Islamic banking services are reported to exceed US$500 billion. Islamic mutual funds are estimated to exceed US$300 billion, while Takaful or Shariah-compliant insurances are estimated to be in excess of US$5 billion. Overall growth rate of Islamic finance is about 15% - 29% per annum. But Islamic finance is still very tiny compared with the conventional Western usury-based systems. This is even more remarkable considering that so many Muslim countries have become extremely rich from the proceeds of the sale of their huge reserves of petroleum. Can we say that it is the prohibition of usury which is stifling the growth of Islamic finance and the prosperity and development in the Muslim world? I don’t think anyone can blame the teachings of Islam.

It has become clear that despite the availability of Islamic financial institutions, including banks, the Muslims seem not to have utilised them fully. The reason is perhaps lack of knowledge in the management of wealth for growth. But it may be due to lack of will also.

The very rich Muslim countries have shown an unwillingness to invest their money in a way that could improve the situation in the Muslim world. For many all that had been done is to buy bonds, which apart from being un-Islamic as the earnings are through interests, give only minute returns. Investing in this way denies the investor any say in the management of the money. In fact as pointed out earlier the funds so invested can be used by the borrowers for things totally forbidden by Islam. The funds could actually be earning interest for the borrower. It is bad enough to invest in interest-bearing bonds, but it is worse when the money lent through bonds go towards financing loans which bear interest. Of course there can be other uses for the money such as investment in non-shariah compliant businesses and for the production of weapons to be used against Muslims.

If the availability of Islamic finance is to help create a better future for the Muslim world then the financial institutions themselves must come up and aggressively promote Islamic compatible ways of investing the great wealth of the Muslims. This the Islamic financial institutions can do by identifying secure investment opportunities which give a fair return but transgress no Islamic injunctions. They can advice on these but they can also set up investment arms and trust funds.

While the investments should be shariah compliant, it need not be confined to businesses owned or operated by Muslims. There are hundreds of thousands of businesses operated in the non-Muslim world which are compatible with the tenets of Islam. Choosing the best with good yield may not be easy. But Islamic financial institutions must be prepared to expand money on investigating and rating the businesses. The actual investors themselves would not be able to do this.

Islamic banks have not shown aggressiveness in promoting their services. Certainly they have not gone all out to gain access to the money owned by the very rich Muslim countries. Perhaps there are religious constraints but if they are keen enough ways can be found to attract the billions and trillions of dollars belonging to the rich countries. After all the Muslim financial experts have found ways to provide banking and financial services and products which comply with Islamic ethics and laws. What is needed is for the products to be aggressively promoted in the Muslim world.

It is noted that there is not a single Muslim country which is fully industrialised. The wealthy nations of the world are without exception the industrialised nations. Some of these have no natural resources to support industrialisation. But they make up by having the most valuable resources of all. They have people who are intelligent, knowledgeable and skilled in the development of industries. They have management skills especially capital management. And they are backed by their banking systems.

If indeed we want to see a better future for the Muslim world we need to industrialise. In this the Islamic financial institutions, like their counterpart in the non-Muslim countries, have again a major role to play. Islamic banks and institutions must have on their staff people qualified not just in financial management but in the technology and intricacies of setting up and managing numerous industries which can create wealth and employment.

Assuming that the Islamic banks have these expertise they can help with the industrialisation of Muslim countries through the promotion of selected industries and businesses and through introducing innovative ways of financing the enterprises.

Together with the Government the Islamic financial institutions can help with the education of the people to man the new industries. Scholarships and loans can be given by the Islamic banks designed to produce the necessary manpower.

Perhaps these would put too much burden on the Islamic banks. But it is not so long ago when the western banks concentrated exclusively on the business of lending money. They employed staff which were trained only in this field. Today their banks employ economists who study the trends in the country and the world’s economy, who hold seminars on economic subjects and publish academic papers. There is no doubt that the banks have benefited from having economists on their staff to tell them what to expect in the near and distant future.

The role of banks in the industrialisation of the developed countries of Europe and East Asia cannot be understated. There is no reason why Muslim banks and financial institutions cannot play the same role. In fact considering the lack of knowledge and initiative in this area among Muslims generally and Muslim investors specifically, the Islamic bank must play an even bigger and more aggressive role than the conventional banks. While they can make use of foreign consultants and experts, they must quickly develop their own expertise so that they can judiciously evaluate the advice they have been given by consultants. It must be stressed that the future of the Muslim World will depend much on its ability to industrialise firstly in basic industries but also to keep up with the new industries of Information Technology and Knowledge Age.

We see a trend today for Islamic banks and Institutions to match the products of Western banking with their own, while keeping them compatible with the teachings of Islam. This is as it should be. But we have seen lately how the financial products available in the Western banking system have been so abused as to cause the great financial crisis that we are experiencing today.

We may congratulate ourselves that by and large the collapse of the Western system has not affected the Islamic financial system much. But before we do so and before we talk of the Islamic system replacing Western banking, it is necessary for us to understand why their systems collapse.

There have been many changes and many new financial products introduced by Western bankers and market players which lend themselves to easy abuse. In fact the original Western banking system itself is not immune to abuses.

We know that Western banks can lend more than the assets they possess in terms of their capital or the deposits they hold. When Governments decide to abdicate their role as the regulators and overseers of banking practices and the enforcement of banking laws; leaving these roles to the market and market forces, the way was opened for imprudent practices. Bank lending exceeded the assets held by them by very many times. Leveraging can be as much as thirty times the invested capital. While this can increase the yield, it can also increase greatly the losses when the investments fail. The losses would be as many times as the amount borrowed. There is no way for the investor to meet margin calls,

Accounting practice makes it appear that the money lent goes into the books of the banks as assets. The more the amount lent the bigger will apparently be the assets of the bank.

With this the banks went all out to lend money without considering the ability of the borrowers to repay. To ensure that the loans do not go bad, they were bundled and sold to insurance companies and secondary mortgage companies.

As we now know the majority of the housing loans became non-performing and neither the insurance companies nor the mortgage companies were able to cover the losses. And so we see the sub-prime crisis which lead to banking failures. Since the banks also finance hedge funds and the derivatives, their failures and the accompanying collapse of the market turned all these financial products sour. The result is the collapse of the whole financial system.

I am speaking from the layman’s point of view. I am not a banker or a financier. But this is how I see the present crises and the abuses of the financial, monetary and banking systems.

There is obviously a need for the Western banking, financial and monetary systems to be reviewed and changes made to prevent recurrence of the abuses. There is a need for the Governments to come back and oversee as well as regulate the activities in the financial markets. Unfortunately we see a reluctance to do this. Perhaps it is because much money can be made in the financial market through the abuses.

But for the Islamic financial and banking systems it would be good if they don’t try to match every product of the Western banking system. There is no doubt that the Western financial market had created much wealth. Many investors have become millionaires and billionaires investing or speculating on the financial market before the crisis. But their wealth had been acquired not through real business but through gambling. Speculating is no different from gambling. If the speculator wins, only he would benefit. There would be no spin-offs in terms of jobs or supporting businesses. Yet as we can see when the speculators fail they dragged down the whole society and the other businesses. In the present case the whole world has been forced to face a financial crisis of unimaginable proportions. What is more, it is the people who have to bail out with public funds.

The Islamic banking and financial system should not follow in the footsteps of the Western financial system in terms of Islamic financial market products. Admittedly it is not the Western system which has gone wrong. It is the abuses perpetrated by the market players, the speculators and the gamblers who have done this.

We cannot ensure there are no rogues in the Islamic financial market or in the Islamic world. We hope that Islamic injunctions will restrain them. But we cannot be sure. Greed assails us all. When opportunities appear for making quick money the rogues would not be deterred by mere religious prohibition.

The banking and financial system in the Muslim world must be regulated and must remain under Government supervision even if this stifles the performance and the role of the banks in ensuring a better future for the Muslim World. This is because whatever contribution the abuses may seem to make for the Muslim World, it will be nothing compared to the disaster that would follow when the bubble bursts.

If I may repeat many Muslim countries are extremely rich. But we also know that many Muslim countries and Muslim people are extremely poor. We should really be able to spread the wealth to the poor not just through charity but also through investments. But unfortunately the capacity of Muslims to invest is quite limited. They are short on industrial expertise, particularly manufacturing. When they invest it is often only in property development. These cannot create jobs and the spin-offs are quite limited. Their added value is really artificial, being dependent on speculative demands.

The banks should be able to advise their clients on the fragility of such markets. Unfortunately they appear not to have done this.

It is the same with the stock markets in Muslim countries. They go through the cycle of booms and busts frequently, apparently without the investors learning anything.

The growth of industrial capacity in some Muslim countries is almost entirely due to investment from foreign non-Muslims. Where Muslims invest in the industries of developed countries, they seldom take part in management. In fact even in businesses belonging to Muslims in Muslim countries, they are likely to be run by foreigners, usually from Europe.

The very rich Muslims and Muslim countries appear not to value their wealth or to care about the management of wealth. This has been taken advantage of by others. We may have unlimited sources of wealth but we can never assume that the resources will always yield wealth forever.

We see in the West great businesses which fail because they failed to see the changes taking place around them. The great automotive giants are a case in point. Not so long ago General Motors topped the list of Fortune 500 companies in the world. Today it is bankrupt.

Rubber used to be the cash cow for Malaysia. But then came synthetic and the bottom fell out of the rubber market. It is entirely possible that one day the same would happen to the oil market. When it does the impact would not be so serious if there are other industries to cushion the effect. Unfortunately there aren’t.

What is the role of the banks in all this? Banks should be able to foresee this and to advise countries on diversification as well as develop models to deal with various eventualities. It is in the interest of the banks to do so. The collapse of the economy for whatever reason will certainly result in the collapse of the banks if not the whole financial system.

There is a grave need to develop capacities in as many fields as possible in this Muslim World. Depending on others to extract and market our resources is dangerous. The Muslim economy are of course a part of the world’s economy but whether the Muslims get their fair share of the wealth of their countries depends on their ability to extract it themselves.

The Islamic banks and financial institutions can help in raising awareness of the dangers of being dependent on others. It is very comfortable to let others do our work when we are rich. But in the process we will not acquire the skills to sustain our wealth when a crisis hits us.

Islamic finance in itself will not ensure a better future for the Muslim World. But it will certainly help if the Muslims learn how to use these institutions to manage the wealth of the Muslim, to aggressively promote the services they can offer, to have a sense of responsibility for strengthening the Muslim community and to make the Government of Muslim countries aware of the potential contribution of banking and other financial institutions.

It is only if the Islamic Financial institutions are aware of the full extent of the role they can play and they are willing to look beyond merely making money available to those who need it, will they be able to represent hope for a better future for the Muslim World.

KLCI will break 1,350, highest since March 08

2010-05-04T01:18:00.002+08:00

Just wanna says it before it appears in the newspaper tomorrow heh heh heh.
Of course la, becoz Dow shoot above 11,ooo already tonight. KLCI only 4 pts more why cannot kawtim? u see tomoro. Cabortttt...... sori argghhhh

Paramount is mounting kabushhh

2010-04-27T02:17:00.002+08:00

Paramon broke the 3.60 major resistance to close at 3.76, the highest level since 1998 i think. However, i think it will pullback to 3.65-3.70 before resuming the upward trend to 5.00. Don't know much abot this companies, except this song: -

There ain't no mountain high enough
Ain't no valley low enough
Ain't no river wide enough
To keep me from getting to you
Remember the day
I set you free
I told you
You could always count on me
From that day on I made a vow
I'll be there when you want me
Some way,some how
'Cause baby,
There ain't no mountain high enough
Ain't no valley low enough
Ain't no river wide enough
To keep me from getting to you
No wind, no rain
My love is alive
Way down in my heart
Although we are miles apart
If you ever need a helping hand
I'll be there on the double
As fast as I can
Don't you know that
There ain't no mountain high enough
Ain't no valley low enough
Ain't no river wide enough
To keep me from getting to you
Don't you know that
There ain't no mountain high enough
Ain't no valley low enough
Ain't no river wide enough

Amresearch wins GDP highest prediction

2010-04-25T01:23:00.003+08:00

Friend o mind, Mr Manokaran Mottain, Amresearch's economist goshhh came out as the most bullish econ predictor, here is what he said:
Go Manu! Go Manu! Go Manu! Yeeeehaaaaa!

Real GDP to post 8% this year - strongest since 1996

Malaysian economy may have probably expanded at a more rapid pace in 1Q10 – at 9.8% YoY, highest in a decade - with private sector spending by households as well as exports leading the way.
Strengthening domestic and external conditions led us to upgrade Malaysia’s economic growth to 8% in 2010 – broadbased recovery expected - versus Bank Negara’s forecast of 4.5%-5.5% and World Bank’s 5.7%.
The 6-month smoothed growth rate of the Leading Index stands at 5.2% - suggests favourable economic conditions ahead.
With prospects of a disappointing global upswing getting dimmer, real GDP will be sustained at around 6% in 2011.
Growth drivers in 2010: Manufacturing sector (+12.3%), led by E&E sector, which represent more than 9% of GDP.
Services sector to grow 7.1%, contributing at least 4.1ppts to GDP – led by stronger demand arising from positive wealth effect from the financial markets, stable employment conditions and rising income levels .
Private consumption is expected to rise on back of improvements in the labour market, disposable incomes and consumer confidence. We forecast 4.5% growth this year, against 0.8% in 2009.
Exports and imports to post double-digit growths of 15% and 16% in 2010 - higher current account surplus of RM125bil or 20% of GDP.
Headline inflation is expected to rise 2.5%, in tandem with improving economic conditions and possible adjustments to prices.
Given the assumption of stronger economic momentum and higher inflation rates, we reckon year-end target for OPR will be at 3% now – still below neutral levels - it will not choke the recovery process.
In this regard, we see the Ringgit at RM3.10 per US dollar by year-end, moving towards its new fair-value, since the tradeweighted index is also a function of GDP and OPR.

OSK! OSK! OSK!

2010-04-23T00:22:00.002+08:00

My ayam's indicator called buy on OSK Holdings Bhd. It seems like OSK the 1.54 resistance has broken. Next resistance level would be 1.63 and 1.88. Support level 1.40. Don't ask me abot da funda mantal. OSK seems like some sort of a hot water flask's brandname, isn't it. Wondering why OSK Research do not make a "Buy" call on OSK Holdings. So u better wait for OSK Research do that lar.

Scomi Group in da haus

2010-04-22T02:08:00.003+08:00

Scomi Group is on the rise on volume above average again. Which suggested, potentially to test the 55 sen resistance. If that level breached, next resistance is 60 sen. Support level is 46.5 sen. On funda mantal side, ha ha do i care, yup, some people said, you also must considered its funda mantal. Well ok, ha ha, this was what Amresearch said:

We are upgrading Scomi Group Bhd (Scomi) from HOLD to BUY with higher fair value of RM0.76/share (from RM0.48/share) based on a PE multiple of 12x - in-line with
peers average.

• First, our upgrade - after our visit to the company - is premised on our revision in earnings by 4% - 27% to RM71mil - RM96mil for FY10F-FY12F. This is underpinned
by: (1) Stronger revenue growth assumption - from 1% to 6% to 10% - for its oilfield services unit; and (2) Higher margin assumption for its maiden monorail business to
10% from 6% previously.
• Second, Scomi is currently trading towards the lower end of its PE band at a multiple 8x. It is no surprise that the market is assigning such valuations given its persistent
poor earnings deliverance.
• Having said that, we believe revenue from drilling fluids and drilling waste management should pick up in tandem with the rejuvenation in global E&P spending - underpinned by rising oil prices and an improved credit market. To highlight our point, global rig counts have
shown improvements.
• Expectation for Scomi is muted given its poor track record in earnings deliverance, but it could surprise on the upside especially with the stronger macro outlook. But group needs to start performing to deserve higher valuations.
• Another re-rating catalyst would be forthcoming for Scomi, if it were successful in securing new monorail jobs. The group is currently bidding for monorail jobs worth circa
US$11bil - at an average of US$35mil-US$40mil/km - including jobs in Brazil, India, Saudi Arabia and Nigeria.
• First phase awards for monorail work in Brazil (24km) – valued at US$2bil - should be announced within the next few weeks. We remain sceptical that Scomi would able to clinch this job with heavyweights like Bombardier also shortlisted.
• But Scomi is confident of securing at least a few more monorail projects - such as in India. It has guided for equal contribution from its O&G and transport units in FY2011F. Given its presence in India, we think Scomi has a better chance of being awarded contracts for extensions jobs in Mumbai and possibly Bangalore (total 65km).
• There is also a possibility of Scomi being involved in the expansion to the KL monorail system and signalling works for the Putra and LRT systems - worth close to RM1bil.

General Corporation Bhd

2010-04-20T01:19:00.003+08:00

GCORP today broke the resistance 1.43 on increasing volume to close at 1.47. Next resistance would be 2.00. Buy on the pullback. Background which I actually don't care - GCORP was incorporated on 29 May 1969 under the name General Ceramic Sendirian Berhad. In January 1971, the Company was listed on the then Main Board of the Kuala Lumpur Stock Exchange in 1981.From incorporation in 1969 to 1981, GCORP was a manufacturer of ceramic wall tiles. In the 1980s, GCORP went through a diversification programme with the acquisition of property development, construction and motorcycle tyres manufacturing companies. In 1991, to complement its property development and construction businesses, GCORP acquired a quarry in Masai, Johore. The manufacturing of motorcycles tyres and tubes were however, discontinued in 2005 and currently these products are imported from the Asean countries for distribution in Malaysia under the Fung Keong brand. In 1990, GCORP acquired Low Keng Huat (Singapore) Limited (LKHS). LKHS was listed on the Main Board of the Singapore Stock Exchange in 1992 and is currently 52% owned by GCB. In LKHS, the GCB Group has ventured into property development, construction, hotel/restaurant ownership/management in Singapore, Australia and Vietnam. The principal businesses of the GCORP thus comprise investment holding, property development, property investment, construction, trading, quarry and hotels operating in Malaysia, Singapore, Australian and Vietnam.

Primus statement on EON CAPITAL

2010-04-19T01:34:00.001+08:00

Primus Pacific Partners (“Primus”) today issued the following statement in relation to its position as a long-term and fully committed shareholder of EON Capital Berhad (“EON Capital”). Primus also wants to express its appreciation to and voice its whole-hearted support for the management team and staff of EON Capital who have and will continue to lead the bank through a highly successful landmark transformation project over a challenging period. In addition, Primus expresses its belief that a great future lies ahead for the EON Capital franchise, as the carefully considered investments that have been made over the last two years are yielding very strong results.

“We are a proud and fully committed shareholder of EON Capital. We have been honored to work shoulder to shoulder with the respected management team of EON Capital, who over the last two years have led one of the most successful transformations in the Malaysian banking industry, resulting in:
• Growing, high-quality earnings - 155% increase in net profits during 2009
• A clean and well capitalized balance sheet
• Capital strength to grow lending business and provide value- added products and services

EON Capital is today among the most innovative banks in Malaysia with a strong brand and extensive branch distribution network. The management team is supported by the 6,000 highly motivated and well-trained professionals.

While EON Capital has laid a strong foundation for the future, as experienced international investors in the financial services industry, we understand the drive towards consolidation. It is in the long-term interest of the Malaysian banking industry to build and develop larger and stronger domestic banks. We support smart combinations of complementary organizations that result in a balanced franchise that provides ongoing long term benefits to all stakeholders. If such a partnership opportunity presents itself, tremendous value can be unlocked by a focus on growing the business, not cutting costs, by creating market leading positions, and continuing to leverage on the experience, strength and resources of shareholders, management teams and staff of both organizations. As experienced international investors, we strongly believe that we can contribute and play an important ongoing active role in such a process.

As far back as our approval to commence negotiations on the acquisition of our shareholding in EON Capital in July 2007, we indicated our long-term commitment to the Malaysian banking industry and our desire to make a valuable contribution to EON Capital and its businesses. Today, we remain as committed to EON Capital as we were three years ago. We have always stood ready to provide the necessary resources and technical expertise to EON Capital in whatever form is required and have always indicated our financial strength and capabilities in this regard to all stakeholders of EON Capital.

We are long-term investors, seeking to create long-term value for all stakeholders through improvements in operations, corporate governance and long-term financial performance. We are shareholders in highly successful financial services organizations across Asia, including New China Life Insurance Co. Ltd., the fourth largest life insurance company in the People’s Republic of China, and we have continued to contribute capital and resources to our investment companies throughout the challenging conditions of the global financial crisis over the past two years. Primus has not sold and is not planning to sell any of its shareholdings in any of its investment companies, as we believe all of our companies are well positioned to take advantage of the long-term economic growth prospects in the Asia Pacific region.

We believe this is especially true for EON Capital, given the strength of the Malaysian economic recovery, the health of the financial services industry and the strong platform that we have created, which, together with its strong capital base, provides excellent opportunities to continue to grow our business.

We are privileged to be supported by deep-pocketed investors, some of whom rank among the most prominent and reputable institutions in the world, including the Qatar Investment Authority, the largest and highest level investment company in Qatar; the Kuwait Investment Authority, the largest and most prestigious investment company in Kuwait; and the Tsai Family, the controlling shareholders of Fubon Financial, one of the largest financial services conglomerates in Asia.

Primus is on track with its long-term objective of building a global financial services holding company, with investments around the globe in leading banking, insurance, brokerage, advisory and wealth management businesses. The global financial services holding company will make long-term investments and have unparalleled capital strength.

Primus Financial Holdings' recent agreement to acquire AIG’s life insurance business in Taiwan for US$2.15 billion in October 2009 is a demonstration of the height and depth of Primus’ goal. The agreement involved the acquisition of one of the largest life insurance companies in Taiwan with assets exceeding US$46 billion and close to 8 million customers. In April 2010, Primus Financial Holdings also announced an agreement to acquire Chapdelaine & Co., a leading US-based brokerage business, which will serve as a springboard for global growth aspirations. Similarly strategic investments are expected to be announced in the near future.

As we continue to broaden our family of investment companies, our commitment to EON Capital remains strong. We look forward to continue our full support of EON Capital, its management team and its employees.”

About Primus Pacific Partners:
Primus Pacific Partners is the largest principal investment firm in the Asia-Pacific region with a singular focus on making investments into financial services companies. Primus Pacific is based in Hong Kong and focuses primarily on Greater China (the People’s Republic of China, Hong Kong, Taiwan), Malaysia and Thailand. Primus Pacific, the first of its kind with such particular industry and geographic focus, is a highly experienced active investor with a long-term commitment to helping build and expand market leading financial services franchises.

Guocoland testing resistance 1.15

2010-04-13T01:51:00.002+08:00

Click to view the chart. Guocoland, dunno what company is it. Must be properties because it got the word "land" there and Guoco must be Hong Leong sort of thing.
Anyway, seems like going to the 1.15 resistance level. If breached, next resistance level would be 1.50. However the trading volume is not so consistence, may be it just a fake pushed up - dead cat, die lor.

Maybank will lead the Correction?

2010-03-14T16:08:00.002+08:00

The underlying strength in the local equity market appears sustainable but its overbought condition could lead to technical correction this week led by core banking stocks. Maybank could top the correction list as rumours about the simultaneous resignations of three senior executives may fuel speculations about lack of cohesion and direction at the top level. Other banking stocks and recent outperformers like glove stocks may undergo similar correction due to their overbought conditions.

KYM to test 1.08 resistance

2010-03-08T23:42:00.002+08:00

Chap Ayam indicator highlight KYM Holdings Bhd today. The stock touched yearly high at 1.05 on 12 Feb before corrected to 85 sen. Now it bounced back on increased volume that i believed potentially testing 1.08 resistance soon. (click on the image to get better picture) If that level breach, the new resistance would be 1.50. Other than KYM, the chap ayam indicator also flashed - Latitude Tree Holdings Bhd that potentially testing the 2.63 resistance level.

New Econ Model launch on 30 March

2010-03-08T22:33:00.005+08:00

Called and talked to Prof Norma from Economic Council this evening - she denied Malaysian Insider report saying "The Najib administration has decided to incorporate the proposed New Economic Model (NEM) into the 10th Malaysia Plan (10MP) in June, as fine-tuning and tweaks will go beyond its initial end-March launch."

She said - "That not true the NEM first draft on track to be launched during INVESTMALAYSIA 2010 end of March by PM. But the details on the implementation will be announced in Jun."

More Upside for FBM KLCI in the Weeks Ahead

2010-03-08T00:29:00.002+08:00

The Bursa Malaysia market extended gains a fourth week with banking stocks leading the rise after Bank Negara raised interest rates last Thursday, fueling optimism the domestic economy is on track for a stronger-than-anticipated recovery.

Week-on-week, the blue chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) climbed 29 points or 2.28% to 1,299.78, with CIMB (+70sen), Maybank (+43sen), Genting Bhd (+34sen) and Axiata (+14sen) representing more than two-thirds of the index’s rise.

Daily average traded volume and value improved further to 884.7mn shares worth RM1.53bn, the highest in five weeks, compared with the 695.6mn shares and RM1.25bn average the previous week.

The rise in banking stocks is hardly surprising as it has been highlighted in last week column that any increase in OPR will benefit the banks as almost all of them have greater exposure in the floating-rate loans except AMMB. Previous week’s announcement on stronger than expected GDP and last Thursday’s announcement on rate increase lifted market optimism about the economy and banks being the proxy to it benefitted.

BNM’s decision to normalize rates could be timely considering that the broader economy has started to recover and cost pressures could be creeping in.

Malaysia’s trade data that was released last Friday echoed the same sentiment as exports surged by the most in more than 11 years in January as manufacturers shipped more goods to China, which more than doubled from year ago to RM7.1bn.

To recap, overseas shipments rose 37% yoy to RM52.5bn after gaining 18.7% in December, higher than Bloomberg estimate of 14 economists for 31.3% increase. E&E sales, which represent 41% of total exports, surged 55.6% compared with 33.3% the previous month.

The exports numbers imply that companies with high exposure to China will continue to progress as demand expands with rise in affluent middle-income population.
The growth in E&E sector will benefit exporters as demand in the consumer electronics and communication sector continues to grow higher than the expected growth rate in the broader economy. China will be the growth driver with its consumer electronics and wireless semiconductor segments expected to grow by 16.3% and 24.9% in 2010.

Unisem and MPI have plants in China that are running at full capacity.

They have indicated about the strong turnaround in demand and their willingness to even double up this year’s capex to meet the growing demand, especially from China. Consolidation of older packages, emphasis on growing new devices like Flip-chip Bonding and Wafer-Level Chip Scale Packaging and migration towards copper wire bonding on some of the packages produced in China will be earnings enhancing for Unisem.

While MPI will continue to reap the benefit from a growing demand from its Micro Leadless Packages that earn superior margin, the staring of its new strip to strip plating and etching lines in March and May this year will add to production efficiency and sales growth.

The Cabinet could make a decision about the increase in gas price and electricity tariff in mid-March that could have wider impact on prices of good and services. As the two-tiered fuel pricing mechanism has been delayed, a slight hike in fuel prices will have similar impact on inflation too.

Nonetheless, as the inflationary pressures are still low (January CPI at 1.3%) the subsequent increase in OPR for the rest of the year could be capped at 50 basis points to accommodate economic growth.

Considering that the Government has raised electricity tariffs by 11.4% and 24% in June 2006 and July 2008 respectively after raising the gas tariffs, a double digit increase cannot be discounted. If the current gas tariff of RM10.70 per million British Thermal Unit (mmbtu) is floated at international market rate of RM16/mmbtu, the effective electricity tariff has the potential to rise by 10%.

The commercial and industrial users could pay double the amount of consumers. e.g 12% vs. 6%. The impact will be “cashflow neutral” on Tenaga unless it gets the base tariff hike that it wanted so that the return on its regulated asset base value equals to its weighted average cost of capital.

A hike in gas tariff hikes will affect industrial players like glove makers and Petronas Gas but some of them have the ability to pass the increase to customers.

Technical Outlook
New spot month March KLCI futures contract traded on Bursa Malaysia Derivatives Berhad settled at 1,303, rising 27 points, or 2.1% last week but premium to the cash index decreased to 3.22 points, compared with the 5.22-point premium the previous Friday.

Stocks began trading last week on a bullish note on Monday, following positive external leads arising from the strong overnight US market due to robust fourth-quarter GDP numbers and stronger-than-expected earnings from CIMB and Axiata, which led gains and lifted the KLCI to close 12.62 points up at 1,283.4.

However, the absence of strong follow-through buying momentum on the broader market forced lower liners to extend profit-taking consolidation for the most part, with market breadth staying negative for the first four trading days last week.

Nevertheless, banking stocks led by Maybank, CIMB and Public Bank staged breakout rallies on Friday, after Bank Negara’s decision to raise the OPR by a quarter point to 2.25% improved the outlook for economic recovery.

The KLCI rose from opening low of 1,276.52 last Monday to eventually peak at high of 1,300.74 by late Friday session, expanding the weekly trading range to 24.22 points, compared with the 17.15-point range the previous week. The FBM-EMAS Index rose 177.08 points or 2.1% last week to close at 8,737.28, while the FBM-Small Cap Index climbed 140.01 points, or 1.32% to 10,777.47.

While the daily slow stochastics indicator for the KLCI is easing from the highly overbought zone, the weekly indicator has hooked up and sparked a buy signal. The 14-day Relative Strength Index (RSI) indicator has improved further to a more bullish reading of 68.57, while the 14-week RSI climbed higher to 66.89 as of last Friday.

The daily Moving Average Convergence Divergence (MACD) trend indicator expanded higher to sustain a bullish trending signal, while the weekly MACD signal line has hooked up for the first instance since triggering a sell in November 2009. As for the 14-day Directional Movement Index (DMI) trend indicator, the +DI and –DI lines expanded away from each other after crossing for a buy the previous week, while the ADX line is turning up for an early trending signal.

More bullish technical indications on the KLCI, highlighted by a weekly stochastics buy signal and hook up on the weekly MACD for the first time since November last year, support a bullish breakout above the current pivot high of 1,308.52 seen on 21 January.

Nonetheless, a strong follow-through buying momentum in excess of one billion shares daily will be critical to sustain the breakout to higher levels. The rally on Wall Street last Friday, triggered by lower-than-expected job losses last month which reinforced the outlook for a stronger economic recovery and lifted the benchmark Dow Jones Industrial Average by 122 points or 1.2% to 10,566, should spillover to help the local market extend gains early this week.

A successful breakout above the 21 January pivot high of 1,308.52 will see subsequent higher resistance levels at 1,320 and 1,340. The immediate upside target is at 1,354, representing the 76.4% Fibonacci Retracement (FR) of the tumble from 1,525 to 801, where we expect more significant profit-taking and selling to surface.

Immediate support is revised upwards to 1,288, the 76.4%FR of the sell-down from the 21 January high of 1,308 to the 9 February pivot low of 1,224. A stronger support platform will be at 1,276, the 61.8%FR level and matching the important 50-day moving average which is currently at 1,275.

Chart-wise, anticipate banking stocks AFG, Maybank, Public Bank and RHB Capital to continue attracting buyers on outlook for stronger economic growth, while Genting Bhd and Genting Malaysia should extend their technical rebound gains.

Rubber glove makers Adventa, Latexx and Supermax are attractive to bargain on price weakness, while other lower liners are set to rebound from consolidation once robust buying momentum returns.

What BNM's normalisation of policy means

2010-03-05T01:18:00.000+08:00

Interesting report by Rupa... thanks sis.

WHEN Bank Negara Malaysia said it will move to normalise interest rates, it means the central bank will bring rates to the prevailing economic conditions.

Given the strengthening economy, that could only mean it will raise the key overnight policy rate (OPR) which consequently determines borrowing costs.

But economists say that any move by Bank Negara to normalise interest rates should not mean that business activities would slow.

Although this could mean raising rates from the current two per cent, it does not mean borrowing costs would rise as central bank governor Tan Sri Dr Zeti Akhtar Aziz stressed the policy thrust is still to remain accommodative to support growth.
RHB Research economist Peck Boon Soon explained the need for normalisation which means the process of rolling back of programmes or policies) without affecting economic activities.

"As confidence returns and the economy turns around to record positive growth, you need to roll back what you have implemented earlier gradually to prevent the extremely loose policy from creating unnecessary inflationary pressure," he said.

The extremely low interest rates imply low returns may lead to speculative activities and build up asset bubble or so- called financial imbalances, he added.

He said during the previous crisis, the three-month interbank rate, which was the benchmark guide for interest rates, dropped to low levels.

In 2009, the 3-month interbank rate was at 2.12 per cent (3.48 per cent in 2008) when the economy contracted by 1.7 per cent. This showed that Malaysia's interest rates have been cut to an extremely low level.

"So when you bring back your interest rates to a more neutral level (which will likely be around 3.0 per cent to 3.5 per cent for the 3-month interbank rate), it is considered as normalisation and not tightening per se, as it would not have significant impact on consumer spending and business activities," he said.

He pointed out that normalisation of policy has already started in the US as well when it gradually scaled back its emergency lending programmes to help various financial markets.

It was announced in the US that quantitative easing would stop by end-March and it raised the discount rate by 25 basis points recently to discourage banks from borrowing emergency funds from the Federal Reserve given that the financial markets have improved.

Another analyst explained that in the case of the benign inflation situation in Malaysia, rate hikes will not be looked upon as a tightening measure but an upward adjustment to address the financial imbalances.

"The imbalances refer to higher household leverage (excessively low rates encourage people to borrow more than they should to finance purchases), and to prevent such condition from escalating to undesirable levels," she said.

Bank Negara Ups OPR By 25 BPs

2010-03-04T18:05:00.001+08:00

Bank Negara said:
GDP Growth Will Strengthen Further
Monetary Policy Remains Accomodative
Inflation To Remain Moderate
Consumer Prices Will Rise Gradually In 2010
Rate Hike To Curb Financial Imbalances

So i think BLR also will increase 25 basis points to about 5.78 percent from average 5.53 percent currently.

Malaysia Abandons Fuel Subsidy Restructure Plan

2010-03-04T15:17:00.000+08:00

From KP Lee.
Malaysia decides not to proceed with fuel subsidy restructuring plan due to "negative response from the public," says Domestic Trade Minister Ismail Sabri Yaakob. Current subsidy of 30 sen/liter for gasoline maintained, no plans to "fully float" gasoline prices without government subsidy, no immediate plans to raise gasoline prices, he says. Government had initially intended to implement new plan on May 1 involving complex 2-tier fuel subsidy system, to try to lower effective contribution from state. Action Economics director David Cohen says more stable oil prices, better economic outlook "has meant that the government can afford to be more patient... especially for a politically-difficult decision." Cohen says with Malaysia's growth staying above forecast, fiscal deficit not as big an issue as for some other countries, "there is less urgency". Still, adds, a long-term solution has to be found sooner or later. Sabri says state spent MYR3.4 billion on gasoline subsidies, MYR1.9 billion on diesel subsidies in 2009; studying best mechanism to eventually adopt.

TA Research Stock Pick

2010-03-01T12:23:00.001+08:00

Maxis Bhd
Target Price : RM5.80 (Hold)
Maxis Berhad announced its FY09 results that came in within consensuses and our estimates reporting net profit of RM2.23bn. Cumulatively, net profit fell by 7% due to onetime costs of RM120mn relating to i)discount for shares issued to retail investors in relation to the IPO of RM53mn, ii)IPO listing expenses of RM50mn, iii)higher finance costs of RM77mn. Revenue grew by 2% thanks to higher mobile subscription base by 9%. EBITDA margin remained stable as guided at 50.4%.

On a QoQ basis, net profit fell by 18% mainly due to the onetime costs mentioned above. Revenue reported an increase by 3% mainly driven by 5% growth in total subscription. Its wireless broadband recorded a 40% increase in subscriptions to 264k. EBITDA margin fell slightly by 0.4p.p. mainly due to higher roaming expenses such as commission on sale of top-up ticket and related service tax coupled with higher sales and marketing expenses in line with its year-end promotional activities and festive seasons.

We think growth will be driven by broadband services. However, we expect Maxis’s mobile market share to be reducing given the current trends. We also estimate ARPU to continue to decline given the Malaysia’s operator’s competitive pricing. Thus, we expect EBITDA margin to be affected as mobile operators boost-up its expenses on network modernization and improvements to retain subscribers.

Maintain our target price on Maxis at RM5.80 based on a 17x FY10 PER. Due to limited capital upside, downgrade to Hold from Buy previously.

Genting Bhd
Target Price : RM9.37 (Buy)
Genting Bhd reported a core net profit of RM1.10bn, which came in within our, but above consensus estimates, accounting for 100% and 122% of full year forecasts respectively. On a YoY basis, power division was the best performer, with a 88% increase in PBT over FY08, mainly due to lower coal prices in its Kuala Langat and Meizhou Wan plants. Oil & Gas segment was the worst hit, recording PBT of only RM4.6mn from RM73.5mn previously, due to lower average oil prices during the year. Plantations division recorded a 38% decline in PBT, due mainly to lower palm product prices and lower FFB production.

No changes to forecasts. We are expecting plantations division to record a better year in FY10, buoyed by higher CPO prices. We have imputed a 10% YoY increase in plantations PBT, with an average CPO price assumption of RM2300 per tonne. L&H division is also expected to turnaround from showing a 10% decline in FY09, mainly due to increased contribution from RWS, as well as continued resilience in RWG’s business. We maintain Genting as Buy with target price of RM9.37. Key risk to our call would be 1) lower-than-expected visitors to RWS, 2) weakness from UK operations and, 3) sudden spike in H1N1 cases to affect tourist arrivals to Singapore.

Genting Malaysia Bhd
Target Price : RM2.95 (Hold)
Genting Malaysia reported its FY09 results, which came within ours, but above consensus estimates, accounting for 100% and 107% respectively. On a YoY basis, revenue was marginally up by 2%, thanks to higher business volume across the board, although this was partly mitigated by lower luck factor in the VIP segment. Visitor arrivals are up 4% in the final quarter, while overall FY09 visitation was 2% higher YoY. We are expecting a slight drop in arrivals in FY10, to the tune of 5% reduction, as the novelty factor of the IRs draws visitors to Singapore. Hotel segment did remarkably well, with ARR increasing from RM75 from RM78 previously. Occupancy rates also improved, up to 96% from 92%. This may also be due to the additional 3% in number of rooms available for rent in FY09. There has been no ‘discernable cannibalization’ in sales at Resorts World Genting since RWS’s opening, according to management.
They also do not have plans to adjust the junket rate. There has been a 10% growth in World Card memberships, and the count is at 3mn members so far. We take this as a very encouraging sign, as the database is crucial to the data-mining info of customers, which can be used to improve customer service.

No change to forecasts

Maintain target price at RM2.95, based on DCF(WACC=11.3%, g=1%). Genting Malaysia is upgraded to Hold, as it offers a capital upside of 11.26%, at current price levels.

KNM group Berhad
Target Price : RM0.90 (Hold)
KNM Group’s FY09 net profit plunged 49.2% to RM170.7mn. It came lower than ours and consensus expectations accounting for 69.4% and 59.2% of profit forecast respectively as it booked in some one-off items in the 4QFY09. In the final quarter, it revalued one of its properties and provide for foreseeable losses and higher operating costs for some of its operations. KNM revalued lower its Canadian asset by RM15mn to RM20mn and took into account another RM35mn to to RM50mn that need to be recovered from customers for raw material costs incurred in Canadian operation, potential losses at Brazil operation (due to inherited contracts) and cost overrun at Indonesia (underestimated cost). In total the amount ranged from RM50mn to RM70mn. Excluding the above items, FY09 profits would have fall within our expectations of RM246mn but still far away from the management’s guidance of 10% to 15% yoy contraction or RM285mn to RM302mn. Profit forecasts for FY10 and FY11 are maintained.

We have lowered our 15% premium to 8% in valuing the stock to be in-line with the 90 sen offer made by Ir.Lee as investors do not have the luxury of time to ride on strong earnings growth next year in view of the impending take over of the company’s business and undertakings. As such our Buy call has been downgraded to a Hold.

Perisai Petroleum Teknologi Bhd
Target Price : RM0.575 (Buy)
For FY09, the reported net profit rose 16.1% YoY to of RM33mn with the contribution from its Derrick Lay Barge (Enterprise 3) and portable SAT. EBITDA margin rose almost 33 p.p. to 71.1% due to the nature of the above bareboat charter agreements where customers pay for everything except for insurance, interest expense and maintenance charges. The results are below our expectation. Its two aged vessels, Allied Shield and ProShield, have been a drag on FY09 earnings as their average utilization for the year was only at 10%. Losses from these two vessels alone were around RM10mn.

We have cut FY10 and FY11 profit forecast by 26.2% and 26.5% to RM34.3mn and RM38.8mn respectively. Maintain Perisai as a Buy based on a target price of RM0.575after imputing a 10% discount to our CY10 target PER of 12x.

Petra Energy Berhad
Target Price : RM2.18 (Buyd)
Petra Energy’s FY09 net profit contracted 64% to RM15.9mn due to vessel delays, late delivery charges, dry docking expenses, provision for doubtful debts and charges related to acquisition of three vessels from Perdana Venus Limited. The result is below ours and consensus expectations. In 4QFY09 it plunged into a net loss of RM3mn due to a RM4.9mn late delivery charges for boiler business, a RM2.2mn provision for doubtful debts for the design and fabrication business, RM4.8mn mobilization charges for the 3 new vessels from Petra Perdana and RM1mn for dry docking expenses. FY10 and FY11 profit forecast was cut by 7.3% and 1.8%.

With the downward adjustment in earnings, target price is lowered to RM2.18 based on a 20% discount to FY10 PER of 12x. Maintain Buy.

Petra Perdana Berhad
Target Price : RM1.47 (Hold)
Petra Perdana’s FY09 reported net profit plunged 66.6% to RM29.3mn due to various reasons. Adjusting for the RM12.7mn gain from the sales of subsidiary and RM7.2mn forex losses, net profit came 73.1% lower at RM16.9mn. The adjusted net profit was grossly below ours and consensus as it only met 51% and 47.7% of FY09 profit forecasts respectively. FY10 profit forecast was cut by 14.9% to RM45.5mn after assuming a pickup in activities in 2H10 only and incorporating RM6.5mn profit contribution from Energy in 1HFY10. Our previous forecast excluded profits from Energy totally for FY10.

We have cut our target price for Petra Perdana to RM1.47 from RM1.72 based on a 20% discount to target sector PER of 12x. The discount is to account for execution risk and continuous earnings disappointments. The stock is downgraded to a Hold from Buy.

Scomi Group Berhad
Target Price : RM0.575 (Buy)
Scomi Group’s reported FY09 net profit plunged 91.5% to RM9.5mn due to associate Scomi Marine’s impairment loss on goodwill of RM158.6mn and provision for insurance claims and doubtful debts of RM13.7mn in the final quarter. This led to a RM35.4mn losses from associates in the 4QFY09 and full year contribution contracted by 135.3% to a loss of RM9.9mn. Excluding the one-off impact, its FY09 net profit of RM56.9mn still underperformed expectations at 73.5% and 79% our and consensus forecasts respectively.

We are cutting our profit forecast by 14.5% to RM89.9mn as OFS is expected to continue eroding profits until a firmer recovery is seen in the upstream sector in 2H10. Scomi Engineering and Scomi Marine’s net profit forecasts for FY10 stood at RM75.6mnn and RM62.4mn respectively. Maintain Buy with a lower target price of RM0.49 after attaching a 20% discount to our CY10 target PER of 12x (on diluted EPS).

RHB Capital Bhd
Target Price : RM7.10 (Buy)
FY09 results came within ours’ but sharply above consensus expectations. Net profit rose 14.6% YoY to RM1.2bn – accounting for 104% and 117% of ours’ and consensus full year estimates of RM1.15bn and RM1.03bn. Despite the 4% and 16% jump in operating expenses and allowances for loan losses, FY09 net profit rose 15% YoY anchored by higher net interest income, income from Islamic Banking operations, writeback of impairment losses amounting to RM18mn (vs. loss of 10mn in FY08) and lower taxes (FY09: 21.4%, FY08: 26%). On a QoQ basis however, net profit sank 15% QoQ underpinned by higher SPs and a 23% QoQ surge in operating expenses.

Net NPL ratio further improved to 2.21% (FY08: 2.24%) – albeit still higher than the industry’s 1.8%. Elsewhere,
RHB Bank’s capital position stood healthy with CCR and RWCR of 10.4% and 13.8% respectively as at end-Dec 2009. Elsewhere, a dividend of 17.45% has been proposed. Combined with the 5% paid earlier, total dividends for FY09 stands at 22.45% (FY08: 19.6%) - representing a payout of 30%.

We tweak our FY10-11 estimates slightly to incorporate the FY09 results. We now forecast RHB Cap’s FY10/11 net profit to rise by 10.2% and 15.5% YoY to RM1,323.9mn and RM1,528.6mn from RM1,302.5 and RM1,467.2mn previously. We forecast stronger net profit growth of 17.2% to RM1,791.3mn for FY12. We also raise DPS assumptions to 24/28/35 sen for FY10/11/12 in line with management’s commitment to maintain its dividend payout ratio of at least 30% per annum.

We are raising TP to RM7.10 (based on the Gordon Growth Model, assuming cost of equity of 10.0%, ROE of 14.3% and sustainable long-term growth of 3% or an implied P/BV of 1.61x) - from RM6.60 on the back of the earnings revision. BUY maintained.

United Overseas Bank Ltd
Target Price : S$20.70 (Hold)

UOB chalked up FY09 net profit of S$1,902mn, accounting for 108% and 104% of ours’ and consensus full year forecast of S$1,762mn and S$1,831mn respectively. 4Q09 results were sequentially higher on lower impairment charges but underlying performance remained weak. On a YoY basis however, FY09 results were dampened by high amortisation and impairment charges. Credit charge stood at 59 bps, compared to 33 bps in the last FY.

Loans momentum continued to accelerate in 4Q09, rising by a marginal 0.9% QoQ (3Q09: +0.7% QoQ, FY09: -0.6% YoY). Elsewhere, total NPL ratio improved to 2.2% in 4Q09 (3Q09: 2.4%, FY08: 2%) while allowance coverage rose remained little changed at 105% from 106% in the previous quarter. Current Tier 1 and RWCR rose to 14% and 19% (compared to 10.9% and 15.3% in FY08) due primarily to lower risk-weighted assets and higher retained earnings. UOB declared final DPS of 40 cents/share. In addition an interim DPS of 20 cents, total DPS for FY09 stands at 60 cents (unchanged from FY08). This represents a payout ratio of 48%.

We are raising our FY10-11 projections on the back of the better-than-expected FY09 numbers. We expect the economic recovery to drive UOB’s earnings in FY10/11/12, whereby we forecast net profit to grow by some 24/6/14% YoY to S$2.35/2.49/2.85b from S$1.91bn and S$2.12bn for earlier FY10 and FY11 estimates.

Rolling forward our ROE and BV/share assumptions to FY10, we derive a new TP of S$20.70 (based on the Gordon Growth Model, assuming cost of equity of 8.4%, ROE of 13.2% and sustainable long-term growth of 3.0% or implied PBV of 1.88x). Hold on potential capital gains of some 11.4% from the stock’s last closing price of S$18.58.

Nestle (M) Bhd
Target Price : RM35.20 (Hold)
Nestlé’s FY09 results came in within ours and consensus’ estimates, reporting full year net profit of RM351.8mn. Despite a 3% drop in sales, net profit increased by 3% mainly thanks to a lower tax rate driven by Halal tax incentives. The lower sales is attributed by i)lower selling prices of MILO and milk products earlier last year. The fall in key raw material costs too affected export selling prices thus the receding exports value. However, exports volumes grew by 11%.
On a QoQ basis, net profit grew by 8% thanks to lower tax rate by >10p.p. To add, increased revenue is reflected by the increase in marketing and promotional activities done in the 4Q.
Margins remain intact. Management announced a final dividend of 100sen per share bringing to a total of 150sen per share.
Maintain our DDM-based target price for Nestle at RM35.20, with a rate of return of 7.9%.

Asia File Corporation Bhd
Target Price : RM5.99 (Buy)
Asia File’s 9M10 results came in strong reporting cumulative net profit of RM46mn, outperforming our estimates by 10%.
Cumulatively, core net profit grew by 35% although sales declined by 16%. We believe the margin expansion came from higher sales of high margin products coupled with higher contribution from its associates.
On a QoQ basis, revenue rose by 15% to RM71mn. Net profit grew an explosive 60% driven by a lower tax rate by >10p.p. and improved margins of products. Management announced an interim dividend of 12sen per share.

We have adjusted our earnings estimates upwards by 19% and 13% for FY10-11 respectively.

Rolling over our valuations with our adjustments on earnings, we derive to a new target price of RM5.99 based on CY11 PER of 10x. Upgrade to Buy.

WCT Bhd
Target Price : RM3.04 (Buy)
WCT has provided a reasonable amount of provision for LAD for FY09 and this should safeguard FY10 earnings to be distorted by late completion. Putting this aside, we expect WCT construction margin to normalize to 6% from 7% in FY09 after making the provisions in FY09. WCT’s current order book stands at RM3.2bn (including some in house building jobs) this year and the management reiterate that the group targets to achieve RM2bn new jobs (50% local vs 50% overseas).

We raise our FY10-11 earnings higher by 8-23% to reflect the change in progress billing and upward adjustment of construction margins. Given the change in earnings, we raise our SOP-derived fair value to RM3.04/share. With a potential total return of more than 15%, we upgrade WCT to Buy from Hold

KSL Holdings Bhd
Target Price : RM1.59 (call)
Stripping off the one-off revaluation gain of RM44.3m, KSL’s FY09 net profit came in below our expectations and consensus estimate by 27-36% respectively. The variance was largely due to lower-than-expected progress billing and higher effective tax rate. The FY09 core net profit slipped 7% yoy to RM41m largely due to lower progress billings (revenue dropped 15% yoy). We attribute the decline in revenue to the delay in launches of new property in early FY09. On a quarterly basis, 4Q09 net profit dipped 96% due to lower revenue and higher effective tax rate
No change to our earnings projections. KSL’s fair value remained unchanged at RM1.59, based on unchanged PER of 8x CY10 EPS.

IJM Corporation Bhd
Target Price : RM4.62 (Sell)
IJM’s 9MFY10 net profit of RM221.5m accounted for 70% of our full-year forecasts. We consider this to be within expectations as we expect higher contribution from the property division in 4QFY10. Meanwhile, we also expect the plantation contribution to normalize in tandem with higher CPO price in 4QFY10.

We maintain our earnings projections. We maintain IJM’s SOP-derived target price to RM4.62/share.

Sino Hua-An International Bhd
Target Price : RM0.65 (Buy)
Huaan’s FY09 results came in below our expectations and consensus estimates. The variance was largely due to 1) lower production utilisation rate of 87% (vs our estimates of 89%); 2) higher-than-expected coking coal price at an average of Rmb1080/t (vs. our estimates of Rmb1020/t); and 3) a one off write-off of an old water treatment plant.

We downgrade our FY10-11 earnings estimates by 14-16% after revising our assumptions on coking coal price higher to Rmb1380-1449/t from Rmb1100-1157/t previously. Given the change in earnings, we downgrade Huaan’s fair value to RM0.65/share.

Kinsteel Bhd
Target Price : RM1.32 (Buy)
4Q09 net profit amounted to RM41m, turning around the full-year net profit to RM18.3m from RM22.9m loss a quarter ago. This came in above our expectation. Kinsteel’s cumulative net profit declined to RM18.3m from FY08’s adjusted net profit of >RM465m. This was largely due to: 1) decline in steel prices; and 2) production cut due to sluggish demand. However, Kinsteel has managed to turnaround since 3Q09, thanks to the recovery in export prices of billets.

No change to our FY10-11 earnings estimates. Maintain Kinsteel’s fair value at RM1.32/share.

YTL Power International Berhad
Target Price : RM2.65 (Buy)
YTL Power reported RM250.3mn net profit in 2Q 0, an improvement on both QoQ (+8.4%) and YoY (+21.7%). QoQ, contribution from PowerSeraya continue to improve with pretax profit of RM128.3mn compared with RM59.8mn in the preceding quarter. YTD, net profit rose 21.7% YoY to RM481.3mn, mainly due to consolidation of earnings from PowerSeraya. Malaysian power segment pretax profit was higher due to impact of windfall tax levy in the preceding period last year. Associate contribution too increased 46.6% to RM111.9mn, thanks to PT Jawa Power. PowerSeraya contributed RM188.2mn in pretax profit, but the impact was partially offset by a 7.8% decrease at Wessex Water and RM2.2mn pretax loss at the investment holding level (vs.57.8mn profit in 1H09). Declared second interim dividend of 3.75 sen (single tier) per share, similar to 2Q09.

FY10 estimate revised lower by 4.5% to impute the lower than expect income from Wessex Water and losses incurred at the investment holding level. Maintain YTL Power as Buy with RM2.65 revised target price. We continue to like the stock for its solid and diversified assets base, and potential earnings accretion, from economic recovery in the short term and successful execution of Wimax in the long term.

Kwantas Corporation Berhad
Target Price : RM2.00 (Hold)
Kwantas reported a net profit in 2Q10 after a few consecutive of losses, thanks to proactive provisioning in the previous quarters and normalising trading market condition. The group recorded a RM14.9mn net profit in 2Q10 compared with net loss of RM38.8mn and RM50.7mn in the preceding quarter and 2Q09, respectively. Turnover was flat YoY and increased by increased 6.1% QoQ mainly due to increased sales of oleochemical products. Average CPO selling price in 2Q10 was RM2,100 per tonne, lower than RM2,206 achieved in 2Q09 and RM2,138 in 1Q10. The situation at the China operation, which was the main culprit of losses incurred in the past few quarters appear to be normalising.

We are leaving earnings our earnings forecasts unchanged. We expect the group to post a RM36.3mn net profit in FY10 compared with a net loss of RM70.8mn in the preceding year.

We upgrade Kwantas to Hold with RM2.00 target price after partially removing risk premium imputed into beta in the DCF model (WACC = 9.6%, g = 4%). Our target translates into 8.1x FY11 EPS compare with 11x long term average PER. We think the discount is sufficient to justify any risk of earnings uncertainty.

Puncak Niaga Holdings Berhad
Target Price : RM3.00 (Hold)
4Q09 results were disappointing with a mere RM3.9mn net profit, a 91.6% contraction QoQ. The sharp contraction was due to seasonal decline in demand (high rainfall and holidays season), resulting in 7% drop in revenue. In addition, notes to the results also attributed the 10.8 p.p. contraction in EBIT margin to higher operating cost without elaborating on the details. Interest expense also increased sharply due to drawdown of new borrowings to finance operation. Consequently, FY09 net profit only amounted to RM142.6mn, significantly below ours and consensus expectations. Revenue increased by 33.2% YoY to RM1.9bn, which includes RM434mn in estimated compensation arising from the delay in water tariff revision, for the period of 1Q – 4Q of CY2009.

We trimmed FY10 and FY11 earnings forecasts by 14% - 15% to take into account the lower than expected operating margin in FY09.

Target price revised lower to RM3.00 in line with the downgrade in earnings forecasts. We continue to recommend Puncak as Hold given the potential upside from a value unlocking asset sale exercise.

Sime Darby Berhad
Target Price :RM9.06 (Sell)
Sime Darby finally revealed that there was cost overrun in its Maersk Oil Qatar (MOQ) project in Qatar. The group booked RM210mn provision in relation to the project in 2Q10, mainly to account impact of higher construction, raw material and logistic costs. As a result, 2Q10 net profit fell 37.5% to RM428.2mn. Stripping out forex effect, core net profit was 430.4mn, a 35.5% contraction QoQ. 1H10 core net profit declined by 11.8% to RM1.1bn , accounting for 40% of ours as well as consensus estimates, mainly due to the provision highlighted above and lower profits from the industrial segment. The latter reported a 15.1% drop in 1H10 operating profit due to slower off-take for new equipment and power system. Declared 7 sen single tier dividends (5 sen in 1Q09).

FY10 and FY11 earnings forecasts downgraded by 5.2% and 4.9% respectively. We have imputed the net impact of, 1) MOQ project cost overrun, lower margins for property, 3) weaker sales of industrial equipment and 4) higher than expected CPO price (RM2,382 vs. RM2,250 previously).

We rolled forward valuation base year to FY11 and upgrade TP to RM9.06. However, Sime Darby remains as Sell. Despite the recent correction, valuations are not compelling to trigger a review of our call on the stock. Key risk to our call is, 1) CPO price underperforming our expectations, 2) sharp correction in crude oil price, and 3) extended El-Nino weather condition.

Boustead Holdings Berhad
Target Price : RM4.10 (Buy)
Boustead announced a sharply improved 4Q10 set of results. Net profit grew by 71.4% QoQ to RM147.7mn on the back of 4.4% increase in revenue, partly due to an undisclosed amount of fair value gain booked on revaluation of investment properties. We believe this gain could be in the region of RM30mn – RM35mn (RM08: RM37.2mn) based on the information available in the result notes. In addition, BHPetrol too recorded stockholding gain but again the amount was not disclosed in the notes.

Although one-off gains were the key reasons earnings outperformed, we highlight notable improvement is other business segments. The finance & investment segment recorded a sharp jump in operating profit to RM24.6mn (Figure 1), thanks to interest savings after the recently completed rights issue exercise and better performance from BH Insurance. The heavy industries’ operating profit, although was lower QoQ but was far better than the RM43.1mn loss recorded in 4Q09, due to escalation of cost and delay in work progress.

FY10 earnings forecasts reduced by 3.3% due mainly to lower earnings assumption from the heavy equipment segment but the impact on target price was negligible. Maintain Boustead as Buy with RM3.42 target price. We continue to see value in Boustead given its attractive valuations. The group clinching new contract to construct OPVs would be the key re-rating catalyst.

Indofood Agri Resources Ltd
Target Price : SG$2.60 (Buy)
IFAR’s 4Q09 reported earnings fell 9.1% to Rp287.7bn on the back of a 8.3% contraction in revenue. Core net profit declined by a larger 28.1% QoQ to Rp151.6bn. The results were grossly below our expectations partly due to bulk charge of Rp55bn in relation to trade promotion (discounts given to cooking oil distributors) and below than expected average CPO selling price. Consequently, FY09 results came in below our expectations, accounting for 89% only of our full year estimate. Reported net profit increased by 33.9% to Rp1.5tr but this was largely owing to Rp622.6bn gain arising from revaluation of biological assets and Rp304bn in forex translation gain. Adjusting for these items, core net profit was Rp919.5bn, a 37.6% decline YoY.

No change in earnings forecasts. We upgrade target price to 2.60 based on revised target PER of 17x (16x previously). The higher target PER is necessary to reflect the narrowing valuation gap between Singapore listed plantation stocks compared with Malaysian. Malaysian big-caps are currently trading at 18x PER on average. We continue to like IFAR as a proxy to CPO price and to a smaller extent, rubber and sugar as well. Maintain IFAR as Buy.

Air Asia Berhad
Target Price : RM2.10 (Buy)
AirAsia’s FY09 results came in below TA’s and consensus estimates.
Cumulatively, group core net profit dipped by 36.8% to RM357.2mn compared to FY08 (RM565.0mn). FY09 core net profit, excluding exceptional items amounted to RM191.9mn. (cumulative forex gain of RM123.6mn, disposal of assets gain of RM45.8mn and unwinding of derivatives gains of RM22.5mn). It booked a deferred tax charge of RM91.9mn in FY09. Excluding the effects of deferred tax, core net profit actually increased by more than 100% to RM449.1mn compared with FY08. The group’s topline grew by a healthy 11.5% YoY, led by higher passenger volume achieved (+20.7% YoY) and higher contribution from ancillary income (+76.8% YoY) as well as other operating income (+73.0% YoY). Load factor was sustainable at 75.0% while cost per available seat kilometer (ASK) declined 18.7% to 10.41sen.

FY10 earnings forecast revised upward by 4% mainly due to lower cost structure and higher yield assumption and new hedging position.

Our target price remains unchanged at RM2.10 based on target PER of 9x. Given the potential upside of 45.8% from the current share price level, we maintain our Buy call on AirAsia. Key risk factors to our call are: 1) slower-than-expected recovery in passenger movements, 2) threat of a severe global pandemic, and 3) spike in fuel prices.

Scan Associates Berhad
Target Price : RM0.08 (Sell)
SCAN posted larger than expected FY09 losses mainly due to higher operational expenses incurred for the maintenance project of one of its subsidiaries in 4QFY09. The cumulative net loss of RM3.9mn was above our expectations. However, it is still smaller than the RM11.5mn net loss recorded in FY08. The lower net loss was mainly attributable to the higher revenue (+91.3% YoY), coupled with higher gross profit margin recorded compared with FY08.

On a sequential basis, SCAN’s net loss for 4QFY09 ballooned to RM2.4mn from RM0.7mn despite a 67.2% surge in revenue. The decrease was mainly due to the reasons highlighted above. We trim down our FY10 earnings forecast. For FY10, we are now expecting a RM0.2mn net loss for F10 as we have factored in higher operating cost and lower gross margin for Scan. Besides, we also factored in higher finance cost due to higher debt position. We expect SCAN to turn profitable in FY11 and conservatively assumed return to profitability (RM0.8mn earnings) in FY11.

We revised downward our target price to RM0.8 after the earnings adjustment. The new target price is based on a lower 30% discount to the adjusted NTA/share of 10.9sen for FY10. Maintain our Sell recommendation on Scan.

Allianz Malaysia Bhd
Target Price : RM5.10 (Hold)
Allianz reported an encouraging set of 4Q FY09 results. FY09 net profit surged by 68.1% YoY to RM118.9mn (vs. RM70.7mn last year) – sharply above ours’ and consensus estimates of RM78mn and RM79.1mn respectively.
On a sequential basis, net profit almost tripled to RM60.2mn despite the 17% QoQ fall in operating revenue. Compared to FY08, PBT rose by 48.3% YoY, underpinned by stronger topline growth, better underwriting profit from general insurance and the transfer of surplus of RM12mn from the Life Fund to the Shareholders’ Fund.

The BOD is recommending an unchanged first and final dividend of 2.0 sen/share. We are keeping our FY10-11 projections unchanged pending an analyst briefing by the management later today. With that, we also keep our TP unchanged at RM5.10. HOLD maintained.

Company Update

MISC Berhad
Target Price : RM6.10 (Sell)
MISC held an Analysts’ Briefing last Thursday to discuss its 3QFY10 results and outlook. After the disclosure of more operating data and prospectus at the meeting, we chose to maintain our earnings forecast. We feel that although MISC’s earnings had hit the bottom, its outlook remains uncertain. This is underpinned by a mixed global economy outlook and expected massive new tonnage over the next 2 years, which likely to create a vicious oversupply cycle and lower freight rates, in our opinion.

LNG shipping is the main savior for MISC. Its YTD revenue and PBT has increased 7.6% and 36.1% YoY thanks to contribution from new deliveries coupled with lower operating cost and lower deprecation (by extending the lifespan of its assets). MISC’s liner business did not show any improvement in 3QFY10 although TEU rebounded 2% QoQ. It suffered YTD loss amounting to RM955.4mn on the back of a 38.9% drop in revenue. We suspect the culprits are higher bunker cost (+24% YTD) and depressed rates due to overcapacity. Although the group has completely exited from Asia-Europe trade effective Jan 2010, nonetheless, there are still some residual costs to be recognised in 1QCY10 mainly due to equipment’s shifting cost back to Asia region.

We maintain our target price of RM6.10 based on PER of 20x on CY10 EPS. The target PER includes a 20% premium to conglomerate shipping companies’ average PER of 16.6x. We think the premium is justifiable given the group’s leverage on the strengths and integration synergies with its parent company – Petronas.

TA RESEARCH

MIDF Stock Selection

2010-03-01T11:42:00.002+08:00

Sime Darby – 1HFY10 Results (Maintain NEUTRAL, Upgrade TP: RM8.70 from RM8.30)

Sime Darby registered a net earnings of RM1,112.8m in 1HFY10, which is equivalent to 48%, 39% and 45% of ours, consensus and Sime Darby’s full-year estimates respectively. Industrial division showed lower operating profit and Energy & Utilities bled red ink. However, the improved results from Plantation , Property, Motor, Healthcare and Other divisions partly mitigated the decline in 1HFY10 net earnings. The historical mean PER of Sime Darby is 17x, with a lower and an upper band of 10x and 24x respective. In view of the hitherto accommodative liquidity situation, we expect the PER rating of a key index stock such as Sime Darby to hover within the premium half of its PER band. At 66-percentile point, we arrived at a value of RM8.70 on FY11 earnings. We thereby maintain our NEUTRAL recommendation on the stock with a revised target price of RM8.70.

IJM Plantation – 9MFY10 Results (Upgrade to NEUTRAL from TRADING SELL, Maintain TP: RM2.30)

IJMP registered a net profit of RM63.7 million in 9MFY10, a decline of 44.4%yoy. The result is within expectation and represents 74% and 75% of ours and consensus FY10 forecasts respectively. Performance was impacted by lower average CPO selling price (9MFY10: RM2,205/MT; 9MFY09: RM2,874/MT) and lower year-to-date FFB (-1.9%yoy) output. However we expect IJMP to perform satisfactorily in the coming quarters owing to the current firmer undertone in CPO prices. Hence we upgrade our recommendation to NEUTRAL with a target price of RM2.30, pegged at 17x of FY11 earnings.

IJM Corp – 9MFY10 Results (Maintain BUY, Unchanged TP: RM5.45)

IJM 9MFY10 net profit of RM359.8m came in below our expectation. The net profit declined by 18%yoy despite an increase of 27%qoq. Forecast for FY11 and FY12 are maintained, backed by RM3.6b orderbook and positive exposure to the construction sector in India and potential local projects. We maintain our BUY recommendation with a target price of RM5.45 per share, based on sum-of-parts valuation. The stock represents a 23% upside from the current level.

Air Asia – 4QFY09 Results (Maintain NEUTRAL, Upgrade TP to RM1.47 from RM1.40)

AirAsia’s FY09 revenue is RM3,178.9m, within our expectations with a difference of only 0.2%, while it is above the consensus by 8.8%. AirAsia’s FY09 net profit of RM549.1m exceeded ours and consensus expectations by 20.9% and 10.5% respectively. We had overestimated their costs, especially the finance portion. We are assigning a PER of 10x based on the average PER of its peers. As the market already prices the stock close to our target price, we are maintaining our NEUTRAL recommendation, with a revised target price of RM1.47.

RHB Cap – 4QFY09 Results (Reaffirm BUY, Upgrade TP to RM6.90 from RM6.60)

4Q09 net profit of RM336.4m was higher by 0.5%qoq and 70.8%yoy. 12M09 net profit of RM1.2b was higher than 12M08 by 15%. Cumulative net profit for FY09 exceeded our expectation by 7.7% and that of consensus full year estimates by 16.6%. ROE for 12M09 was 14.5% higher than 12M08’s 14.1%. The improved profit performance was contributed mainly by stronger net interest income and Islamic banking income. We are reaffirming our BUY call on the stock with increased target price from RM6.60 to RM6.90 based on 12 times PER on FY10 EPS.

Nestle – 4QFY09 Results (Maintain NEUTRAL, Upgrade TP to RM35.30 from RM32.00)

Nestle’s FY09 net profit grew +3.2%yoy to RM351.8m, accounting for 100.9% of our full year estimates. Commendable results in 4QFY09 (+11.6%yoy or 8.1%qoq) are the key factor. Halal tax incentives and better sales mitigated lower EBIT margin on intensified marketing and additional office relocation expenses in 4QFY09. We revised upward our Target Price for Nestle to RM35.30 (from RM32.00), derived from perpetual DDM valuation with an estimated risk free rate of 4.5%. However, as upside for Nestle’s share price is only 4.1%, we maintain our NEUTRAL call.

Kulim – 4QFY09 Results (Maintain NEUTRAL, Upgrade TP to RM7.28 from RM7.00)

Kulim registered FY09 net earnings of RM142.1m or equivalent to 106% and 84% of ours and consensus estimates. The actual FY09 figure slightly exceeded our expectation (due to better than expected plantation performance in 4QFY09) but way short of consensus. The plantation division recorded lower operating profit due to the decline in CPO prices. Oleochemicals division reported a loss due to lower output prices. On the other hand, the foods & restaurants business remained profitable and expanded locally as well as abroad. The historical mean PER of Kulim is 7.7x, with a lower and an upper band of around 5x and 11x respectively. In view of the better growth prospects engendered by the recent acquisition, we expect the PER rating of Kulim to hover within the premium half of its PER band. At 75-percentile point, we arrived at a value of RM7.28 on FY10 earnings. We thereby maintain our Neutral recommendation on the stock with a revised target price of RM7.28.

Kinsteel – 4QFY09 Results (Reaffirm BUY, Unchanged TP: RM1.20)

4Q09 net profit of 41.1% was higher by 216.2% compared to 3Q09. 12M09 net profit of RM18.2m was 43.1% lower than 12M08. 2009 was impacted by lower average selling prices for steel products. 12M09 net profit exceeded our expectation of a loss of RM3.2m and was better than consensus estimates of a net profit of RM4.2m. We make no changes to our forecast for FY10. We reaffirm our buy call on the stock with an unchanged Target Price (TP) unchanged at RM1.20, pegged at 8 times FY10 EPS.

Century – 4QFY09 Results (Maintain BUY, Revised TP: RM2.25 from RM2.32)

Century Logistics’ performed better than expected. FY09 net profit of RM20.9m is 14.6% and 20.6% better than ours and consensus estimates respectively. The economic recovery continues to benefit Century as increased business activities from new and existing customers resulted in a higher revenue of RM210.9m for FY09, a 28.7% yoy increase. We maintain our BUY recommendation for Century as we expect the company to continue with its good performance in FY10 as the economic recovery continues. However, we revise our target price slightly RM2.25 (from RM2.32 previously) to better reflect the start of slower growth and the moderation of restocking activities.

Hock Seng Lee (HSL) – 4QFY09 Results (Maintain BUY, Upgrade TP to RM1.40 from RM1.34)

HSL FY09 net profit came in within our expectation. Overall, FY09 results were impressive as compared to the preceeding year. We raise our FY10 net profit forecast by 4% as HSL will benefit from increased infrastructure spending and the development of SCORE. The group remained in a net cash position. We reiterate our BUY call with an increase in target price of RM1.40 from RM1.34 based on 12x FY10 PER. The stock offers a 12-month potential return of 12% (including dividend yield of 1.7%).

YTL Power– 2QFY10 Results (Maintain BUY, Unchanged TP: RM2.45)

YTL Power announced its 2Q10 result which was below ours and market’s expectation. 1H10 earnings came in at RM481.3m, accounting for 43% of our full year estimate of RM1.13b. The shortcoming was due to a lower than expected gross margin. A slight revision (-7%) made to our forecasts with EPS for FY10 and FY11 at 15.4 sen and 17.8 sen respectively. • Maintain BUY on YTL Power with target price unchanged at RM2.45/share based on DCF with a 10% hurdle rate.

Ann Joo – 4Q09 Results (Maintain NEUTRAL, TP: RM2.80)

4Q09 net profit after tax of RM22.8m was lower by 50% than the preceding quarter. In 4Q09, average selling steel prices was lower

and margin fell to 10.8% (vs. 14.0% in 3Q09). 12M09 net profit after tax of RM31.6m was lower by 77.3% compared to 12M08 due to lower

average selling prices of steel products. 12M09 net profit after tax accounted for 70% of our forecast and 51% of consensus estimates. We are reaffirming our NEUTRAL call on the stock with an unchanged target price of RM2.80 based on 8 times PER on FY10 EPS.

Lion Industries – 2QFY10 Results (Upgrade to BUY from NEUTRAL, Revised TP: RM2.10 from RM1.70)

2Q10 net profit of RM83.4m was higher by 19.7% compared to 1Q10. 6M10 net profit of RM153.2m accounted for 73.5% of forecast and 64% of consensus full FY10 estimates. Lower revenue due to decline in selling prices for steel products was offset by stronger contribution from associate companies and lower finance cost. For 6M10, share of profit from associate companies was by higher by 154.1%yoy to RM86.5m (vs RM34m in 6M09). We are upgrading our call on the stock to BUY (from NEUTRAL) with target price increased from RM1.70 to RM2.10 based on 6 times PER on FY10 EPS.

KPJ – 4QFY09 Results (Upgrade to BUY from NEUTRAL, Revised TP: RM2.94 from RM2.71)

KPJ Healthcare (KPJ) continues to deliver commendable earnings growth of +25.1%yoy in 4QFY09, translating into 18.9%yoy growth to

RM101.9m for the full year. The FY09 core earnings were slightly above expectation, accounting for 107.5% of our estimated FY09 number. This was due to higher than expected revenue and lower minority interest dilution in 4QFY09. Upgraded to BUY with higher Target Price of RM2.94, derived from 14x revised EPS10 of 21 sen. We believe that our valuation on KPJ is fair, taking into account that regional peers are trading at PER and P/BV range of 11.4x-20.3x and 1.8x-4.2x respectively. Also, KPJ has a relatively higher prospective dividend yield of 4.4% in FY10 compared with peers’ average.

Public Packages Bhd

2010-03-01T00:00:00.003+08:00

My Chap Ayam indicator flashed short term 'buy' Public Packages. Technically has potential to test the 50 sen resistance level. I don't know what the company doing, who goreng the stock etc. This is just based on my hibrid technical indicator.

Weekly Expectation

2010-02-28T22:52:00.002+08:00

For this week, I think volume expansion crucial for further rally. Last week, improved regional sentiment on hopes the US will keep interest rates low for a prolonged period, better-than-expected earnings from a slew of blue chip companies and strong fourth quarter GDP numbers helped the local stock market sustain gains for a third straight week.

For the week, the blue chip benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) rose 13.11 points or 1.04% to 1,270.78, with Axiata (+6.28 points to the index), CIMB (+5.26), Maybank (+1.36) and Maxis (+1.08) leading gains. Daily average traded volume and value improved to 695.6mn shares worth RM1.25bn, compared with the 589mn shares and RM1.06bn average the previous week.

The 17-point rally post CNY or a 0.9% month-on-month expansion in the benchmark index was not as strong as expected to call a termination in the rally as the vibrant corporate earnings and higher than expected expansion in the domestic economy support a further extension in FBM KLCI. Any knee jerk reaction following a potential hike in Overnight Policy Rate subsequent to the GDP announcement should be viewed as a buying opportunity ahead of the unveiling of a new economic model for Malaysia this month, which could coincide with Invest Malaysia 2010 on 30th and 31st.

A rate hike is likely to lift the average lending rate of banks that has dived to historical lows due to competitive pressure, which is positive for banks. It is not expected to derail loan growth and take away attention into PDS or bond market as it is natural to expect corporations to issue PDS to take advantage of the low rates in the midst of rising pressure on yield curves, which has steepened.

Nonetheless, it is noteworthy to take note that the demand now is for the high-quality AAA-rated and government guaranteed debt papers. In fact, the spread between the high and low quality PDS has widened and not many players can qualify for a highly rated paper.

Thus, despite an increase in OPR, most companies will find it more feasible to ride on the cheaper bank loans. In fact, gross loans grew at a faster pace of 8.6% year-on-year (yoy) in January this year against 7.8% yoy in last December, and this year’s loan growth is expected to exceed 12% with business loans driving the growth and consumer loans remain resilient on the back drop of a recovering economy.

A rate hike will mostly benefit banks that have high exposure to floating-rate loans and lower proportion of short-tenured deposits like Alliance , EON Cap, Maybank and RHB Cap.

Nonetheless, an anticipation of a rise in average lending rate will have its fair share of negative repercussion on auto and property players with cost of borrowings going up. The same applies to companies with high debts. So watch out for price correction in some of those players like Proton that could provide an opportunity to buy on weakness, ahead of a potential JV with a foreign partner.

Immediate downside risk is an increase in car prices if it follows the footstep of some Japanese marques like Honda, which is expected to raise car prices by RM1,000 to RM2,000 starting this week due to Yen’s strength.

With regards to domestic economic data, unemployment rate will be announced today followed by OPR and trade numbers on Thursday and Friday respectively. The outcome of the last two items can have some impact on the market. The US will release some important data such as personal spending, ISM manufacturing, vehicle sales, pending home sales, unemployment rate and nonfarm payrolls as well.

Technical Outlook
Spot month February KLCI futures contract traded on Bursa Malaysia Derivatives Berhad expired at 1,276, surging 24 points, or 1.9% week-on-week to reverse to a 5.22-point premium to the cash index, compared with the 5.7-point discount the previous week.
Bursa Malaysia shares rose on Monday as investors bought blue chips, encouraged by regional strength after slower-than-expected US inflation data raised hopes the Federal Reserve will keep interest rates low. Blue chips ended mixed the next day on moderate volume as trading interest centered on rubber glove stocks.

Nevertheless, the market bounced back on Wednesday as index heavyweights CIMB and Axiata led gains after reporting better-than-expected earnings. Stocks closed flat the next day as profit-taking interest picked up ahead of the long three-day weekend break, due to the religious holiday on the birthday of Prophet Muhammad.

The KLCI rose from opening low of 1,260.51 on Monday and climbed to peak at high of 1,277.66 prior to month-end position squaring, causing the trading range expansion to 17.15 points, compared with the narrow 9.13-point range the previous week. The FBM-EMAS Index climbed 106.33 points or 1.3% last week to close at 8,560.2, while the FBM-Small Cap Index advanced 193.71 points, or 1.85% to 10,637.46.

The daily slow stochastics indicator for the KLCI has leveled at the overbought region (Chart 1), but is offset by the weekly indicator which hooked up from the initial oversold level. The 4-day Relative Strength Index (RSI) indicator continued leveling with a more positive reading of 53.92, while the 14-week RSI registered an improved reading at just above 60.

Meantime, the daily Moving Average Convergence Divergence (MACD) trend indicator registered a bullish expansion following early last week’s buy signal, while the weekly MACD is in a late bearish stage. As for the 14-day Directional Movement Index (DMI) trend indicator, the +DI and –DI lines crossed for a buy signal, but the sustained decline of the ADX line indicate absence of trend.

On the current technical situation, further strength on KLCI will reinforce the daily MACD buy signal last week and subsequently trigger a weekly stochastics buy signal, offsetting the overbought daily indicator. Last Friday’s more robust buying momentum looks promising, but nonetheless, stronger participation in excess of one billion shares per day will be crucial for a sustainable breakout from the current consolidation phase.

Meanwhile, stronger-than-expected economic data from the US and regionally will be an added boost to market sentiment this week.

In the immediate term, the index should meet resistance at 1,276 and 1,288, the respective 61.8% and 76.4% Fibonacci Retracement (FR) of the sell-down from the 21 January high of 1,308 to the 9 February pivot low of 1,224, where profit-taking and selling should stall gains. A decisive breakout above the 50-day moving average, currently 1,272, backed by robust buying momentum, will enhance the recovery.

Meantime, immediate supports cushioning downside are at the 100-day moving average at 1,263, then 1,256, the 38.2%FR, with 1,249 and 1,240 as stronger downside buffers.

Happy hunting.

PM Securities Technical Stock Pick

2010-02-27T22:04:00.003+08:00

Actually, I like PM Securities. Because a bit daring in their views and research esp technical analysis. Click on the image to view in full.

Plus testing 3.50

2010-02-25T02:31:00.007+08:00

My Chap Ayam indicator pointed Plus Expressway today. Technically, has potential to test resistance RM3.50. Analyst said, this counter has defensive qualities. OSK kept PLUS Expressways at Buy with RM4.10 TP, citing its defensive nature as well as decent yield of 5%. Plus Expressway’s FY09 earnings grew 9.9% to RM1.2b in-line with the brokerage’s projections. OSK also noted that the traffic volume for FY09 increased for all 4 domestic highways driven by substitution to domestic travel given the H1N1 outbreak and recession, travel incentives offered during festive seasons and improved driving conditions on the North-South Expressway. However, OSK added that cost savings brought about in FY09 were unlikely to continue indefinitely.

Weekly Market Expectation

2010-02-21T18:21:00.004+08:00

Bursa Malaysia shares rose last week as investors returned to nibble after the long CNY festival holiday break, but lack of buying momentum and profit-taking amid weakness in Asian markets checked gains.

The US markets displayed more signs of confidence as the week draws to a close last Friday than Malaysian or Asian markets. Lower than expected January inflation rate, positive earnings data with more three quarter of companies that reported results beating street estimates, sustainable expansion in manufacturing activities and leading indicators caused the US markets to brush aside the unexpected 25 basis points increase in Fed’s discount rate.

It is important to acknowledge the difference between discount rate and federal funds rate. The former is the established rate for banks to borrow from the fed while the latter is the overnight lending rate between banks. Optimist would view the increase in discount rate from a positive perspective as that is a clear indication of banks’ liquidity returning to normalcy and improved confidence among banks to lend each other. This increase will in no way lead to an increase in funds rate that corresponds directly to banks’ lending rate to consumers in the near-term. With the increase, the current spread between the discount and fund rates is at 50 basis points. It is still possible for the spread to rise above 100 basis points before anything is done to the latter.

It appears that the current tame inflation, high unemployment and tepid economic growth outlook for 2010 will keep the target rate well into second half of this year. Ben Bernanke, the Federal Reserve chairman, is likely to echo the same view when he delivers his semi-annual report on the US economy and interest rates to House and Senate panels this Wednesday and Thursday. As such, negative perceptions related to the increase in discount rate will be short-lived and the US markets are expected to remain buoyant in the near term.

Any positive spill over effect from abroad is good for the local market, which is likely to see an improved trading volume when investors return from their long Chinese New Year holidays. Nonetheless, a change in policy direction could act a short-term dampener if BNM opts to increase its OPR next Thursday (March 4th) after indicating recently that the rate is hovering at low levels for too long and it prefers to normalize it than tightening it. Thus, the outcome of January CPI that will be released this Wednesday is immaterial although consensus expectations are for it to remain tame at 1.5%.

A lower numbers could excite the market for a brief moment but worries of a rate hike should return, more so if the 4Q GDP numbers for Malaysia that will be released on the same day came better than expected 2.9% yoy.

Attraction in Glove stocks may return this week after Supermax reported a strong FY09 net profit which almost tripled to RM129.8mn compared to the previous year on the back of strong global demand, higher output and better pricing power. Its 24% increase to 62 sen per share in its earnings guidance for this financial year and the announcement of a special and final tax exempt dividend of 9% and 8% are added attractions in the stock apart from its huge 20% discount in valuation compared to its nearest competitor Top Glove.

Proton may attract some interest as well as its nine-month FY10 net profit already made up 94% of consensus net profit forecast for full year. A speculated tie-up with a European player real soon is likely to be an added attraction.

The outcome of EON Capital’s EGM this week will be closely watched. It appears that some of the major shareholders are confident that they will get shareholder approval to appoint eight new directors. News in the grapevine indicates that Hong Leong Bank’s strategic planning for the new financial year assumes the inclusion of EON Capital. If true that surely speaks volume about a hidden agenda.

On technical side, conflicting signals from trend and momentum indicators for the KLCI suggest that the index may pause for further consolidation, but the impending daily MACD buy signal offers hope for the bulls this week. Further strength in buying momentum, with more investors returning to the local stock market after the Chinese New Year holidays, is crucial for a more sustained recovery from the present consolidative phase. The resilient US stock market last Friday, encouraged by lower-than-expected inflation data which reduced concern the Federal Reserve will increase interest rates, should provide a boost to sentiment this week.

In any case, watch for resistance for the index at 1,266 and 1,276, the respective 50% and 61.8% Fibonacci Retracement (FR) of the sell-down from the 21 January high of 1,308 to the recent pivot low of 1,224, where profit-taking and selling could check gains. A decisive breakout backed by robust buying momentum in excess of one billion shares daily above the 100-day and 50-day moving averages, currently at 1,261 and 1,272, will be ideal to support further recovery going forward. Immediate support to cushion downside remains at 1,256, the 38.2%FR, with 1,249 and 1,240 acting as stronger downside buffers.

2010-02-19T00:32:00.003+08:00

My Chap Ayam indicator flashed PADINI today. But lookin at it, the drawback is very low volume. Got to think 10.54 times before buying this counter. Padini is mainly an integrated operation that controls its products - fashion wear and accessories - from concept stage to manufacturing, merchandising and image marketing. Can be considered as among local brand leader involved in the distribution and retail of its own fashion labels through 190 freestanding stores, franschise and consignment counters. Technically speakin, the current market condition for Padini Holding Bhd is Bullish. Closed currently Above it's 200,90 and 30 period moving average. Upper bound is 4.29
and lower bound is 3.95. P&L and financial condition, i dunno. Ada brani? I tak brani lol.

Lii Hen

2010-02-17T20:53:00.004+08:00

First round took profit after over 8 months zero holding. Actually i don't even knew what the company's business and financial condition, may be its just my luck!
Gosh... promise next time i check P&L and broker's forecast first before jump in. lol

http://tauke-saham.blogspot.com/2010/02/lii-hen-industries-bhd.html

Well Done PPT - DJIA abv 10,000

2010-02-16T01:17:00.004+08:00

THE PLUNGE PROTECTION TEAM (PPT) has done a good job yesterday. They managed to defend Dow Jones Index free fall after opening bell, well above 10,000.
But, the question remain - FOR HOW LONG?

A little bit background on PPT - The secret maneuverings of the Plunge Protection Team (PPT) - The Working Group on Financial Markets, also know as the Plunge Protection Team, was created by Ronald Reagan to prevent a repeat of the Wall Street meltdown of October 1987. Its members include the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the SEC and the Chairman of the Commodity Futures Trading Commission. Recently, the team has been on high-alert given the increased volatility of the markets and, what Hank Paulson calls, "the systemic risk posed by hedge funds and derivatives.”

According to John Crudele of the New York Post, the Plunge Protection Team's (PPT) modus operandi was revealed by a former member of the Federal Reserve Board, Robert Heller. Heller said that disasters could be mitigated by “buying market averages in the futures market, thus stabilizing the market as a whole.” This appears to be the strategy that has been used.

Former-Clinton advisor, George Stephanopoulos, verified the existence of The Plunge Protection Team (as well as its methods) in an appearance on Good Morning America on Sept 17, 2000. Stephanopoulos said:

“Well, what I wanted to talk about for a few minutes is the various efforts that are going on in public and behind the scenes by the Fed and other government officials to guard against a free-fall in the markets….perhaps the most important the Fed in 1989 created what is called the Plunge Protection Team, which is the Federal Reserve, big major banks, representatives of the New York Stock Exchange and the other exchanges and they have been meeting informally so far, and they have a kind of an informal agreement among major banks to come in and start to buy stock if there appears to be a problem. They have in the past acted more formally… I don't know if you remember but in 1998, there was a crisis called the Long term Capital Crisis. It was a major currency trader and there was a global currency crisis. And they, with the guidance of the Fed, all of the banks got together when it started to collapse and propped up the currency markets. And, they have plans in place to consider that if the markets start to fall.”

Stephanopoulos' comments have never been officially denied. In fact, as Ambrose Evans-Pritchard of the U.K. Telegraph notes, Secretary of the Treasury, Hank Paulson has called for the PPT to meet with greater frequency and set up “a command centre at the US Treasury that will track global markets and serve as an operations base in the next crisis. The top brass will meet every six weeks, combining the heads of Treasury, Federal Reserve, Securities and Exchange Commission (SEC), and key exchanges”.

This suggests that the PPT may have been deeply involved in last Wednesday's “miraculous” stock market rebound from Tuesday's losses. There was no apparent reason for the market to suddenly “go positive” following a ruinous day that shook investor confidence around the world. The editors of the New York Times summarized the feelings of many market-watchers who were baffled by this odd recovery:

“The torrent of bad news on housing is only worsening, with a report yesterday that new home sales for January had their steepest slide in 13 years...Manufacturing has already slipped into a recession, with activity contracting in two of the last three months. How is it then that investors took Mr. Bernanke's words as a “buy” signal?”

How indeed; unless other forces were operating secretly behind the scenes?

Market Rigging

“Gaming” the system may be easier than many people believe. Robert McHugh, Ph.D. has provided a description of how it works which seems consistent with the comments of Robert Heller. McHugh lays it out like this:

“The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline; need to be prevented by a rally already in flight. To get that rally, the PPT's key component — the Fed — lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer's account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today's prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy — and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals' rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own.” (Robert McHugh, Ph.D., “The Plunge Protection Team Indicator”)

If a secret team is interfering in the stock market, it presents serious practical and moral issues. For one thing, it disrupts natural “corrections” which are a normal part of the business cycle and which help to maintain a healthy and competitive slate of equities.

More importantly, outside intervention punishes the people who see the weaknesses in the stock market and have invested accordingly. Clearly, these people are being ripped off by the PPT's back-channel manipulations. They deserve to be fairly compensated for the risks they have taken.

Moreover, artificially propping up the market only encourages over-leveraged speculators and smiley-face Pollyanna's who continue to believe that the grossly-inflated market will continue to rise. Rewarding foolishness only stimulates greater speculation.

The tinkering of the PPT is sure to erode confidence in the unimpeded activity of capital markets. It's astonishing to think that, after years of singing the praises of the “free market” as the ultimate expression of God's divine plan; these same conservative ideologues and “market purists” favor a strategy for direct intrusion. The actions of the Plunge Protection Team prove that it's all baloney. The “free market” is merely a public relations myth with no basis in reality. Saving the system will always take precedent over ideology; just as the “invisible hand” will always be overpowered by the manicured and mettlesome fingers of banking elites and Wall Street big wigs. It's their system and they're not going to let it get wiped out by some silly commitment to principle.

The free market system is supposed to be “self cleansing” through cyclical purges of over-inflated equities and over-extended speculators. Do we really want “central planning” from an unelected, Market-Nanny that re-jiggers the system according to its own economic interests?

The Plunge Protection Team may wrap itself in pompous rhetoric, but it operates like a Fiscal Politburo inserting itself into the market in way that promotes the narrow interests of its own constituents. It's an outrage.

Besides, the market is so fragile it trembles every time someone halfway around the world sells a fistful of equities. It needs a good shakedown.

The years of deregulation have taken their toll. The market is resting on a foundation of pure quicksand. Collateralized debt, rickety hedge funds, shaky sub-prime equities, and an ocean of margin debt are just a few examples of deregulation's excesses. These untested debt-instruments are presently bearing down on Wall Street like a laser-guided missile. It'll take more than Hank Paulson and his PPT “plumber's unit” to prevent the implosion.

Wall Street needs to regain its lost credibility with more regulation and stricter laws. The system needs a major face-lift. Still, even as the markets rumble and shake, Paulson rejects any move towards greater government supervision. According to the New York Times:

“Henry Paulson and top financial regulators said the government need not — and should not — provide greater oversight for the $1.4 trillion hedge fund industry, or, by extension, the trillions of dollars more in complex derivative transactions spawned by the industry. That stance is mostly free-market ideology run amok. But it is also based on the unproven assumption that unregulated investing, which dispersed risk and reduced volatility as markets surged, will continue to do so when markets tank.
The upshot is a one-sided bet for investors. They have explicit assurances from regulators and policy makers that almost anything goes when the markets are hot, and implicit assurances — based on past experience — that the Fed would lower interest rates to contain a financial crisis should one erupt. Unfortunately, there is no guarantee that easing up on rates would have the same powerful effect in a future crisis as it had in the past.

The next crisis appears to be building around weakness in the United States, not in Russia or Asia or South America. That means money could flow out of the country if markets were rattled. That would weaken the dollar and require speedy and complex remedial action by the world's central banks — not just a rate cut by the Fed.” (NY Times)

The Times is right, Paulson's “hands off” attitude is a classic example of “free-market ideology run amok”. A meltdown in the Hedge funds industry or the derivatives market would bring the entire economy crashing to earth. Paulson's Plunge Protection Team is a band-aid approach to a much more serious dilemma. It's time for the government to get involved and protect the small investor.

Paulson has shown that he understands the problem; he simply resists the solution. Just a few months ago he opined, “We need to be vigilant and make sure we are thinking through all of the various risks and that we are being very careful here. Do we have enough liquidity in the system"?

No, we don't. And Paulson knows it; that's why there's a plan to fiddle the system and try to “cheat the Reaper”. But it won't work. This is the biggest equity bubble in history. Neither increasing the money supply nor lowering interest rates will fend off the impending catastrophe. We need to address the mushrooming risk that has arisen from lending hundreds of billions in sub-prime loans, and from overexposure in the hedge funds and derivatives markets. These things need to be confronted immediately as they pose a “clear and present danger” which could set off a chain reaction of defaults and bankruptcies.

The world's markets are facing a global liquidity crisis which will become more evident as the real estate sub-prime market continues to deteriorate. This will undoubtedly be accompanied by larger and more ferocious gyrations in the stock market.

Does “Hans Brinker” Paulson really believe he can stop the flood by sticking his well-burnished finger in the dike?

It's All Uphill from Here on Out

The U.S. economy faces daunting challenges in the near-future; a steadily shrinking manufacturing sector, increasing job losses in housing, a nascent currency crisis, and a real estate market that is in full retreat. Additionally, the “always dependable” American consumer is showing signs of fatigue which is pushing investors towards foreign markets.

This explains why “the SEC said it aims to slash margin requirements for institutions and hedge funds on stocks, options, and futures to as low as 15pc, down from a range of 25pc to 50pc.The ostensible reason is to lure back hedge funds from London, but it is odd policy to license extra leverage just as the Dow hits an all-time high and the VIX 'fear' index nears an all-time low – signaling a worrying level of risk appetite. The normal practice across the world is to tighten margins to cool over-heated asset markets.” (Ambrose Evans-Pritchard, “Monday View: Paulson Reactivates Secretive support team to prevent markets meltdown” UK Telegraph)

This is yet another red flag. The stewards of the system are actively seeking larger infusions of marginal debt just to keep the faltering market on its last legs.

That's not reassuring and it is clearly a step in the wrong direction. It further illustrates the worrisome level of recklessness at the top rungs of the decision-making apparatus.

Converting the PPT into another Safety-net for Private Industry

The original purpose of the Plunge Protection Team was to prevent another 1987-type “Black Monday" stock market crash. This seems like a reasonable way to address the prospect of a major economic collapse following a terrorist attack or a natural disaster. However, the systemic weakness in the market and the great uncertainty surrounding hedge funds and derivatives suggests that the PPL is probably being used to stabilize an over-leveraged and thoroughly-debauched system.

If that's the case, then we need to know whether the PPT really operates in the public interest or if it is just a stopgap for big business to avoid a painful retrenchment?

It's the corporate warlords and banking moguls who have benefited the most from dismantling the regulatory system. The PPT creates an additional “taxpayer-supported” safety net for dubious debt-instruments which are finally beginning to unravel. There's no reason why the market should be manipulated simply to protect private investment. It is a fundamental contradiction to the workings of a free market.

According to Michael Edward: (“The Secrets of the Plunge Protection Team” Rense.com)

“Since 911, there have been at least three major long-term stock market rallies. In all 3 instances, when the markets opened all the indexes began to quickly plunge. In each incidence, by early afternoon the markets were brought back from the brink of collapse to the surprise of everyone, including historical analysts….An event that should have sent markets spiraling downward was the Enron, et al, unprecedented corporate accounting scandals. Yet despite this, an unprecedented across-the-board markets rally began on July 24, 2002. Once again, the European Press called it a ‘PPT rally'". Edward goes on to say that outside the US it's “no secret” that the market is being manipulated. He cites an article in the UK Guardian on 9-16-01 which states, "that a secretive committee... dubbed 'the plunge protection team'... is ready to coordinate intervention by the Federal Reserve on an unprecedented scale. The Fed, supported by the banks, will buy equities from mutual funds and other institutional sellers.”

There are myriad other examples which support Edward's basic theory. As the NY Post's John Crudele said, “Over the next few years, people like me suspected that Heller's plan was indeed in effect. Whenever the stock market was in trouble someone seemed to ride to the rescue.”

Crudele is right; the market is being manipulated.

This may explain why the Federal Reserve mysteriously decided to stop publishing its M-3 report. Since the Fed is the “main resource” for buying averages in the futures market “the money is injected into markets via the New York Fed's Repo desk, which easily showed up in the M-3…. Without the useful resource of M-3”, Robert McHugh, Ph.D.says, “we need to find other tools to monitor when the PPT is likely to intervene, and kill shorts”.

What? So by abolishing the M-3, the Federal Reserve has removed its greasy fingerprints from the smoking gun of market meddling?

It appears so.

Trust in the Free Market is Wavering

Whatever happened to the idea of completing the “market cycle” and allowing markets to self-correct whether that meant belt-tightening or not? And, what about the ethical question of whether government manipulation should be allowed in a “free market”?

Also, by what authority do the government and the privately-owned banks interfere in the futures' markets and shift momentum from the prevailing trend? Is this a free market or a command economy?

The precariousness of our present economic situation has caused these dramatic changes and strengthened the conjugal relationship between the privately-owned Central Bank, major corporations and the state. The market is more vulnerable now than anytime since the late 1920s, a fact that was emphasized in a statement by the IMF just 2 months ago:

“Financial markets have failed to price in the risk that any one of a host of threats to economic security could materialize and deliver a massive shock to the world economy. It is clear that risks are on the downside of a sharper than expected slowdown in house prices that would produce weaker-than-expected growth that would have implications for global growth and financial markets.” (“IMF: Risk of global crash is increasing” UK Independent)

Risk, over-exposure, cheap money, shaky loans, a falling dollar, low reserves and a confidence deficit; these are the crumbling cinder-blocks upon which America's Empire of Debt currently rests. The possibility of a major disruption grows more likely by the day. Consider the world's 8,000 unregulated hedge funds with $1.3trillion at their disposal or the wobbly derivatives market and the effects that a sudden downturn might have. Kenneth J. Gerbino put it like this in his recent article “The Big Sell Off” on kitco.com:

“With a global market panic starting in a low interest rate and, so far, low inflation environment, one has to be wonder about the real reason for (Tuesday's) sell-off. Easy money almost everywhere leads to leverage and speculation. No where is this more prevalent than in the global derivatives market. It is not out of the question that third party defaults and risk aversion designed instruments that collapse and go sour may someday overwhelm the financial markets. Latest figures from the Bank of International Settlements: $8.3 trillion of real money is controlling $313 trillion in derivatives. That's 38 to 1 leverage. These figures are just for the over - the - counter derivatives and do not include the global exchange traded derivatives in currencies, stocks and commodities which are another $75 trillion.”

“$8.3 trillion of real money is controlling $313 trillion in derivatives!”

This illustrates the sheer magnitude of the problem and the economy-busting potential of a miscalculation. That's why Warren Buffett calls derivatives “weapons of mass destruction”. If there's a fire-sale in hedge funds or derivatives, there's nothing the Plunge Protection Team or the Federal Reserve will be able to do to stop a meltdown. The market will crash leaving nothing behind.

We are reaping the rewards of a lawless, deregulated system which has removed all the safeguards for protecting the small investor. There is no government oversight; it's a joke. The stock market is a crap-shoot that serves the sole interests of establishment elites, corporate plutocrats, and banking giants. The small investor is trapped beneath the wheel and getting squeezed more and more every day. He has no way to fix the markets like the big guys and no lobby to promote his interests. He must arrive at his decisions by researching publicly available information and then plunking down his money. That's it. He'd be better off in a casino; the odds are about the same.

How to Spot the Big Stock and Commodity Market Trends

2010-02-15T05:22:00.003+08:00

Every trader and investor would love to buy at the bottom and sell at the top. The reality is that this is not a winning solution, nor is it possible to do this on a consistent basis. Some says the sweet spot is the 70% to 80% that's in the middle of a trend. Here's a video on how to detect that kinda things.
http://broadcast.ino.com/education/bigtrendsaff/?campaignid=3

KNM

2010-02-12T02:40:00.003+08:00

KNM is a privatisation target by its Grp Managing Director priced at 90 sen, which form a short term target. After a initial surge to 85 sen on announcement day, it had corrected in line with overall market. Technically, KNM now moving sideways between 70 sen to 87 sen. Given 90 sen assuming the takeover will materialised, the upside target would be at 87 sen, building opportunities to buy on pullback with strong support at 76 sen.

To my many many many Chinese Friends

2010-02-12T01:58:00.006+08:00

I've lot of Chinese friends, dude, neighbors, aunties, uncles etc etc. The CNY festivities are looming and that means to a lot of them, pre-, during-, and post CNY stress. There’s spring cleaning, shopping, hometown exodus, Reunion Dinner, visits and cross visits, and Ang Pows for the elderly and children. And, not to mention the endless feasting and drinking and Yee Sang.

For the Year of the Tiger, all I have to say is that the impossible just might be possible this year as the Tiger is represents energy and activity – so let us all endeavor towards our objectives this year with gusto and determination to follow thru! It is also a time for tearing down walls instead of building them and reaching out to others.

Cheers... yours sincerely, me lor, wishing Happy Chinese New Year; GONG XI FA CAI; KEONG HEE HUAT CHYE; GUNG HEI FAT CHOI and may you be blessed with good health, wealth and prosperity AND continuous good fortune!

Dow Jones Index Going to 9000?

2010-02-10T00:48:00.005+08:00

Wauuweee yup 9,000. Technically, its still testing the support zone between 10,400 to 10,000 and based on Chap Ayam Indicator, has potential to drop to support zone 9,000. The reasons are fear, fear and fear - concerned that high unemployment rate will continue to keep a lid on US consumer spending, which was the primary driver for global growth before the recession. Sentiment is also being dampened by growing debt woes in several euro zone member countries, such as Greece, Portugal and Spain.

WHERE THE HECK IS THE PLUNGE PROTECTION TEAM?????

Don't ya guyz suppose to maintain above 10,000????

Sovereign Debt:Tracking the Short Sellers
Dataexplorers - - February 2010 Report
“The massive expansion of Sovereign balance sheets has been essential to compensate for the complete collapse of the Libor market, but it has left investors increasingly nervous. If the Government is lender of last resort, then what happens when they cannot meet their obligations …… Some market discussion and sell side research has investigated the linkages between these countries – for example, the Greek banks are said to have lent heavily to Romania and Bulgaria; most of the Eastern European countries have focused their borrowing in Austria. Patterns like these will determine whether isolated defaults become falling dominoes.”

Fears of 'Lehman-style' tsunami as crisis hits Spain and Portugal
Ambrose Evans-Prichard - Telegraph.co.uk
“Portuguese debt surged (02-04-10) to a record 222 on reports that Jose Socrates was about to resign as prime minister after failing to secure enough votes in parliament to carry out austerity measures. Parliament minister Jorge Lacao said the political dispute has raised fears that the country is no longer governable. “What is at stake is the credibility of the Portuguese state,” he said. Portugal has been in political crisis since the Maoist-Trotskyist Bloco won 10pc of the vote last year”

The Coming Sovereign Debt Crisis
Nouriel Roubini and Arpitha Bykere – Forbes.com
“In 2009, downgrades and debt auction failures in countries like the UK, Greece, Ireland and Spain were a stark reminder that unless advanced economies begin to put their fiscal houses in order, investors and rating agencies will likely turn from friends to foes. The severe recession, combined with a financial crisis during 2008-09, worsened the fiscal positions of developed countries due to stimulus spending, lower tax revenues and support to the financial sector. The impact was greater in countries that had a history of structural fiscal problems, maintained loose fiscal policies and ignored fiscal reforms during the boom years.”

The Greek tragedy deserves a global audience
Martin Wolf, Financial Times
“Most of the time having an independent currency is nothing but a nuisance. But every so often and quite unpredictably, countries desperately need a safety valve. The 1930s were a time when such relief was needed. Our own era is posing what look like similar challenges. Stuff does, indeed, happen. Having willed the creation of the euro, its members must overcome the difficulties that arise when, as now, stuff happens”.

IPO Homeritz

2010-02-09T22:29:00.002+08:00

Leading upholstered home furniture with complete range of product. Exported to 40 countries across the world. Distribute 40% of net profit as dividend.
Homeritz business are different with other Bursa' listed furniture manufacturers. Hence peer comparison may not be suitable benchmark for Homeritz valuation.
So, I tikammmmmm 66-67 sen fair value, PE 5.5, 5.6, average new company listed on Bursa.

Hong Leong Bank: No Extension For EON Capital Buyout Offer

2010-02-08T23:21:00.000+08:00

Hong Leong Bank Bhd said Monday it is not extending its MYR4.92 billion buyout offer for EON Capital despite a request by some EON Capital shareholders.

Malaysia's sixth largest lender by assets said in a stock exchange filing that it was unable to consider a request by EON Capital shareholders Kualapura (M) Sdn. Bhd. and Lintang Emas Sdn. Bhd. for the deadline to be extended.

The offer from Hong Leong Bank expired last week after EON Capital's board rejected a MYR7.10 per share offer for being too low.

"Hong Leong Bank is unable to consider (Kualapura and Lintinga Emas') request as the Board of EON Capital had rejected the offer and Hong Leong Bank has not been informed of any change in the Board of EON Capital's position," the company said.

Kualapura and Linting Emas had last week called for an extraordinary meeting of EON Capital for the appointment of eight new directors in an attempt to revive the Hong Leong Bank deal.

FKLCI Spot Month & FCPO

2010-02-06T01:20:00.004+08:00

My views unchanged, same as before
KLCI bearish target 1,180
http://tauke-saham.blogspot.com/2010/01/klci-spot-month-bearish-target-1180.html#links"
FCPO also bearish target RM2,200
http://tauke-saham.blogspot.com/2010/01/cpo-3-mnth-bearish-target-rm2200.html#links"

Fountain View: former director & remisier fined RM1 milion

2010-02-05T20:44:00.001+08:00

The Kuala Lumpur Sessions Court today convicted Dato’ Chin Chan Leong and Hiew Yoke Lan for their involvement in the manipulation of Fountain View Development Bhd shares.

This is the second conviction for market manipulation which the Securities Commission Malaysia (SC) has successfully prosecuted.

Dato’ Chin, 57, a former director of Fountain View, pleaded guilty to the offence under section 84(1) of the Securities Industry Act 1983 for creating a misleading appearance of active trading of Fountain View shares on Kuala Lumpur Stock Exchange (now known as Bursa Malaysia Securities Bhd) through at least 20 CDS accounts which were beneficially owned by the accused through the companies that he controlled.

Hiew, 48, a former remisier, also pleaded guilty to abetting Dato’ Chin in the above offence, thereby committed an offence under section 84(1) read together with section 122C(c) of the Securities Industry Act 1983. Hiew was responsible for executing and relaying orders for the sale and purchase of the shares during the material time to various stockbroking firms. The offences were committed between 18 November 2003 and 20 January 2004.

The Sessions Court sentenced Dato’ Chin to a fine of RM1.3 million (in default 13 months imprisonment) as well as a one-day imprisonment under section 88B of the same Act while Hiew was fined RM1 million (in default 10 months imprisonment).

The SC has been proactively pursuing this and other market misconduct cases (such as manipulation, market rigging and insider trading) because such activities severely undermine investor confidence and tarnishes the reputation of the Malaysian capital market. The SC will continue to be vigilant and take whatever action necessary to protect investors and to maintain a fair and orderly capital market.

Lii Hen Industries Bhd

2010-02-04T01:23:00.004+08:00

Chap Ayam indicator flashed Liihen today.
It seems Liihen broke the 1.20 resistant level and potentially testing 1.30 resistant on increasing volume. If the 1.30 level breakout, next target would be 1.80. Short term support or cut loss level would be 1.20 and 85 sen.

Shamsul Azhar appointed as Petronas President

2010-02-03T20:07:00.004+08:00

Shamsul Azhar Abbas has been appointed as the president and chief executive of state-run Petroliam Nasional Bhd, or Petronas, replacing Hassan Merican whose term expires on Feb. 9, Malaysia's Prime Minister Najib Razak said Wednesday.

Shamsul, 57, who was the president and chief executive of Malaysian shipping giant and Petronas unit MISC Bhd. between 2004 and 2009, will assume his new position on Feb. 10, Najib said in a statement. Hassan has helmed Petronas since 1995Unlisted Petronas is Malaysia's only Fortune 500 company. It is also among Malaysia's largest bond issuers.

In addition to MISC, Petronas also controls several other listed units, including retail gasoline station operator Petronas Dagangan Bhd and gas distributor Petronas Gas Bhd.

Illegal Deposit Taking - Arrest Warrant Issued on Eastana & Jazmeen Bosses

2010-02-03T00:27:00.003+08:00

This announcement by Bank Negara issued on Saturday.
It is believed related to press statement on 13 October 2008, whereby Bank Negara Malaysia raided Buluhmas Enterprise Sdn. Bhd., Jazmeen (M) Sdn. Bhd, Noradz Travel & Services Sdn. Bhd., and Eastana Farm Industries Sdn. Bhd. under Section 25(1) of the Banking and Financial Institutions Act (BAFIA) 1989 and Section 4(1) of the Anti-Money Laundering and Anti-Terrorism Financing Act (AMLATFA) 2001. Section 25(1) of BAFIA 1989 prohibits any person from receiving, taking, or accepting deposits without having a valid license, whereas Section 4(1) of AMLATFA 2001 prohibits any person from engaging in, or attempting to engage in, or abetting the commission of money laundering activities.

The raids were conducted at the premises of the companies in Kuala Lumpur, Selangor and Negeri Sembilan following complaints received from members of the public. Relevant assets and documents of the companies were seized for purpose of the investigation.

Any person or company who commits an offence under Section 25(1) of BAFIA 1989 shall, on conviction, be liable to a fine not exceeding RM10 million or to imprisonment for a term not exceeding 10 years or to both. Any person or company who commits an offence under Section 4(1) of AMLATFA 2001 shall on conviction, be liable to a fine not exceeding RM5 million or to imprisonment for a term not exceeding 5 years or to both.

Members of the public are advised to be cautious of investment schemes promoted on the internet, through phone calls or through seminars conducted by individuals or companies that are not licensed or authorized by Bank Negara Malaysia to accept deposits or to conduct foreign currency dealings. A list of all licensed institutions that accept deposits is available on Bank Negara Malaysia's website at www.bnm.gov.my.

Ghee.. More info about Premium Nutrient from S Dali

2010-02-02T20:54:00.003+08:00

Gosh... this is from fellow blogger S Dali.
Thanks bro. So i quoted him lah ha ha

Why I Like Premium Nutrients
Premium Nutrients is one of the largest, fully integrated and dedicated lauric and non-lauric refineries in the world - a fact missed by many investors in Malaysia.

The principal activity of PREMIUM is that of investment holding. The principal activities of the subsidiary companies are manufacture and sale of speciality fats based on palm kernel oil, palm oil, coconut oil, rapeseed oil, soya bean oil etc., including those refined and fractionated. PREMIUM is principally involved in two broad categories of activities, such as processing of commodity products and converting processed commodity products.
http://malaysiafinance.blogspot.com/2010/02/why-i-like-premium-nutrients.html

S&P take on Zhulian, Supermax & Tenaga

2010-02-02T12:18:00.002+08:00

Supermax

Lift to Strong Buy from Buy. Supermax’s order backlog remains at about 5 bln glove pieces. Demand continues to be strong, partially boosted by the A(H1N1) pandemic, which has prompted governments to stock up on gloves. We increase our 12-month target price to MYR6.50 (vs. MYR4.60).

Zhulian

Raise to Buy from Hold. We also lift our 12-month target price to MYR2.10 (vs. MYR2.00) on an improved earnings outlook. We continue to like Zhulian for its strong balance sheet (it remains debt-free and has cash per share of 36 sen), strong cashflow
generating business and attractive dividend yield of 7.7%.

Tenaga

Maintain Buy. Tenaga’s earnings visibility has improved, given that coal cost is contained while electricity demand is recovering at a faster rate. Its valuations are undemanding with a PER of 11.3x, as compared with its forward PER range of 10.3x-30.4x in the past five years, and its peer group average of 11.7x.

My take yesterday was on Premium Neutrients ha ha ha

Premium Nutrients

2010-02-01T23:30:00.003+08:00

For now, technically nothin larrr... no signal nothin
except for this counter - Premium Nutrients - however somethin fishy, the volume suddenly increased - its did break the resistant level 33 sen. My chap ayam indicator pointing 45 is the next resistance level. How reliable it is, i dunno because i'm not familiar with this counter.. ada brani!!!

Now they came out with a new word - NORMALISATION

2010-01-31T02:56:00.003+08:00

At last "NORMALISATION" after almost decade of "VIGILANT".

Zeti Akhtar Aziz reiterated the central bank's comments on Tuesday that keeping rates too low for too long could result in a buildup of fiscal imbalances.

'It should not be looked at as tightening,' said Ms Zeti, she told reporters after attending an Islamic finance lecture.

'A distinction has to be made between normalisation and tightening because the policy thrust is still to remain accommodative especially when inflation is going to remain modest.'

World economy in 'progressive normalisation'
Leading central bankers believe a "progressive normalisation" of the world economy has taken hold, driven by emerging economies, the president of the European Central Bank said Monday.

"At a global level... there is a confirmation of the progressive normalisation of the economy," ECB chief Jean-Claude Trichet said on behalf of the participants in a meeting of central bankers in Switzerland.

CPO 3 Mnth - Bearish Target RM2,200

2010-01-30T02:17:00.002+08:00

KLCI SPOT MONTH - Bearish Target 1,180

2010-01-30T02:02:00.000+08:00

Credit Crunch

2009-08-09T18:59:00.000+08:00

Part 2/2 - Silly Money

2009-08-09T01:51:00.002+08:00

Part 1/2 Silly Money

2009-08-09T01:48:00.001+08:00

Financial Adviser

2009-08-09T01:47:00.001+08:00

Subprime Banking Mess

2009-08-09T01:46:00.002+08:00

The Financial Crisis Explained

2009-08-09T00:53:00.001+08:00

Market top would be around 1,130

2009-06-07T02:27:00.000+08:00

Results on My New Filtering Formula

2009-06-06T21:53:00.000+08:00

For swing trades only. Short term very very short term.

The Bilderberg Plan for 2009: Remaking the Global Political Economy

2009-06-06T21:15:00.002+08:00

From May 14-17, the global elite met in secret in Greece for the yearly Bilderberg conference, amid scattered and limited global media attention. Roughly 130 of the world’s most powerful individuals came together to discuss the pressing issues of today, and to chart a course for the next year. The main topic of discussion at this years meeting was the global financial crisis, which is no surprise, considering the list of conference attendees includes many of the primary architects of the crisis, as well as those poised to “solve” it.

The Agenda: The Restructuring of the Global Political Economy

Before the meeting began, Bilderberg investigative journalist Daniel Estulin reported on the main item of the agenda, which was leaked to him by his sources inside. Though such reports cannot be verified, his sources, along with those of veteran Bilderberg tracker, Jim Tucker, have proven to be shockingly accurate in the past. Apparently, the main topic of discussion at this year's meeting was to address the economic crisis, in terms of undertaking, “Either a prolonged, agonizing depression that dooms the world to decades of stagnation, decline and poverty ... or an intense-but-shorter depression that paves the way for a new sustainable economic world order, with less sovereignty but more efficiency.” Other items on the agenda included a plan to “continue to deceive millions of savers and investors who believe the hype about the supposed up-turn in the economy. They are about to be set up for massive losses and searing financial pain in the months ahead,” and “There will be a final push for the enactment of Lisbon Treaty, pending on Irish voting YES on the treaty in Sept or October,” which would give the European Union massive powers over its member nations, essentially making it a supranational regional government, with each country relegated to more of a provincial status.

Shortly after the meetings began, Bilderberg tracker Jim Tucker reported that his inside sources revealed that the group has on its agenda, “the plan for a global department of health, a global treasury and a shortened depression rather than a longer economic downturn.” Tucker reported that Swedish Foreign Minister and former Prime Minister, Carl Bildt, “Made a speech advocating turning the World Health Organization into a world department of health, advocating turning the IMF into a world department of treasury, both of course under the auspices of the United Nations.” Further, Tucker reported that, “Treasury Secretary Geithner and Carl Bildt touted a shorter recession not a 10-year recession ... partly because a 10 year recession would damage Bilderberg industrialists themselves, as much as they want to have a global department of labor and a global department of treasury, they still like making money and such a long recession would cost them big bucks industrially because nobody is buying their toys.....the tilt is towards keeping it short.”

After the meetings finished, Daniel Estulin reported that, “One of Bilderberg’s primary concerns according to Estulin is the danger that their zeal to reshape the world by engineering chaos in order to implement their long term agenda could cause the situation to spiral out of control and eventually lead to a scenario where Bilderberg and the global elite in general are overwhelmed by events and end up losing their control over the planet.”

On May 21, the Macedonian International News Agency reported that, “A new Kremlin report on the shadowy Bilderberg Group, who this past week held their annual meeting in Greece, states that the West’s financial, political and corporate elite emerged from their conclave after coming to an agreement that in order to continue their drive towards a New World Order dominated by the Western Powers, the US Dollar has to be ‘totally’ destroyed.” Further, this same unconfirmed Kremlin report, stated that, “most of the West’s wealthiest elite convened at an unprecedented secret meeting in New York called for and led by” David Rockefeller, “to plot the demise of the US Dollar.” This report, which was not acknowledged by other media sources, requires verification.

Bursa Malaysia EOD Data For Metastock

2009-04-26T22:00:00.000+08:00

20090604.ZIP
20090605.ZIP
20090603.ZIP

20090602.ZIP

20090601.ZIP
20090529.ZIP
20090528.ZIP
20090527.ZIP
20090526.ZIP
20090525.ZIP

20090216.ZIP
20090213.ZIP
20090212.ZIP
20090211.ZIP
20090206.ZIP

20090522.zip
20090521.zip
20090520.zip
20090519.zip
20090518.zip
MAY 2009
APR 2009
MAC 2009
FEB 2009
20090130.ZIP
20090129.ZIP
20090128.ZIP
20090128.ZIP
20090123.ZIP
20090121.ZIP
20090120.ZIP
20090119.ZIP
20090116.ZIP
20090115.ZIP
20090114.ZIP
20090113.ZIP
20090112.ZIP
20090109.ZIP
20090108.ZIP
20090107.ZIP
20090106.ZIP
20090105.ZIP
20090102.ZIP

Every Dark Cloud Has Silver Lining, Bottom Fish in 3Q09

2008-12-30T23:39:00.003+08:00

2009 In A Nutshell, According to TA Research:
• Projected slowdown in Malaysia's GDP growth to 3.8% in 2009 due to dampening global demand and softness in domestic expansion is a reflection of weak corporate earnings growth potential in 2009. We have more than halved our CY09 earnings growth forecast to 3.3% after the 3QCY08 earnings reporting season.
• A bear market rally is expected in early 1Q09 mainly due to external factors and seasonality due to the Capricorn effect. A quick endorsement of Barack Obama's aggressive US multi-hundred billion stimulus package to revive real housing market and create 2.5mn new jobs after taking control of the oval office on January 20th will have a positive spillover effect on global equity markets.
• UMNO election in March 2009 could ignite speculative interest in the market as more small scale development projects will be rolled between now and March to appease the smaller class F contractors, but not many drivers are apparent for listed players unless the pump priming on big ticket 9MP projects takeoff full swing.
• Nevertheless, the above two short-term drivers are not capable of dwarfing the bearish market sentiment that will prevail well into 3QCY09 before we see some light at the end of the tunnel. Market worries will escalate as months pass by as economies that were thought capable of withstanding the current economic blow like China are already cracking under the turmoil due to weaker demand for its products, not to mention Malaysia's key trading nations like US and Japan.
• On the back of a doom and gloom outlook, demand for our commodities will take a back seat and significant price recoveries in CPO and crude oil could be delayed until 4Q2009. We expect CPO and crude oil prices to average RM2,000/tonne and US$45/barrel in CY09, much lower than this year's average of RM2,800/tonne and US$104/bbl respectively.
• The two key sectors, banking and plantation that have more than 35% weighting on the KLCI will come under further pressure due to weakening global demand. Any upswing in the benchmark index has to be driven by upward movements in the share price of banking and plantation stocks. We do not foresee them driving the index given the declining capital market activities and faltering credit expansion, and softening pricing power for CPO, respectively.

DOWNLOAD FULL RESEARCH

The Greatest Wealth Transfer in the History of Mankind Starts Now!

2008-12-28T23:06:00.001+08:00

Right now, the Treasury, the Federal Reserve, and the banking system seem to be gearing up for an event the likes of which has never been seen. I believe the crisis that will unfold over the next few years will add up to the biggest economic event in history. The scale of what is happening will dwarf all other economic events combined. The Tulip mania of 1637, John Law's "Mississippi Scheme" of 1720, and the dot-com / tech bubble of 1999 will pale by comparison. Even the hyperinflation in Weimar Germany in 1923 and the Great Depression will seem like a walk in the park compared to what is coming.

But wealth is never destroyed - It is merely transferred. Neither you, nor I, have the power to stop what is coming. But we do have the choice to either freeze in panic and be crushed under the wheels of the economic freight train that is bearing down upon us, or catch the ride of our lives on the road to immense wealth.

Critical Week for Global Stock Markets and Economic Recovery

2008-11-18T23:17:00.000+08:00

According to recent research from JP Morgan, the next week or so could be an important period of time for the stock market.

This research is based on the S&P 500's intraday low of 838 on October 10, which had been the index's lowest point prior to Thursday's intraday low of 818.

JP Morgan examined more than a century of bear markets to look for recovery patterns and came up with a few interesting observations. It found that market bottoms are almost always retested, and that such retests result in a new low about 40 percent of the time.

History shows that three-quarters of the retesting events occurred within 44 days of a bottom, so if the October 10 low in fact marked a bottom, a retest (which could create a new low) should be expected prior to November 23.

The longest span for retesting a low was 104 days in 2002. A repeat of that extreme case would schedule the retest for January 22, 2009.

Of course, JP Morgan makes no promises that October 10 is the pivotal date. One of its causes for concern is market volatility, as measured by S&P's intraday swings. As an example, Thursday's swing – a high of 913 and the 818 low – was more than 10 percent of the index's value.

G20 Economic Summit Changes Nothing

2008-11-17T21:42:00.000+08:00

The conference did not address the real causes of why the world is heading into a global recession or why the U.S. economy in particular is in such dire straits. Nor will the meeting result in redress of the staggering level of bankers' criminality abetted by the U.S. government in the creation of the financial bubbles whose collapse is underway.

The real problem is that the world is locked into a debt-based financial system run by the world's banks, where the only way currency can be entered into circulation is through lending. It's been massive amounts of completely irresponsible lending which have leveraged the bubbles against much smaller amounts of tangible value.

World With No Engines Of Growth

2008-11-15T02:38:00.000+08:00

Nouriel Roubini is writing about the Rising Risk of a Hard Landing in China .

For the last few years the global economy has been running on two engines, the U.S. on the consumption side and China on the production side, both lifting the entire global economy. For the last few months the first engine of global growth has effectively shut down as the latest batch of macro news from the U.S. are worse than awful: collapsing consumption and consumer confidence, plunging housing, collapsing auto sales, plunging durable goods spending (while supply side indicators such as production, ISM and employment are also free falling).

There are now increasing signs that the other main engine of the global economy – China - is also stalling. Let us consider now in detail the evidence that China may be on its way to a hard landing…

As always, Roubini writes an excellent column that is well worth a look.

Fed chief endorses stimulus plan

2008-10-21T00:25:00.000+08:00

A second economic stimulus package could help the slowing economy, according to Federal Reserve Chairman Ben Bernanke.

"A fiscal package would not only boost overall spending and economic activity but would also be aimed at redressing specific factors that have the potential to extend or deepen the economic slowdown," the Fed chief said to Congress last night.

1,000 revisited

2008-09-16T21:59:00.000+08:00

KLCI ends down 1.9% at 1012.37 in modest volume, weighed down by steep falls in regional bourses on concerns over health of financial institutions in U.S after news of Lehman Brothers' bankruptcy, credit crisis faced by AIG. Also, retreat in CPO prices triggered selldown in plantation stocks by foreign funds, heightened political risk kept investors on sidelines. Index expected to trade between 1000-1016 range Wednesday. Foreign funds led the selling today with plantations and finance stocks hardest hit. Local investors opted to stay on the sidelines ahead of Anwar Ibrahim's planned Parliamentary coup. This cocktail of poor markets, a weaker ringgit (against USD) and uncertain political future provided the ideal excuse for funds to exit Malaysian equities

Dr M: Why must Malay leaders say sorry?

2008-09-06T22:34:00.003+08:00

Tun Dr Mahathir Mohamad has questioned why Malay leaders were apologising over a remark deemed as racist by an Umno leader.

He said non-Malay leaders never apologised when similar racist remarks were made by members of their community.

The former prime minister said in his blog (www.chedet.com) the Malays were so scared of being labelled racist that they even wrote in Malay papers that the Malays were not racists.

He was referring to the apology by Deputy Prime Minister Datuk Seri Najib Tun Razak made on behalf of Umno over a racist statement by Bukit Bendera Umno division chief Datuk Ahmad Ismail.

He cited the case of the Hindu Right Action Front, he said so many allegations including Islamist extremism and ethnic cleansing were hurled against the Malays.

However, no one demanded apologies from leaders of the non-Malay community.

He also cited the case of Wee Meng Chee who made parody of the Negaraku and poking fun at the call for prayers but there was no apology from leaders of the community over Wee’s actions.

Head & Shoulder??

2008-08-19T23:10:00.001+08:00

Hopeless & Helpless

Composite Weekly Chart

Boycott Streamyx !!!!

2008-08-19T22:11:00.002+08:00

Slow aiiyoooh very slowwww... download capping... poor customer service... technical problem response law ya...
Zamzam not so alakazam as CEO...
Mariam "A Lousy PR" Begum...

Terminate the stupid STREAMYX

Better Try this one...WIMAX for Packet 1 by Green Packet..

When The Going Gets Tough

2008-07-07T23:13:00.000+08:00

OSK Research said, while most of us are highly biased towards the fundamental approach in assessing the market, the prevailing developments may discourage such analysis for the time being.

In this regard, we are making a brief diversion and attempt to look at things from the quantitative and technical perspective. Although our findings may not be etched in stone, nonetheless it at least enables us to gauge the market’s direction and the level at which the window of opportunity opens for investors to accumulate on weakness.

What our models say. Not good, to say the least. The current political developments plus yesterday’s trading glitch certainly do not bode well for the stock market. From the quants perspective, our analysis reveals that the KLCI’s propensity to decline is much higher than that rising.

Technically, 1,090 pts seems to be the immediate support, with a more solid 1,050 to hold the market.

DOWNLOAD FULL RESEARCH REPORT

Unholy Trinity

2008-07-05T11:26:00.000+08:00

Suhaimi Alias (Aseambankers) said, after a sizzling 1Q08, Malaysia’s economic growth is expected to fizzle in the following three quarters.

The culprit is the “unholy trinity” of
(i) a slowing US/global economy;
(ii) prolonged domestic
political uncertainties and risks; and
(iii) rising inflationary pressures externally, which clouds the global and local economic
outlook further.

Consequently, real GDP growth this year is expected to come in lower at 5.3% vs. 6.3% recorded last year. Next year, economic growth is expected to plod along at 5.1% amid an expected gradual uptrend in quarterly growth. But this projection is contingent on several “no change” assumptions, namely status quo fuel-energy prices and benchmark interest rate.
Nevertheless, to counter any further downside and damage to the economy, we expect monetary and fiscal policies to be “supportive” and “expansionary” respectively. This will entail an unchanged Overnight Policy Rate (OPR) and the likelihood of people-oriented tax incentives and spending in Budget 2009, plus the 15% increase in the development expenditure allocation following the Mid-Term Review of the Ninth Malaysia Plan.

Meanwhile, we see the Ringgit to shaking off its seasonal summer blues since its de-pegging to end the year firmer at RM3.10 per USD.

Download Aseambankers Full Research Report Here

KLCI Strong Support 1,067 pts

2008-07-01T23:46:00.000+08:00

KLCI Monthly Chart - strong support at 1,067 pts (Waves)

TMC Life on the rebound - immediate target 1.78

Tomyam Shopping List

Testing 1,300 level

2008-05-15T00:56:00.000+08:00

KLCI ends +0.1% at 1287.74 in sluggish trade on absence of market-moving catalysts; The tone of the market was mixed with strong gains in steel and plantation stocks offset by profit taking amid a weak technical outlook. Investors are still cautious because of the continued failure to surpass the 1300 level; gainers beat losers 371 to 313, with total 605 million shares traded; traders tip index to remain in 1275-1300 range near-term.

TOMYAM SHOPPING LIST

Global Food Shock

2008-05-11T02:28:00.000+08:00

By: Jennifer_Barry
Global Asset Strategist

Rich countries like the U.S. used to store extra food in case of emergencies. Many grain elevators were built in the Great Plains after World War II for this purpose. 2 This stockpile reduced the volatility of food prices. When prices rose, the government released some grain into the market. When costs were low, the Department of Agriculture would support prices by purchasing surpluses. Excesses of wheat, milk, and butter were exported, given away or even destroyed for lack of demand. After the passage of the 1985 farm bill, the USDA divested itself of grain stocks and other foodstuffs.

What happens in the U.S. agricultural markets has a great impact on the rest of the world. America is the “Saudi Arabia” of grain as it is the largest exporter. The U.S. supplies 70% of the world's corn, and it has little 2007 crop surplus of soybeans and wheat left to sell. 3 Many poor countries depend on imports of these staples to feed millions of their hungry citizens.

Another major cereal exporter, Australia is just starting to lift out of a drought that started in 2002. 4 They lost most of the winter wheat crop and their main breadbasket, the Murray-Darling Basin is still excessively dry. Officials hope that the La Niña weather pattern will lead to bumper crops this fall. However, the La Niña that should bring rain to Australia and India will likely deny it to the U.S. agricultural heartland, as well as parts of Brazil and Argentina. 5

With increasing world demand and poor weather in the Southern Hemisphere, the margin for error has become very thin. This year, global wheat supplies are projected to hit a 60-year low, and barley will plunge to a 42-year low. Corn stocks are expected to drop to the lowest level since 1984. Global grain supplies are down to 50 days, less than half the amount just 8 years ago. 6

Another pressure on cereals is the increased global consumption of meat and dairy products. Asians were mostly vegetarian a half century ago, but today they can afford more animal protein. Increased demand for meat puts upward pressure on grain prices, as livestock consume large quantities of feed. Many pounds of grain are necessary to produce each pound of meat.

While China has approximately 25% of the world's population, it only has 10% of its arable land, making it vulnerable to food shortages. More land is turning into desert every year from climate change and poor soil management practices. Ground water is being depleted at a frightening rate, and China will likely have to import water in the form of grain. China isn't expected to export any corn this year, and may become an importer. Half the world's soybean crop is now consumed by China, and a small 2007 harvest has left stocks low. 7 Asian crises like bird flu and the current pig disease further deplete food supplies. 8

Another threat to the food supply is a mysterious disorder killing honeybees called Colony Collapse Disorder, or CCD. Even before this threat, bee populations shrunk 50% from their peak in the 1970s. Bees are essential to pollinate many commercial crops we take for granted. 9 About one third of fruits and vegetables produced in the U.S. depend on insect pollination.

Worker bees are suddenly disappearing and abandoning their hives, and some keepers have suffered a 90% loss of their insects. Even more odd, bee predators like the wax moth won't touch the unguarded hive. Theories range from stress to mites, fungus, pesticides, genetically modified crop poisoning and even abnormally large honeycombs, but no one knows for certain. Now another pollinator, bats are dying in a similarly baffling way in the Northeast U.S.

Much of the world's food supply is not eaten, but converted into biofuels. Even coffee beans are being harvested as an energy source. The EU has mandated that 10% of car fuels should be from biological sources by 2020, a target that will lead to much higher food prices.

Last year, 24% of the U.S. corn crop was used to produce ethanol. 10 In America, ethanol production is subsidized which pushes up the price of corn. At the same time, taxes are levied on foreign sugar ethanol to support domestic sugar growers. About 20% of the U.S. soy oil production is used for biodiesel.

However, this biofuel production is a drop in the bucket of gasoline demand. Even if all the grains harvested in America were converted to fuel, only 16% of the automobile needs would be met. Peasants in the developing nations may be forced off productive cropland so that governments may produce more profitable and nonedible biofuels for export to the energy thirsty West.

The world can't increase supply of food or biofuels easily. Global arable land has reached a plateau at 3.7 million acres. Prime farmland is still being purchased for housing developments decreasing acreage for planting. In suburbs across the United States, former farms are now growing condos and big box stores. Without more acreage under cultivation, "we go to a religion-based energy policy -- pray for good weather," remarked Monte Shaw, head of the Iowa Renewable Fuels Association. 11

All this excess demand has caused rapid increases in food prices, putting the poor in grave danger. Wheat, barley, and oats have more than doubled over the past year. The poorest individuals already spend 80% of their income on food, and they can't afford the price hike. There are nearly 900 million hungry people in the world with the population growing every year.

Jacques Diouf, head of the UN's Food and Agriculture Organisation warned of serious social unrest if food prices continue to skyrocket. In Argentina, farmers are currently on strike to protest the high export taxes on their soybean crop, while Italians protested the high price of pasta with a one day boycott last year. 12 In 2007, there was a huge protest in Mexico City as the price of corn jumped by more than 400%. 13 Food riots have also occurred in West Bengal, Burkina Faso, Yemen and Uzbekistan.

Nations feel pressure to control prices that are spiraling out of control, and keep their citizens from going hungry. Russia, Argentina and the Ukraine decided to restrict wheat exports to ease the pressure on the price of bread. Kazakhstan has a four month moratorium on exports. 14 Vietnam, Cambodia and Egypt have reduced their foreign rice sales, while India and Bangladesh banned exports of most types of rice. The devastating cyclone that recently hit Myanmar has only increased anxiety about the supply of staple foods.

Some experts hope that technology will be able to solve the food crisis. In the past the “green revolution” was a great success, enabling the world to feed more people on less land using hybrid crops, irrigation, fertilizer, and pesticides. In fact, this was really a petroleum revolution. Cheap energy allowed farmers to fuel tractors and other machinery that raised productivity. Globalization and low transport costs allowed farmers to find markets at the opposite end of the globe, allowing consumers to eat apples in May and strawberries in December. Fertilizers made from natural gas allowed food to grow in depleted, even sterile soil. Commercial pesticides are also produced from petrochemicals. 15 Oil is imbedded in every calorie we eat, and the surging price of petroleum will only accelerate food price inflation.

Many countries like to blame speculators for the price rise in foodstuffs. India has taken the extreme step of stopping trading in some commodities like potatoes and soy oil for at least four months, even though last year's ban in rice and wheat futures had no discernable effect. 16 These actions distract from the real cause of inflation, the debasement of their currency.

If you look at the price of a staple food like corn, the price was severely depressed. U.S. farmers were getting no more in nominal terms for their crop in 2005 than they did in 1994. Meanwhile, official CPI had increased by a third.

The bull market in foodstuffs is driven by real fundamentals. Prices are high because stockpiles are depleted, and forecasts for production in many commodities are poor. Prime farmland has been turned into subdivisions and big box stores. Pollinators are dying while the global population explodes. Food is being burned in gas tanks instead of eaten, eroding the margin of safety. The manufacture of biofuels also uses up part of the rapidly dwindling petroleum reserves.

Food is not a luxury and demand will not be significantly depressed by rising prices or punishing “speculators.” These higher food costs are not going away. In fact, I expect that food will take an ever increasing bite out of your budget, as governments competitively debase their currencies. News of shortages only exacerbate the problem as individual consumers stock up. While the Federal Reserve disparages this “inflationary psychology,” I think buying some extra non-perishable food is a wise idea.

lack of positive catalysts

2008-05-07T23:49:00.000+08:00

KLCI shares end +0.9% at 1287.15 in moderate volume but off intraday high of 1289.31 as profit-taking narrows gains in plantations, oil & gas stocks and select blue chips. Decliners outpaced gainers at 397 to 310 while market lacked depth with almost 50% of available shares untraded. The benchmark drifted in 1280 to 1290 range with intermittent profit-taking capping gains. The lack of positive domestic catalysts capped the benchmark's rise, retail players largely adopted sell into strength strategy. KLCI tipped to trade in tight 1280-1290 range Thursday with interest possibly focused on similar theme plays such as oil & gas and plantation stocks.

extend consolidation

2008-05-06T23:26:00.000+08:00

KLCI ends +0.1% at 1276.09 in moderate volume supported by gains in government-led companies, select blue chips and high dividend yield stocks. Market breadth turned positive in late trade with gainers outpacing decliners 342 to 311. Local funds provided buying interest while retail players selectively accumulated plantations, trading & services and small-cap stocks. Benchmark index tipped to extend consolidation within 1265-1285 range tomorrow. Local funds helped to shore-up some selling pressure but intermittent profit-taking dragged the benchmark of its intraday high. The market is likely to consolidate within a tight range but oil & gas stocks, dividend plays and plantation stocks may post marginal gains.

FED IS RUNNING OUT OF ROOM TO HELP ECONOMY

2008-05-05T01:54:00.000+08:00

By John Crudele (NY Post)

May 1, 2008 -- THE Federal Reserve is almost at a dead end.

To understand what's happening with the US economy you have to look at two things that happened yesterday - the Fed's decision to cut interest rates by only a little bit and the economy's itty bitty growth in the first quarter. First, the Fed.

Because inflation is out of control, the Central Bank's leader Ben Bernanke - who inherited one helluva mess from his predecessor - is being forced to ratchet down the amount of monetary stimulus he should be providing to the economy.

So a quarter-point rate cut is all that the Fed could spare, what with the dollar declining to record lows on a regular basis, gasoline and other commodities being held captive by speculators and foreign governments bemoaning the lack of self control on the part of Americans.

In another eight weeks the Fed will meet again and it will do NOTHING.

The second thing that happened yesterday was the first-quarter estimate of the nation's gross domestic product - which is nothing more than the financial statement of the country.

I'll apologize here in advance because the rest of this column is going to be numbers - important numbers, to be sure, but mind-numbing digits for which the reader will need a load of caffeine.

Starbucks for everyone! Borrow money from the Fed if you can't afford it.

The Commerce Department estimated yesterday that the nation's economy grew at an annual rate of just 0.6 percent in the first three months of 2008. That was the same growth reported for the fourth quarter of last year.

There are several things that have to be kept in mind.

First, the 0.6 percent is simply an estimate that isn't based on many actual, hard numbers. In fact, it's such a squishy guess that the margin of error is an enormous plus or minus 3 percent.

And before you break out the champagne (or Propel if you're driving) the "annualized" growth of 0.6 percent means the economy in the first quarter expanded at a slothful 0.15 percent. (Divide the 0.6 percent by the four quarters of the year to come up with that figure.)

In other words, if the people of Peoria, Ill. had all suddenly gone on the wagon and stopped buying liquor for a day the economy probably would have contracted.

Worse, it was government spending and inventory building by corporations that created most of the first-quarter gain.

Neither of those is something you want to rely on for a recovery. But the situation was even more dismal than that.

In coming up with the 0.6 percent annual growth figure, the Commerce Department decided that inflation was just 2.6 percent.

That's lower than Wall Street had been expecting and a tad higher than in the fourth quarter.

Still, the 2.6 percent figure for price increases used for the GDP calculation was nowhere near the 4 percent inflation calculated by other government agencies.

If inflation, for instance, had been 4 percent then the nation's economy would have contracted by an 0.8 percent annualized rate.

And not only that, if inflation was being honestly reported the economy would have contracted in the fourth quarter of 2007 as well.

In other words, there would have been two straight quarterly declines in GDP and the debate over whether or not we are in a recession would be settled.

Not that there's any doubt about the recession - housing prices keep dropping, inventory of unsold homes continues to go up, the job situation is weak and family budgets are being drained by the higher cost of everything.

I really hate being a downer, but someone has to honestly assess this data.

In truth, the last two quarters could have had a larger economic contraction than I just explained.

John Williams, who runs ShadowStats.com, says another set of government numbers - the national income figures from the GDP report - shows that Wash ington could be overstating the health of the economy.

As weak as the GDP was, the national income figures hint that Americans might have actually had $139 billion less in come to spend in the fourth quarter than the government believed.

There is some hopeful economic news, which I offer to those of you who might be feeling suicidal about now.

Interest rate cuts could still have a positive impact on the economy. And the tax rebates might help - at least temporarily.

But right now the Fed is dead-ended. It will either have to stay right where it is, or back up. Neither one is a good option.

Asia Getting Fed Up With Bernanke's Rate Cuts

2008-05-05T01:38:00.000+08:00

Commentary by William Pesek (Bloomberg)

Chalongphob Sussangkarn knows a thing or two about volatile currency markets. Until February, he was the finance minister of Thailand, which over the last decade saw its currency plunge too low and surge too high. Yesterday, I bumped into Chalongphob at a Madrid hotel as he grappled anew with the vagaries of exchange rates -- this time as a consumer exchanging dollars.

``I should just get rid of these dollars before they fall even more,'' joked the president of the Thailand Development Research Institute, as we exchanged U.S. currency for euros.

Thailand's currency, the baht, has risen 16 percent against the dollar over the past 18 months, part of an Asia-wide trend. Hastening the dollar's slide is a Federal Reserve set on avoiding recession at all costs. On April 30, the Fed lowered its benchmark interest rate by a quarter point to 2 percent, the seventh cut since September.

While the Fed hinted it may be ready to pause, the amount of monetary stimulus in the pipeline is a growing threat to Asia. One immediate side effect is rising currencies, which poses challenges for Asia's export-dependent economies.

The bigger issue is that easy money is fueling global inflation.

``With inflation running very high in most countries, the ability of central banks to reduce interest rates to offset the impact of the U.S. slowdown is going to be constrained,'' says Subir Gokarn, Tokyo-based Asia-Pacific chief economist at Standard & Poor's.

Fed Up

Fed Chairman Ben Bernanke acts in the U.S.'s interest. Yet the Fed's cuts are adding ever more liquidity to global markets. While bad weather and the increased use of biofuels explain part of the run-up in food prices, rising oil costs are as a much a consequence of liquidity as demand.

Asia is on the front lines of the phenomenon, especially with investors like Mark Mobius betting on more rate cuts. Mobius, who oversees $47 billion in emerging-market equities at Templeton Asset Management Ltd., says Bernanke may cut rates to 1 percent as U.S. housing foreclosures worsen.

Central bankers in Asia could be excused for feeling a bit, well, fed up by sliding U.S. rates. Their concern is over ``hot money'' flows of the kind that wreaked havoc in Asia a decade ago. Investors who had poured in amid rapid growth fled even faster at the first sign of trouble. Large amounts of the liquidity created by the Fed are heading Asia's way to tap its rapid economic growth.

Too Much Money

The meltdown at Bear Stearns Cos. in March raised the stakes as the Fed stepped up its campaign of rate cuts. Asia was already awash in money thanks to the Bank of Japan. Even though Japan has been growing steadily since 2002, the BOJ's key lending rate is still a mere 0.5 percent.

Excess liquidity is dovetailing with Asia's record buildup of currency reserves. China, Japan, Taiwan, South Korea and India hold a combined $3.5 trillion of reserves. There's increasing evidence that Asia's currency holdings are seeping into the money supply, adding to inflationary pressures.

In a perfect world, economists would be predicting aggressive rate increases in Asia. Yet with more that two-thirds of the world's poor living in the region, central banks may be reluctant to slam on the brakes.

The Real Risk

Officials in Indonesia, the Philippines and Thailand may raise interest rates as higher oil and commodity prices feed into inflation, say economists such as Beng Ong at JPMorgan Chase & Co. in Singapore. It's unclear, though, how aggressive central banks will be even as crude oil, rice, corn, wheat and soybean prices reach unprecedented levels.

Timidity might be a mistake. Inflation is the real risk to Asia's long-term prosperity, not slowing U.S. growth. China's inflation has quickened to the fastest pace in 11 years, and consumer prices rises in Sri Lanka and Vietnam have exceeded 20 percent. Singapore's consumer price gains have reached levels not seen since 1982.

There can be little doubt inflation concerns will dominate the Asian Development Bank's annual meeting, which begins this weekend in Madrid. The ADB predicts inflation in Asia will reach a decade-high this year even as economic growth cools.

Paying the Price

``It's hard to exaggerate how much of a problem rising inflation is to Asia's short-term stability and longer-term prosperity,'' ADB Chief Economist Ifzal Ali told me in Tokyo last month. ``It really is THE issue.''

Some Asian policy makers sympathize with Bernanke's plight. As Philippine central bank Deputy Governor Diwa Guinigundo sees it, the Fed is pursuing a ``first-things-first approach.'' The trouble is, low rates are treating the symptoms of the U.S.'s problems, not the underlying sickness.

What ails the U.S. is too much consumption, too much debt, too little household savings and a financial system that's more vulnerable than once thought. Fixing these imbalances will require strong action from lawmakers and economic officials -- not more liquidity.

Japan squandered a decade believing low rates would restore its economy to greatness. The longer it takes the U.S. to heed those lessons, the more Asia may pay the price.

(William Pesek is a Bloomberg News columnist. The opinions expressed are his own.)

FED'S RATE CUTS ARE NOT HELPING

2008-04-26T01:46:00.000+08:00

By JOHN CRUDELE (New York Post)

THE vast majority of experts still think the Federal Reserve will reduce interest rates next Wednesday, but this time the betting is for a modest quarter-point cut.

However, there is a growing sentiment - now 18 percent, up from zero in recent weeks - that the Fed might call a halt to its monetary stimulus. Or, at the very least, it will warn that the cessation of rate cuts is near.

If that happens, the financial market could be caught off guard.

Several prominent economists and even some Fed members have expressed concern that rate cuts are doing more harm than good.

Rate cuts are killing the value of the dollar as well as America's reputation; causing a sharp rise in inflation, including commodities like gasoline, and bringing monetary policy to the brink of impotency.

And the heat is coming especially from Europe, where their central bank has been refusing to go along with the rate cuts - although injecting plenty of money into the financial system - because it, unlike our Fed, fears inflation more than economic stagnation.

It'll still be months before we will really know whether the six rate cuts that added up to a 3 percent drop in the federal funds rate are doing much good.

And it could be even harder to figure how much May's tax rebates will help.

Are we in the nightmarish economic quagmire some of us expected when the Fed began cutting rates last August?

Or are we making too much of an economic cloud that will soon lift?

Those are just some of the questions the Fed will be dealing with next week when the problem of the inability of people and companies to borrow money will be front and center.

I think you'd agree: We're all tired of the economic drag that the so-called credit crunch is causing.

And if the economy could be controlled like our TVs, with the press of a remote control, we'd simply change the channel.

But Ben Bernanke's Fed is finding this economic downturn to be different from others. The damn thing just won't click off.

Few people would still disagree that we are in a recession right now; but there's agreement on little else.

Take the issue of another reduction in interest rates.

While the Fed has been diligently ratcheting down its funds rate - which is the amount banks charge each other to borrow money - those lower costs aren't being passed on to borrowers.

Mortgages are a good example.

While the Fed has cut rates by 3 percent - or 300 basis points, in Wall Street lingo - the average rate on a 30-year fixed-rate mortgage has fallen very modestly.

These mortgages recently averaged 5.88 percent compared with 6.17 percent last year.

That's a drop of only 0.29 of one percent, or 29 basis points.

In other words, the Fed has cut the interest rate it controls 10 times as much as banks have cut what they charge would-be homeowners.

And that's not even the biggest problem.

Here's an e-mail I got re cently from a reader who recently had to navigate the mort gage market.

"I bought a vaca tion home in July - before the market hit the fan and the Fed had to lower [rates]. I locked in a 6.5 percent 30-year fixed mortgage when fed funds were 5.25 percent," says Scott J. Redler.

"So last month [I] figured, with [the] Fed lowering rates so many times I could refinance to a great rate for the long term."

Redler called up Chase Bank but the new rate had only dropped to 6.18 percent.

"How does that stimulate the economy," Redler asked, if the banks aren't passing much of the rate reduction on to consumers.

"That's problem No. 1," said Redler, who volunteered that he has a strong 795 credit score and probably got a better deal than most people could get.

"Then I get a phone call that the place I bought in July appraised for $30,000 less than when I bought it." So, in order to get a new mortgage Redler had to come up with $30,000.

"This downturn won't be short and sweet. There will be big-time problems down the road," Redler added. "I'm not an economist - just using common sense from experience."

Banks have been the hardest hit in this economic downturn, so it's understandable that they don't want to be generous to customers when they can use the money themselves.

Earnings of financial institutions in the first quarter are down 70 percent from the same time last year.

Unless the banking industry causes another panic the Fed could be finished with its magic for a while.

john.crudele@nypost.com

Extend Gains

2008-04-16T23:44:00.000+08:00

KLCI ends +0.8% at 1253.64 in moderate volume with 583.6 million shares changing hands; market's rise led by plantations, consumer stocks and construction plays. Market breadth positive with gainers edging out decliners 407 to 287. The benchmark likely to extend gains tomorrow, possibly rise to test 1264 (April peak) with both foreign and local funds selectively accumulating stocks. KLCI may find psychological support at 1250. The KLCI seems to have bottomed-out at around 1150-1160. Both local and foreign funds have been accumulating plantations, consumer stocks and dividend yield plays. The ringgit's strength in recent days has acted as an additional catalyst for foreign funds. Ringgit +1.2% vs USD over last 2 weeks.

Sell on strength

2008-04-15T23:24:00.000+08:00

KLCI ends +0.9% at 1244.20 in thin volume of 440.1 million shares with gainers outpacing decliners 408 to 224; buying interest from both local and foreign funds in plantations, index-linked heavyweights, construction and select blue chips helped buoy the market but dealers remained cautious throughout. Benchmark tipped to extend gains Wednesday, possibly attempt to breach 1250 psychological resistance but profit-taking into strength may reverse gains, possibly drag index down to 1230. Buying interest is very modest. The market lacks both depth and breadth. There's a strong likelihood that selling pressure will emerge at around 1250.

Bottom Up?

2008-04-11T00:18:00.000+08:00

KLCI ends +1.7% at 1248.19 in moderate volume led by gains in plantation, construction, blue chip stocks; market breadth ended positive with gainers trouncing decliners 469 to 188. Key trigger for rising buying interest attributed to stronger ringgit; USD/MYR last at 3.1520 (level last seen 10 years ago), tracking SGD after MAS tightened monetary policy. Follow through buying interest tomorrow could help KLCI close Mar. 10 gap down move (1278 to 1242) if volume traded accelerates. Buying interest from foreign funds accelerated in late afternoon trade, lifting the KLCI close to 1250 (psychological resistance). Further ringgit strength tomorrow is likely to lift the broader market. MIMB's Pong Teng Siew says KLCI has already bottomed-out; may be poised for an upswing in coming days or weeks.

Action Against Repco Low & The Gang

2008-04-09T21:26:00.000+08:00

KUALA LUMPUR — The Securities Commission (SC) has initiated a civil enforcement action against eight foreign parties and two Malaysians in relation to the manipulation, market rigging and fraud of Iris Corp Bhd shares.

The SC said it has also sanctioned two stockbroking companies and two dealers representatives involved in the case.

"The milestone action marks the beginning of a new approach in combating market manipulation," the SC said in a statement here today.

According to the SC, the two Malaysians named in the suit were Datuk Tan Mong Sing and Low Thiam Hock while the foreign defendants comprised five companies and three individuals.

The foreign companies were Aeneas Capital Management L.P.(ACM); Priam Holdings Ltd; Aeneas Evolution Portfolio Ltd; Aeneas Portfolio Co L.P.; and, Acadian Worldwide Inc.
The three individuals were Thomas R. Grossman (managing partner, investment manager and portfolio manager of ACM); Richard Benjamin Cohen (research analyst-cum-Malaysian investment trader of ACM); and, John Suglia (principal/chief operating officer of ACM).

The SC said the civil enforcement approach would enable it to seek various reliefs from the High Court including injunctions, compensation, restitution and declaratory orders.

It filed the civil suit on March 27, 2008 at the Kuala Lumpur High Court.
In addition to the civil suit against the named defendants, the SC has imposed administrative sanctions against MIDF Amanah Investment Bank Bhd on Dec 17, 2007, and PM Securities Sdn Bhd on Feb 1, 2008.

"Both PM Securities and MIDF Investment were fined RM400,000 and RM200,000 respectively, and suspended from submitting any application to register new dealers representatives for six months," it said.

It said administrative sanctions were also imposed against two dealers representatives from Avenue Securities Sdn Bhd, namely, Lee Hooi Li and Patrick Taylor to revoke and to suspend their dealers representatives licences respectively.

"Lee was found to have used five accounts without authorisation of the account holders when transacting in Iris shares while Taylor was found to have failed to perform his duties efficiently, honestly and fairly in carrying out his supervisory responsibility over Lee.

"Additionally, a dealers representative from PM Securities Sdn Bhd, Lim Joo Lang, was suspended by Bursa Malaysia in July 2007," it said.

The SC said Lim was barred from trading for a period of nine months and fined RM10,000 for various breaches of Bursa Securities rules in relation to the trading of Iris shares.
It said it initiated formal investigation after Iris was declared a designated counter on May 11, 2006.

"From September 2005 to May 2006, the price of Iris shares rose by 17 times from eight sen to close at a high of RM1.36 on the back of very strong demand with an average of 200 million shares being traded daily.

"The SCs investigation found that the manipulation was carried out through a complex layering of the origination of the orders and transactions via foreign intermediaries in several jurisdictions," it said.

The commission said the investigation further revealed that the defendants had collectively used numerous trading accounts which contributed to the strong demand for Iris shares during the material period.

"The foreign defendants and their representatives worked closely with the Malaysian defendants in creating an artificial demand for Iris shares.

"The SC was able to unravel the defendants activities through painstaking and careful analysis of trading data of more than 100 trading accounts at 15 local and 16 foreign brokers, records of various communication modes between the perpetrators including more than 200,000 e-mail messages, and recording of statements from witnesses locally and overseas," it said.

The SC it in pursuing its investigation, it has worked closely with its foreign counterparts, namely, the US Securities and Exchange Commission, Hong Kong Securities and Futures Commission, Monetary Authority Singapore, Financial Services Authority UK, BVI Financial Services Commission and Cayman Island Monetary Authority. — BERNAMA

Lack of oxygen

2008-04-03T02:03:00.000+08:00

KLCI ends down 0.9% at 1239.65 in moderate volume. Plantations stocks dragged the index lower on concern CPO prices may see a continued downtrend. Market breadth negative with losers outpacing gainers 390 to 305; index tipped to trade Thursday with downward technical bias to test next support at 1220, after breaking earlier support of 1240. The main drag on the market is plantation stocks; CPO prices peaked at MYR4,486 on March 4 but are now on a downtrend. That translates to lower profits than initially expected.

dead-cross

2008-03-31T23:57:00.000+08:00

KLCI ends down 0.9% at 1247.52 in moderate volume, snapping 8-day rally, as some investors bet recent gains in government-linked heavyweights have outpaced future earnings potential. Market breadth negative with losers outpacing gainers 509 to 230; index tipped to head towards 1226 support (8-day moving average) tomorrow in absence of positive catalysts. Local end-1Q window-dressing is likely to have been completed today. The market is turning bearish (breached 1250 psychological support) and the 'dead-cross' at the 50- and 200-day moving average marks a potential turn day.

TOMYAM SHOPPING LIST

Hope for another technical rebound

2008-03-30T22:15:00.000+08:00

KLCI ends +0.3% at 1258.41 in heavy trade; buying interest in stocks across sectors on end-1Q "window dressing" by local funds. Some 949 million shares change hands, market breadth positive with gainers outpacing losers 498 to 237. Retail interests concentrated more on speculative lower liners and the select heavyweight stocks that had encountered sharp falls. Investors are expected to continue increasing their exposure for a further technical rebound ahead, before the current rally shows sign of exhaustion, likely near to the 1,300 psychological level or the 40-day SMA near 1,325.

TOMYAM SHOPPING LIST

HOW TO INVEST ANY MONEY YOU HAVE LEFT OVER

2008-03-30T00:15:00.000+08:00

By John Crudele
NY POST

March 27, 2008 -- ANOTHER day, more bad news for the stock market. That's been the pattern.

Yesterday it was a surprisingly bad drop in sales of durable goods, plus speculation that giant bank Citigroup might have a frighteningly big loss this quarter.

On Tuesday, the gloom was caused by a collapse in consumer confidence and news that home prices were sliding quickly.

Tomorrow it'll be something else. The day after that, thankfully, will be Saturday - so maybe nothing bad will happen.

It's all enough to make an investor turn tail and run.

But what if you still have some money left after paying the outrageous price of gasoline and filling your bags with overpriced groceries at the supermarket?

What if you still have the nerve to invest in something - anything - even though your house didn't turn out to be the deal you thought it was?

Normally I'd call folks on Wall Street for advice on investing in this environment, but I already know what they'd say - buy stocks and hold them for the long term.

How long? Just long enough for the person giving that advice to be out of sight if the move doesn't pay off.

If you missed it, The Wall Street Journal did a fine front-page piece yesterday about the stock market's "lost decade," when Treasuries did better than stocks.

Not surprising, but it's nice to see someone else holding their nose.

So here are some ideas that might protect you in a bad economy and might even make you a few bucks.

Let's start with stocks - although they are not the safest investment for these times.

Let me state very clearly that stocks are likely to be the most dangerous and volatile investment over the next few months.

This is another warning - stocks could drop precipitously.

Prices of equities haven't retreated nearly as much as they should have, maybe because - I suspect but can't yet prove - the federal government is holding a safety net under them.

That being said, this should have been a fine year for stocks. And it still can be if you pick your spots.

It's a well-reported fact that the stock market historically does well in the last seven months of a presidential election year like this one, up 13 of the last 14 times.

That means the rally should begin in June.

There are several other favorable trends for stocks, like prices rising during options expirations week and at the end of each month and quarter.

Last week options expiration helped the market. This week professional money managers wanted the market up so they could show clients better results.

But all of these patterns could - and probably will - be interrupted by more bad news.

First-quarter profits that come out in a few weeks aren't going to wow anyone. Projections for the rest of the year could also sting.

Oil companies should keep earning well, especially since Washington is ignoring their excessive profits.

And companies involved in agriculture and commodities might also thrive.

Safe plays would be companies that produce the staples of everyday consumer life.

So walk around you supermarket and see what people can't do without - and then buy stock in the manufacturer. That gets us to more conservative and sensible stuff.

Treasury securities and certificates of deposits - as boring as investments come - will let you sleep at night, but maybe not so well.

CDs are paying next to nothing. And you can lose money in Treasuries if the bond market sinks and interest rates climb.

And that could happen, especially if I'm correct that economic statistics, like the nation's payrolls, make the economy look stronger than it really is over the next couple of months.

If you're worried about the US financial system, then you'll want to look at assets that aren't denominated in dollars.

Buy some diversified foreign bond funds. Stay away from any one particular currency - especially the euro - because the US could easily drag Europe into a recession that'll hurt those investments.

Buy into some precious metal funds, or Exchange Traded Funds that specialize in gold, silver or other commodities.

You could also do what I recently did - bank hop.

In desperate need of capital, many banks are now offering multi-month premiums to new customers.

Chase gave me a 4.5 percent annual rate; an annuity from Allstate 7.5 percent.

Not exciting, but I'd rather get my excitement at the amusement park than in my portfolio statement.

Healthy Rebound?

2008-03-26T21:32:00.001+08:00

KLCI ends +1.3% at intraday high 1245.42 in moderate volume of 751.1 million shares; market breadth positive with gainers outpacing decliners 402 to 298 with buying interest from both local, foreign funds across all sectors providing market buoyancy. Sustained buying interest may help benchmark index test psychological resistance at 1250 tomorrow but most expect profit taking to narrow gains. The market has enjoyed a healthy rally over the last 6 trading sessions, partly supported by the Invest Malaysia 2008 conference. Some value hunting emerged over the last few days but it may be a struggle for the benchmark to overcome the gap down on March 10 (1283.19 to 1242.64). Notes KLCI March Futures +7 points at 1230, but at discount to cash market.

TOMYAM SHOPPING LIST

Nothing to say

2008-03-23T23:38:00.000+08:00

(Pix courtesy of Mat Kayangan)

Most Asian financial markets rose in thin holiday trading Friday after a turbulent week. Japanese shares were buoyed by gains in property developers and financial issues. The Nikkei 225 index climbed 222.13 points, or 1.81%, to close at 12,482.57.

South Korean shares extended their winning streak into a fourth session amid easing concerns about global inflation after commodities prices declined. The Korea Composite Stock Price Index, or Kospi, added 22.30 points, or 1.4%, to 1,645.69.

Trade was also subdued because many markets in Asia, Europe and the Americas were closed for Good Friday. Regional markets that were off included Hong Kong, Australia, India, Indonesia, New Zealand, the Philippines and Singapore.

It was a quiet end to a week that began with global markets plunging on news that JPMorgan Chase would buy troubled U.S. investment bank Bear Stearns, which had been battered by the subprime mortgage crisis.

Asian markets rebounded Wednesday after the U.S. Federal Reserve cut rates by a hefty three-quarters%age point, sparking a huge rally on Wall Street.

Worries linger about the outlook for the American economy and much of Friday's gains in Tokyo were from a short-term adjustments.
In Thailand, the key index rose 0.7%, while Malaysia's market inched up 0.2%.

Chinese stocks were mixed, with the benchmark Shanghai Composite Index edging lower as market heavyweight PetroChina fell 4%, outweighing gains in steel makers.

The benchmark Shanghai Composite Index fell 0.2%, or 7.47 points, to 3,796.58. The smaller Shenzhen Composite Index rose 1.4% to 1,173.14.

The Shanghai index was up over 2% at one point yesterday afternoon after plunging more than 6% in mid-morning, a sign that institutional investors were already beginning to bargain hunt.

In currencies, the dollar was trading at Y99.60 at midafternoon, down from Y100.00 late Thursday in New York. The euro rose to $1.5444 from $1.5433.

In Asia, markets in Australia, Hong Kong and New Zealand will remain closed Monday.

On Friday KLCI ended +0.2% at 1189.06 in razor-thin volume. Late buying interest from local government funds on government-linked stocks helped offset retail investor sell-down, subdued trading interest also due to Easter holiday closure in some regional markets. Market breadth ended negative with losers outpacing advancers 376 to 285. Index tipped to trade in 1170 to 1200 (psychological resistance) but government funds may lend support in view of country's annual investor conference next week. The market may be propped up to make it pretty for fund managers to look at and it will be interesting to hear the PM speak amid the unfolding political drama, which may drag on for some months.

TOMYAM SHOPPING LIST