2007-08-06

Friday, August 03, 2007

Mega-Sales needed to attract Rio Tinto to revives Bakun

The country might have successfully pushed for the construction of one of the largest hydroelectric dam projects in Asia. The Bakun project in Malaysia's Sarawak State was nevertheless hit by several postponements from the period of it being proposed till now, as if there was a curse trying to stop it from completion. It was more than a decade ago when the former premier Mahathir issued the go-ahead, regardless of the concerns on the environmental effects raised and the objection of the relocation of the original settlements within the area.

In the name of development, everything was bull-dozed to make the mega-project the size of Singapore itself becomes reality. Nothing can stop the decision, and so the Bakun project was started on an area covering 60,000 hectar. All it needs was the 1997-98 Asia Economy Crisis to stop the project, well, at least temporary. And since then the original blue-prints, the main contractors, bulders and others have changed. 

In late June 2007, the stubborn government seems to have found the pulse to continue the project when Malaysia offered Japan's Sumitomo Corp. (TYO: 8053) a $1.5 billion deal to lay a 700-kilometer long submarine cable which will transmit electricity from Bakun to Peninsular Malaysia despite the fact that the country has excess of 40% of un-used capacity currently.

So, there you go; you have the area the size of Singapore for you to play with by flooding it with waters. The people who stayed on the original lands were forced to settle somewhere else. The economy is back to pre-1997 crisis level (or is it?) and the government needs to spend in order to create business activities. The main contractor is more or less has been finalized and it’s none other than another GLC (government-linked-company) conglomerate Sime Darby Berhad (SIME: stock-code 4197). You have roped in the expertise from Japan to lay the cable and state-owned utility company Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) is surely the buyers of the electricity generated, regardless whether the nation really needs the extra capacity of 2,400 megawatts or not. 

But suddenly the government realized they indeed need to build a business justification in order to sell the huge 2,400 megawatts or else the electricity will sit there idling, not that you can put it on the table as one of your dinner’s dishes. If you’re surprise with such methodology, please don’t, as that’s how the country works. The government’s concept is to build the infrastructure and worry about other problems later on as can be seen with most of the city-planning’s methodology. Thus you can see buildings being built up only to realize that the infrastructure such as the roads, severage systems, drainage systems and so on could not cater for future expansion – anyone care to enjoy the fun of having flash floods?

Earlier StockTube had blogged about the solution to the extra excessiveelectricity by courting power-hungry industry such as aluminium smelter.There’re couple of major players in the aluminium sector and based on the recent proposal from Rio Tinto (NYSE: RTP,stock) to acquire Canadian aluminum producer Alcan Inc. in a $38.1 billioncash-deal after Alcoa (NYSE: AA, stock) backed off, the Malaysia is talking aggressively trying to court Rio Tinto into Sarawak.

Yesterday, Aug 2, Rio told Reuters that it will sign an agreement next week with its Malaysian partner, Cahya Mata Sarawak Berhad (KLSE: CMSB, stock-code 2852) to pave the way for a feasibility study on a $2 billion aluminium smelter.Cahya Mata is part-owned by the family of Sarawak Chief Minister Abdul Taib Mahmud. 

Whether Rio Tinto will proceed to build an aluminium smelter in Sawarak is yet to be seen, if the earning announcement by Rio yesterday is anything to goes by. Rising costs has cut its profit and the earnings fell to $3.25 billion from $3.8 billion a year ago. Even though the poor result was mainly caused by overruns at Rio Tinto's Argyle diamond mine, the two main commodities that contributing nearly 90% of its earnings are iron ore and copper. Unless the potential profits from the aluminium justify a new smelter, Rio might take its own sweet time to make the decision to expand into Sarawak. Maybe Malaysia can do cheap-sales on the electricity to attract Rio, the same way current “Mega-Sales” is happening throughout Malaysia.

For the time being, the other Malaysia government agencies might want to take a look and solve of the problem of “sex-slaves” crying for help trapped inside the Bakun perimeters currently. It’s disturbing to learn that while the gangsters and syndicates are known to supply the women, nothing is being done to rescue them. If you’ve not read this hot story, you can click here to read it. Just because there’re 2,000 workers working within the project doesn’t gives the police the right to justify that the law-enforcers can’t do anything about it.

Other Articles That May Interest You ...

• Sumitomo Offered $1.5 Billion Deal by Malaysia
• Why You Hate and Love TENAGA at The Same Time?
• SIME Won RM15 Billion Cable Project
• Does Malaysia Needs Bakun Project?

Thursday, August 02, 2007

Bad Economy & Crimes Eat into Petrol Stations?

With or without government approval, the 3,200 petrol stations nationwide in Malaysia, including those along highways, will close at 10pm and open at 7am. Most newspaper reported the news and the decision was decided at the annual delegates conference of the Petrol Dealers Association of Malaysia (PDAM) here yesterday.

The justifications for such action: frequent armed robberies, increased security costs, higher wages for workers, low night sales, soaring rentals and electricity bills. To make matter worse, the dealers also want customers who use credit cards to buy petrol to fork out the 1% commission, previously absorbed by the dealers.

“The association’s acting president, Major (Rtd) Wahid Bidin, said the decision was likely to go into effect in two months and added “Last year, every petrol station was robbed at least once … The average collection of only about RM1,000 daily after 10pm did not make it worth their while.”

“However, Federation of Malaysia Consumers Association chief executive T. Indrani said that petrol stations should not be allowed to close early because “The dealers are making profits and, if they were losing, they would not be in business … If they are truly making losses, they should show their income and expense statements to prove that they are making losses.''

While I do not agree with the decision to close the petrol stations at 10pm, I can’t deny the fact that from the business perspective, it’s really not worth the operating cost if what the PDAM claimed is true. City drivers might be able to adapt to the early closure but those operating along highways should remains open.Can you imagine what will happen during the peak season if drivers need to refill gas along the PLUS highway but couldn’t find any petrol stations, not to mention the normal traffic jam even on the pay-highway itself?

Unless the dealers can prove they’re making losses, the government should not allow this to happen. But what if the dealers are right? It might be true that the business is not that rosy though, considering the petrol prices were increased multiple times during the current administration headed by premier Badawi. You might still remember those days when the petrol was at RM1.10 per liter not too long ago and with a stroke of an announcement (the nation’s coffer is drying?) it’s now more than RM1.90 per liter.

The chain-reaction was that almost all your can think of in your daily expenses has risen – transportation, foods, car-parts and just anything. It’s normal now that car owners drive daily to the nearest LRT (light-rapit-transit) only to park their car and board the LRT. Some resort to cheaper transport alternative – motorcycles, thanks to the forever in-efficient bus transportation.

And due to the government’s policy to import foreign workers especially from Indonesia, the social problems had began to show its’ color – increase in crimes such as arm-robberies, rapes, hijacking, snatch-thefts and anything related to crimes which you can name it. It might makes sense to utilize these foreign cheap labors during the good times but once you’ve a leader who’s not capable to maintain, not to mention increase the nation’s economy expansion, you should get ready to combat battalions of walking zombies terrorizing public’s security.

Other Articles That May Interest You …

• Is Malaysia's Coffer Out of Money?
• Stock That You Can Milk for The Next 40 Year

Moody Says Smaller Deficit, Malaysia Said Otherwise

Moody's Investors Service said Malaysia needs a smaller budget deficit and faster economic growth to earn its first credit rating upgrade since 2004. Standard & Poor's on July 31 raised the outlook on the Southeast Asian nation's foreign currency borrowings to positive from stable, which means the company's first upgrade on Malaysia since 2003 is more likely – reported Bloomberg.

Moody's however said today a stable outlook is more appropriate. Malaysia's government, which has spent more than it earns for nine straight years, plans to maintain a budget deficit this decade to fund a $58 billion development program. Second Finance Minister Nor Mohamed Yakcop in June argued that foreign investment, economic growth and the state's ability to repay debt weren't factored into the nation's credit ratings.

Malaysia's government plans to post a deficit of 3.4 percent or less of gross domestic product until 2010, Yakkop said on July 10. The government expects the economy to expand 6 percent this year after growth of 5.9 percent in 2006.

On July 31th 2007, Standard & Poor's left the rating on Malaysia's foreign currency debt unchanged at A-, the fourth-lowest investment level. Moody's rates Malaysia's foreign currency long-term debt as A3, the equivalent level.

It would be interesting to see how on earth can the government spend less to decrease the budget deficit when the premier Badawi has been promoting one mega-project after another, starting with IDR in southern region of Peninsular Malaysia to NCER in the northern part and now he’s getting ready to launch another one in the eastern part of Kelantan, though on a smaller scale as Kelantan is governed by opposition party.

Looking at the pattern of how Badawi going around the nation promoting new projects one wonders in amusement how could the premier who are known to often fall-asleep even on official functions could suddenly wide awakes giving away all the goodies. The premier could be flying off to Sabah and Sarawak to hand more good news to the locals in the last effort to fish for votes before calling the next general election.

Nevertheless in order to put the chart to shows smaller deficit, the government needs to either increase exports or reduce imports but it’s easier said than done.Artificial figures could do the trick though. 

Other Articles That May Interest You …

• Rating Upgrade Refused by Moody for Malaysia

Wednesday, August 01, 2007

Murdoch’s $60 a share Offer and Fees-Paid Wins

Rupert Murdoch claimed victory today, Wednesday 1st Aug 2007, in his battle to acquire Dow Jones after securing support from enough Bancroft family members to clinch majority backing for his $5.6 billion cash offerfor the owner of The Wall Street Journal. The breakthrough came after nearly four months of often torturous negotiations between the media mogul and the fractious clan of heirs to a family which has controlled the leading US financial newspaper for more than a century.

Mr Murdoch overcame objections from inside and outside the family that his hands-on editorial style and tabloid newspaper sensibility would tarnish the Journal's reputation for high editorial standards and independence. The 76-year-old mogul, who has in the past 50 years built News Corp from a small Australian newspaper group into a global media giant, has had his eye on the Journal for at least a decade.

The Bancrofts control 64 per cent of Dow Jones's voting shares, held through a complex series of privately-held trusts. More than half the family votes, representing more than 30 per cent of Dow Jones's overall voting shares, are needed for News Corp to be confident that its offer will be voted through by a majority of the company's shareholders. A turning point came on Tuesday after a Bancroft family trust holding around 9 per cent of Dow Jones's voting shares dropped its push for a higher price from Mr Murdoch. Instead, it agreed to back the deal after receiving assurances that the family's fees would be paid as part of the deal.

Murdoch's $60 a share offer, a 65 per cent premium to Dow Jones' share price before news of News Corp's interest emerged carried the day after he agreed to a last-minute deal sweetener by helping to cover millions of dollars of legal and advisory costs incurred by the Bancroft family. By adding it to a stable of media properties that run from tabloids such as The Sun in London and the New York Post, to Fox News Channel and MySpace, Mr Murdoch cements his position as the dominant force in global media.

Based on Murdoch’s vision for Dow Jones to establish The Journal as the rival to The Times in setting the daily news agenda of the country, there is little doubt that he will directly aim at luring both readers and advertising away from The New York Times and The Financial Times, The Journal’s closest rivals. His strategy will probably include aggressively undercutting advertising and investing heavily in editorial content – reported New York Times.

When he repurchased The New York Post in 1993, he focused on raising the paper’s circulation by cutting the cover price of the paper several times and handing out copies free. “If he hadn’t come in, there wouldn’t have been a New York Post,” said Jerry Fragetti, senior vice president for media and operations at Newspaper National Network, who worked as chief financial officer of The Post in the 1980s and as an executive for the News Corporation in the early 1990s.

After IDR now NCER – Segregating Pies

Just what happens to the highly marketed and the buzzling of IDR (Iskandar Development Region), the first mega-project initiated by Malaysia’s premier Badawi which is suppose to be another clone of Hong Kong or Dubai spanning over 20-year whileattracting 105 billion dollars?

Before anything has taken off in a scale which can instill confidence that IDR is not a fantasy but a real thing, the premier today ambitiously launched the Northern Corridor Economic Region (NCER) project which will see the transformation of Penang into a modern, vibrant city and a major logistics and transportation hub. The NCER is said to be the bullet to turn Penang into the “Gateway to the Northern Corridor”. Excuse me but aren’t Penang has been the “gateway” to the northern Malaysia all this while? Either this is another nice marketing strategy to further segregate projects to the ruling party’s linked companies (or cronies) or the Chief Minister of Penang has done a damn bad job in maintaining, not to mention developing, the status of Penang as the northern gateway.

Everyone knows the main company which benefits the most from IDR is the UEM World Berhad (KLSE:UEMWRLD, stock-code 1775), a construction firm linked to ruling UMNO party and the one which has huge lands located within IDR. So, you shouldn’t be surprise if the NCER is another way to give the other pieces of pie toMalaysian Rresources Corporation Berhad (KLSE:MRCB, stock-code 1651), another GLC (government-linked-company) and Equine Capital Berhad (a close business associate of Badawi). Did I hear someone said General Election is around the corner?

Anyway, compare to IDR, NCER seems to have a stronger and clearer blueprint, at least on the paper. To start the ball-rolling, at least a China company has been secured to finance and build the Penang second bridge. Among some of the sub-projects within the high-level blue-print for NCER are:

• Penang Sentral integrated transport hub – a RM2 billion modern transportation and logistics hub to transform Butterworth into a modern metropolitan area, covers 557,418 square metres. The hub will integrate rail, ferry, monorail and land transport modes – the came concept as KL Sentral. Winner - MRCB
• Penang Global City Centre – a RM18bil project to transform Penang Turf Club into a modern city center which will have international exhibition and conference centre, shopping complexes, two five-star hotels, commercial and residential properties, a state-of-the-art cultural centre and a 10.5ha park. Winner – Equine Capital Berhad (KLSE: EQUINE, stock-code 1147). Does this sound like KLCC to you, both also on the land of turf club with the same concept?
• Second Penang Bridge – a RM2.7 billion bridge connecting mainland and Penang which will be the South-East Asia’s longest bridge. Expected to be complete by 2011, it will be built under a joint-venture between UEM Builders Bhd and China Harbour Engineering Co Ltd.
• Pulau Jerejak premier medical tourism centre
• Penang-Butterworth fast ferry
• Penang Port expansion
• Bayan Lepas Airport expansion
• Penang 37km Monorail
• Swettenham Pier redevelopment
• Micro-Electronics Centre of Excellence
• Hospitality college
• Khazanah Nasional Bhd regional office

In June MRCB was awarded a contract by Pelaburan Hartanah to build houses and apartments with a combined gross development value (GDV) of RM500mil on three sites on Penang Island. Analysts expect MRCB to secure additional projects in the state such as the construction of the proposed monorail and Penang Outer Ring Road (PORR).

While MRCB might have proven itself with the KL Sentral project (though I’ll reserve the comment on the successfulness of it), it’s mind-boggling to note that Equine Capital Berhad was given the RM18 billion project considering it only registered RM131 million revenue for the financial year 2006 as compare to RM140 million in 2007. The net profit was a double-digit of RM17 million (2006) and RM31 million (2005) respectively. So can Equine take the risk of a project more than 10 times its’ annual revenue? But then the boss of Equine, Patrick Lim, probably carries more weight than anyone else – at least in the Malaysia’s political world if not corporate world.

Neverthless it’s definitely the people’s hope that all these billions of dollars would put to full good use and development to benefits everyone rather than another wasteful mega-project which only benefits a few cronies as accustomed to the Malaysia’s ruling party’s business policy.

Other Articles That May Interest You …

• Wealthy Malaysia Spending Like There's No Tomorrow
• IDR-Nusajaya - Another White Elephant Dooms to Failure?
• Malaysia's Policy - Now You See It, Now You Don't

Tuesday, July 31, 2007

STEMLIFE Skyrocket without anyone notice

It was merely about two-weeks ago when StockTube wrote about TMC Life Sciences Bhd (KLSE: TMCLIFE, stock-code 0101) stock any justify why you should own it in your portfolio. Yes I know the stock has not move yet (you’re really impatient when come to stocks investing, aren’t you?), in fact it has consolidated from the peak to current RM1.38 per share, well above the support of RM1.24. Isn’t this a good level for you to accumulate, you greedy investor (or rather punter?) who always thinks of making fast money overnight?

Well, this post is not to talk about TMC Life but rather on StemLife Berhad(KLSE: STEMLFE, stock-code 0137). Between the two devils, StemLife’s stock obviously performs better. Just to refresh, it was about two-weeks ago on the same article, I was nagging about how I should not have sold my positions in StemLife, even though I’m still holding a very small amount of shares as of now. On the date of that article being written, the stock price of StemLife was about RM4.00+ per share. Can you please go and take a look at the price now?

But if you have found StockTube’s blog and read the article on why you should invest in TMC Life and StemLife stock back in Jan 2007 when it was trading at about RM1.00 per share, you would have gained a whopping 400 percent in profitif you had just follow the recommendation blindly. If only life is so predictable, it would be a wonderful world, won’t it?

Anyway, looking at the momentum and technical analysis, you would noticeStemLife has been trading within a narrow but uptrend range without failsince it broke out from the resistance of RM2.60 per share in 21st May 2007. The stock is trading at RM 5.75 per share at the time of writing. Will it reaches RM7.00 or even RM8.00 per share? With the amount of 5 cents on every next bid after RM5.00 per share, it’s a matter of time before the target is reached, provided the trading range is not broken.

Having said that, aren’t StemLife expensive at the current share price? You bet, it’s obvious the stock is being “fried” but considering the stock has Goldman Sachs (8.85% stake) and JP Morgan (4% stake) in its shareholders list (as of Mar 2007), it’s not that difficult to convince others the stock could goes up further. The latest would be Capital Group International Inc. which acquired 5.27 percent stakeon 4th July 2007. Furthermore StemLife is the main player in the stem-cell storage in town with TMC Life set to kick-in sometime in September 2007 to give StemLife a run for some money. It was said that come 2008, the number of players would increase to 7 (seven) in the stem-cell banking business giving more competition.

Regardless whether the StemLife is frying the stock to make fast bucks or knowing in advance that it might be “acquired”soon (please don’t drop your jaw in surprise *grin*), the shares will continue to attract a small of followers who are laughing all the way to the bank. I mentioned small followers because the daily volume is negligible. I won’t complaint a word if you start to buy StemLife and help push the price higher. Of course I would hope the stock will skyrocket to RM10.00 per share but then I should accumulate in stages on TMC Life, don’t you think so?

Other Articles That May Interest You …

• TMC Life - A Must Have Healthcare Stock in Your Portfolio
• Stem Cell Research - To Hype or Not To Hype
• Stem Cell - Who Is Crazy? Public or Malaysian Government?
• India-Malaysia Venture on Stem Cell Research
• Why You Should Invest TMC-Life and StemLife Stocks?

Monday, July 30, 2007

Could the Eagle Fly Against the Weak Housing?

Eagle Materials Inc. (NYSE: EXP, stock) is set to announce its earning today, Monday 30th July 2007, after market close. Eagle Materials Inc. is a manufacturer of basic building materials, including gypsum wallboard, cement, gypsum and non-gypsum paperboard and concrete and aggregates. The CompanyGÇÖs primary businesses are the manufacture and distribution of gypsum wallboard and the manufacture and sale of cement. Gypsum wallboard is distributed throughout the United States with particular emphasis in the geographic markets nearest to its production facilities. It sells cement in four regional markets.

Rating Indicators for EXP:

• Wall Street consensus : 0.76
• StockScouter rating : 9 / 10
• Whisper Number for this stock : 0,78
• Schaeffer rating for this stock : 7 / 10
• Power Rating : 6 / 10
• Insider Trading (last 52 weeks) : ($0.00 M)
• Zacks Analysts Rating: Hold
• Option Trading: Oct 2007 45.00 Call
• Implied Volatility (IV) for Sep 2007 $45.00 Strike : 42.16%

Sales, Income & Growth - For the past 12-months, Eagle Materials registered $922.4 Million in sales versus the industry’s $14,313 Million. Income amounted to $203.00 Million against the industry’s $1,334 Million. While Eagle’s 12-months sales growth is at 7.30% the income growth is 25.90% (the same industry sector sales growth is at 12.00% and income growth of -0.20%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 22.0%. Eagle Materials has a debt/equity ratio of 0.37 compare to industry’s ratio of 0.62.

Stock Resistance & Support Level – The resistance is at 44.88 (200-day moving average) while the first level support is at 31.76 (52-week low)

Risks – The shares are heavily sold by financial institutions.

The struggling housing sector has taken its’ toll on the housing stocks such as Beazer Homes, D.R. Horton and Pulte Homes. Related stocks in building suppliers which supply cements such as Eagle Materials is affected as well. But compare to direct home suppliers, cements could be diverted elsewhere. Furthermore the share price of Eagle has consolidated from its peak at $51 per share to current $43.50 per share, nearing its support of $42.00.

Based on its’ track record in beating earning estimate, it could be the most valuable bullet in investing its option or stock. We have not heard much news on the merger of cement players since May when a German cement company said it’s considering to buy over Hanson PLC.

The War between Bloggers and Government Peaks

It’s very disturbing to note the war between Malaysian bloggers (political bloggers to be specific) and the UMNO, the main party component of the ruling Malaysian Government has started to peaks and potentially couldspread into other categories of bloggers – financial, personal, mum-and-dad or even food and recipe blogs. 

Almost all printed and electronic licensed medias in Malaysia are controlled, one way or another by the ruling Government which has been in the power since the 1957 Independence. People were said to be fed with positive news only by these controlled medias but everything changes when the “blog” (or web log) was created and gains momentum. Thanks to the technology, people who know the basic internet surfing can now turn to read the other side of the stories.

UMNO, of which the ministers are mostly aged and moulded into walking zombies who will only follows the instruction from the highest person who walks the corridor of powers, have been taken by surprise of the popularity of certain blogs. One similarity that hit all the famous bloggers in Malaysia which command tens of thousands to millions of views per day is that almost all of them are being charged (or going to be charged), one way or another by the government.

First it was Jeff Ooi (his blog http://www.jeffooi.com/), Ahirudin Attan a.k.a. Rocky (his bloghttp://rockybru.blogspot.com/) and then the webmaster of opposition party PKR, a Harvard-graduate Nathaniel Tan(his arrest). But none of the above attracts the wide-publicity or the cyber-supports as compare to Raja Petra Kamarudin whose critical articles in his blog,http://www.malaysia-today.net/, invited the UMNO to make a police report. The prominent political writer Raja Petra was then interrogated by police for 8 hours for sedition following complaints that articles on his blog belittled Islam and tried to stir racial tension in the multiethnic nation.

Authorities have not made clear which of Raja Petra's articles were allegedly seditious but most readers suspected that the government started the war againts Raja Petra (and others?) after his article (read here) on allegations against Inspector General of Police (IGP) Musa Hassan. The Attorney General was surprisingly fast in passing the verdict to clear the IGP and thus government leaders used it as the reason to calls for bloggers to be controlled.

Nazri, another minister sparked concerns over online freedom last week after he said the government was drafting new laws for bloggers and would not hesitate to use the Internal Security Act, which allows for detention without trial, against bloggers who insult Islam or stir sensitive topics.

Khairy Jamaluddin, deputy youth leader of the ruling Malay party and the prime minister's son-in-law called for legal action taken against bloggers who spread lies and slander. "There are no laws in the cyberworld except for the law of the jungle. As such, action must be taken so that the monkeys behave," Khairy was quoted as saying by Bernama.

And today, the government continues the war when Information Minister Zainuddin told the newspaper that the public should be wise in identifying the websites of goblok (Indonesian slang for “stupid”) bloggers, who are willing to be tools of others to destroy the nation. He added that these writers do not have an Asian mentality but lean towards a Western thinking because they were educated overseas.

In his latest salvo, Raja Petra wrote an interesting article titled Raja Petra seditious? Hogwash! after his previous mild article on See you in hell Muhamad son of Muhamad. Raja Petra claimed and pointed out a few IDs that belonged to the 25 UMNO cyber-troopers recruited by UMNO as the persons who actually left the sensitive comments in his blog (read the article a comedy of errors). Malaysia Today is so influence that Raja Petra claimed there was DOS attack launched against the blog.

Regardless of which party wins the war ultimately, the government is definitely wrong and subject to the laughing stock of other countries if it indeed tries to blackout all the other bloggers. As most of the ministers are not IT-literate, you can only expect the worst in any rules, regulations or laws drafted and proposed by them to control the bloggers. However I’m very interested to know how the government plans to block “permanently” those blogs hosted by Google’s Blogger’s platform or blogs hosted overseas. At this moment, the government can only block (such as the case of Malaysia Today) blogs within Malaysia only. Even then there’s a workaround to it unless the Internet Service Providers are instructed to press the button to “power-off” all the equipments.

It’s time for the ruling government to learn the rope of cyber-blogging and accept the fact that bloggers are here to stay. It’s sad to read that while the U.S. Democrats are taking the debate to a higher level of YouTube, Malaysia’s government is still struggling to learn the basic of e-mail and surfing (readhere), let alone blogging. If you practice good governance (the same way in corporate governance), nobody will cares about Raja Petra’s blog but if you’ve barrels of worms planted all over the place, then any Tom, Dick and Harry’s article would make you jump up in the middle of your sleep.

Sunday, July 29, 2007

GreenPacket – Light at the End of the Tunnel?

The last entry StockTube touched on Green Packet Berhad (KLSE:GPACKET, stock-code 0082) was on June 25th, 2007 when the stock plunged the second time since it broke the support of RM4.80 per share. I’ve wrote about what StockTube see from the RSI and Stochastic technical reading. The post also highlighted what could be the concerns or problems haunting Green Packet stock back then. StockTube also mentioned that from the perspective of technical and fundamental, the stock will surely rebound from the support of RM4.00 per share – and it did rebound beautifully. You can read more about the post here at Relook at GreenPacket Stock - Problem or Opportunity?

So I hope those who have confidence in the stock had made some money from the rebounce after the stock touched the support of RM4.00 per share on 25th June 2007. And if you care to relook at the chart of Green Packet it soared and hit the resistance of $4.80 per share before plunges back thereafter. Between RM4.00 and RM4.80, that’s 20 percent of good and easy money to be made, only if you traded within the range. 
July 13th 2007 was the date that changed the landscape of Green Packet stock’s pattern; it was also the day of bonus issue and share consolidation. The chart that you’re seeing on this post has taken that into consideration – I’ve since re-map the support and resistance level.

What’s the Technical Lookout of GPacket?

Since there’s no change in the fundamentals of Green Packet, we can only analyze from the technical perspective of the stock. The concerns are still the high receivables which might prompt investors in dumping the shares recently. But whether the stock’s plunge has anything to do with the shares restructuring or thepiece of important news which will be revealed at the later part of this post (so, continue reading) is still up to everyone’s guess.

StockTube does not apply hundreds of technical reading to confuse and scare the shits out of readers as it is assumed most readers are not technical-savvy. To make money investing stocks or trading option should be fun and not boring and complicated to the extent of costing your good night sleeps.
Referring to the chart that has been blown-up above, you can see how volume plays a very significant but almost ignored role in giving you hint of what’s actually happened or about to happen. On both occasions that saw the stock rebound when it touched the support of RM5.40 (RM4.00 before shares restructuring), it were followed or had accumulation signals prior. These accumulations by buyers indicate that investors (outsiders or insiders) are ready to bargain hunt on such scenario as the stock was seen to be attractive.

However, if you look at the consolidation after the bonus issue and shares consolidation, there were obvious sign of sellers’ distribution. Why investors didn’t see this as an attractive level to scope the shares are beyond normal investors’ basic understanding. You should take such price-volume-action with a pinch of salt and not scratching your head till you become bald. There’re many reasons to this and if you’ve trade U.S. stock market long enough, such pattern is normal. It could be the investors “knew” some bad things are going to happen and these investors are not you or me. They’re the insiders or professionals. So am I saying insiders are selling or insiders are feeding crucial info to others to sell or refuse to buy? Your guess is the same as mine.

Often “invinsible hands” are playing the advance game of buying or selling before normal investors can even blink their eyes. And by the look at the distribution volume, the chart is telling you the stock could have more falling to go before testing the support of RM3.75 or even RM3.30. Don’t you like to have the choice of shorting the stock now *evil grin*?

Angel to the Rescue

Now, I mentioned there’s a piece of news that is rather important to the development of GPacket’s stock action next week onwards. If you care to check the filing in the Kuala Lumpur Stock Exchange, you would notice that there’s one very crucial new shareholder emerged in GPacket. It’s none other than Goldman Sachs Group, the global investment group which has a capitalization of a whopping USD78 Billion.

Goldman Sachs acquired 455,275 shares on 18th July 2007 and another 1,000,000shares on 19th July 2007. Both were done via open market. Altogether, Goldman Sachs owns 17,987,275 shares representing 5.4% in GPacket. While such acquisition is normal in U.S. stock market, it’s something that should raise your eyebrows as Goldman Sachs is notorious for making acquisition with high probability of making good money from their investment decision.

It’s not easy to make US$10 Billion income on revenue of over US$76 Billion in the last 12 months of operation. So you got to give this new shareholder some respects with the decision to invest in GPacket. And since GPacket’s shares were acquired at the price of lower than RM5.40 per share (based on the date of purchase), it only makes sense to conclude that Goldman Sachs has confident the stock price will goes up above the acquisition price in order for it to make money before exit.

Hence, could it be the Goldman Sachs is the light at the tunnel for Green Packet? It could be the sunshine that would make you tons of money; it could also be the main reason why the stock plunges since then. One way or another, you’ve to accept the rules of the stocks investing game.

Other Articles That May Interest You …

• Green Packet Stock Pattern Behaving like Google Stock
• Investing Technology Stock - Turn Green Packet to Greenbacks
• Perfect Match - DIGI-GreenPacket and Telekom-Time
• Smaller and Newcomers Won WiMAX Licenses

Friday, July 27, 2007

China’s Syndrome – ICBC Stock Exposure

Of late, there has been great interest in foreign-stock Call Warrants among the Malaysian stocks investors, simply because the local growth stories could be boring or seems to be ending. Couple with the fact that the Composite Index is trading at the range of 1,300+ without the ability to bypass the 1,400 mark, the audience just got inpatient – people wants to see stocks move up so that they can make money. 

So, when the Call Warrants which were based on foreign-stocks hit the bourse,people just scrambled into the counter without knowing what it is, resulting in the warrants being pushed up in 2-digit gains within the listing day. Little did these punters know what are the factors affecting the Call Warrants’ stock performance.

To refresh everyone, there’re basically two factors which will enable you to make money if you plan to play with this new Call Warrants. First if the respective foreign share price goes up, then the call-warrants will be in-the-money (a term which I hijacked from option trading). Second, if the foreign currency (of the original foreign-stock) appreciates against Malaysian Ringgit, then you’re in luck because the value of the Call-Warrant will have higher value. 

The two investment banks which dominate the foreign-stock Call Warrants locally are CIMB (Commerce International Merchant Bankers, an investment bank of Bumiputra-Commerce Holdings Berhad (KLSE: COMMERZ, stock-code 1023)) andOSK. While CIMB likes to issue the Call Warrants in European-style, OSK prefers the American-style and there’re definitely differences between both styles, mind you. 

Tired of CIMB, let’s talk about OSK which had issued some American-style foreign-stock Call Warrants. Among them are:

• PetroChina Company Limited (PETROCH-C1, stock-code 0500C1)
• China Mobile Limited (CHMOBIL-C1, stock-code 0501C1)
• Industrial And Commercial Bank Of China Limited (ICBC-C1, stock-code 0502C1)

Due to the request from one of StockTube readers, let’s focus only on ICBC Call Warrant at this particular moment. ICBC-C1 was listed in local stock market on 5th June 2007 with approximately 50 million of floating shares. To summarize the important data an investor should know:

• Expiry-date – 29th February 2008 (9 months)
• Issue Price – RM0.12 per share
• Exercise / Conversion Price – HKD 4.38
• Exercise / Conversion Ration – 2 Call-Warrants for 1 ICBC-share

How Big is ICBC?

Industrial And Commercial Bank Of China Limited (HKG: stock 1398) is the mainland’s largest lender which was founded as a limited company on Jan 1st 1984. As of June 2006, it had assets of over RMB 7,000 billion (US$893 billion) with 18,764 outlets including 106 overseas branches and over 2.5 million corporate customers plus 150 million individual customers. ICBC was listed both in Hong Kong Stock Exchange and Shanghai Stock Exchange on 27th Oct 2006.

Already, ICBC overtook Citigroup as the new world’s biggest bank early of the week when its stocks’ surged to give it a market capitalization of $254 Billion versus Citigroup’s $251 Billion. However in terms of profitability, Citigroup is still the leader with income four times larger than its nearest competitor. But while Citigroup is only trading at 11 times its 2007 EPS (earnings per share), ICBC is trading at the hot and dangerous multiple of 28 times level. ICBC benefits mostly from the appreciation of Yuan against the Dollar.

ICBC recently was reportedly said it might announce more than 50 per cent growth in net profit for the first six months of the year 2007, as compare to a net profit of 25.14 billion yuan in the first half of 2006

Technical and Fundamental Analysis

A glance at the chart of ICBC since it went public will tell you that the immediate resistance is at HK$ 5.00 with the first level support at HK$ 4.40 and second level support at HK$ 4.00. The HK$ 4.40 became the support level after it was breached sometime in the middle of June 2007. So you should know how to trade this stock with this piece of information, if you’re trading the ICBC shares itself in Hong Kong Stock Exchange.

As highlighted above, ICBC is the equivalent of Malaysia’s Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) so I’ll skip the portion of the fundamental. Suffice to say ICBC would not become a penny stock unless the whole China’s economy collapsed. Nevertheless, the stock is trading at an alarming high multiple of 28 times and this should be your main risk.

Should You Invest in ICBC Call Warrant?

As of today, 27th July 2007 (2:50pm trading time) ICBC is trading at HK$ 4.70 per share while ICBC-C1 (Call Warrant on KLSE) is trading at RM 0.135 per share. If you decide to convert the Call Warrant to ICBC share (or mother share), it will be:

• (2 x RM 0.135) + (4.38 / 2) = RM 2.46 (assuming 1 RM = 2 HK$)
• Translate into 2.46 x 2 = HK$ 4.92 per share
• Which means you’re paying a premium of 4.68 % over its’ actual value.

But the premium of HK$ 0.22 (RM 0.11) is a small and attractive value to payfor the remaining time-value as the expiration is on 29th Feb 2008. If you compare to most Malaysia’s warrants which are way out of money, ICBC-C1 is indeed very attractive. 

Supposing you’re greedy and would like to maximize your profit and you believe HK$ 4.40 will be a strong support and you intend to invest when it hit this level, nothing more and nothing less. So I’m sure you can work the conversion back the same way to see what’s the ICBC-C1 price that you should go in, can’t you?

Other Articles That May Interest You ...

• Foreign Stock Call Warrants - SINGTEL & HSBC
• Know The Difference - Warrants & Call-Warrants
• Options Investing 101 - Part 1
• Options Investing 101 - Part 2
• Options Investing 101 - Part 3

AvalonBay provides Apartment and Stock Dividend

When people talked about money, somehow the conversation topics couldn’t run too far away from stock investing and property or real-estate investment. StockTube have blogged about Mah Sing Group Berhad and E & O Property Development Berhad as the favorite stocks in property sector. Now, let’s fly out of the country and travel a couple of thousands miles towards U.S.

Avalon Bay is actually a REIT (real estate investment trust) company which focused on developing, operating and owning apartment communities in the Northeast, Mid-Atlantic, Midwest, Pacific Northwest, Northern California and Southern California regions of the United States. As of March 31, 2007, AvalonBay owned about 171 apartment communities containing 49,402 apartment homes in ten states in U.S.

Through the Investor Relations segment, Avalon Bay claimed that its average annual Funds from Operations (FFO) per share growth and dividend growth have exceeded the industry average. Considering Avalon’s Compound Annual Growth Rate of 19.5%, it is definitely a set of impressive data out-beating the S&P500 and Nasdaq’s growth. Since the company went public back in 1994 (trades on the New York Stock Exchange and under the ticker symbol "AVB"), AvalonBay Communities, Inc. has consistently paid dividends each year since then.

So, if you happen to think about owning an apartment in California, Massachusetts, Washington, New York or elsewhere in U.S., you probably might want to give Avalon a thought.

Dow Jones Plunges 300 - Expect Regional to Drop

Wall Street suffered its second-biggest plunge of the year Thursday, extending its weeks-long streak of volatility after disappointing home sales figures added to investors' increasing uneasiness about the mortgage and corporate lending markets. The Dow Jones industrials briefly fell more than 300 points (as of trading hour at 2pm), while Treasury yields plunged as investors moved money from stocks to bonds.

Investors who had been able to shrug off concerns about subprime mortgage lending problems and a more difficult environment for corporate borrowing were clearly worried once again. The Dow's drop is the biggest since it plummeted 416 points on Feb. 27 after a nearly 10 percent decline in Chinese stock markets.

The anxiety on Thursday increased after the Commerce Department reported thatsales of new homes fell 6.6 percent last month to a seasonally adjusted annual rate of 834,000 units, more than triple what had been expected and the largest percentage drop since sales fell by 12.7 percent in January.

Thursday's trading was the latest in a series of frenetic sessions over the past month - many accompanied by triple-digit swings in the Dow - as investors sold on worries about the subprime fallout or bought on optimism that there wouldn't be any widespread problems caused by mortgage failures. Many analysts have described the back-and-forth trading as overwrought and based more on gut emotion than careful consideration of market and economic fundamentals.

So, expect the regional markets including Malaysia to open lower when the Friday stock market resumes trading for the last day of the week. The week market definitely pulled down the performance of Apple Inc as most of the indexes are in red. Apple would have performs better if not for the plunge.

Thursday, July 26, 2007

China Mobile the Actual Rescuer for TIME?

Who would have guess that Malaysia loss-making Time DotCom Berhad (TIMECOM: stock-code 5031) had quietly sneaked out of the country desperately looking for life-partner? Everyone thought this hopeless stock would either partner with a local telco company (DIGI.com or Telekom) or be bailed out by the government. Hence, Time Engineering (KLSE:TIME, stock-code 4456) together with Time DotCom’s stocks price were bid up when the rumor hit the street that Hong Kong-listed China Mobile Ltd is interested in Time Engineering which holds 40.68 percent stake in Time DotCom.

However, Second Finance Minister Nor Mohamed Yakcop said today the Malaysian government is not aware of the interest by China Mobile. As usual, you’ve to take the statement by Yakcop with a pinch of salt as he seldom issues concreate statements. China Mobile(HKG: 0941) could indeed be talking to Time Engineering and unless China Mobile denies it, the rumor and possibility of Time DotCom finally being rescued will continues.

With more than RM850 million in debts, Time is dying and if the country’s coffer allows it, the government would definitely not think twice about bailing it out, the same way billions of public money was being used to do so during previous premier Mahathir’s rule, not to mention Time is one of the important business entity within UMNO, the biggest party component in the current ruling government.

StockTube would not be surprised should the acquisition goes through if the recent contract to provide soft-loan, design and build the second multi-billion Penang bridge by a Chinese-based company is used as the gauge of Malaysian Government’s approach towards Malaysia-China business relationship. While former premier adopted pro-Japan policy, current Badawi could be adopting pro-China policy which makes sense looking at how the emerging giant is giving even U.S. a headache on the huge trade inbalance in favor of China.

Nevertheless StockTube would be interested to know the final stake that Time is willing to let go – definitely China Mobile will not accept anything less than a controlling stake, would it?

Other Articles That May Interest You …

• Time DotCom – to Acquire or be Acquired?
• Perfect Match - DIGI-GreenPacket and Telekom-Time
• Smaller and Newcomers Won WiMAX Licenses
• Lost Again - What Should DIGI Do Next?
• Telekom Malaysia TM To The Rescue - TimeDotCom

APPLE Jumped, StockTube Jumped

You could be wondering why StockTube was not updated since I blogged about APPLE Should Beats Earning but Other Number Counts, that’s one day ago. In actual fact, I was re-researching Apple stock and could only find optimistic data that point to Apple will definitely beats earning. I’ve to admit I was quite nervous if Apple will join Google’s party. After the earning announcement, I jumped in joy, not too much on the news that it indeed beaten the earning estimate again but because the new set of numbers indicating the iPhone sold is double of what reported by AT&T Inc. (NYSE: T, stock) earlier.

Apple Inc.'s fiscal third-quarter profit soared more than 73 percent and it sold 270,000 iPhones in the first two days on the market. That’s the headline which sent Apple stock up by more than 9 percent ($12.92 in extended trading hour), enough to send short-sellers to cover their shorts when the trading starts on Thursday. Although the iPhone figure didn’t contribute to the earning announced, it simply means Apple future earning can depends on iPhone to bring in cash into the coffers.

As reported by AP and most of the financial news, it’s a well-known fact that Steve “always” issues a conservative outlook that fell short of Wall Street's expectations during the earning announcement. So most investors just smiled and sent the stock skyrocket at the same time.

For the quarter ended June 30, Apple's profit rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents a share in the year-ago quarter – easily beats the estimate of $0.72 per share by Thompson Financial. Sales grew to $5.41 billion from $4.37 billion last year against estimate of $5.28 billion. The conservative figures from Apple itself were projected earnings of 66 cents per share on quarterly sales of $5.1 billion.

“Steve Jobs said “We're thrilled to report the highest June quarter revenue and profit in Apple's history, along with the highest quarterly Mac sales ever … iPhone is off to a great start … We hope to sell our one-millionth iPhone by the end of its first full quarter of sales … and our new product pipeline is very strong”.

The company said it shipped a record 1.76 million Macs, up 33 percent from the year-ago period, accounting for $2.5 billion, or more than 60 percent of the quarter's revenues. Unit sales of iPods increased by 21 percent from last year to 9.8 million and generated $1.57 billion in revenue. You should wait and see the numbers when Apple announce the iPhone sales in the next subsequent quarter.
The reason for the discrepancy between Apple's and AT&T's numbers on iPhone sales was unclear and the only reason raised at this moment is the service activation problems. There was initially some disappointment in the 270,000 iPhone units, but as people realized the gross margins came in at 37 percent, they were very encouraged by the profitability of the company as can be seen with the Apple stock price’s reaction during the extended hours. 

Before Apple's results were announced, its shares rosed $2.37, or 1.8 percent, to close at $137.26. Then in a heavy-volume trading after hours, shares fell as much as 6 percent before they rose more than 9 percent to $150.18. What can you learn from these 3 lines of information? DO NOT trade during extended hours, period. Extended hours are not designed for small investors to trade the stocks (option trading stops completely at 4:00pm) in the hope of making money. You should work as a professional investor in the U.S. to know what I meant. These market makers made transactions faster than you can blink your eyes during this hour, trading against the opposite side of the market makers. So, you small boys or girls should just grab a cup of coffee and sit there watching the show.

# TIP: Do not trade stocks during extended hours, it’s not for you.

Other Articles That May Interest You ...

• Red Dots for iPhones all over the States
• Apple to Sell 1 million iPhones before end of 2007
• APPLE iPhone Sales Top US$100 Million on Day-1
• June 29th – Apple iPhone's Judgement Day

Tuesday, July 24, 2007

APPLE Should Beats Earning but Other Number Counts

Top U.S. telecommunications service provider AT&T Inc. (NYSE: T, stock) said on Tuesday quarterly profit and revenue rose, helped by growth in wireless and Internet subscribers. AT&T, which began selling Apple's iPhone on June 29, however said it activated 146,000 iPhone subscribers in the first two days of the launch with more than 40 percent of those subscribers were new customers.

The data immediately sent stock price of Apple Inc.’s (Nasdaq: AAPL, stock) plunge 4 percent (off $5.70 to $138.02) this morning’s trading before recovered to minus $4.00 or down by 2.85 percent (as of 10:30am Tuesday). The 146,000 iPhone sales were well below analyst estimates.

Apple Inc. is set to announce its’ earning tomorrow, Wednesday 25th July, 2007 after market closed. So would Steve be able to announce another round of earning which will beat the estimate $0.72 per share? It has to if Apple wishes to see today’s disappointed figure of iPhone sales and the share’s drop be compensated and set a dynamic and uptrend or possibly gap-up.

If the investors smell any earning figures which do not looks impressive enough, it could be punished a second time. And the second time of punishment would not be a nice view to look at, that’s for sure. Nevertheless going by the normal conservative figure given by Steve as usual, Apple is on the high probable of beating the estimate. It’s a question of whether the set of numbers are impressive enough for analysts to say the current stock price is trading at the lower range (and substantially raise their targets).

Trading at P/E (price to earning ratio) of 45.50, Apple’s stock price is not cheap. It’s even higher than Google Inc. which is trading at 43.60 multiple of its earning. Not an easy decision to make if you should long or short the stock, don’t you think? Well, depending on how long is your investment for Apple, you might want to long it if you’re optimistic the iPhone numbers will eventually go above analysts’ estimate.

Dividend Yield Stocks (Part 1) – Berjaya Sports Toto

There’ve been numerous requests from readers of StockTube on recommendation on stocks which give away good “dividend yield”. This type of stock is also one of the favorites among the long-term investors who see it as a better alternative to banks’ fix-term-deposit saving or even the EPF’s (Employees Provident Fund) pathetic annual dividend. The latter is applicable for retirees who are planning to grow their hard-earned savings.

Basically stocks which can provide good and “consistent” dividend pay-out are normally defensive stocks, meaning comes rain or shine the stocks will still pay you dividend. I’ve previously blogged about two stocks (upon request from a loyal reader) which consistently pay relatively good dividends. The reader couldn’t make the decision as to which stock to invest, so StockTube published the article onWhich Stock to Invest - GENTING or Public Bank? back in end of May 2007 to summarize the comparison.

StockTube New Mini Project

StockTube will starts (in no particular order) to publish several articles on stocks that provide “Good and Consistent Dividend Yield”, one stock at a time with more fundamental and technical information. I’ll neither commit on the time-period of the next subsequent article nor would I commit on the number of stocks which fit the topic. I’ll just let the flow takes its course. Let’s kick-start with one of my favorites, Berjaya Sports Toto Berhad (KLSE: BJTOTO, stock-code 1562).

Sports Toto Malaysia Sdn Bhd was incorporated in 1969 by the Government of Malaysia, was privatised on 1st August 1985 and thus separated its’ status quo as a state-owned gaming enterprise. Sports Toto is currently a wholly-owned subsidiary Berjaya Sports Toto Berhad which is listed on the Bursa Malaysia or Kuala Lumpur Stock Exchange.

Sports Toto is the sole national lotto operator with over 680 outlets throughout Malaysia and offers a variety of games – digit-type games (namely, 4D, 5D and 6D) and lotto-type games (namely, Toto 6/42 Jackpot, Super Toto 6/49 and Mega Toto 6/52). The Company has total staff strength of more than 450 working at its head office in Kuala Lumpur and branches throughout Malaysia, and over 1,500 staff employed by agents of the Company.

The Man behind Berjaya Sports Toto

If you do not know yet, Berjaya Sports Toto Berhad is part of Berjaya Corporation which is owned by none other than Tan Sri Dato’ Seri Vincent Tan Chee Yioun. Vincent used to be on the corporate front-page during the former premier Mahathir period. He was said to be one of the Chinese corporate cronies of Mahathir and he was well-known within the circular of stocks investors in the 1990s for the infamous “rights issue” and “bonus issue”, so much so that Vincent Tan’s listed companies consists of billions of floated shares – one of the highest around.

As the “King of bonus and rights issue”, it wasn’t a surprise that the share prices of his Berjaya companies rarely hit above 2-digit figure due to enormous floating shares in the market, with the exception of Berjaya Sports Toto. Due to the nature of the business, Berjaya Sports Toto is undoubtly the ultimate cash-cow for Berjaya Corporation and Vincent Tan as the largest shareholder.

Sports Toto’s Fundamental

Fundamentally, Berjaya Sports Toto, just like any other gaming (or gambling) stocks is a defensive stock. Despite the regulation which only allows certain days of the week for punters to bet on their luck, all the outlets continue to attract customers. Since 1997 (and prior to that) the revenue has never once registered below RM 1 Billion figure. During the 1997 Asia Economy Crisis the company saw a jump in revenue to breach the RM2 Billion mark – a proof that people will bet even more during the difficult time.

Profit has grown from a mere RM343.7 Million in 1997 to RM571.9 Million in financial year ended 2006. The earnings per share (EPS) were rather on the yo-yo trend mainly due to the inter-company restructuring but shareholders will definitely see 2-digit of earnings per share as registered since 1997.
The company reserve however has grown from 1997 from RM109 Million to RM1.2 Billion in 2002 only to be reduced to RM366 Million in 2004 before picking up to RM463 Million in 2006.

Technical Analysis on the Stock

Looking at the 3-year chart, Sports Toto has since rebound from the boring RM3.00 per share to above RM4.00 per share. Due to the consistent and expected result of the gaming stocks revenue, the share price rarely jumps (or drops) beyond imagination.
The first level support is at RM4.90 per share while the second level support is at the strong RM4.30 per share. The resistance is at the RM5.50 per share level. Since the stock breached the support of RM4.90 about a month ago (June 19th, 2007 to be exact) it could be too early to tell if the immediate resistance (RM5.50) or support (RM4.90) will holds.

However, if you analyze the volume distribution and accumulation pattern, the technical chart seems to comply with the rules, meaning the opportunity to buywhen it consolidate to the support of RM4.90 nears.

Dividend Analysis

A glimpse on the gross dividend per share summary chart will shows that the Berjaya Sports Toto is a stock to own if you’re looking at the rare 2-digit return on investment. It wasn’t so attractive pre-2005 with a single-digit of dividend returns. For the financial ended 2005, it declared a total RM0.45 per share of dividend while the attractiveness increased in 2006 when it declared RM0.51 per share. This is about 10 percent annual return, not a bad figure for dividend hunters.
It is estimated the company will declare the same $0.51 per share, if not higher, for the financial year ended 2007’s dividend payout. The latest dividend declared is the fourth interim dividend of 7.5 sen per share (less 27% income tax) with the expiration-date on Aug 15th, 2007 and the payment-date on Aug 30th, 2007. This 7.5 sen is however was said to be lower than the expected 10.5 sen by certain analysts.

Should you go in now?

This is perhaps the most popular question I received in my mailbox. While I can give you a 100-pages analysis, I simply cannot tell the future if some external factors beyond my control will take a particular stock out of the trading range as pictured in the technical chart. What I can tell is if everything goes by the book, the best time to go in is at RM4.90 or slightly lower, provided you are lucky enough.

On June 23, Berjaya Sports Toto launched the Mega 6/52 Jackpot with a minimum RM2 million jackpot. This gave its daily lotto revenues a 25% boost and with three lotto games in its belt, it is believed the stock will continue to performs.

Having said that, if you happen to see an abnormal high volume or selling, please raise the red-flag. This stock is perhaps another good example of how you can make money trading within the range. Stay tune for the next part of investing dividend yield stocks to make money out of it.

Monday, July 23, 2007

Could Crane’s Stock Price Be Lifted-Up?

Crane Co. (NYSE: CR, stock) is set to announce its earning today, July 23rd, 2007 after market close. Crane Co. (Crane) is a diversified manufacturer of engineered industrial products. The Company operates in five segments: Aerospace & Electronics, Engineered Materials, Merchandising Systems, Fluid Handling and Controls.

The Aerospace & Electronics segment consists of two groups: the Aerospace Group and the Electronics Group. The Engineered Materials segment consists of Crane Composites and Polyflon. The Merchandising Systems segment consists of two groups: Vending Solutions and Payment Solutions. The Fluid Handling segment consists of the Crane Valve Group (Valve Group), Crane Pumps & Systems and Crane Supply. The Controls segment consists of Barksdale, Azonix, Dynalco, Crane Environmental and Crane Wireless Monitoring Solutions. During the year ended December 31, 2006, Crane acquired Dixie-Narco Inc., Noble Composites, Inc. and Telequip Corporation. In 2006, it acquired certain assets of Automatic Products International and substantially all of the assets of CashCode Co. Inc.

Rating Indicators for CR:

• Wall Street consensus : 0.78
• StockScouter rating : 8 / 10
• Whisper Number for this stock : N/A
• Schaeffer rating for this stock : 7 / 10
• Power Rating : 6 / 10
• Insider Trading (last 52 weeks) : ($5.00 M)
• Zacks Analysts Rating: Hold
• Option Trading: Dec 2007 45.00 Call
• Implied Volatility (IV) for Sep 2007 $45.00 Strike : 25.92%

Sales, Income & Growth - For the past 12-months, Cranel registered $2.34 Billion in sales versus the industry’s $87.31 Billion. Income amounted to $172.13 Million against the industry’s $10,478 Million. While Crane’s 12-months sales growth is at 14.40% the income growth is 16.70% (the same industry sector sales growth is at 46.20% and income growth of 24.70%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 7.4%. Crane has a debt/equity ratio of 0.44 compare to industry’s ratio of 2.13.

Stock Resistance & Support Level – The resistance is at 44.98 (52-week high) while the first level support is at 44.59 (50-day moving average)

Risks – The ratio of Crane's price-to-earnings multiple (17.00) to its five-year growth rate is above the average of all stocks within the same sector. The volume is relatively low so you might not be able to get a good price on the option.

Another stock which is on StockTube radar is Waters Corporation (NYSE: WAT,stock) which is expected to announce its earning on Tuesday, 24th July, 2007 before market open. However you need to have lots of time-value on Waters as it normally trend-up rather late.

Major Crackdown on Malaysia Political Bloggers Started?

In yet another breaking news (how StockTube wish there’s a similar CNN “Breaking News” in Malaysia), theStar reported that UMNO (the main party of the current ruling government) has lodged a police report againstMalaysiaToday for carrying a series of comments and remarks that it deemed as insulting the Yang di-Pertuan Agong, degrading Islam and as inciting hatred and violence in Malaysia's multi-racial society.

Party information chief Tan Sri Muhammad Muhammad Taib lodged the report at 12.57pm at Tun H.S. Lee police station here Monday. He said the comments and remarks, consisting of criminal elements and inciting religious and racial sentiments which could affect the country’s security, were carried by the blog on July 11.

The report was lodged under Section 121 (B) and Section 123 of the Penal Code, Section 4 of the Sedition Act 1948 and Section 263 and Section 266 of the Communications and Multimedia Act 1998.

Could this mark the start of a major crackdown on political bloggers who wrote the other side of the stories as compare to the traditional pro-government news? A visit to MalaysiaToday today often could not get through, most probably due to high traffic to the famous news portal which attracts tens of thousands of visitors per day. However the author was said to know in advance that his portal will be closed down on Monday and he will be charged and arrested.

What could be the reason for the possible charge or arrest of Raja Petra Kamarudin, the author of MalaysiaToday? Could it be due to this article which has many theories or could it be earlier articles which highlighted what could be thegreatest exposure since the creation of George Lucas’s Star Wars or Steven Spielberg’s Jaws? Though many reasons could be presented as to why certain bloggers were being pulled into court, the latest crackdown on Raja Petra could spell that the General Election is indeed around the corner and the government is not taking any chance which will deny it the overwhelming winning ticket.

Time DotCom – to Acquire or be Acquired?

It was reported that the loss-making but 3G-awarded Time DotCom Berhad(TIMECOM: stock-code 5031) has been asked by controlling shareholder Khazanah Nasional Bhd to put its third-generation (3G) rollout plan on hold. BusinessTimes also reported that Time had been granted the necessary bank loans and was ready to roll out its 3G infrastructure in March before the"instruction" came in.

"It is basically a shareholder issue. Khazanah is in talks that involve several parties, which may result in changes in the shareholding of Time. So, it is believed that the best solution (for now) is to put the 3G plans on hold," said a source. By putting the plans on hold, which will satisfy its shareholders and potential new shareholders, Time is said to be at risk of losing its 3G licence.

Could it be that Khazanah, being the major shareholder of Time DotCom with its stake of 30% has other plans in mind as specified by BusinessTimes? If Time indeed has taken the twist to be “sudden” super-efficient in putting the 3G roll-out within project timeliness, then it’ll spawn another interesting speculation –Khazanah is talking with other parties on the possibility of M&A.

Going by the way the government would like it to be, the most likely preferred candidate for Time is with DIGI.com Berhad (DIGI: stock-code 6947), although StockTube had numerously blogged that the best marriage would be between DIGI.com and Green Packet Berhad (KLSE: GPACKET, stock-code 0082) while Time should just partners with Telekom Malaysia Berhad (KLSE: TM, stock-code 4863). 

But then, what Time is lacking is a team of efficient management with experience in marketing and operation as well as driving the company in the right business direction, not to mention the vital people in taking care of dollars and cents. Time has the rest of the chips such as government support, 3G license, inefficient teams, tons of losses and even a bail-out should things turn ugly. You can read how DIGI - If You Can't Beat Them, Suck the Coffer Dry article, a brilliant plan by the DIGI.com to prevent Time from taking over DIGI.com forcefully – a famous tactic which has been used by government-linked-companies repeatedly in the past.

So I won’t blink my eyes even once out of the worry that Time will risk losing its 3G licence as it always can be extended by a simple government announcement should the period of roll-out not met. For all you know, Time could be still sitting on the 3G licence awarded earlier this year without any plan to even test the workability of the 3G. It shouldn’t surprise you as the 3G was awarded to Time as the bargaining chip to force DIGI.com to acquire Time (or the other way round?) and thus solves Time’s losses once and for all.

One way or another, Time DotCom definitely needs to go if the shareholders (in this particular case Khazanah) do not wish to see more red in the profit-and-loss spreadsheet. Nevertheless the interest on Time stocks will surely attracts punters or speculators.

Other Articles That May Interest You …

• Perfect Match - DIGI-GreenPacket and Telekom-Time
• Smaller and Newcomers Won WiMAX Licenses
• Lost Again - What Should DIGI Do Next?
• Telekom Malaysia TM To The Rescue - TimeDotCom

Sunday, July 22, 2007

The Good, the Bad and the 5-Figure Profit

Last Friday’s Option-Expiration was another exciting trading day at least it was for me as I’ve to monitor two of my favorite stocks, Apple Inc. and Google Inc., almost with higher than normal heartbeat. If you do not know, Expiration Friday is the day where all options with a particular month contract will expires worthless, the same way a stock’s warrant becomes zero in its worthiness as it matured.

As for Google, it was exciting as I had blogged in GOOGLE Tumbles, Expect Nasdaq to be Pulled Down, the first 45 minutes would be crucial to determine if the stock will take a freefall. Looking back then, Google showed it’s muscular when it decided to stay above the lowest of the low withn the 45 minutes – thus I did nothing (buy Put to scalp) as I can’t execute the plan since the price action says otherwise (still suffering from the paper losses).

On the other hand, Apple continues to defy gravity when it actually soared to all time-high since my profit taking. If you didn’t mark the blog, it was here, First Stock Rise since iPhone Launch - 95% Profit that I highlighted how I suspect the $125 per share would probably be breached due to the high volume between 10:15am and 10:30am trading on July 3rd, 2007. And looking at the historical chart, Apple indeed breached the $125 on that same day and never looked back, registering a permanent $128 per share as the immediate support level.

But my trade was without any roller-coaster. The AAPL Oct 120 Call was entered in two batches on June 11th, 2007, at 3 contracts and 6 contracts respectively. Since it was Oct expiration, I’ve tons of time-value on my side. I was bullish on Apple because everyone was bullish and the fact that APPLE iPhone Sales Top US$100 Million on Day-1 only reinforced the confidence in Steve Jobs.
Why then I closed the positions since I still have time-value on my nine contracts of Apple? Well, let’s just say that I’m a little bit nervous with Apple’s earning (not sure how will it goes) since Google has just disappointed me. I thought it would be wise to take the money off the table, for now at least. Furthermore I’ve made 5-figure profit out of Apple and I shouldn’t be too greedy. There’s always another trade on Apple.

Friday, July 20, 2007

Does CIMB Plans to acquire more Banks?

CIMB (Commerce International Merchant Bankers), an investment bank of Bumiputra-Commerce Holdings Berhad (KLSE: COMMERZ, stock-code 1023) has been mulling the idea of having smaller number of banks via numerous press reports. And if the latest statement by its chief executive officer Nazir Razak (brother of current Malaysia Deputy Prime Minister) is anything to goes by, StockTube would interpret it as the readiness of the group to start gobbling another bank or two.

The chief of CIMB predicted that the number of Malaysian lenders may be down to six in the near term. He said "We need to accelerate consolidation, and it is my personal opinion that, perhaps, regulatory intervention is necessary to get it done quicker ahead of liberalization … Otherwise, the local players may not be able to withstand the forces of liberalization."
With politicians normally putting their hands in the business policies, it’s not difficult to push merger with a stroke of an announcement. Malaysia Central Bank (Bank Negara) just needs to make a simple announcement that local banks need to raise the minimum capitalisation or shareholders' fund from existing RM2 billion to a higher figure to make the rest of the banks scrambling looking for new partner(s).

Nazir might be speaking from his comfort zone of being the chief of the second biggest bank in Malaysia, giving him the advantage of being an acquirer than acquiree. I wonder if he would have opens his mouth should he be the chief of one of the smallest banks. While it makes perfect sense to consolidate further to face the full force of globalization and liberalization, the decision to merge nevertheless should come from shareholders themselves, with minimum regulatory intervention – as reported by BusinessTimes.

So if you’re a punter which bank should you watch-out to potentially make money out of the merger news (if it indeed happens)? Going by the normal trend, the three smallest banks namely EON Capital Berhad (KLSE: EONCAP, stock-code 5266),Malaysian Plantations’ Alliance Bank (KLSE: MPLANT, stock-code 2488) andAffin Holdings (KLSE: AFFIN, stock-code 5185) should be your choice. But then in Malaysia corporate world whereby the smaller piranha could gobble up a buffalo, you simple won’t know if there’re still surprises in the closet.

One thing is sure though, CIMB is preying one of the banks sitting at the bottom in terms of capitalization.

GOOGLE Tumbles, Expect Nasdaq to be Pulled Down

Finally the giant tumbles and the chain reaction is expected to crawl into the Nasdaq market when it opens for trading on Friday. Earlier StockTube mentioned that Yahoo’s Weakness is Google’s Gain and I’ve considered Call Option on Google's (Nasdaq: GOOG, stock). Everyone on Wall Street is expecting revenues of $2.68 billion, up 60% over the same quarter last year, nothing less.

And so, when Google reported a mere 28 percent earnings increase, analysts viewed the result as a “major” letdown since the Mountain View-based company's quarterly profits had never before improved by less than 60 percent. And to prove how disappointed Wall Street is with such figure, Google’s stock was severely punished and the shares plunge more than 7 percent (that’s a whopping $39) in extended trading.

Google earned $925.1 million, or $2.93 per share, during the three months ended in June. That compared with net income of $721.1 million, or $2.33 per share, at the same time last year. If not for costs associated with employee stock compensation, Google said it would have earned $3.56 per share. That figure missed the average analyst estimate of $3.59 per share among analysts polled by Thomson Financial. It marked just the second time that Google hasn't exceeded analyst expectations in its 12 quarters as a public company – reported AP.

Already well-known for pampering its employees, Google poured even more money into expanding its work force during the spring. Google hired 1,548 additional employees during the quarter, compared with the 1,152 workers it added at the same time last year. Google Chairman Eric Schmidt told analysts in a conference call that the company would be more "careful" about adding employees in future quarters.
Brin reiterated that sentiment in an interview, saying the company would be more disciplined in its future hiring now that it has attracted enough employees to pursue its ambitions. Google ended June with 13,786 employees, a 74 percent increase during the past year.

So, how to salvage the trade that’s in the loss? First, let’s relax and be cool about the trade as you should have anticipate such thing will happens sooner or later in investing world. This is a major letdown, so let’s dissect what would be the majority investors’ perception. The gap-down will definitely follow through the early morning trading and every Tom Dick and Harry is going to dump the shares. It will becomes worst as its’ Expiration Friday so the first 45 minutes of trading is very important. Since your option is not expiring Friday (I hope you didn’t buy the option with 2 days of expiration, did you?) it could provide you with opportunity to make fast money scalping this stock. Expect very high volatility and volume – short the stocks with Put Option.

How to View and Interact with Investment Directors

Won’t you like to be able to connect and see some of the investment directors' actual and real account portfolios? What about being able to receive updates whenever transactions occur due to the changes made by the investment directors? You might think that’s not possible and even if there’s such option, you need to pay a leg and an arm for it. 

It might be a dream if you’re reading this from a country like Malaysia or Singapore but in U.S. the concept of value-added and investing creativity had taken a twist so much so that you can view it for free. One of such providers is Vestopia, a site where you can meet the investment directors, well, virtually. What you need to do is to register for free and then you would be able to view their transaction. 

For example, I know Brooke Synder, CFA, who claimed to have over a decade working in the financial world as equity researcher, analyst and advisor has sold 100 shares of Citrix System Inc at $38.77 on July 19th 2007. You can also click on his blog which will tell you his reason for buying (or selling) and you can submit your comment on that particular entry.

What’s cool is I can view Brooke’s performance in a graph format, the interactive performance grid will shows the stocks which was bought or sold by hovering your mouse over it. Also you can see the portfolio composition in a pie-chart format to determine which sector was the investment director bullish on. Vestopia has a list of Premium Investment Directors who you can view – together with their approach in investing, strategic profile and equity strategy.

Thursday, July 19, 2007

Yahoo’s Weakness is Google’s Gain

As much as I like Yahoo Inc. (Nasdaq: YHOO, stock) to be strong and muscular in order to prevent Google's (Nasdaq: GOOG, stock) from becoming too monopolize in the online search and advertisement market, I never really like the stock. I’m not sure what to say about Yahoo. Despite started early in the dotcom boom and survive thereafter, it never seems to be able to lift a finger to fight Google’s domination. I’ve tried trading Yahoo stock before but it simply disappointed me, so I dumped it and never look back.

However Yahoo’s earning result could prove to be the ultimate weapon to make money, not on Yahoo's stock or option, but on its enemy – Google. So when Yahoo announced its weak earning Tuesday (inline), it simply gives a bonus point to investors to invest on Google. As Forbes pointed out, Yahoo’s weakness is not the Internet that’s suffering – it’s just Yahoo.

Having said that, expectations are high (as usual) for Google to turn in another impressive result when the search giant is expected to announce the earning today, Thursday, July 19th, 2007 after market closed. Analysts and investors have learned that they can continue to raise the bar for Google, and Google will continue to deliver it.

They expect revenues of $2.68 billion, up 60% over the same quarter last year, and earnings of $3.59 cents per share, up 44%. The company’s advertising business, which accounts for nearly all of its revenue, is still growing. So the result would be another earning being beaten up again.

However, investors will want to hear about new ways Google plans to make money when CEO Eric Schmidt speaks to them Thursday. They’ll listen for clues about how and when the company will wring dollars out of video-sharing service YouTube and new mobile products. They’ll also want details about how much headway the DoubleClick acquisition will give Google in the growing field of display advertising once the deal is completed.

# TIP: Even though Google stock is trading at all time high, it can go higher should the result impress investors. I’m considering Call Option on Google at $550 Strike.

Wednesday, July 18, 2007

Three Stocks to Watch – ISIL, eBAY and ATR

Intersil Corporation (Intersil) (Nasdaq: ISIL, stock) is set to announce its’ earning today, July 18th, 2007, after market close. Intersil Corporation (Intersil) is a designer and manufacturer of high-performance analog integrated circuits (IC). The Company focuses on broadening its portfolio of application-specific standard products (ASSP) and general purpose proprietary products (GPPP), which are targeted at four markets: high-end consumer, industrial, communications and computing. The Company markets its products for sale to customers, including distributors, primarily in China, the United States, Taiwan and Japan.

Rating Indicators for ISIL:

• Wall Street consensus : 0.31
• StockScouter rating : 9 / 10
• Whisper Number for this stock : N/A
• Schaeffer rating for this stock : 6 / 10
• Power Rating : 5 / 10
• Insider Trading (last 52 weeks) : ($13.15 M)
• Zacks Analysts Rating: Hold
• Option Trading: Oct 2007 30.00 Call
• Implied Volatility (IV) for Oct 2007 $30.00 Strike : 38.45%

Sales, Income & Growth - For the past 12-months, Intersil registered $729.38 Million in sales versus the industry’s $21,917 Million. Income amounted to $152.02 Million against the industry’s $3,237 Million. While Intersil’s 12-months sales growth is at -6.30% the income growth is 2.10% (the same industry sector sales growth is at 0.70% and income growth of 6.70%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 20.8%. Intersil has a debt/equity ratio of 0.0 compare to industry’s ratio of 0.09.

Stock Resistance & Support Level – The resistance is at 34.08 (52-week high) while the first level support is at 31.41 (50-day moving average)

Risks – The ratio of Intersil's price-to-earnings multiple (30.90) is above the average of all stocks within the same sector.

In the meantime, I’m researching on another two promising stocks namelyAptarGroup, Inc. (NYSE: ATR, stock) and eBay Inc. (Nasdaq: EBAY, stock) which will announce their respective earning after market close today as well. eBay seems to have strong resistance at $35 per share which might make the stock looks risky while ATR is hitting the wall of resistance at $38 per share.

AptarGroup is a supplier of a range of dispensing systems for the personal care, fragrance/cosmetic, pharmaceutical, household and food/beverage markets while eBay provides online marketplaces for the sale of goods and services, online payments

Funniest Malaysian Story – Who’s the Fool?

Ireally have to stop blogging about investing stocks for a while as I found this story to be amazing yet funny. I would give my thumbs-up to the thief and thumbs-down to the Malaysian police, not that I endorse what the thief did but what lesson could be learnt from the police force.

It was just yesterday and barely nine hours ago when the same smartly dressed man coolly walked into a showroom at Auto-City (Naza Premier Auto Bhd) in Juru and asked for the key of the RM963,000 Porsche 911 Targa 4 before sped off crashing it through the showroom’s glass pane. Somehow the man forgotten to fill up the gas and had to abandon the car some 2 km away.

I bet most of the police force and public was laughing at how idiot the thief was. Before you conclude that, you better think twice of who is the “real fool”.Guess what, the same man pulled it off for the second attempt – this time rightunder the noses of the police. The thief stole back the Porsche 911 Targa 4 from the compound of the police headquarters. He managed to do so because he had the keys and this time he was ready with a container of petrol (okay, please stop laughing).
Just like the first attempt, the thief abandoned the car about 15 km away, most probably because the road-block was setup after the police realized the missing car. While the police has ordered an investigation to ascertain how the suspect gained entry into the district police headquarters compound, the incident definitely has left Malaysia police generally and Penang police specifically stumped and red-faced.

Ever wonder why car-theft cases have been going up in this country? Maybe the government needs to recruit thiefs to do a random "audit" on the alertness of police force.

Dow Jones finally Crossed the 14,000 Mark

The world well-known stock market indicator, Dow Jones Industrial Average (DJIA), crossed 14,000 in the first half-hour of trading today (Tuesday) and rose as high as 14,011.79, having taken just 57 trading days to make the trip from 13,000. The Standard & Poor's 500 index advanced 0.34, or 0.02 percent, to 1,549.86, having set its own record highs in recent sessions. The Nasdaq composite index rose 9.05, or 0.34 percent, to 2,706.38.

Stocks have risen fairly steadily since the spring amid a continuum of buyout news and evidence that despite higher fuel prices and the ongoing problems in the housing market and mortgage lending industry, consumers are spending and companies remain optimistic about the future. The move higher Tuesday came as Wall Street sorted through a mixed inflation reading and profit reports from blue chip names including Coca-Cola Co. and Merrill Lynch & Co.

But the Dow's latest accomplishment does raise questions about whether investors are buying more on speculation than fundamentals. A week ago, the average tumbled nearly 150 points after disappointing forecasts from Home Depot Inc., Sears Holdings Corp. and homebuilder D.R. Horton Inc., but only two days later, the Dow barreled 283 points higher as investors chose to put a positive spin on a generally lackluster series of retail sales reports.

Light, sweet crude rose 49 cents to $74.64 per barrel on the New York Mercantile Exchange, after trading over $75 per barrel. Oil hasn't closed above $75 since August.

The short time that it took the Dow to pass this its milestone recalls its ascent during the dot-com boom, especially because it took only 129 days to make the passage from 12,000 to 13,000. In the late 1990s, the Dow took just 24 days to go from 10,000 to 11,000, and 89 days to go from 6,000 to 7,000. The end of the high-tech boom plus the recession and the aftermath of the Sept. 11, 2001, terror attacks helped send all the major market indexes into reverse.

Tuesday, July 17, 2007

Personalize Stories that Interest You with Thoof

If you’ve been long (or old) enough in the information technology world, you would realize how the technologies and contents have changed over the last ten years. During its infancy period, websites were static and most of the information was about the company profile without pulse. Now, most of the contents are dynamic, so much so that you can personalize a site according to your interest and preference.

One such site is thoof which allows you to personalized news based on your taste showing interesting news, videos and other links. After browsing the site, it tends to have the characteristic of a social bookmark such as ability to submit links or news that interest you so that you can share it with friends and others. It also allows you to vote (same concept like digg) on certain story that interested you. 

The concept of allowing anyone to submit news links is perhaps one of the smartest moves because the owner of the site does not have to spend precious time moderating hundreds or thousands of submission daily. But thoof goes another step by allowing you to improve on certain submission by giving your opinion on how the story summary should appear. Besides using collaborative filter technology to actually understand a reader’s interest and thus pushing similar stories from the same topic to the reader, thoof also offers simple yet tidy option of either hide (bury it) or tell the system that you’re not interest in the story by clicking “not interesting”.

You can also add more tag to better reflects the category of the story. Overall, the site design is easy yet comprehensive to use. Could thoof becomes another digg or technorati in terms of popularity? Times will tell. In the meantime, just click the stories that interest you and let Thoof do the rest.

*sponsored*

50th Independence yet MAS Cannot Take the Turbulence

Malaysia might be celebrating its 50th Independence Day in about a month time but judging from the turtle pace on how she compete in a globalization market is definitely disturbing. On one hand you have politicians screaming at the top of their voice about how successful the country is, with obvious credit taken by the ruling government. On the other hand, it’s indeed a shameful policy to continue with the iron-fist protection of highly sensitive entity such as the Malaysian Airline System Berhad (KLSE: MAS, stock-code 3786).

I understand most of the national carriers are the symbol of a country’s pride and normally it’s protected in the name of the country or national interest. We understand that and can very well accept it. What we cannot accept is to have incapable top management sitting on top of losses without giving it a damn. Although the current boss of MAS is said to have turnaround the carrier, it’s too early to sing the song of praises. You have to remember that billions of debts had been artificially wiped out with a stroke of a pen by transferring it to the government, meaning the public’s tax money are being used to bail the losses. MAS in return “rent” the planes back to back.

Now, I can understand how Tony Fernandes felt with all the obstacles being thrown at his baby – the highly successful Malaysian budget carrier AirAsia Berhad (KLSE: AIRASIA, stock-code 5099). I can bet with my last penny that the management of MAS and certain government officials were and are very jealous with the capability of AirAsia in not only turnaround the once almost bankrupt budget carrier but to register profit quarter after quarter since the public listing. How they wish Tony Fernandes was a bumiputra and the captain of MAS.

It makes perfect sense with Tony’s argument that competition will actually makes MAS better. But to be competitive, you have to sacrifice your pride by appointing “capable” captain to run the show without any prejudice as to the race of the better man, to which the de facto government has yet to develop after 50 years of independence. There’s a saying “if you can’t prosper, don’t obstruct others from being prosperous”, but this is exactly what MAS is doing. What this joker did was simple – get government to block the intention of AirAsia to have direct flight to Singapore. MAS know KL-Singapore route is very lucrative as it fits very well into AirAsia success business model of fast turn-around time.

Tony also realize that it’s near to impossible to have unlimited flight for KL-Singapore, so he only asked for two daily flights to Singapore, to which it was rejected blatantly. Tony also argued well that just because you started the flight to a destination doesn’t give you the exclusive right forever. A good example would be the potential Manchester destination which MAS does not fly to. What if this point proves to be highly successful at the later stage to AirAsia? Can AirAsia execute the veto power to reject MAS coming into Manchester since the former started the landing right first?
Today, AirAsia announced it plans to offer a second daily flight from Kuala Lumpur to Shenzhen in China, pending China Aviation Authority approval, in the last quarter of 2007 citing good response. Already AirAsia is planning to increase its four daily flights to Macau to five times a day. In the meantime, Transport Minister Datuk Seri Chan Kong Choy is still clueless or has yet to get endorsement from his comrades in the ruling party to enable AirAsia to expand to Singapore.

If MAS still feel threaten with two daily flights request to Singapore by AirAsia, it only means MAS is not independent and ready to survive the turbulence of the global aviation sector.

Debt Consolidation could help to pay less

Gone are the days when you need to travel to the nearest bank or financial institution in seeking loans, regardless whatever types it is. With today’s technology, you can basically do all the research you desire to secure the loans that satisfy your need. According to articles published by iloans, 2007 will be another record year as far as mortgages are concerned with estimated £360 billion to be borrowed. 

Basically the important factors a seeker is looking for in a loan are the term (number of months), repayment interest rate and any additional fees such as processing or insurance protection plans. Having said that cheap loan debt consolidation is gaining momentum in UK simply because 0.27 percent of the UK population become insolvent in the first quarter of 2007 – over 247,000 consumer debt-related court cases registered within first three months.

Debtors are normally advised to consider a debt consolidation loan to pay off high interest debts, such as credit cards or car loans. As such borrowers can pay a lower interest rate, which can save them thousand of dollars over time, not to mention the improvement in credit rating as a result of it.

Monday, July 16, 2007

Small Profit Taken on GOOGLE last Friday

If you’ve been reading StockTube blog for the last couple of months, you would notice that I’ve been trading just a handful of stocks, preferring the option, repeatedly again and again. To some of you it’s rather boring but to others, it could be quite easy and no-brainer. There’re particularly two stocks which I love to invest namely Apple Inc. (Nasdaq: AAPL, stock) and Google Inc. (Nasdaq:GOOG, stock), simply because the U.S. stock market is relatively more efficient compare to other regional stock markets.
I mentioned relatively efficient because I can find stocks which tend to follow the basic technical rule of support and resistance. Investing based on these two rules could be one of the easiest methods to some of you, including me. And so, I’ve taken profit yet again on Google last Friday. Although it was a small profit (about 16 percent for 1 week period), the way Google defying gravity makes me very nervous, so much so that I sweared I wouldn’t regret even though the stock will register new high. As of this morning’s trading, you can see how Google passed the $550 per share without much hiccup (to which I was thinking of kiicking myself for disposing of the positions).

How can this stock keep on flying, considering that I’ve locked in the profit just on June 22th, 2007 to which I blogged at Locked Profit on Google - 20 Percent for 5-Days Trading? This doesn’t make much sense but then this is Google we’re talking about. Indirectly it gives me a creepy feeling on how the stock will perform comes the earning announcement day later.
Nevertheless, this is a classic technical chart behavior which you should take advantage of by going in and exiting from it “fast”. You got to be fast and never be greedy as if it choose to tumbles, there could be blood all over the street. So keep the contract or position small but watch out for any sudden price reverse. I’m watching my Apple very closely now – isn’t the performance awesome?

TMC Life – A Must Have Heathcare Stock in You Portfolio

Health-care is probably one of the most-ignored sectors when one talks about stocks investing, particularly in developing countries, including Malaysia. If you care to spend a couple of minutes looking at health-care, hospitalization or drugs-related stocks in developed countries such as U.S. or Britain, you would be amazed with how good profits this sector is bringing home to the investors.

And when you have players exploring the niche medical area such as stem-cells banking, you just can’t ignore the opportunity to take part investing its stocks. Having said that, I’ve to admit I should not have disposed of my earlier investment in StemLife Berhad (KLSE: STEMLFE, stock-code 0137) when I Locked-In Profit - STEMLIFE back in Oct-2006. But there was no way that I know StemLife stock would skyrocket to the current price of more than RM4.00 per share. On the consolation side, I’m still holding a small amount of Stemlife shares as long-term investment.

On the other hand, another up-coming stem-cell player is none other than TMC Life Sciences Bhd (KLSE: TMCLIFE, stock-code 0101). TMC Life is currently relying on Cyro-Cord as its partner in providing the stem-cells banking service to complete the total solution. Although TMC Life has laid the roadmap to have its own stem-cells facility months ago, it’s still not operational yet. But you shouldn’t wait till the chicken is hatched before decided to take part in this stock.

TMC Life’s Key Person

The main selling point in TMC Life is definitely on one person – the founder, DrColin Lee who has transformed the company into a leading fertility center in Malaysia. As the Managing Director, Dr Colin, who has 25 years of medical practice experience, is still practicing his profession in his ever-crowded main hospital in Damansara Utama. When Dr Colin is not available, Dr Wong Pak Seng, who is also the Executive Director of TMC Life would be the acting general.

To gauge how good the business is, one has to pay a visit to the center during weekday and weekend - patients have been commenting (or complaining?) on the long-queue to seek consultation from Dr Colin or his team of 6 (six) doctors on top of 7 (seven) resident embryologists and 2 (two) urologists .Guess good things don’t come fast and cheap.

TMC Life’s Fundamental

Revenue has been on the uptrend since financial year 2001. Net profit has also registered a healthy and consistent growth from 2001 till 2006. For the financial year 2007, TMC Life is expected to register revenue of RM 32.5 million and net profit of RM 11 million. TMC has been consistently declaring dividend of 1 sen per share since financial year 2005 and is expected to declare the same for the financial year 2007. Earnings per share (EPS) since 2004 are 3.4 (2004), 4.6 sen (2005), 5.3 sen (2006) and 6.9 sen (2007, estimated).

As of time of writing, TMC Life stock is trading at RM1.70 per share - the share is attracting buyers who are willing to invest in the shares at PE (price earning ratio) of 24.4 times the projected financial-year-2007. This is well above the regional health-care stocks PE of 20.0 times.

TMC Shares on Accumulation Phase

While StemLife’s main forte is in stem-cell storage and making more than 50% profit margin out of it, TMC Life business model depends very much on human capital. That could be the reason why TMC Life stock price was lagging compare to StemLife. The story is about to change judging from the stock movement of TMC Life since last Friday. Looking at the technical chart, you can basically see two strong shares accumulation phases (I called it “First Leap” and “Second Leap”) since the IPO.

The “First Leap” occurred on Jan 19th, 2007, when it crossed the resistance of RM 1.00 per share with relatively high volume. For the next half-a-year, the stock price was in the trading-range of between RM1.00 to RM1.24 – a rather boring period. However, if last Friday is any event to goes by, it could be the most promising “accumulation” stage ever recorded by TMC Life. This “Second Leap” is definitely the leap of faith with the mind-boggling volume of over 23 million shares transacted on the open market. It sparked my basic-instinct if someone was and is on the buying spree. I would like to stress here that Tan Sri Quek Leng Chan, the tycoon of Hong Leong Bank is the strategic shareholder with about 14.53% stake in TMC Life.

Moving Forward

The rally in TMC Life stock price since last Friday will definitely make investors who had ignored this small but highly potential company to raise the alarm and consider adding it into their portfolios. Remember that sector diversification is the name of the game if you want to make smart money investing stocks.

Nevertheless, there’re some known potentials that you should know which might make this stock highly explosive, among others:

• The potential earnings from the still-under-construction Tropicana Medical Center were NOT included into earnings growth of TMC Life. The new 120-bed hospital is expected to be operational in early 2008 and an estimated 40 (forty) doctors are expected to be on the new payroll.
• Revenues from stem-cell business should comes very handy to investors who choose to believe that the success of StemLife could be duplicated the same way here in TMC Life, not to mention the high profit margin in such cell-banking facility. With the ever-loyal and satisfied clients, the mouth-to-mouth advertisement of the professionalism and proven TMC solution would eventually turn the patients into ready-customer for the stem-cell banking business.
• Tapping into Indonesia market – TMC Life which has six representatives office in Indonesia is hoping to capture more Indonesian clients, which are contributing 34% of foreign revenue in 2006.

I’ve no problem believing that this stock should be upgraded to Main Board very soon based on its’ strong fundamental and business model since its listing on the MESDAQ in Oct-2005.

# TIP: Consider TMC Life stock as your long-term investment. When the price reaches the level of current stock price of StemLife, you would probably laughing your way to the bank.

Other Articles That May Interest You …

• Stem Cell Research - To Hype or Not To Hype
• Stem Cell - Who Is Crazy? Public or Malaysian Government?
• India-Malaysia Venture on Stem Cell Research
• Why You Should Invest TMC-Life and StemLife Stocks?

Saturday, July 14, 2007

Chua Ma Yu sets to make Good Money Again

Chua Ma Yu was in the limelight again after his company CMY Capital (L) Ltd reportedly will pay RM1.168bil cash to acquire a 14.02% stake in Star Cruises Ltd from Resorts World (KLSE: RESORTS, stock-code 4715). Resorts World’s wholly owned subsidiary, Resorts World Ltd (RWL), had accepted the offer from Datuk Chua Ma Yu-owned CMY to purchase 1.01 billion shares of 10 HK cents each in Star Cruises.

Resorts World said it was reducing its 33.91% stake in Star Cruises to mitigate its exposure to the volatile earnings of the Star Cruises group. Until March 2007, Star Cruises' unaudited results showed a net loss of US$79.39mil on revenue of US$564.88mil.

Based on Resorts World's audited consolidated financial statement as at Dec 31, 2006, the proposed disposal is expected to result in a net gain on disposal of RM309.7mil. That is equivalent to consolidated earnings per share of 5.67 sen.

It’s interesting to see what this investor legend (well, I’ve high regard for Chua Ma Yu) will do with the newly acquired stake in Star Cruises. Chua is a well-known low-profile investor who often seen as able to acquire and dispose of his stock investment in time to make good profit. He’s more of an investor than a businessman, so I’m not sure he’ll keep Star Cruise for a very long time. He might just be the middleman and time will tell if he’ll make another round of great money when he resells Star Cruise to someone else.

If you do not know who Chua is, maybe it’s worth to mention that he’s the co-founder of Rashid Hussain Bhd (KLSE: RHB, stock-code 1309) back in 1983 only to be forced out from the company due to mostly “greed” of the other partner. I would probably remember him as the person who “pioneered” the ESOS(employee share option scheme) when he was still with RHB and in the journey made a lot of millionaires (or half-milionaire).

Chua also was the person who broke the stalemate when Nazir Razak hit the wall in acquiring Southern Bank. When Nazir Razak (brother of current Malaysia Deputy Prime Minister and CEO of Bumiputra-Commerce Holdings Berhad or BCHB) couldn’t seem to find a way to forcefully acquire Southern Bank, it was said that Nazir turned to Chua for help. Chua, via his direct 17.5 percent stake in Killinghall (which owned 16.4 percent of Southern Bank), master-minded the removal of four of Southern's seven directors (namely Tengku Zaitun Tengku Mahadi, Ian Craig Buchanan, Nicholas Spiro Zefferys and Sieh Lee Mei Ling.) and approved the Bumiputra-Commerce bid via shareholders EGM and the rest is history.

Too bad he’s no very active in the Malaysian corporate scene since he brought most of his major business out to Hong Kong (via Waterfront Group) right before the 1997 Asia Crisis.

You can read more about Chua at the other old articles below.

Other Articles That May Interest You ...

• GENTING, Stanley and Chua - The New Three Musketeers
• Kuwait Finance House Buying RHB?

Friday, July 13, 2007

Why Proton Needs Rebranding as Europestar for China?

Proton Holdings Bhd (KLSE: PROTON, stock-code 5304) today inked an agreement with China's Jinhua Youngman Automobile Manufacturing Co Ltd to sell 30,000 units of its GEN.2 for a period of 20 months,rebranded the Europestar, in China. It was reported that Youngman will eventually develop a new range of Made-in-China Europestar cars with the engineering services of Lotus.

Youngman is a commercial vehicle manufacturer (which has focused on luxury coaches and trucks) that has been awarded a licence from the Chinese authorities to produce passenger vehicles.

With car ownership in China currently at only 1% of the population, it’s no-brainer that the market is indeed a very attractive for any car-makers to make profit out of it. The Western, Japanese and Korean cars had already making inroads into China. With the middle-income group growing in size spurred by economic growth expected to be above 8% annually, the car market is estimated to be revved up by 20% to 30% annually in the next few years.

Malaysian should be proud of such achievement after previous repeatitive failures penetrating into oversea market (successfully) after more than 20 years in the automobile industry. But should you actually start celebrating? Why are the Chinese not proud of selling the original “Proton” logo but has to resort to rebrand it as “Europestar”? The name Europestar, while is not a sophisticated name whatsoever, it still gives an impression that to sell the car somehow it has to be associated with “Europe” to convince potential customer that qualities are attached with the car.

Somehow, I’ve a feeling that the cars will be sold at a cheaper price or better quality (with safety features such as ABS and Airbags) or both compare to what you’re paying in Malaysia. I do not have the detail info on the pricing and specification as of now, so if you happen to read this article and have the information, kindly share it with the rest of the readers of StockTube.

If the selling price is cheaper than in Malaysia, does that mean Malaysian were being taken for granted all these years? Why suck the blood out of the original Malaysian, not to mention the lack of standard safety features, while it can be sold at cheaper price elsewhere while still making good profits?

On the other hand, if the selling price is cheaper but Proton is actually making losses, why would then proceed with such a venture? Just to show-off that Malaysian Proton is not dead yet and still can go into the China’s Silkroad as if it’s Marco Polo?

Other Articles That May Interest You ...

• PROTON Saga Ending - VW as New Boss with 51%
• PROTON Fails to Beg VW - Expect More Failures
• Proton Continues to Bleed but PM's Taking It Easy
• 5 Reasons Why You Shouldn't Investing Proton Stocks
• Does Volkswagen Chief Wants to Meet Badawi?

Thursday, July 12, 2007

Malaysia’s ENRON – Bravo to SC but What About Others?

In following up with the Malaysia’s Enron case, the Securities Commission has finally charged three key executives of Transmile Group Berhad(KLSE: TRANMIL, stock-code 7000) namely the founder and former CEOGan Boon Aun, 46, together with ex-chief financial officer (CFO) Lo Chok Ping, 38, and ex-executive director Khiudin Mohamed, 50. Three of them are accused of providing "misleading statement" in the carrier's quarterly report for the financial year ending Dec. 31, 2006.

All three opted to contest the charges at the Kuala Lumpur Sessions Court and they were released on bail pending a hearing set for January. They face a minimum fine of 1 million ringgit ($289,855) and/or up to 10 years in jail if convicted. The court imposed bail of 1 million ringgit ($289,900) on Gan, 500,000 ringgit on Khiudin and 300,000 ringgit on Lo. In addition, Khiudin and Lo were also required to surrender their passports. Gan and Khiudin resigned from their top posts last month, though Khiudin's lawyer said his client remains an employee. It is not known when Lo left the firm.

Transmile, whose chairman is former MCA president (a component party of the current ruling government) and Transport Minister Ling Liong Sik, is controlled by Hong Kong-based Malaysian billionaire Robert Kuok. Other shareholders include U.S.-based investment bank JPMorgan Chase and state-owned postal company Pos Malaysia Bhd.

This is indeed good news as far as good corporate governance is concerned as it would serve as an example for others to think twice before committing the book-cooking in future. Nevertheless it’s yet to be seen if the guilty parties will be punished severely or let-off the hook with minor fines. Having said so, investors and public will surely keep their eyes and ears open waiting for the result of the trial. I hope Transmile will not be the final company to have the irresponsible and greedy top executives charged. Do the same to other chefs who had been cooking the accounting book not in millions but billions.

Other Articles That May Interest You ...

• MEGAN Overtook TRANSMILE for Gold Medal
• Steel-Man Eric Acquitted - Are You Surprise?
• Listed Co Not Trustable - Book-Cooking from Day-1
• Widespread Accounting Crisis - Government Equally Responsible

Middle-East Invading Southeast Asia for Biofuels

If I read it right as reported by BusinessTimes, after the failure in securing Malaysian financial institutions in the form of banks (which is a rare commodity), super cash-rich Middle-East giants are set to buy whatever company that makes money in the world, including Southeast Asia at this moment.

Kuwait Finance House (KFH) which was denied the Rashid Hussain Bhd (KLSE :RHB, stock-code 1309) which in turn owns the RHB Bank recently has turns to oil palm plantation, both Malaysia and Indonesia. The Islamic investment bank was reportedly carrying hundreds of millions of dollars walking around the street looking for acquisition in the next three months. Who can blame them considering the price of palm oil has surged over 80% since 18 months ago? 

Kulim (Malaysia) Bhd said it was selling its entire Indonesian plantation business for US$125 million (RM431 million) to focus on more profitable ventures elsewhere. Boustead Holdings Bhd said it too might sell its Indonesian plantations to focus on developing estates at home.

Malaysia's plantation index trades at about 18 times this year's forecast earnings, above the wider market multiple of 16 times. Palm oil prices are off last month's all-time high but are expected by experts to hold up over the next year or so. 

So, what’s the real rational KFH (and potentially others) is looking into this un-exciting sector? All hints and opinions are pointing to the prospect of generating biofuel from the palm-oil, which make sense considering almost all Middle-East guys have this “oil” thing within their business-blood. And since biofuel is gaining popularity in Europe and North America as a green alternative to petroleum, what better way than to slowly buy into the palm-oil business in this region?

And could that be the reason why Genting Group (KLSE: GENTING, stock-code 3182) and Asiatic Development Berhad CEO Tan Sri Lim Kok Thay denied the speculation that Asiatic is up for sale and instead hinted that Asiatic could be an acquirer instead? He hinted (was he?) that Asiatic could flex the muscle to purchase IOI Corp instead.

StockTube has blogged about some of the potential smaller palm oil companies during the heat of palm-oil M&A back in Dec-2006. Could one of the companies ended up on the plate of KFH? You can read it more at Plantation Merger & Acquisition Heating Up.

Other Articles That May Interest You ...

• Kuala Lumpur Kepong Follows The Smart Move
• Kuok Group Consolidates To Defend Palm Oil Business
• Singapore's Wilmar To Bid PPB
• Plantation Merger & Acquisition Heating Up
• Guthrie, Sime, Golden-Hope Shareholders Under-Offered
• Who's Behind Synergy Drive?
• After The Super-Merger Will Others Follow?

Wednesday, July 11, 2007

Britain’s Super-Casino in Cold Storage?

Could there be a U-Turn on the super-casino planned earlier by former British Prime Minister Tony Blair who had originally envisioned over 20 Las Vegas-style casinos, but that number was cut back to eight, and then finally just one?

It seems British Prime Minister Gordon Brown backed away from UK plans to build a Las Vegas-style supercasino in the northern city of Manchester, saying there might be better ways to encourage economic growth there. A source close to government told Reuters: "The regional casino is pretty much dead in the water", adding that plans for 16 new smaller casinos would be unaffected.

Manchester in January unexpectedly won a competition to host a supercasino, which was expected to generate 2,700 jobs through its 5,000 square metres of gaming floors and bars and in surrounding cinemas and hotels. However in March, politicians led by church leaders in the upper House of Lords rejected plans to build the venue, following months of campaigning by anti-addiction campaigners.

Overseas casino operators had invested millions of dollars in planning and lobbying in the UK, and those intending to bid to run the Manchester casino included U.S. operators Las Vegas Sands, Harrah and Britain’s Ladbrokes.

Other Articles That May Interest You ...

• Billionaire Quek Building New Gaming Empire

Design Your Credit Card to Win Apple Macbook

How do you educate your teenage kids about financial management? Give them credit cards, cell-phones, cars and chances are they’ll just spend like nobody business. PAYjr Visa Buxx which was launched recently could do the trick. It is actually a re-loadable prepaid card designed specifically for teens. This allows teens the flexibility in their spending management.

From the point of parental control and monitoring, the PAYjr system also provides SMS text messaging or email notifications to keep parents aware of the card activity, such as balances and loads to the card. Furthermore the card is the safer choice compare to cash because it’s insured by FDIC. 

What’s cool about this card is that PAYjr has just launched a card design competition that allows people to upload their own card designs to compete with others. You can vote for your favorite card designs and the winner will win a new Apple Macbook and other prizes. Isn't that cool?

*sponsored*

Tuesday, July 10, 2007

Cheaper and Smaller iPhone Nano on 4Q-2007?

Could Apple Inc. (Nasdaq: AAPL, stock) be gearing for the release ofsecond generation lower-cost iPhone based on the popular iPod nano? At least JP Morgan believes so, and it’s sooner than you can guess – possibly fourth quarter of 2007.

Kevin Chang, a JP Morgan analyst based in Taiwan, cited people in the supply channel he did not name and an application with the U.S Patent and Trademark office for his report dated July 8. Kevin was referring to the patent application document dated July 5 that refers to a multifunctional handheld device with a circular touch pad control, similar to the Nano's scroll wheel.

Chang said the new cheaper version of iPhone could be priced at $300 or lower, compare to current price range of $500 to $600 (depending on storage). An iPhone based on iPod nano size could trim the features but that’s the only way to bring down the costs. It was estimated that sales of between 30 and 40 million (Steve Jobs expecting 10 million pieces sales for 2008) are "achievable" if Apple has a less expensive iPhone.

If everything goes accordingly, the new iPhone could have a converted click wheel that adjusts its functions based on context, such as reverting from the traditional circular scrolling motions to tapping out phone numbers on different sections of the wheel during the calling process. No touchscreen is included in the concept paper. Taiwan's Catcher Technology would definitely benefits if it indeed materializes as it will be the "major source of metal casing" for the new phone. Kevin estimated revenue from Apple could representT$6 billion ($183 million) to T$8 billion ($244 million) revenue for Catcher in 2008.

Hence, there’re two stocks which you should pay attention to, Taiwan’s Catcher Technology and Apple Inc., of course. Did you see how Apple stock price jumped more than 2 percent this morning’s trading? Could be due to the iPhone Nano speculation? Nevertheless I hope Apple would think twice about tying-up customers with AT&T.

Other Articles That May Interest You ...

• Red Dots for iPhones all over the States
• First Stock Rise since iPhone Launch – 96% Profit
• Apple to Sell 1 million iPhones before end of 2007
• APPLE iPhone Sales Top US$100 Million on Day-1?
• June 29th – Apple iPhone's Judgement Day

SwissCash Scam – SC a Little Too Slow & Too Late

Report from BusinessTimes called it a milestone against investment scams when it quoted the Malaysian Securities Commission has obtained a worldwide Mareva injunction against persons involved in the Swisscash investment scam preventing them from disposing of assets in and outside Malaysia.

The SC also announced it has blocked access to two more websites offering illegal investment schemes, namely www.eaindex.com & www.winifund.com. This brings to 10 the total number of websites blocked so far.The Mareva was sought by the SC following the filing of a civil suit against defendants Albert Lee Kee Sien, Kelvin Choo Mun Hoe, Amir bin Hassan, Dynamic Revolution Sdn Bhd, Swiss Mutual Fund (1948) S.A, SMF INternational Ltd and SMF (1948) International Ltd, SC said in a statement today. The injunction was obtained on June 21 this year.
The Mareva restrains and prohibits the defendants from carrying on the business of Swisscash, targeting, soliciting and collecting funds from the public for investments in Swisscash or any other internet investment scheme. The defendants also cannot host or operate the Swisscash websites or operate any other such websites which solicit investments for Swisscash or any other Internet investment scheme.

The pace of the authority in protecting public interest is simply marvelous. The scam was reported in major newspaper and TV back in 19th April, 2007. Back then StockTube has also picked up the news when the Securities Commission (SC) haspublished a list of more than 50 companies which are not approved or authorised to deal in securities. So, why only 10 websites are blocked so far when the fact remains that the rest of the 40 companies are operating illegally cheating public’s money (I’m not going to debate on how naive and greedy the public is in such a scam).

Secondly, why the famous SwissCash scam (die-hard fans would understand what I mean) was allowed to operate for such a long period without any action? The authority was rather low-profile on SwissCash but StockTube has highlighted this company back in Apr (you can read the article at Internet Investment's Get-Rich-Scheme You Should Avoid). Could it be that SwissCash members consist of high-rank individuals who couldn’t resist the temptation of the mind-boggling returns of the investment? High-ranking individuals here mean those with “Dato”titled, yes the scam is that influential, mind you?

Thirdly, why took such a long time to finally pay attention to SwissCash scam? The scam has been operating in Malaysia for more than a year – some said. Pardon me for forgetting that the government actually practices “close-one-eye” policy, not to mention the sleeping-on-the-job working culture. It doesn’t help to only blow the whistle after all the big fishes swam away leaving baby fishes alone.

SC said it secured the Mareva following its investigation on the scheme under the Securities Industry Act 1983 and the Anti-Money Laundering and Anti-TerrorismFinancing Act 2001. Looking at the action by the authority today, it could be due to the urgency that the scam could possibly link to the funding for terrorism. Furthermore, Federal CID Director Datuk Christopher Wan Soo Kee reported that luxury vehicles stolen in Malaysia are being smuggled overseas for sale to fund terrorist and criminal organisations.

Other Articles That May Interest You ...

• Internet Investment's Get-Rich-Scheme You Should Avoid

Monday, July 09, 2007

CHTT – Chattem to Open my Earning Season

Healthcare products, toiletries and dietary supplements manufacturerChattem, Inc. (Chattem) (Nasdaq: CHTT, stock) is set to announce its’ earning tomorrow, July 10th, 2007, before market open. The Company's products target niche market segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. The Company's portfolio of products includes well-recognized brands such as Icy Hot(R), Gold Bond(R), Selsun Blue(R), ACT(R), Cortizone and Unisom(R).

Rating Indicators for CHTT:

• Wall Street consensus : 0.77
• StockScouter rating : 7 / 10
• Whisper Number for this stock : N/A
• Schaeffer rating for this stock : 7 / 10
• Power Rating : 5 / 10
• Insider Trading (last 52 weeks) : ($15.66 M)
• Zacks Analysts Rating: Hold
• Option Trading: Aug 2007 65.00 Call
• Implied Volatility (IV) for Aug 2007 $65.00 Strike : 38.21%

Sales, Income & Growth - For the past 12-months, Chattem registered $317.36 Million in sales versus the industry’s $22,187 Million. Income amounted to $43.99 Million against the industry’s $2,526 Million. While Chattem’s 12-months sales growth is at 20% the income growth is in negative 7.60% (the same industry sector sales growth is at 22% and income growth of 83.40%).

Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 13.9%. Chattem has a debt/equity ratio of 3.57 compare to industry’s ratio of 0.42.

Stock Resistance & Support Level – The resistance is at 65.87 (52-week high) while the first level support is at 62.11 (50-day moving average)

Risks – The ratio of Chattem's price-to-earnings multiple (28.60) is above the average of all stocks within the same sector.

Chattem’s past two quarters earning had been impressing. I’ve to admit this is among one of the smallest drug manufacturers and marketers stocks around. I believe investors who’re eyeing this stock also hope for M&A possibility on this guy. Nevertheless this stock experiences sudden drop in stock price as of writing, in fact the stock slided since 10:30am trading time till now. I’m not trading huge volume on Chattem as I rarely like drug stocks but I’m attracted to the stock’s pattern. Be careful with this stock if you plan to trade the option because the volume is not high. But then if the result is good, the uptrend should be sustainable.

Sunday, July 08, 2007

The New 7 Wonders of the World on 07.07.07

The New 7 Wonders of the World has been announced during the Official Declaration ceremony in Lisbon, Portugal on Saturday, July 7, 2007 – 07.07.07. And I think this round of winners make more sense as they represent the great past history of mankinds.

The Great Wall of China, Rome’s Colosseum, India’s Taj Mahal, Peru’s Machu Picchu, Brazil’s Statue of Christ Redeemer, Mexico's Chichen Itza pyramid and Jordan’s Petra made it to The New 7 Wonders of the World. The pyramids of Giza, the only surviving structures from the original seven wonders of the ancient world, were assured of retaining their status in addition to the new seven after indignant Egyptian officials said it was a disgrace they had to compete.

About 100 million votes were cast by the Internet and cellphone text messages, said New7Wonders, the nonprofit organization that conducted the poll. The campaign to name new wonders was launched in 1999 by the Swiss adventurer Bernard Weber. Almost 200 nominations came in, and the list was narrowed to the 21 most-voted by the start of 2006.

The Statue of Liberty and Australia's Sydney Opera House were near the bottomof the list from the start, reported Associated Press. Also among the losing candidates were Cambodia's Angkor, Spain's Alhambra, Turkey's Hagia Sophia, Japan's Kiyomizu Temple, Russia's Kremlin and St. Basil's Cathedral, Germany's Neuschwanstein Castle, Britain's Stonehenge and Mali's Timbuktu.

Too bad the Hanging Gardens of Babylon, the Statue of Zeus at Olympia, the Temple of Artemis at Ephesus, the Mausoleum of Halicarnassus, the Colossus of Rhodes and the Pharos lighthouse off Alexandria have all vanished.

My favorite is definitely the Great Wall of China, the only structure visible from the space, although I think Terracota Warriors can easily beat other contenders. And just wait till the day the first China’s Emperor’s tomb is unearthed. Perhaps we should expand the 7 Wonders to 10 Wonders as there’re simply too many amazing things left behind by our ancestors, don’t you think?

Saturday, July 07, 2007

Earnings Season Next Monday – Good Result Expected

The time is here and if the following report makes it through, you can make nice money trading option or investing stocks. Stocks could rise next week if the first round of quarterly earnings yield could injects optimism about results for the period. Alcoa Inc., the world's largest aluminum company, kicks off the earnings season on Monday, and results from the second quarter could surprise on the upside because of the weak U.S. dollar.

On average, about half the earnings at companies that make up the benchmark Standard & Poor's 500 Index come from overseas. When a foreign currency is strong, the conversion of earnings from abroad translates into more dollars, reported Reuters.

A surprisingly strong employment report about the economy on Friday reinforced a view that the Federal Reserve would keep interest rates on hold. U.S. employers added 132,000 jobs in June and payrolls rose more strongly than previously thought in April and May, according to a Labor Department report. National unemployment rate remained steady at a relatively low 4.5 percent.

A Reuters’ poll of primary bond dealers, conducted after the job report was issued, found all 18 dealers felt the Federal Reserve will keep its trendsetting federal funds rate steady at 5.25 percent at the next policy setting committee on August 7. Ten dealers thought the Fed will keep rates on hold through year-end while four felt it might reduce them this year if a housing slowdown erodes growth.

So, it’ll be another busy schedule for StockTube from next week onwards as lots of research and readings need to be carried out before making any new positions. As usual, I’ll highlight stock(s) which might be the potential candidate(s) to make money for me this round. Hopefully the shortlisted stocks would be as hot as the summer season.

Friday, July 06, 2007

Why MAXIS Group CEO Resigned?

Are you surprise with the departure announcement of Maxis Communications Bhd group CEO, Datuk Jamaludin Ibrahim, by the end of July 2007? I’m not, and the reason which I think contribute to the quit-letter is strongly related to the privatization. He will nevertheless continue to serve on the board of directors and remain with Maxis' parent company, Binariang GSM Sdn Bhd, as a non-executive director. Maxis' CEO for Malaysia, Sandip Das, will take over from Jamaludin.

It was reported (as expected) that his resignation is due to personal reason and not related to the recent privatization. He’s the guy who helped and saw the company which he commanded took public in 2002. But he’s also the guy who watched helplessly from his chair how the company was delisted on the 22nd June 2007. In short, he helped Ananda tripled the tycoon’s fortune from a mere RM11 billion in 2002 to RM40 billion in 2007 in market capitalisation.

Why is he quitting?

In the process of enriching Ananda, Jamal (as he’s normally called) also benefited in terms of generous stocks option (latest being receiving close to RM15 millionby accepting Binariang’s RM15.38 per share offer for close to one million shares) which has made him a millionaire as well. But with the delisting, he basically lost the cash-cow, the same cow which made him millions of dollars and which will never comes back to home anymore.

It was made known that Ananda has adopted the look Indian-SriLankan policy with the privatization. Mr Sandip Das was the Deputy Managing Director of Essar Hutchison's operations in India before joining Maxis with a strategic role of supporting the India operations of Maxis in the form of Aircel (Aircel is 74% owned by Maxis). Sandip was the second in command at Hutchison and was the first employee spending 13 years there. Besides money, a great roadmap and vision could have been painted to attract Sandip by tycoon Ananda.

Experience wise, Sandip knows India more than anyone else and this includes Jamal. So could there be difference in opinions between both giants, Jamal and Sandip? Or could this resignation already anticipated by Ananda when his plan was laid on the table? As the saying goes, there can’t possibly be two tigers living harmoniously within the same mountain. And since Maxis Malaysia operations are almost on auto-pilot mode, Jamal is definitely disposable. Ananda is a cool-blooded businessman anyway, the same reason why he’s so successful till now. Ever heard of the story that he actually turned down the proposal because the cost was too “high” to lay a fiber-option cable at his home to solve the slow internet access problem?

Which operation could be affected?

Prior to his 10-year tenure at Maxis, Jamaludin was the CEO of information technology firm Digital Equipment (Malaysia) Sdn Bhd, often referred as DEC or DIGITAL (acronym for Digital Equipment Corporation). DEC was then acquired by Compaq in June 1998. Subsequently Compaq merged with Hewlett-Packard in May 2002. So it’s no coincidence that Hewlett-Packard Company’s (NYSE: HPQ,stock) monopolise most of the hardware and software within Maxis Malaysia I.T. operations. The rumor which has been circulating is that Maxis is nearing to outsource the I.T. to most probably HP, the same way Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) outsourced to CSC.

Most of the senior staffs of Maxis already have jumped boat elsewhere. It would be interesting to see if Jamal would pull his followers together to his new destination, a norm especially when such a high-ranking person left a company. Maxis has more than one COO (chief operating officer) taking care of different areas and they do not see eye-to-eye. So expect a major restructuring with Jamal’s departure. At the age of 48, you don’t think Jamal will retire from the scene, do you?

Besides internal staff, expect major changes to the vendors as well since existing suppliers depends very much on the strings pulled previously in securing contracts.

Which company do you think Jamal would end up with ultimately? Would it be another telecommunication company? Care to guess? There’re not many telco in Malaysia anyway – Telekom, Celcom, DIGI, TimeDotCom, MiTV or others.

Other Articles That May Interest You ...

• Squeezed by Tycoon - You Should Squeeze IRD back
• Ananda Made Instant Profit from 25% Sold to Saudi
• Privatization Gaining Momentum - Junk Stocks Left
• Maxis Privatization - What They Said & You Should Say
• Top 10 Things You Can Do With RM15,600
• It's RM15.60 for Your MAXIS Shares - Would You Sell?
• D-Day for MAXIS Shareholders but A.K.'s Fortune Doubles

Thursday, July 05, 2007

Red Dots for iPhones all over the States

This is awesome, a check on the iPhone availability at local Apple Storetoday shows ALL iPhones are sold-out except at Pittsburgh, Shadyside, Pennsylvania. The highly popular iPhones could be snapped out during yesterday’s Independence Day’s holiday, talk about timing of the launching. So you just have one green dot (available) while the rest of the Apple Stores are waiting for replenishments. 

Could that be the reason why Apple Inc. (Nasdaq: AAPL, stock) stocks zoomed passing the $130 per share recordthis morning after trading started? You bet, and looking at the way the stock is behaving, the uptrend could continue unless some really bad news comes out. So, if you’re long on the stock (just like me), you should just let the share runs as far as it can goes. Aren’t you happy seeing all those Apple Stores running out of the devices while waiting for stocks and the iPhone fanatics yelling and complaining of the shortage? 

Nevertheless, Apple better replenish the stocks fast to leverage on the current fever of the iPhone craze. But wait, maybe Steve Jobs already knew this will happens, and this is part of his evil plan to hold the stocks while enjoying seeing people on the street crying for iPhones. That’s to punish skeptical who criticize him earlier but somehow these same people couldn’t control themselves and ended up queuing trying to get iPhone instead. The die-hard fans already got their iPhones during the first couple of days after the launch.

But I can’t say all these latecomers are not Steve fans. They’re just waiting to see other people get their hands on the gadget and see if there’re problems or complaints with it, as they do not want to be labeled as guines-pigs. These are the fence-sitters. I think during the Fourth of July holiday, friends who got hold of the iPhones would probably had bragged and showed off the devices and more people are now dying to get one. Furthermore the only complaint was the slow activation from AT&T.

Other Articles That May Interest You ...

• First Stock Rise since iPhone Launch – 96% Profit
• Apple to Sell 1 million iPhones before end of 2007
• APPLE iPhone Sales Top US$100 Million on Day-1?
• June 29th – Apple iPhone's Judgement Day

iPhone.com domain cost Millions of Dollars for Apple

How can you be a millionaire on the web? There’re thousands of ways but it's sure by owning the relevant domain name and a bit of luck, at least that’s what Michael Kovatch will tells you. AppleInsider who picked Jay Westerdal as reported that the deal could cost Apple Inc. (Nasdaq: AAPL, stock) millions of dollars to secure the www.iPhone.com.

Michael Kovatch had registered the domain well in 1995, before Apple chief Steve Jobs' return to his company, and has been using the site for an online cellphone store - The Internet Phone Company. He knew the Internet would allow telephone calls one day (the same reason he registered for iPhone.com) but he didn’t know Apple’s revolutionary phone will makes him an instant Millionaire. Although Michael would not disclose the sale prices, considering the importance of the domain to Apple, the smallest figure would be a seven-digit sale.

Michael initially turned down the offer from Apple as he registered the domain back in 1995 and was building a company on the domain. But I guess the strength of the dollars speaks louder than anything else. A check shows that the domain’s ownership has been transferred to Apple and now Apple Inc. is the proud owner of the DNS. It could just been updated as early as 3rd July, 2007.

Considering APPLE iPhone Sales Top US$100 Million on Day-1 and the high potential of Apple to sell 1 million iPhones before end of 2007, I wouldn’t be surprise if Michael’s demand for $10 million for the domain’s release could easily be accommodated by Steve Jobs. Furthermore it’s not everyday that you can strike such a gold mine. If you’re Michael, how much would you ask to let go of the iPhone.com domain?

Other Articles That May Interest You ...

• June 29th – Apple iPhone's Judgement Day

StockTube breached More Than 100,000 Pageviews

Since StockTube started early Oct-2006, the blog has grown on a modest pace and thanks to the loyal readers, today marks the day when the pageload or pageview breached the 100,000 figure. It’s a small figure compares to other A-list bloggers out there but nevertheless I’m proud of the achievement as it means over 530 posts or articles have attracted 100,000 views from thousands of returning and unique visitors combined since then.
StockTube would continue to provide more useful articles to readers in order to make more money and in return the readers will continue to support this blog. Sospread the word about the existent of this blog to your friends, family-members and your love one as I believe such free information should be shared to benefits everyone. 

Last but not least, StockTube would like to thank all the readers for their continuous support and hope there’ll be a quantum leap as regard to the number of pageviews in future.

Wednesday, July 04, 2007

StockTube Wishing USA Readers Happy Fourth of July

Today marks the Independence Day for the people of United States of America. And to celebrate the big day (coincidence or not), Hilton Hotels Corp. has agreed to an all-cash buyout from The Blackstone Group LP in a$20.1 billion deal that would instantly make Blackstone the world's largest hotel owner.

The private equity group said it would combine cash from its real estate and corporate private equity funds to buy all outstanding Hilton shares for $47.50 each, a 32 percent premium over Tuesday's closing stock price. The acquisition would take Beverly Hills-based Hilton Hotels private and boost Blackstone's portfolio of lodging properties. Blackstone owns more than 100,000 hotel rooms in the United States and Europe. On the other hand, Hilton Hotels owns or operates 2,800 hotels and 480,000 rooms in 76 countries.

Hilton has been expanding aggressively since 2005, when it bought Britain's Hilton Group PLC for $5.7 billion cash, reuniting two brands that split in the 1960s. The deal allowed Hilton, which had been limited to properties in the U.S. and Canada, to become a global player. In 2006, Hilton's revenue nearly doubled to $8.16 billion, and net income climbed 24 percent.

StockTube would like to take this opportunity to wish all American readers a“Happy Fourth of July”. May God bless America and StockTube’s trading portfolio.