2008-04-23

Tuesday, April 22, 2008

TMI and TM stock Reference Price post spin-off

Ahead of its listing on Apr 28th 2008 Telekom Malaysia International(TMI), the mobile-phone arm of Telekom Malaysia Berhad (KLSE: TM, stock-code 4863) after a spin-off plan, Bursa Malaysia has given its’ indicative stock price of RM7.85 a share which translates into RM26 billion in market value. The boring fixed-line TM meanwhile is only worth RM3.05 per share, according to Bursa. The combined reference prices of TM and TMI should equal to the last traded price of TM on April 22th 2008 (today, closing price was RM10.90 a share).

However Kenanga Research house has pegged a fair value of only RM7.17 for TMIjustifying that despite cost improvements and higher productivity, the risk was equally high if one was to look at the regional expansion. Late last year (2007), TM has sweetened the demerger of its mobile and fixed-line business by proposing to return RM1.63 billion to its shareholders as special cash dividend – gross dividend of 65 sen a share. TM shareholders were entitled to receive one TMI share for every TM share they own.

The stock price of TM would be adjusted downwards (to RM3.05) on April 23rd 2008 to reflect the TMI shares distributed to shareholders of TM. Post demerger exercise, TMI would have a proforma net profit of RM1.52bil on revenue of RM9.99bil and the shareholder equity would stand at RM9.77bil. Debts, including amounts owed by the company to TM pursuant to the demerger, would come to RM9.12bil.

It would be interesting to see how both TM and TMI will sails from here onwards. At one corner TM needs to prove it still has muscles to be flexed, depending on how successful it could rollout the high-speed broadband services secured late last year. On the other corner, TMI needs to show its’ old brother, TM, and all the investors that it could take the place of Maxis Communications (privatized now) as far as the cellular phone business is concerned. The money is there on the street and it is TMI’s duty to convince previous Maxis shareholders that they are as good, if not better, than Maxis stock.

Other Articles That May Interest You … 

• Maybank and TMI new chiefs, dare to ignore Rumors?
• TM spin-off project, Wahid to exit with Jamal’s entry?
• The Rise of CELCOM Empire, Tales You Should Know

Monday, April 21, 2008

AAPL’s earning - the key is on the International Revenue

Apple Inc.’s (Nasdaq: AAPL, stock) coming earning announcement is on Wed, 23rd Apr 2008 – two days away. Since Google’s sudden quantum leap, Apple has been having free ride up the hill. I mentioned if Google were to drop, then it would drag Apple and most of the technology stocks with it and vice-versa. I was trying to scalp and hope to squeeze some money out of Apple last Friday but it didn’t get triggered until today. And so the money was off the table for AAPL Jul 160 Call Option.

About three months ago when Apple announced its first-quarter earnings, the stock was punished and whacked left, right and center by investors despite posted the best earnings in its 32-year history. The stock was then tumbled to less than $120 a share before recovers, remember those days. But you might argue that it was due to recession fears and Apple’s pathetic guidance for Q2 of about 94 cents against analysts’ expectation of $1.09 a share. Could that be the strategy to lower analysts' appetite for Q2 earnings? Your guess is as good as mine.

If you were to ask most analysts or investors / punters / speculators, majority of them are bullish about the Q2 earnings (this Wednesday). IDC reported that Apple’s computer shipments were up 25.1% although overall U.S. PC sales were a mere 3%. Gartner said Mac sales up 32.5% instead. Since Google’s earnings announcement last week, you can’t ignore the international sales factor. Assuming Apple’s international performance is good, the company should easily beat the Street’s consensus of 1.95 million Macs sold in the quarter. Analysts are equally bullish with Piper Jaffray looking at Mac sales of 2-2.1 million while JP Morgan expects a higher figure at 2.11 million.

In terms of iPods, JP Morgan estimates that Apple sold 9.68 million units in Q2 while Piper Jaffray is betting between 9.7-10.5 million units. While iPods sales are so-so, iPhone sales are sending both JP Morgan and Piper Jaffray scratching their heads as the gadget was affected by shortages and black market in developing countries. JP Morgan thinks Apple to report sales of 1.5 million iPhones but Piper Jaffray believes the number could reach 2 million.

Nevertheless there’s one intangible consideration that I think is worth to ponder upon. It’s the “expectation” - a magic variable that contributed to the Google Inc.’s (Nasdaq: GOOG, stock) huge gap-up last Friday. Generally people were not having high hope on Google, hence when it reported a “nice” number the stock was bid up. Putting Apple into the same context, what’s the expectation of Apple? I doubt Apple could stage another equivalent gap-up even if it presents a set of good numbers. Furthermore Google’s effect has push up Apple’s stock since then. All the eyeballs are staring at Apple’s sales figure for Q2, guidance for Q3 andother goodies in the bag.

Anyway, I’m bullish on the stock and if it’s true that Apple intentionally gave a lower guidance in Q1 and manipulated the iPhones inventories both in U.S. and Europe, there’s even more reasons to bet on the Call Option. Another reason that you might want to consider – Apple’s Call Option was bid-up pretty badly for May 160 up to May 210. On the other side, the Put Option was bid-up also for May 145 up to May 120. This is really exciting!

Other Articles That May Interest You …

• What a busy day - scalp BIDU, sell GOOG and AAPL
• Stocks do not go linear - Scalp your way to make money
• Make Money from Apple, Early Birds get the Worms

Unlimited international calls for $9.95 / month from Skype

There’s an obvious reason why the domestic land-lines phones are not and will not be upgraded into an IP-phone in the near future. It could potentially send the monopoly players such as Telekom Malaysia Berhad (KLSE: TM, stock-code 4863) packing simply because people will be busy making free calls from anywhere, provided you can load a small piece of software into the IP-phone. One of the softwares is Skype.

However, Skype which was acquired by eBay Inc. (Nasdaq: EBAY, stock) in 2002 is introducing its first plan for unlimited calls to overseas phones on Monday. The plan will allow unlimited calls to land-line phones in 34 countries for $9.95 per month which includes most of Europe, Canada,Australia, New Zealand, Chile, China, Singapore, Taiwan, Japan, Korea and Malaysia. Skype has already been selling unlimited calls to the U.S. and Canada for $3 a month and to Mexico City for $5.95 per month.

Basically you can use Skype to call anyone in the world as long as both of you have software application (Skype) running on a computer equipped with a microphone and speakers or a headset. With most of you have smart phone which could load the Skype software nowadays, you can virtually call anyone as long as you’re connected to the internet.

Other Articles That May Interest You …

• How to withdraw money from PayPal to local account?

Sunday, April 20, 2008

Can you spot how lousy this Photoshop work was?

Four years ago Prime Minister Abdullah Badawi issued a “blank check”with promises of a paradise. People took the bait and gave him more than 90 percent passing mark. Four years later people found out they had voted a sleepy head instead and so swung 360 degrees, so much so that even a junior candidate such as Loh Gwo-Burne won easily for the Kelana Jaya parliamentary seat. Loh probably is still giggling until today since the 8th Mar 2008 general election of his unexpected windfall. He was tagging with his businessman father, Mr Loh Mui Fah, for legal advice from Lingam but the junior got bored, started playing with his phone and recorded the conversation involving Lingam brokering judicial appointments.

With such degree of people’s rejection Abdullah should thank God for still being able to become the Prime Minister although he single-handedly brought the National Front to its' worst defeat in the history. Short of apology to the wrongly sacked former judges in the 1988 Judicial Crisis, the PM chose to use money in the form of ex-gratia payment compensation instead. He was also pressured to setup a Judicial Commission specifically to appoint judges.

Many believe Abdullah’s day is over and it’s a matter of how he could exit not seen as being booted out. The man who screamed he was in “control” is obviously couldn’t control any of his own people. It’s the final countdown and the final assault was being launched using the controlled print and electronic media to the fullest. The pig-farming issue was exploited to the max despite the fact that the former Chief Minister Khir Toyo was the one who approve the project and the man who mooted the demonstration was the same man who gave the thumb up during his Europe study tour on modern pig-farming.

But of all the desperate efforts by the controlled-media to twist the facts to sabotage opposition Pakatan Rakyat (People’s Pact) and to create or fabricate goodies for PM Abdullah Badawi, nothing beats what Utusan did during the recent Malaysian Bar Council dinner. It was a lousy Photoshop work!!! Can you spot it(from source)?

Other Articles That May Interest You … 

• Mirror mirror on the wall who’s the biggest liar of all?

Saturday, April 19, 2008

Iran President thinks oil prices are damn cheap at $115

Some of you might be screaming - He got to be kidding! America’s next immediate target, Iran President Mahmoud Ahmadinejad declared that crude oil prices, now above $115 a barrel, are just too low. He further added “The oil price of $115 a barrel in today's global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value." Crude oil futures already surged to a new trading record of $117 a barrel Friday following an attack on a key pipeline in Nigeria.

Despite analysts suggestion that today's crude prices might have surpassed inflation-adjusted highs set in early 1980, the Iran President thinks otherwise. With heavy political tone, Mahmoud Ahmadinejad blamed Western industrialized nations of "selfishness" and “arrogance” in their quest for cheaper oil. The fact is U.S. weakening economy translates into weaker dollar which in turns push up the global oil prices

Ahmadinejad, whose country Iran has switched U.S. dollar to Euro in its oil transactions, further declared thatU.S. currency is "a handful of paper" without any commodity support. This reminds me of the “Banana” money used as the currency issued by Imperial Japan during its’ occupation of Malaya, Sarawak, Singapore and Brunei. Regardless of the validity of the claim, in reality too many countries are holding the U.S. dollar as their reserves, so much so that it would be suicidal to replace the U.S. dollar in their daily business transaction.

Anyway I’m not surprise with President Mahmoud Ahmadinejad’s statement that the oil prices could goes up higher as I’ve wrote that it would be generous to have the black-gold even reaches the $130 a barrel.

Other Articles That May Interest You … 

• Oil prices going for the $130 jackpot, are you ready?
• Reasons Why Oil Price might spikes to $90 and beyond

Friday, April 18, 2008

Google is still invincible, thanks to International Revenue

Google’s invincibility remains intact for now, not even a weakening U.S. economy could impact the search engine giant. Google earned $1.31 billion, or $4.12 per share, during the first three months of the year – a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007. Google said it would have made $4.84 per share if exclude one-time items and stock option expenses, therefore beat Thomson Financial projection of $4.52 per share.

So what was the surprise in the closet? It’s hard to predict that the international revenue rocketed and accounted for 51 percent of the total Google’s revenue this time around, surpassing U.S. revenue for the “first time” *Wow!*. Google’s stock staged a huge gap-up of about 17 percent or $76 to $525 a share after-hours trading, their highest since Feb 2008 *Ouch!*. And so StockTube goes down the drain together with ComScore Inc. (Nasdaq: SCOR, stock) which plunged more than 8 percent or $1.98 per share.

Despite Google's reassuring first quarter, some analysts and investors remain cautious because so much of the company's advertisement revenue comes from small and midsize businesses more apt to curb their spending if the economy's woes worsen – reported AP.

Google Inc. (Nasdaq: GOOG, stock) is smart to not provide any guidance as with other companies, thus eliminate another tool that could be used by analysts or investors to whack the stock the other way round. And I believe Google will continue to ignore the request to issue guidance. You should have experienced how a lower guidance issued could turn the table over companies that otherwise reported a set of good earning. A good example is Intuitive Surgical Inc. (Nasdaq:ISRG, stock).

It’s puzzling why the stock was beaten down after-hours trading despite a yet another excellent earning. ISRG’s first-quarter profit surged a whopping 88 percent to $44.8 million or $1.12 per share from $23.8 million (or 62 cents per share) in the same quarter a year earlier, mind you. Thomson Financial expected income of only 98 cents per share on $178.2 million in revenue. So what’s the problem here? People said it could be the bearish call spread on the stock but others said the guidance issued was not good enough.

The good thing about investing in U.S. stocks market is the fact that it’s a “two-way” street. You can long or short, buy Call or Put options. If you’re convinced the stock has a fantastic story then continues to hold it. On the other hand if you believe the stock’s trend has reversed due to the latest story then goes to the other flip of the coin. Just do something and stop moaning. What could you learn from the Google’s trade? Trading options and stocks based on earning is a risky business. But then high-risk high-gain and can you imagine the potential profits for those who were bullish on Google? Bottom line is if you can’t take the loss, then don’t trade such a volatile stock. Let’s see if Google can maintains the momentum after the opening bell.

Other Articles That May Interest You … 

• Waiting for GOOG earning, any Giant Slayer out there?
• What a busy day - scalp BIDU, sell GOOG and AAPL
• What can you learn from the top Fund Managers?

Thursday, April 17, 2008

Waiting for GOOG earning, any Giant Slayer out there?

As of writing time, I’m still monitoring the U.S. stock markets which saw a lower opening as far as Dow and Nasdaq index are concerned. So far, there’s no opportunity to enter new position yet. If you’re still longing Baidu.com, Inc. (Nasdaq: BIDU, stock), Congrats! I know I’ve mentioned yesterday that Baidu breached the $300 level and the stock looked very tasty indeed. Of course I scalped and made a fast exit yesterday despite the bullish look because I was too scared to be a pig. Okay, maybe it’s good to say that it’s better to become a chicken than a pig – so I chickened out too early, as what one of my readers emailed me (I believe this StockTube reader is making good money with AAPL Call Option now *grin*). Big deal!

If you’re still new in the world of stocks investing or option trading, you need to recognize the fact that you’re trading against your ownself and no one else. Forget about the top fund managers such as John Paulson, George Soros or James Simons who made a combined fortune of $9.4 billion in 2007 alone. I’m pretty sure these successful individuals had mastered the skills of a Jedi – they could make great money blindfolded as long as they can access the market news and happenings to gauge the pulses.

My point is as long as you make money, no matter how small in the beginning and without the need to punch a hole into your head with a driller because you’re still cursing yourself for “exit too early” and hence lower profit, then you’ve won half the battle. A small profit is still better than no profit or worse losses. Sometimes you just need to listen to your inner voice to take the money off the table. And if the stock continues to run after you locked-in the profit, be grateful someone else is making money because you offloaded your position to that person.

Hey! Respect the Mother Nature because everything is a cycle – whatever goes around comes around. Don’t be a greedy parasite who thinks of only sucking the last drop of the honey unless you do not wish the bees to come back. There’re always another trades next time and eventually you’ll know “yourself” very well that you could smell a trade opportunity miles away. I’ve mentioned in one of my articles that as long as your strategy makes you money, then your strategy is a good strategy.

Have you ever wonder why the strategies that you learnt after paid in thousands did not work despite the coach being the so called the best in the market? People who lost money claimed that if this instructor is so damn good, why bother teaching others? You can debate until cow comes home but I believe one of the reason is the strategies taught are not your cup of tea. You tried to embrace something which you might not have the passion for it. You don’t have the discipline to comply with the “10 Commandments.” You’re too lazy to do homework and there’s no teacher to spank you. And the list goes on.

Okay, enough of philosophies and let’s get to business. In compliance with my article yesterday, I still think Google Inc. (Nasdaq:GOOG, stock) will disappoints after today’s closing (earning announcement) and thus I’ve opened new positions on GOOG May 450 Put Option in addition to the remaining I left yesterday (GOOG Apr 530 Put Option) for a trophy. With my gains on GOOG closed yesterday, I think I can afford a total loss should the giant proved to be impossible to be slayed *grin*.

Other Articles That May Interest You …

• What a busy day - scalp BIDU, sell GOOG and AAPL
• What can you learn from the top Fund Managers?

What a busy day - scalp BIDU, sell GOOG and AAPL

Trading stocks or options during earning season could be very tricky yet fun and possibly rewarding. At the beginning of this season you can be sure of ups and downs almost on daily basis. Hence your finger tips need to be inline with the market pulse else it could create havoc to your portfolio especially if you’re trading on short-term. For example today, Wednesday, the bull is showing its horn led by robust first-quarter earning results from Coca Cola Co. (NYSE: KO,stock) and Intel Corp (Nasdaq: INTC, stock), not to mention JPMorgan Chase & Co. (NYSE: JPM, stock) which beat analysts’ expectation despite report of $2.6 billion writedown.

The above three stocks are enough to lift both Dow and Nasdaq into positive territory. On my screen I can see Apple Inc. (Nasdaq: AAPL, stock) and Baidu.com, Inc. (Nasdaq: BIDU, stock) performing very well while Google Inc. (Nasdaq: GOOG, stock) is crawling (as of writing time) like a sick old-man *grin*. And did you notice how Intuitive Surgical Inc. (Nasdaq: ISRG, stock) stock is flexing its muscle *grin again*?

I’ve been thinking what to do today since tomorrow, Thursday, would be an interesting day. First of all, internet giant Google will be releasing it’s result and looking at the ComScore report, this arrogant Google could be heading for a bad day tomorrowsince people are searching less and clicking on advertisements (Adsense) at a much slower rate. In March, Google’s Adsense clicks grew only at a pathetic 2.7 percent giving the first-quarter growth at 1.8 percent – a huge disappointment from 25 percent in the previous quarter.

Analysts are looking for adjusted earnings of $4.52 a share on sales of $3.61 billion in the first quarter 2008 from Google. So could the company deliver the much needed upside surprises? You have to understand that analysts are notorious for their huge appetite when come to Google’s earning. Google needs to beat the street estimates by a huge margin or else risk getting slaughtered when the market opens Friday. Now assuming Google will disappoints tomorrow, then this stock could potentially pull-down Nasdaq and the rest of the technology stocks.

When that happens, you can be sure that whatever gains Apple Inc. is enjoying today would be wiped out, never mind that the stock is on a free ride to the top. Like it or not, I don’t think Google could beat the estimate handsomely. Hence, I’m going to lock-in profit on my GOOG APR 530 Put Options which I opened during the same day with Baidu.com (you can read it here). However since my GOOG APR 520 Put Options have already made more than 100 percent profit (about 134 percent), I’ll leave one-contract for tomorrow to see if I could create another trophy for my ownself after the 486-percent profit. Why I decided to close the position since I think Google will probably crumble tomorrow? Hey, this week is the option expiration week and Friday would be a very volatile day especially for Google. Furthermore I still remember that “Bull and bear make money, Pig gets slaughtered”.

On the other hand, I’m closing my Apple AAPL MAY 140 Call Options even though the profit is not comparable to Google. It has met my target, can’t be too greedy since it was decent money for a less-than-a-month trade. There’s still abundance of opportunities to re-enter Apple again. Got to control my emotion! Also, I’m taking off some pocket money from the table on Baidu.com, Inc. (Nasdaq: BIDU, stock) after I opened and scalped BIDU MAY 300 Call Option hours ago today. By the way it appears Baidu.com has breached the $300 resistance level. I’m going to off my laptop and play some games now.

Other Articles That May Interest You … 

• Stocks do not go linear - Scalp your way to make money
• Time to make money trading Apple stock, are you ready?
• Take Money & Run, Google crumbled nearing 1-year low
• My biggest Profit in Option Trading – 486 Percent

Wednesday, April 16, 2008

What can you learn from the top Fund Managers?

Can you imagine yourself as a fund manager making $3.7 billion a year? That’s a lot of money and I couldn’t imagine the area needed to put the stacks of notes just for the pleasure of looking at it. But that’s exactly the money one of the fund managers in the Wall Street made in 2007, a whopping US3.7 billion for himself. John Paulson, the founder of Paulson & Company, even beat George Soros as the ultimate winner. His firm ended 2007 with $28 billion in assets, up from $6 billion at the start *Wow!*.

As comparison George Soros, the currency speculator whom Malaysia former prime minister despised and accused of wiping billions of dollars of wealth during 1997-1998 Asia Crisis, earned only $2.9 billion from his personal stake through his Soros Fund Management. Soros’ $17 billion flagship Quantum Endowment fund racked up a 31.7 percent return in 2007, its best annual showing since the high-tech implosion at the start of this decade.

Another hedge fund manager, James H. Simons, 70, was at third placeaccumulated $2.8 billion via Renaissance Technologies. He is an award-winning mathematician trades anything anytime and everything everywhere.

According to Alpha Magazine, Paulson, 52, was shorting risky pools of collateralized debt obligations and buying credit default swaps on the cheap for the firm’s merger arbitrage and event-driven funds as early as 2005. Paulson was betting that the U.S.’s five-year housing bubble was ready to burst. Now, can you see the power of short-selling?

The top 50 hedge fund managers last year earned $29 billion, compiled by Institutional Investor. What can you learn from the top fund managers? These are what I learnt but you’re free to add onto it:

1. It again proves that the higher the risk, the higher the gain you’ll reap. Risk management is one of your best weapons against annihilation.
2. It’s easier and faster to make money, lots of it, from shorting financial instruments be it stocks, options, futures, commodities etc due to human’s emotion. People tend to fear and panic easily the moment they see some bloods on the floor. Do you know how much Soros made during the 1997-1998 Asia Currency Crisis?
3. In the financial markets nothing is certain. Every investors, speculators, fund managers, analysts are actually betting – it’s a 50/50 chance of hitting the jackpot. You can argue that it’s the biggest casino in the world but the difference is – there’re more market makers who leveled the playing fields than only one-market-maker from a typical casino.

Other Articles That May Interest You …

• Celebrating 10th Anniversary of Stock Market Crashes
• Speculators & Fund Managers Art of Making Money
• Will Currency Speculators Attack Malaysia Next?
• Aging Mahathir To Meet Soros Since 1997 Crisis

Tuesday, April 15, 2008

Stocks to watch for the week, ISRG to gap-up again?

Since the earning season started, there are ups and downs. Unless all the companies report pathetic result, any big-boy who could give a breath of hope would potentially lift the overall market sentiment although for a very short period as can be seen by health products maker Johnson & Johnson today. I’m particularly excited this Thursday, 17th Apr 2008, because some of my favorites are going to announce their results such as Nucor Corp (NYSE: NUE,stock), Google Inc. (Nasdaq: GOOG, stock) and Intuitive Surgical Inc.(Nasdaq: ISRG, stock). Caterpilar and SanDisk Corp used to be my favorites not many moons ago but not anymore.

Let’s talk about Intuitive Surgical which is scheduled to announce its earnings after the closing bell on Thursday. The flagship product is definitely the daVinci robotic surgery system used mostly by surgeons. The daVinci Surgical Systems consist of a surgeon’s console, a patient-side cart, a vision system, wristed instruments and surgical accessories. The da Vinci Surgical System controls Intuitive Surgical endoscopic instruments, including rigid endoscopes, blunt and sharp endoscopic dissectors, scissors, scalpels, forceps/pickups, needle holders, endoscopic retractors, electrocautery, ultrasonic cutters and accessories during a range of surgical procedures.

The stock dips yesterday as an analyst from Cowen and Co. Eli Kammerman expects Intuitive Surgical to miss Wall Street's earning estimate by a penny due to hefty spending in Research and Development. According to Thomson Financial, analysts are looking at 98 cents per share on revenue of $178.2 million. However Wachovia's Michael Matson is bullish and expects ISRG to beat earnings. Overall analysts think the company will reaffirm its outlook figure for 2008 and this is what matter the most.

Rating Indicators for ISRG:

• Wall Street consensus : 0.98
• StockScouter rating : 8 / 10
• Whisper Number for this stock : 1.02
• Power Rating : 7 / 10
• Zacks Analysts Rating: Hold
• Option Trading: May 2008 330 Call
• Implied Volatility (IV) for Jul 2008 $330 Strike: 66.57%

The only problem trading this option is the high Implied Volatility making it very hard to make good money unless with huge gap. But this is a company that registers sales and income growth of 61.20 and 100.60 percent (compared to industry’s 22.50 and 2.00 percent) respectively with zero debts. Did you notice how the stock skyrocket starting from 10:45 trading hour today? Simply fabulous! I’m not sure if I should lock-in profit by taking half of it from the table (scalp it) while let the remaining runs for its’ earning this Thursday.

World’s biggest carrier from Delta and Northwest

Global oil prices are seeing its effect when U.S. Delta Air Lines Inc. and Northwest Airlines Corp. are combining in a stock-swap deal that would create the world's biggest carrier. Under the terms of the Delta transaction, Northwest shareholders will receive 1.25 Delta shares for each Northwest share they own - represents a premium to Northwest shareholders of 16.8 percent based on Monday's closing stock prices.

Delta said the combined airline, which will be called Delta, will have an enterprise value of $17.7 billion, which includes the combined market values of the two companies and combined net debt – reported AP. Delta Chairman Daniel Carp will become chairman of the new board of directors and Northwest Chairman Roy Bostock will become vice chairman.

As with any other merger or consolidation, head-cuts could be on the horizon but Delta said at the moment there will be an unspecified number of job cuts or transfers through the consolidation of overlapping corporate and administrative functions. Both airlines have more than 80,000 people on its’ payroll.

Delta also announced it will provides the Delta pilots a 3.5 percent equity stake in the new company and other enhancements to their current contract. However the agreement does not cover Northwest pilots. Northwest pilots and the union representing most of Northwest's ground workers immediately announced they would fight the combination. Delta and Northwest filed for bankruptcy protection in New York on Sept. 14, 2005 but both emerged from bankruptcy as leaner carriers last spring, after shedding billions in costs during their reorganizations.

Could this set the tone for more global merger in aviation sector in the future?

Web design is as important as SEO for blogs

I’m not sure if I should revamp the design of StockTube in case I decide to host it on my own, meaning to bid farewell to Google’s blogspot. Due to the reason that blogspot and wordpress (the most likely blogging platform I’ll choose) are very different in nature, it’s very hard to maintain StockTube’s existing design though it can be done. Anyway besides content I believe web or blog design plays a significant role in its success simple because the readers are human and human likes lovely and structured design.

Stylish Design is one of the web design and SEO related blog website that talks about the importance of design and SEO, that’s search engine optimization. The website started just recently, Feb 2008, and naturally it doesn’t have many articles but what caught my eyes was this article that you can never find out the true PageRank. Robert, the author, further argued that it was a myth that Google penalizes pages by giving them PageRanks of 0 to which I disagreed. If you’ve been in the blogosphere long enough you should have read how the notorious Google punished sites by reducing their PageRank to 0, some on stages over a period of time.

Overall I think Stylish Design has a good domain name plus a clean layout. I believe Robert worships Google and trust his soul solely on Adsense, which is not a very wise thing to do as he could potentially loose everything should Google tried to be nasty. Maybe the site should update more frequent to lock-in more readers. I’m currently looking for unique blog template but I couldn’t find it in Stylish Design. Hence probably Robert could give away some cool and free templates or themes.

*sponsored*

Monday, April 14, 2008

Astro Indonesia suspension – Sabotage or Exit Plan?

Astro Nusantara (PT Direct Vision), the Indonesian unit or branch of Astro All Asia Network Plc (KLSE: ASTRO, stock-code 5076) seems to be having some serious problems. It has been ordered by Indonesian Information and Communications Ministry to temporarily halt broadcast pending the fulfillment of several requirements and the transmission was off since 10 a.m. last Friday, 11 Apr 2008.

Thousands of subscribers are fuming for being left in the dark and are demanding refunds with some threatening to cancel their subscription, especially the soccer fans who missed the live EPL (English Premier League) match between Manchester United and Arsenal on Sunday. It was reported that PT Direct Vision which is under Lippo Group, the same company that owned KabelVision but rebranded as First Media received a whopping 18,000 complaints from its customers since the indefinite suspension.
Why the sudden disruption? Indonesia’s Department of Communications and Information director general Basuki said Astro Nusantara has not solve the issue of radio station permit, operation inspections and fees not paid for the right to use the broadcasting frequencies. However there’re reports that claimed Astro has actually paid the broadcasting fees but rumors added that its competitor, Indovision, wastrying to sabotage Astro by “asking” government officials to conduct the “raid”. It was a known fact that Indovision lost considerable amount of customer since it lost the EPL rights to Astro.

In reality, doing business in Indonesia could be very tricky. Heck, any people who do not like Astro could charge that the company is against the Indonesian SatelliteCommunications Law simply because Astro is using foreign satellite (Malaysia’s Measat). On the other hand, this could be a good example of whatever goes around comes around. Foreigners who would like to do business in Malaysia often hit the wall due to numerous bias and racial policies. It’s not too much to say Astro and to some larger extent other Malaysian companies which were attracted to Indonesia market taste their own medicine, only this time the corruption is on a much bigger scale.

However assuming the bad boy Astro didn’t abide Indonesian laws and broke all the laws mentioned. What was the intention then? Maybe Astro realizes that it’s high time to pull out from Indonesian soil altogether since the early dream to serve 3 million households, nearly 10% of all homes with TVs in Indonesia by 2010, is just a bad dream after all. If this is true then it’s definitely good news to Astro shareholders because the venture is dragging down Astro without clear sign when it’s going to end. It might be a total loss of RM200 million to end this expedition but to continue spending RM20 million a month to stay afloat, you don’t need a rocket scientist to make the decision.

Other Articles That May Interest You …

• Astro to buck-up? Wait till the Sun rises from the West
• ASTRO Bullying Customers But Minister Is Helpless
• ASTRO Measat-3 Facing Problem Migrating Channels

Sunday, April 13, 2008

Stocks do not go linear - Scalp your way to make money

There are many ways to skin a cat and in stocks investing or option trading, it applies perfectly. Even though it is said that the cat has nine lives I’ve pretty sure there’re more than nine ways to making money from stocks markets although by comparison I might only have 10 percent the intelligence of Albert Einstein. In stocks investing you can long or short the stocks (yeah, I know certain stone-age stock markets despise short-selling) while in option trading you can open “Call” or “Put” option positions. These are basic fundamentals 101 but there’re more methods out there.

So, you thought you can only buy stocks (or options), wait and hopefully it will goes up higher in order to reap the difference as profits. Or you thought you were wise enough to sell-short and hope for the stocks to be condemned so that you could buy back at lower price to cover your position and in the process make good money. Wrong! There’re so much more that you could do to make good pocket monies “during” the process.

Money can be made by “Scalp”

One such method is to “scalp” and make money, normally within the same trading day. The concept has been generalized. Some people believe “scalp” is associated with day-trading, made popular during U.S. dotcom glory days when highly-paid managers quit their day-jobs to day-trade at home. They made damn good money, mind you. It was easy meat during those days because the technology stocks just skyrocketed on daily basis, so much so that even a hot-dog seller could make money as day-trader.

Another more precise definition was that by scalping you’re naturally buys and sells rapidly. Profits or losses could be small but the main principle is you should hold your position(s) for only a “short period” of time during the trading session. Long-term investors normally do not like such notorious way of trading because it contains the element of speculation which is true to a certain extent. Big-time speculators could drive up the stocks or options price creating an artificial demand only to sell their positions with great profits.

Stocks do not go linear 

But you should know that I’m no where near those big-time speculators. As such what I did was perfectly healthy and you can try this at home *grin*. It didn’t surprise me after I received queries why I scalped AAPL May 155 Put Option when in fact I was long on AAPL May 140 Call Option prior. Well, just because I long Apple Inc.’s (Nasdaq: AAPL, stock) doesn’t mean I’m prohibited from making some pocket monies by way of “scalp” whenever the opportunity arises. In normal circumstances the stock does not goes up a linear line and fit the y = mx + c equation. It’s not a one way street.

In contrary, the stock could reverse its’ trend by huge quantum intradayplunges or skyrockets during its journey. You wouldn’t want to let go of such golden opportunity to scalp and make some pocket monies, would you? And that’s the reason I scalped Apple Inc.’s AAPL May 155 Put Option within the day last Friday itself. Need I tell you why Apple stock plunged last Friday? If you insist, blame it on General Electric which plunged about 13 percent dragging the Dow Jones with it by more than 250 points after its’ disappointing first-quarter earnings. General Electric which normally meets earnings target reported that profit fell 6 percent to $4.3 billion or 43 cents per share (against estimated 51 cents a share), enough to wipe out a whopping $47 billion off it’s market value *Wow!*.

Short benefits of scalping

However I agreed with some analysts that General Electric’s problems are both an isolated incident and a reflection of a break in the financial system. Hence I took the action to scalp Apple Inc. during this “hiccup” as the price, volume and other factors triggered my “Buy” (to scalp) signal. This is another way to maximize your investment while waiting for the stock to reach your target. It’s also a good way tominimize your losses should unforeseen factor kicks in, for example if suddenly Steve Jobs somehow joins the “LOST” groups in an abandoned island *grin*. By the way, there’s another way to make pocket money by writing check to yourself every month.

Other Articles That May Interest You …

• Pocket Money for the weekend but Bad Habits Never Die
• Time to make money trading Apple stock, are you ready?
• Why you should use Limit Order when you’re undecided
• Fishing for the bottom? Don’t bother, just trade short term
• How to Write Check to Yourself Every Month?

Saturday, April 12, 2008

Pocket Money for the weekend but Bad Habits Never Die

Don’t you hate it when the stock tends to go higher right “after” you lock-in the profit on your long-position or go even lower right “after” you did the same on your short-position? It happened donkey of times and I believe there’s no reason why it won’t happens again in future. I was talking about Apple Inc (Nasdaq: AAPL, stock) which I scalped hours ago today. Couldn’t resists the temptation thus entered 3-contracts of AAPL May 155 Put Option with the intention of scalping.

Waited for two hours but the stock was moving (plunging) like a turtle. The profit was razor-thin and so decided to wait a little longer as my target was to gain at least 3-figure profit for the weekend. The stock reached my target and I mauled it like a tiger without food for 3-weeks. But guess what, right after I lock-in the profit, the stock drops further *smack myself*. You just can’t beat the market – can’t buy at the lowest and sell at the highest. That’s the fact and if you can’t get over it, chances are you’re not an inch away from the emotional trap which could affect your next decision-making on the remaining positions.

Just don’t get greedy when your position enters the profitable territory. But it’s easier said than done isn’t it? In reality, the deeper the profits enter into your terrain, the greedier you become. You tend to believe the profits will continue to build and it’s a sin to let it go. When the greed clouds your mind, there’s when the trap gets into you. The stock starts to reverse and you refuse to close the position because you believe the “difference of profits” erased are yours and you can’t accept the fact that you’re making less profit. Sounds familiar huh?

Well, get over it as there’ll be another trade another day. This is the basic investing or trading rule that you should prepare mentally no matter how hard it is to master. Hey, I’m still cursing myself every now and then. My God! Look at the huge sell-volume at 1:27pm trading hour *smack myself again*

Friday, April 11, 2008

Litrak Capital Repayment, a nice way to suck money out

Mahathir Mohamad, the former Prime Minister of Malaysia admitted hisCabinet’s stupidity about a year ago when he said the government has erred in signing the toll concession agreements. Early 2007 he said “This is one of thing that we need to correct. What you have is a cabinet which is not very knowledgeable all the time because it is not made up of experts but politicians (and) some politicians like myself can sometimes be stupid!”

Hence miraculously the government and sadly the public were held ransom by these highway operators. One of them is Lingkaran Trans Kota Holdings Bhd (KLSE: LITRAK, stock-code 6645) which operates the 40 km Damansara-Puchong highway, where the toll rose by 60 percent early 2007. Shareholders or Litrak will be paid RM1 for every share they have, in the form of 93 sen cash under a capital repayment exercise and another seven sen in a single-tier interim dividend for the year ended March 2008.

The 93 sen per share repayment - involving a payout of up to RM462 million - will be done via a reduction of the company's share capital and share premium.Gamuda Berhad’s (KLSE: GAMUDA, stock-code 5398) which owns 44.8 percent of Litrak also rose in tandem with Litrak shares. Where the heck does Litrak intends to raise this RM452 million?

Litrak has last Friday proposed the issuance of up to RM1.55 billion in Islamic debt papers under a sukuk programme or Islamic securities of which it received the approval from the Securities Commission (SC). The proceeds from the sukuk bond issue would fully retire Litrak’s existing debts (RM819 million as of Dec 2007) that were taken to fund the construction of the Damansara-Puchong Expressway (LDP). The tenure for the sukuk programme is 15 years.

Assuming the entire sukuk programme was drawn up Litrak would have maximum cash surplus of RM726 million. So, the RM462 million capital repayment exercise will be extracted from the RM726 million. However the capital repayment exercise is just a proposal at this moment but chances are high that the plan might proceed.

People can argue until the cow comes home that the agreement between the government and Litrak is lopsided and not done in the best interest of the people but the fact remains that Litrak is a money-making machine. What do you expect from a UMNO-linked company such as Litrak? And what can the people do even though there’s a claim that the company had actually recovered its construction cost three years into operation and whatever they’re getting thereafter are pure profit? Heck, then why raise RM1.55 billion in the name of wiping the construction cost?

Well, that’s the beauty of becoming the toll operators in Malaysia because the government will ensure you will reap all the profits for as long as possible. The agreement will remains confidential and Litrak can claim whatever they like. What better way to get some serious monies into your own pocket in the name of capital repayment exercise by issuing 15-years debts? Now fundamentally I don’t have to explain in length the handsome profits that this cash-cow is registering. Just look at the charts. Technically, the stock is trading above the support of RM3.70 with the immediate resistance of RM4.20 a share. So, you should know what to do with this stock.

Other Articles That May Interest You …

• Mahathir Admitted Malaysian Cabinet's Stupidity
• Road Tolls To Rise By 60 Percent

Thursday, April 10, 2008

Oil prices at $112, another $18 to reach $130 a barrel

The global oil prices will be touching $130 a barrel pretty soon. Ouch! That hurts but *yawn* are you sure it’s not just another prediction or myth? I know Malaysian Prime Minister Abdullah Badawi doesn’t like what I’ve written. Petronas could hardly laugh because in spite of the new crude oil’s record that topped $112.21 a barrel the first time in the futures market Wednesday, the company knew it needs to subsidize the same amount that it’s profiting. Badawi’s balls are within your grip since he couldn’t raise the fuel price after the recent 12th general election no matter how desperate he wishes to, thanks to your votes. Anyway I’ll leave that discussion for another day.

I’ve written reasons why oil prices might spikes to $90 and beyond back in Sept 2007 and also why I was over-generous to think that the black-gold could actuallytouch the $130 barrel about a month ago. Hey, if Crazy Jim predicted even higher oil prices than that, I can’t be any crazy. The same old reasons such as the summer driving season, weak dollar and the OPEC who are still fooling around chasing its own tail contributed to the high price. But the vital report from EIA (Energy Information Administration) which said crude oil supplies fell by a surprising 3.2 million barrels last week against expectation of an increase of 2.4 million barrels added the fuel to the flame.

Analysts believes crude imports fell in part because fog closed several shipping channels in Texas and Louisiana that serve as vital oil import conduits last week. However I believe the oil prices could just escalate as long as the U.S. economy is cracking and Uncle Ben needs to cut the interest rate. Furthermore elsewhere it is cheaper to buy oil now due to weaker dollar. With current $112 a barrel it’s only another $18 to go before the oil prices reach the $130 a barrel. Do you think it's achievable?

Other Articles That May Interest You … 

• Oil prices going for the $130 jackpot, are you ready?
• Reasons Why Oil Price might spikes to $90 and beyond

Wednesday, April 09, 2008

Astro to buck-up? Wait till the Sun rises from the West

Although Astro monopolizes the paid-television market in Malaysia not many investors like the stock, at least not me especially after the company tried to put its foot onto Indonesian soil. Just ask any of the existing Astro All Asia Network Plc (KLSE: ASTRO, stock-code 5076) customers and chances are majority of them will give their thumbs-down for obvious reasons. Basically they (the customers) do not have other choice even though they knew the services sucks big time, not to mention the parasite-like monthly fees imposed.

Thanks to Malaysian Communications and Multimedia Commission (MCMC), Ministry of Energy, Water and Communications (makes you want to kick former Minister Lim Keng Yaik’s butt), unlisted pay-TV operator MITV Corporation Sdn Bhd (now known as U Telecom Media Holdings Sdn Bhd) and a whole bunch of other idiots, customers are still being screwed. But then with the untouchable billionaire Ananda Krishnan standing between Astro and the policy makers, it would be easier to blow up Mongolian model with C4 than to ask the company to buck-up *grin*.

While I’m not suggesting Astro should stay indoor and live under the coconut shell, in reality its’ venture into Indonesia could be the biggest mistake it ever made. It might be a wise move to cut loss while it can since the company continues to register loss of RM6.16 million the financial year ended Jan 31, 2008. Revenue rose 17% to RM2.6bil from RM2.22bil while earnings before interest, taxation, depreciation and amortization (EBITDA) rose by RM29mil or 5.5% to RM556.5mil. Guess where’s the revenue come from? In short, it was the Malaysian subscribers who are subsidizing the Astro Indonesia-venture to the extent that it’s tiny EPS (earnings per share) of 8.32 sen was reduced to negative EPS or loss-per-share of 0.32 sen.

Hence, when the newly appointed Energy, Water and Communications Minister Shaziman Abu Mansor said Astro will not be allowed to introduce new channels until the Malaysian Communications and Multimedia Commission (SKMM) is satisfied with its efforts to improve its services, I’ll take that with a pinch of salt. Shaziman’s statement was not new and it would be an uphill task for him to direct the bully Astro to address problems such as poor service, billing problems and charges that burden users.

Due to the needs to squeeze every penny from Malaysian to reduce losses in regional expansion such as Indonesia and India, ridiculous extra charges were imposed such as RM10 for late payment charge, RM20 for reconnection feeand RM50 fee minimum charge for technical services. Now, I’m sure most of the readers experienced the RM50 fee before. Normally when you have problem with reception (common problem) you’ll call Astro customer hotline. Many times you’ll be put on hold and bombarded with advertisement; music etc till you gave up. If you’re lucky enough the customer support will guide you through the normal standard trouble-shooting steps such as checking the satellite signal or off the decoder and wait for 20-minute before retry.

Strangely most of the time it doesn’t work and if you care to call back, the customer support will tell you to engage technical support of which was outsourced to outsiders with the minimum charge of RM50 just to show up at your doorstep. It’s laughable that Shaziman is giving Astro a deadline, by end of 2008, to migrate (because Broadcasting Act and Telecommunication Act which governed Astro had been abolished) to the Communication and Multimedia Act, as promised in 1997. Wow! Astro was telling the entire previous Ministers to fly kites since 1997 and this Shaziman expect he could do the magic now? Does he know how much Astro’s tycoon has contributed to the National Front’s coffer for the recent 12th general election campaign?

With 126 channels under its belt, Astro does not need to rush to comply with the Act since the offerings are more than the subscribers could take. In fact, some of the programs are so outdated that my grandma was complaining about it the other day. And they have the cheeks to call me up to subscribe to their Astro-On-Demand (hail the pirated DVDs *grin, I'm no fan of pirates*) because the take-up-rate was poor.

What this new Minister should do is to force Astro to sign the dotted-line and probably limit the mind-boggling excessive advertisements served (on Astro). It would be nice to invite other players elsewhere to create some competitionsalthough Astro is expected to maintain its domain in the Chinese-channels.

Other Articles That May Interest You … 

• Astro trying to make money with Virgin
• ASTRO Bullying Customers But Minister Is Helpless
• ASTRO Measat-3 Facing Problem Migrating Channels

Tuesday, April 08, 2008

Make Money from Apple, Early Birds get the Worms

If you’ve positions in Apple Inc., either stocks or "Call Option", you should be celebrating by now especially if you noticed now the stock performed yesterday, Monday 8th Apr 2008. Never mind that the stock reversed its’ uptrend afternoon as it has jumped more than $10 bucks over the last five days. So it only makes sense for profit taking to emerge after the rally. Most importantly iswhether you make any money out of it. I’ve mentioned how critical it was to pay attention to Apple Inc.’s (Nasdaq: AAPL, stock) last Friday and I hope StockTube readers who trade the U.S. stocks or options did put some time monitoring this stock.

Apple stock has climbed above 200-D Moving Average and the 50-D Moving Average is now history. The earning season has just started and if you take Alcoa Inc. disappointed earning announcement and Advanced Micro Devices Inc.'s surprise warning that its’ first-quarter sales were lower than expected across all business lines, it appears Apple Inc.’s rally could be disrupted with a slight hiccup.

Nevertheless analysts are calling “Buy” now although there’re equal numbers of them who think otherwise. You can’t blame the pessimism especially after the recent freefall from $200 to $115 in a mere two months period. Not everyone can take that type of heart-attack-experience, mind you. It’s a matter of risk management and early birds get the worms. Sometimes it’s fun and interesting to watch people flocking into the stock only to realize it’s too late as the early birds are preparing to sell.

That’s the strategy nowadays – to buy and sell on short-term basis since the U.S. economy is still in a mess. Did you notice that despite the so-called recession, thevolatility of stocks is still very much intact and you could squeeze some money out of it? Sometimes it helps to not read too much into what other analysts are saying as it could confuse your decision-making’s process. And if you’re still burning the midnight oils wondering why the local Malaysia stock market is not recovering, you better spend more time on U.S. stocks.

Other Articles That May Interest You … 

• Time to make money trading Apple stock, are you ready?
• Why you should use Limit Order when you’re undecided
• Fishing for the bottom? Don’t bother, just trade short term
• Apple Stock - 6 Reasons you should pay attention now
• Why You Should Look At 200-day MA before Investing

Monday, April 07, 2008

Maths Genius Sufiah enjoys Sex career, no Regrets

She might not be close to Einstein but she could at least develop some sort of technical formulas for technical analysts to predict the direction of stock market, for example *grin*. Indeed it was a great loss that Maths genius Sufiah Yusof chose the field of prostitution as the way out to whatever reasons known only to her. Blame it on her monster father, the pressure, the high expectation or simply her wish to control her own life.

But the damage has been done and the fact is she’s enjoying working as a prostitute and she has no regret. Instead she even gave a short lecture that being an escort is not that terrible and sleazy as she revealed it. Photos and sexy videos about her made headlines.

It’s not everyday you come across such genius especially from a small nation such as Malaysia with a population of less than 30 million. Nobody thought that the genius would turn hooker 10 years later and drives men wild by reciting Maths “Equation” to her clients as they have sex. She claims that selling her body for up to £1,000 a time provides her with a far more glamorous life than she ever dreamt of when she went to Oxford University aged just 13.

In an interview with “News of the World”, 23-year-old Sufiah boasts “My clients love the fact that I can stimulate their minds AND their bodies … And I don't believe my education has been wasted - in fact I usually take problem sheets with me to solve before appointments … I've always had a high sex drive - and now I'm getting all the sex I want … and guys are much better in bed with an escort than a girlfriend.”

She further went on to say how her clients treat her like princess. For example one guy took her shopping on Bond Street, bought her a beautiful black Gucci dress for £700 and then took her to Selfridges and told her to pick any handbag she liked. She chose a £600 Gucci clutch and felt like Julia Roberts in Pretty Woman."Later that night we went for dinner. I wore my Gucci dress and sexy lingerie and took great pleasure in peeling it off for him later on back at his hotel" – she revealed.

The fact that she got fascinated after read Belle De Jour's Diary of a London Call Girl, researched escort agencies on the internet and sent them photographs for clients showed that Sufiah wasn’t that innocent after all. Her first client was a 20-something tall and handsome guy and she exclaimed “I can't believe I'm getting paid to have sex with this man … We had a drink then went upstairs to his room and had fantastic sex … I left that night feeling totally elated having had an amazing time with £250 in my purse.” 

Now that she has reveals all, let’s see if there’re still people who feel that she needs rescue and probably drag her back to Malaysia for treatment in rehabilitation center. Get real - this genius is enjoying every bit of his life now without any regrets whatsoever. "One man asked me how much I earned a year … I said £60,000 … He told me - I'll pay that amount straight into your bank and buy you a flat and you can be my mistress … But I don't want that because I'm happy doing what I do … I don't have any regrets … I've never felt more confident about my body and I've had some of the best sex of my life." – the genius Sufiah concluded.

Therefore it’s best to leave her alone. Maybe after a couple of years when she got tired of her “career”, she could make full use of her Maths knowledge in other area. Probably she could help the Malaysia government especially the Finance Ministry (recruit her Abdullah Badawi!!!) in crunching complex numbers such as inflation rate which strangely always settle at between 2 – 3 percent no matter how many times daily goods’ prices increase, not to mention the extraordinary economic growth despite people complaining of not getting the goodies.

Other Articles That May Interest You …

• I have no regrets, says Sufiah
• Math prodigy now a £130 hooker claim
• How you’re being taken for a ride by the Suckers
• Why Can’t Public Enjoy the Benefits of Strong Ringgit?

Sunday, April 06, 2008

Slow and Complacent Yahoo gets 3-week Deadline

Three weeks for Yahoo to accept its $41 billion buyout offer or else face the music of a hostile takeover at a less attractive price – that’s the deadlinegiven by Microsoft in its letter sent on 5th Apr 2008. The hostile takeover mentioned was referring to the proxy fight including nomination of a new slate of directors likely to approve the deal. Apparently Microsoft is getting impatient over Yahoo’s refusal to start the negotiations.

Chief Executive Steve Ballmer warned that should Microsoft Corporation (Nasdaq:MSFT, stock) forced to take an offer directly to Yahoo’s shareholders, that action will have an undesirable impact on the value of Yahoo. Ballmer further said Yahoo's search share and page views appear to have fallen since the offer was made at the end of January. The letter while re-emphasize that the initial offer at a 62% premium was more than fair it also set the clock ticking which hopefully will get both parties to start talking.

In what seems to be the only solution for Yahoo Inc. (Nasdaq: YHOO, stock), Microsoft is adamant of not raising its’ own offer. Time is not on Yahoo’s side and it’s more than obvious that Yahoo co-founder and CEO Jerry Yang is check-mate. In fact nobody should feel sad about Yahoo being swollen by Microsoft and if you wish to put the blame on someone, that person has to be Jerry Yang. It’s not that Yahoo didn’t see where Google is going and Microsoft is coming in the internet advertising business.

So, blame it on Yahoo’s top management for being too slow, not to mention too complacent, in strategizing ways to improve itself from the competitor (Google Inc.). Yahoo’s management was so irritating that its’ own strong supporters were calling “Sell” on its stock long before Microsoft launched the hostile takeover.

Other Articles That May Interest You …

• Microsoft-Yahoo Showdown – Bill Gates’ first salvo
• A game to get higher price, Yahoo rejects Microsoft
• Google panicked, Yahoo to nag and Microsoft to borrow
• Yahoo hates Microsoft but Resistance is Futile
• Reasons Yahoo should accept Microsoft’s $44.6B offer

Friday, April 04, 2008

Time to make money trading Apple stock, are you ready?

Apple Inc.’s (Nasdaq: AAPL, stock) next confirmed earning announcement is on 23rd Apr 2008, slightly less than three-weeks away. Assuming the Dow Jones could floats above 12,000, this stock that tumbled from it highest of $202 to lowest of $115 a share seems to be ready for the next wave. I blogged how I mauled at Apple Inc.’s AAPL May 135 Call Option on 25th Mar 2008 because it’s neck was sticking out of the 50-D Moving Average (read here). Of course I had closed the positions the next day but not before I opened new position on AAPL May 140 Call Option (read here) and have been holding it since.

Now Apple is trading above 50-D Moving Average and is moving towards the 200-D Moving Average. Chart-wise, I’m monitoring and keeping my finger-crossed that the stock could find a comfortable support level above $150 a share. Above $150 it should have a smooth sailing towards $190 *grin*. If you’ve not make any money during its previous rally or worst still lost some money (got hit at the top) but were too afraid to commit “Put Option” during its $80 dollars drop, a new opportunity could be smiling at you now. But please watch out for the $150 level.

There’re other goodies that you should know and should serve as justifications to hold on to the stock (if you long on Apple Inc.). Apple Inc.'s iTunes online music store leaped past Wal-Mart Stores Inc. in February to become the top overall music retailer in the U.S. Interestingly social-networking MySpace said on the same day it will launch its own music service, in partnership with three of the biggest record labels namely Vivendi's Universal Music Group, Warner Music Group and Sony BMG Entertainment to rival Apple Inc. Besides free advertising-supported streams of songs and videos, MySpace visitors will be able to purchase restriction-free song downloads, ringtones and other merchandise. But it’s too early if such venture could kick Apple out of picture in big way.

Of course the major news that moved Apple’s stock was the confirmation by the company itself that it’s facing iPhone shortageand not handset problem or component shortage as rumored. Some believed the reason for the shortage is that Apple simply can't keep pace with the extraordinary demand for the iPhone overseas, so much so that there are Nigerians shipping more than 500 iPhones weekly from New York to Lagos. Apple spokesman Steve Dowling says the company is "working to replenish iPhone supplies as quickly as we can."

It was reported that there are at least 7 million potential iPhone users in Nigeria, 9 Million in South Africa, 80 Million in India, 25 Million in Russia, 25 Million in Brazil, 8 Million in Indonesia and 100 Million in China. A mere 5 percent from this mind-boggling figure would still translate into 10 million units. In terms of compatibility, the quad-band GSM iPhone works seamlessly with an estimated 2 billion GSM phones users worldwide.

As the darling of the gadgets, such shortage also invited other rumors. One such is that Apple was actually gearing towards new model hence the tight supply. Many also said Apple underestimated its iPhone demand but there’re also reports that truckloads of iPhones were being hijacked or stolen. Whatever the reasons, the craze for iPhone is still puzzling. So, you know how to play this stock and make good money out of it, don’t you?

Other Articles That May Interest You … 

• Why you should use Limit Order when you’re undecided
• Fishing for the bottom? Don’t bother, just trade short term

Thursday, April 03, 2008

Stocks Investing - read more blogs than local media

Blogging in Malaysia seems to have scores another milestone - reported Utusan Malaysa, possibly the most bias government-controlled print media exist today. If not for the recent 12th general election which saw the National Front led by Prime Minister Abdullah Badawi crumbled with shameful defeat, I believe Malaysian bloggers will still be looked down upon, not to mention being called “monkeys”, “jobless women” and other funny names. I’m not sure how Utusan plucked the numbers but it’s definitely puzzling to know that Malaysia has about 500,000 active bloggers (Wow!) and 70 percent of the election results were influenced by such blogs’ information.

StockTube blogged about the general election’s effect on the local stock market on 10th Mar 2008, the same and first day the stock market open for trading after the election which saw a stunning 130+ points plunge. Also written was the simple reasons why foreign investors are still adopting a “wait and see”approach without committing huge funds into the local stock market. Without new foreign funds injection is bad and to have these same investors selling right after the election is worse but the worst of all is the fact that the politicians from the National Front themselves were selling like mad. And they are still selling into strength, mind you. Just look at the performance of KLCI against the Dow Jones in the chart below.

Equally stunned by their “master’s” defeat was the government-controlled media and electronic media. They're still taking cue from the simple-majority government as far as their policies are concerned. You can still read the same denial syndrome again. They never learn do they? Central bank still thinks the economy could still grow at 6 percent. Inflation was (still) said to be at 3 percent when Singapore announced theirs at more than 6 percent. Former dictator Mahathir repetitively calls Abdullah Badawi to quit, calling him “shameless” for not resigning. Badawi stubbornly refuse to throw in the towel no matter what people call him - shameless song or not.

But really, you shouldn’t read too much into the latest politics new dawn in case you got too carried away, though it’s still hot, exciting and hilarious till today. Suffice to say while the new Pakatan Rakyat (People’s Alliance) led collectively by PKR-DAP-PAS is gaining strength, the Barisan Nasional (National Front) led by Abdullah Badawi is crumbling. Only today, more than 3-weeks after the 8th Mar 2008 election, local media theStar finally gained enough strength to report that local stock market fails to join regional rally due to, you guess it, political reason. Prior to this all the fingers were pointed at Dow Jones, blaming the old subprime crisis.

So you see, if you just rely on media such as theStar, New Straits Times, Utusan Malaysia and so on, you’re at least 3-weeks outdated. Not only are the local media slow in this aspect, the local investment research houses are equally reluctant to publish it. Worst still, you might have bought stocks thinking you had made the most brilliant decision in your life. But if you read blogs such as StockTube *grin, smack myself* you would have save some bullets for the bargain day. If you can’t afford to access StockTube blog because your pathetic boss would look over your shoulder then subscribe it via email or RSS feed.

You might want to ask if the time is ripe to enter the stock market now. The answer is a simple “No” especially if you’re aiming the blue-chips unless you’ve excessive bullets to waste. It’s a waste that short-selling cannot be performed the same and easy way as buying the stocks or else you could be smiling all the way to the bank now. That’s why trading alternative stock markets such as U.S. would keep you from falling asleep. And if you wish to try your skill trading currency, you can read here on how to try it for free.

Other Articles That May Interest You …

• Bursa Main and Second Boards Merger, a Marketing Ploy?
• Malaysia to have new PM – who is the faster runner?
• Stocks still gloomy as tension runs and Lim slams PM
• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market

Wednesday, April 02, 2008

Hanky-Panky in Maybank-BII deal? How about MAS?

Everyone thought Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) was a sucker for draining its coffer to the tune of US$2.7 billion to buy a financial-weak PT Bank Internasional Indonesia (JAK: BNII). Almost all analysts thought it was too pricey and were scrambling to cut Maybank’s rating. Investors who invest based on dividend cried foul as almost 25 percent from the Malaysia’s largest lender “cash-reserve” have just evaporated – they were hoping for special dividend from the huge US$11 billion cash on hand initially.

No matter how fishy the deal sounds, I thought the actual winner was Singapore’s Temasek which invested only $217 million for the stake and hence made fivefold profit from the sucker (Maybank). But I was wrong because someone has made more than that. It was interesting that Maybank’s “top management” made the decision (was it pre-planned?) right after it’s president and CEO, Amirsham, was about to serve the remaining months before hand-over to Telekom Malaysia Berhad’s group CEO Abdul Wahid Omar.

Was it a coincidence that Amirsham somehow was called to tender his service as the Minister in the Prime Minister’s Department when he should finish his term at Maybank till June 30th 2008? Or was it a haste decision so that Maybank could blindly pay $2.7 billion for BII knowing Amirsham would not agree to it (or somehow delay it)? If what Malaysia-Today claimed is true, then it could provide the missing piece of the puzzle.

Everything can be traced back to the shameful defeat by Abdullah Badawi’s National Front coalition parties recently. By now everyone on the street knows UMNO is a sinking ship and most of its parasites sailors are waiting for the right signal to jump off just like the TITANIC, only this time there’s no icy ocean, no Leonardo DiCaprio, no Kate Winslet but loads of boats from opposition waiting to pick-up the leftovers.

According to Malaysia-Today, it was a simple equation oftransferring as much money as possible out of the countryassisted by the "broker" who advised that the Indonesian bank was a freaking good deal that Maybank should not let go. So the nation’s largest lender was made to over-pay RM3 billion for BII, a small token compared to over RM42 billion taken out by former Finance Minister Daim Zainuddin and the RM21 billion just before the recently 12th general election by some invincible hands. Well, that’s what the article said. I just say what Malaysia-Today said.

And assuming the claims were true, could the recent staggering purchase of 55 Boeing 737-800 aircraft for US$4.2 billion by the national flag carrier Malaysia Airline System (KLSE: MAS, stock-code 3786) tainted with irregularities as well? MAS is expected to take the delivery from Sept 2010 onwards. With weakness in the global economy to persist for sometimes, wouldn’t it be wise to purchase only when it hit the bottom, i.e. when MAS could bargain and buy at a lower price? Furthermore MAS is not short of planes the same way as AirAsia Berhad (KLSE:AIRASIA, stock-code 5099). Maybe the whole idea was to renovate and transform MAS into the “World's Five Star Value Carrier” but still, why the rush and the huge order and most importantly, why now? What was the actual discount rate for such a bulk purchase? Any hidden commissions paid to unknown "agent(s)"?

Now, it’s up the Maybank shareholders to approve or reject the over-price acquisition although I doubt Bank Indonesia regulatory will rejects it. Reject the acquisition and you might see a better chance of getting special dividend. At least bombard the top management and ask them to bargain for a lower price unless you wish to be the laughing stock of foreign investors and analysts.

Other Articles That May Interest You …

• Anwar, PM-in-waiting plans Sabahan for Prison Break
• Maybank’s stock punished after $2.7 billion BII purchase

Tuesday, April 01, 2008

The Swiss Meltdown of another $12B, no April Fool

Just when you thought only U.S. financial institutions were in deep trouble, Switzerland’s largest bank UBS AG (NYSE: UBS, stock. VTX: UBSN) dropped another bombshell when it said it expected to post first-quarter net losses of a mind-boggling $12 billion and would seek $15 billion in new capital due to exposure in U.S. subprime mortgage. UBS AG is seeking writedowns of $19 billion putting its total writedowns since 9-month ago at a whopping $40 billion – the largest by a bank so far.

It was reported that more heads will be chopped by the bank as a result of the losses. The latest losses by the Zurich-based UBS also mean its chairman Marcel Ospel is stepping down to be succeeded by another 58-year-old general counsel Peter Kurer. Prior to this, others who lost their jobs were former CEO Peter Wuffli, finance chief Clive Standish and investment banking head Huw Jenkins.

Although UBS shares rose 1.82 francs to 30.68 francs by 10 a.m. in Zurich, thestock has fallen 41 percent this year, cutting the bank's market value to 63.7 billion francs and making UBS the second- worst performer on the 60-member Bloomberg Europe Banks and Financial Services Index. Analysts had expected the bank to write down an additional 10-20 billion francs in 2008. Earlier on the same day German’s largest lender, Deutsche Bank, said it expected a first-quarter loss of about €2.5 billion, or $3.9 billion, on write-downs of the same old U.S. real estate loans and assets crisis.

As of now the global banks have written down more than $200 billion of soured loans after the explosion of U.S. subprime mortgage crisis. This is the game for the big boys – high risk high gain. Therefore take it with pride Mr. UBS, as not every banks could incur such huge losses *grin*.

Monday, March 31, 2008

The entry of Franklin Templeton, the more the merrier

Franklin Templeton Investments is probably one of the best global investment management organizations with over $650 billion in assets management. In a nut shell the organization can be segregated into three main management groups – Franklin Funds, Templeton Funds and Mutual Series Funds. Its coverage includes 54 offices across 6 continents – North America, Europe, Asia, South America, Africa and Australia.

Heck, if you’ve been in the investing world for a while you should know who Sir John Templeton is. Just like Warren Buffett, Templeton rejected the teaching of technical analysis and worship fundamental analysis and he made great number of billions as a stock investor, not to mention he’s a great philanthropist. The company was listed under the name Franklin Resources, Inc. (NYSE: BEN,stock).

Before Malaysia awards Franklin Templeton Investment a license to operate in the nation's $53 billion asset-management market, the nearest office was in Singapore. Malaysia has awarded the same license to other four foreign fund managers namely Credit Agricole, Aberdeen Asset Management, BNP Paribas Asset Management and Nomura Asset Management. The listed company (Franklin) registered annual sales of $6.5 billion and annual income of $1.9 billion.

So, is this good news to the local stock market? Yes, if the company has already identified a substantial amount of money to be parked here immediately. No, if the company is just setting up the office while waiting for the right investment climate change for the better. There’s no commitment by these foreign fund managers to pour in “X” amount of dollars within “Y” time-frame. What they’re doing now is to secure a license and probably adopts a wait-and-see approach especially with the latest political landscape changes. Nevertheless it’s a recognition that there’re money to be made in Malaysia.

Getting the best web hosting is the most difficult

Since the blogosphere took off with a big bang, the traditional way of information flows has changed tremendously. Bloggers were mushrooming with great influence so much so it knocked out billions of dollars off Apple Inc.’s market capitalization, not to mention how it changed the political landscape such as in Malaysia and now Singapore is talking this trend very seriously.

Serious bloggers went a step further to monetize their blogs and due to obvious reason a new channel of making money from domain names buying and selling flourishes. While getting your own domain name is quite straight forward, the same cannot be said about web hosting. Besides having to pay for web hosting there’s no guarantee that it wouldn’t give you nightmare such as downtime, horrible customer support etc which could be better spent on blogging.

It’s more of a try it and see if you can get the best web hosting company. Generally, you would bump into names such as Host Monster, Host Gator, Yahoo Host, Blue Host, Dream Host and many more. Of course after you consider domain name and hosting company, it’s time to consider the design of your web or blog. So, what’s your experience and which web hosting would you recommend?

Sunday, March 30, 2008

Anwar, PM-in-waiting plans Sabahan for Prison Break

Former premier Mahathir had done many mistakes during his 22 yearswalking along the corridors of power. He could be forgiven if he didn’t realize it during his tenure as the Prime Minister since every single soul he met gave him the thumbs up. Even before he could finished farting, apple polishers would screamed at the top of their voice of how great the “smell” was – better than KFC. That’s how Mahathir lived throughout the 22 years – as a dictator who was afraid of no one, not even the President of the United States or the Prime Minister of Britain, let alone the nation’s highest person in the judiciary or the monarchy.

The hypocrite Mahathir

So, when Mahathir opened his mouth and suggested that the nomination quotato contest top posts in UMNO should be abolished as it is being abused to prevent members from nominating candidates I almost fell off my chair laughing. Not sure if he’s really senile or the denial syndrome still running thick inside his body but it was him who architected the quota system to prevent anyone from challenging him when he was still the PM. Funny how this old-fox still talks as if he’s still a virgin. He basically ripped off the Judicial Pillar and architected the inappropriate sacking of the then Lord President Tun Mohd Salleh Abbas.

Aren’t you amused now that he has the cheeks to claim he has done no wrong and if somebody needs to apologize to Salleh Abbas, that person(s) comes from the tribunal (that sacked Salleh Abbas). Have I mentioned how Mahathiramended the constitution twice in order to curb the power of the monarchy when he was the Prime Minister – first, to adopt laws without assent from the Yang di-Pertuan Agong (The King) and second, to withdraw royal immunity? And he’s now singing the song of praise to the Sultan of Trengganu (who happens to be the King as well), indirectly gave Badawi’s a punch below belt. Right, Abdullah Badawi could easily goes down the history as the weakest Prime Minister but the fact is he was theproduct manufactured from Mahathir’s own assembly line.

Internet and blogs play vital roles

If there’s one thing that Mahathir had done well, it has to be his commitment in 1999 that there would be no censorship of the Internet in Malaysia as stated in the Communications and Multimedia Bill. Heck, I bet he was jumping up and down in joy when he could only found comfort in Internet whereas all the government print and electronic media blackout him after he left the office. And thanks to Internet and bloggers, the arrogant National Front coalition parties were given the shock of their lifetime during the recent 12th general election.

Of course I wouldn’t be able to trade local and U.S. stocks and options online anywhere. So compared to Myanmar, we’re indeed very lucky *grin*. Even the once arrogant former Chief Minister of Selangor who is now on opposition shoes has started his own blog – his first post attracted a whopping 247 comments with StockTube being one of them *grin*.

Anwar preferred as PM by business community?

While it’s true that Anwar Ibrahim and Tengku Razaleigh are running towards the finish-line, more and more money is on Anwar as Malaysia sixth Prime Minister. Mahathir who once wrote off Anwar’s chance to become the PM is now sulking, pushing and supporting Razaleigh to replace Badawi but not before hinting that Deputy PM Najib Razak could be the candidate as well. Of course every Tom and his dog know Najib is tainted with the Mongolian Altantuya trial but Mahathir wouldn’t care.

His first preference was Najib, not because the latter is a saint but more because Mahathir was grateful to Najib’s father who saved his arse after kicked out by the first Prime Minister, Tunku Abdul Rahman from UMNO. Could that be the reason the rumors Najib’s brother, Nazir Razak, was pushing for his Bumiputra-Commerce Holdings Berhad (KLSE: COMMERZ, stock-code 1023) to eat up the country’s biggest lender Malayan Banking Berhad(KLSE: MAYBANK, stock-code 1155)? Or perhaps it was the other way around.

Given a choice, the corporate world would choose Anwar instead of Razaleigh as the new Prime Minister considering Anwar’s past experience as the Finance Minister and his close relationship with the West. Rumors were spreading thatcorporate world has started to place their bets with most of it on Anwar.Even Berjaya tycoon Vincent Tan started to rub Anwar’s shoulders, not to mention hypocrite press editor such as theStar’s Wong Chun Wai started to slowly by surely play the neutral game. Heck, Chun Wai could be sent packing once the political landscape change again.

National Front still in denial, Sabah to “Prison Break”

MCA and MIC is still adopting denial syndrome while Gerakan was rumored to be considering bitter medicine to ensure their relevance, probably pull out from the National Front. UMNO is falling apart and the only thing that Badawi can do now it to delay the dying process but it depends very much on how he could convince the Eastern Malaysia (particularly Sabah) from crossing over to Anwar’s side. Nevertheless I think Badawi needs to do more than sweet-talk or to just give another one or two minister-ship to Sabahan.

The reality is Sabahan has been taken for a fool for many years with its vast resources in timber, palm-oil, crude oil and gas etc being sucked up without a fair re-distribution back to the Sabahan. What better time to show the card now and yell in front of the Prime Minister’s face to fly kite? It’s like television series“Prison Break” with Anwar as Michael Scofield who is providing the venue for Sabah to break free from their imprisonment (by UMNO). There’s reason why Anwar is so relax and calm now – maybe he already got more than 30 defectors and it’s only a matter of time before the “big day”.

Other Articles That May Interest You … 

• Malaysia to have new PM – who is the faster runner?
• Second Tsunami - Anwar to form the next Government?
• Stocks still gloomy as tension runs and Lim slams PM
• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market
• The Rise, Fall and Re-emerge of Rashid Hussain Again?

Friday, March 28, 2008

Transmile’s sudden Spring to Life, what’s in the pot?

Frankly, I was planning to buy some Transmile Group Berhad (KLSE:TRANMIL, stock-code 7000) shares if the stock hit below RM1.00.Seriously there were not many reasons that could justify the purchase since the company was literally ripped off under the previous management. And to think the former chairman could just chicken out as if there’s nothing happen can easily send your blood boiling. But that’s Malaysia whereby politicians or former politician in this case are basically immune from any wrongdoings.

Since the cargo carrier Transmile office was raided by Securities Commission back on 25th May 2007, the stock was hammered to as low as RM1.50 from its high of RM13.00 a share. Malaysia's richest man Robert Kuok, JP Morgan, Goldman Sachs, the Singapore government and national postal company Pos Malaysia & Services Holdings (KLSE: POSHLDG, stock-code 4634) were speechless. The only reason why I would want to buy at below RM1.00 a share was because ofRobert Kuok and nothing else. With investment below RM1.00 a share I was ready for a total-loss.

After Transmile’s cooked accounting book was exposed, Robert Kuok stood by the company, so much so that its’ main customer, DHL, was willing to give the new management a chance to right the wrong. Wong Yoke Meng, formerly Chief Operating Officer (COO) at RHB Capital was appointed the new Managing Director of Transmile. Along the way, Robert Kuok was rumored to be interested to privatize the company but I guess the company was too badly injured, or was it?

However my hope to become one of the minority shareholders vanished when the stock suddenly jumped and hit the 52-week high with speculations that new substantial shareholder may emerge. Some of the possible shareholders who might be interested in Transmile included:

1. DHL – while it denied the speculation, this company is the most probable candidate since Transmile and DHL business matches perfectly, not to mention close business relationship. If the price is right, the deal would make sense.


2. Pos Malaysia – with 15 percent stake in Transmile, this company could not run away from speculated as the potential buyer. Analysts however think Pos Malaysia will not dig deep into its pocket for the company. Furthermore Transmile business model might not be Pos Malaysia’s the cup of tea. But Robert Kuok could be planning something here.


3. Konsortium Logistik Berhad – Konsortium holds 20 percent while Pos Malaysia and Transmile holds 42.5% and 37.5% respectively in CEN Sdn Bhd which in turns own CEN Worldwide, the marketing arm of Transmile. What role could Konsortium plays by acquiring Transmile?


4. Malaysia Airlines Cargo Sdn Bhd (MASkargo) – does MASkargo needs to buy Transmile since both has the same landing rights? There’s no compelling reason for MASkargo to buy into Transmile.


5. Local tycoon Tan Sri Syed Mokhtar Al-Bukhary – with over US$2 billion he’s the seventh riches man in Malaysia. I won’t be surprise if this guy emerge as the new shareholder since he’s in the transportation industry as well.

Wong Yoke Meng who was appointed the new Managing Director of Transmile in Sept 2007 has resigned today. Hence, the rumors about a new substantial shareholder might be true after all. It doesn’t make sense for Wong to resign after his short tenure in Transmile unless there’s a major development.

Other Articles That May Interest You … 

• No fees but shareholders fuming Ling Chicken Out
• Learn from Mistakes - better days ahead for Transmile
• Ling Liong Sik Resigned (or Fired?) from Transmile
• TRANSMILE in Loss since 2005, Lower 2004 Profit
• The timing is right for Transmile to have New Auditor

Thursday, March 27, 2008

Maybank’s stock punished after $2.7 billion BII purchase

Did Malaysia’s biggest lender, Malayan Banking Berhad (KLSE:MAYBANK, stock-code 1155), overpay when it bid billions of dollars in its quest to acquire 100 percent of Bank Internasional Indonesia (BII)? Maybank agreed to fork out a whopping $1.5 billion for 55.7 percent stake of the Indonesia’s sixth largest bank with another $1.2 billion for the remaining 44 percent stake from BII shareholders. It definitely raised many eyebrows with investors gave an early punishment when it sent Maybank’s stock price lower by more than 10 percent, it’s biggest drop since September 21, 2001 when market reopened this morning.

Maybank will acquire the 55.7 percent controlling stake from Sorak Financial Holdings, a consortium 75% owned by Temasek and 25% by South Korea's Kookmin Bank in a deal that valued BII at 511 Indonesian Rupiah per BII share - a premium of 23 percent.Maybank defeated other bidders including Hong Kong Shanghai Banking Corporation (HKSE:0005), China Construction Bank (SEHK:0939, SSX:601939) and Bank of China (SSX:601988, SEHK:3988).

Temasek has been forced to sell the stake under a Bank Indonesia's rule of single presence policy banning an investor from having controlling stake in more than one bank in the country. Temasek also has a majority stake of 69.57% in the country's fifth-largest lender, Bank Danamon. Malaysia’s Khazanah Nasional Berhad also affected by such ruling but it planned to merge both Lippo Bank and Bank Niaga.

Too Pricey – Analysts downgrade Maybank

Analysts said a US$2.7 billion offer for PT Bank Internasional Indonesia (JAK: BNII) is overpriced and will undermine its ability to pay dividends. Furthermore the offer prices BII at 4.6 times book value, above Maybank’s 2.3, while the top five Indonesian banks now trade at around 3.8 to 3.9 times book only. Maybank naturally has created history as this is highest ever paid (book value) for a banking acquisition in Indonesia.

BII had posted weak financial results in the past two years while the country's other major lenders had reported strong performances – its net profit tumbled 36 percent and 13 percent for financial year 2007 and 2006 respectively. Hence analysts were generally stunned with such a high offer from Maybank. But Maybank said the price was justified as the deal would help it tap neighbouring Indonesia's fast-growing banking market which is aiming for loan growth of over 20 percent this year.

To add salt to the wound Citigroup Inc. and Morgan Stanley cut their ratings on the stock. Citigroup slashed Maybank's target price to RM8.38 a share from RM10.63 and downgrade it to “Sell”. Meanwhile Credit rating agency Fitch put Maybank's creditworthiness (current A- credit rating) on watch after the deal. While Maybank said it would fund the deal internally Fitch thought otherwise - the bank was likely to have to raise capital to reinforce its balance sheet. Credit Suisse analyst said the deal would empty the war-chest that Maybank has accumulated for acquisitions.

Maybank Dividend Yield at Risk

The cash-rich Maybank has about $11 billion (RM36 billion) cash on hand. Maybank last paid a special cash payment to shareholders in 2005. The company’s stock offers a gross dividend yield of 3.5 per cent, more than double that offered by Malaysia’s second-biggest bank, Bumiputra-Commerce Holdings Bhd, according to data compiled by Bloomberg. However with this latest acquisition, the hope of any special dividend vanishes – another reason why the stock was dumped.

Who’s the Winner?

The winner is definitely Singapore’s Temasek which paid only $217 million or 82 Rupiah a share for the BII (51 percent initially but increased to 56 percent later) in 2003 from BPPN, Indonesia’s banking rescue agency – making a fivefold profit from the sale. While Temasek is laughing all the way to the bank, Maybank still has to face and seek shareholders approval, not to mention regulatory approval from Bank Indonesia although Malaysia’s central bank has approved the acquisition.

So, could this be another classic example of a little too late and a little too pricey for Maybank to expand regionally? Hopefully it was not a decision (to purchase BII) based on emotion to emerge as the winner. Regardless of the arguments from Maybank’s top management to justify the acquisition, it’s up to the shareholders to reject or approve the acquisition.

Could there be any relationship between this pricey acquisition and the rumorsthat Bumiputra-Commerce Holdings Berhad’s (KLSE : COMMERZ, stock-code 1023) Bumiputra-Commerce Bank might be merged with Maybank?

Wednesday, March 26, 2008

Why you should use Limit Order when you’re undecided

Seriously, if you have this problem of falling in love with your portfolio, either stocks or options, you’ve better leverage on the limit order function to enter the price(s) you desire to sell or buy. It’s not too much to say that almost all the investors who trade on behalf of their own account are incapable of putting their emotions (greed and fear) aside. This is normal so don’t feel bad about it. Regardless of all the changes since the invention of stocks trading, one thing remains unchanged – human emotions.

My trades, AAPL May 135 Call Option, were triggered and hence all my options that expired on the month of May with strike price of $135 were closed automatically. In fact I lost more money (gained less) by constant monitoring than by leaving the STC (Sell To Close) to the system. Hey, all these brokerages invested millions of dollars for such functionalities so it would be very cruel if we didn’t use it. If you’ve been investing or trading long enough, you should realized that the major problem why traders lost money (or made less money for that matter) was because they do not know when and how to “SELL”.

Every Tom, Dick and his dog knows how to buy or open a new position. Strangely when it comes to sell or to close existing position, he or she tends to think for ages yet couldn’t find the courage to click the button to sell or close the position(s). Anyway, it appeared Apple Inc. (Nasdaq: AAPL, stock) is riding on the bull and has breached the $140 resistance and heading towards $148 a share. Above this level ($148), all hell is expected to break loose and would be climbing to its’ previous $180 with pit-stop at $160.

As of writing, Apple Inc. Google Inc. and Baidu.com Inc. are all in the green territory even though the Dow and Nasdaq are in the red. I’ve mentioned in my previous article why I’ve chosen Apple Inc. instead of Google Inc. and Baidu.com Inc. for the Call Option. Open up your trading chart and watch how Apple Inc. skyrockets as of current moment – it’s a 30 degrees intraday uptrend. Wow! How I wish my Apple is still available (there I go again *grin*). Let’s see if there’s any more money to scalp from here – AAPL May 140 Call Option anyone?

Other Articles That May Interest You … 

• Fishing for the bottom? Don’t bother, just trade short term

Cost-saving tip for PM, $200,000 instead of $30 million

Remember how the whopping $30 million tax-payers money evaporatedinto thin air by sending a Malaysian space tourist as part of the “controversial” $1 billion Russian arms deal back in Oct 2007? Some said the space tourist idea was never part of the original plan but since the enormous amount of $1 billion somehow contained hanky-panky elements (opposition Anwar Ibrahim claimed so during his campaign). Thus the bright idea of blasting a Malay tourist into the space hoping to divert the attention away, not to mention the potential of “feel-good” factor amongst the ethnic-Malay which could be translated into votes for the National Front coalition parties.

Fast-forward six months later the space tourist back-fire. Not only the National Front lost five states in addition to the prized two-third majority but its two states, Perlis and Trengganu were embroiled in government-palace crisis, so much so that Prime Minister Abdullah Badawi’s was humiliated when his preferred candidates for the Chief Minister’s position were rejected point-blank. Fortunately the country didn’t manage to buy (and waste another $100 million) the damn whole Russian Soyuz TMA-11 Space Rocket, courtesy of another freaking good idea from former Science, Innovation and Technology Minister Jamaluddin Jarjis.

I’m not sure if the government has finally awaken from its’ arrogance dream but its’ everyone’s hope that the struggling government would not send the second space tourist again. If the government (how about you?) still adamant and stubborn about this space tourist and can’t live without it, there’s another cheaper alternative.

Just two months after aerospace designer Burt Rutan and billionaire Richard Branson unveiled a model of SpaceShipTwo which is being built for Branson's Virgin Galactic space tourism company, another developer namely Xcor Aerospace revealed it’s rocket ship – The Lynx. Expected to begin flying in 2010 “The Lynx” is designed to take off from a runway like a normal plane, reach a top speed of Mach 2 and an altitude of 200,000 feet. At only $200,000 per person for the ride, it’s definitely an affordable access to space for individuals and researchers.

There you are Mr. Prime Minister, the latest tip in cost-saving. Instead of spending another $30 million, of which you can send 150 persons instead of one, you now need to spend a fraction of $200,000 only.It’s good to hear that the Prime Minister has finally admitted his "biggest mistake" in disastrous elections was to ignore cyber-campaigning on the Internet which was seized by the opposition. Now he knows the power of the bloggers so start respecting them.

Other Articles That May Interest You … 

• Malaysia to have new PM – who is the faster runner?
• Malaysian Astronaut Project Poll Result
• Malaysian first Astronaut? Not sure, but will he urinate

Tuesday, March 25, 2008

Bursa Main and Second Boards Merger, a Marketing Ploy?

Speaking at the “Invest Malaysia 2008” conference here today (25th Mar 2008), the Prime Minister Abdullah Badawi announced that local stock market would merge its Main and Second boards to set up a single and unified board for more established companies with strong financial records (huh?). The third board, Mesdaq, which caters mainly to technology companies that are not qualified for listing on either the main or second board will be revamped to allow relatively smaller companies to access the equity market at an earlier stage of their life cycle.

Now, hold your horse as you should take this with a pinch of salt. Forget about the marketing talks that by combining both boards (Main and Second) it will miraculously create better established companies, let alone boosting stronger financial result or investment. The Main and Second board were created for obvious reason – to separate the “proven” and larger capitalized companies (Main board) from the “smaller-revenue” medium-sized companies. In short Second board companies that didn’t qualify for listing into Main board would need to “prove itself” financially before could be considered to be upgrade to Main board.

The merger could be argued from both flips of the coin. While the anxious government’s objective understandable (to attract) is to project to (foreign) investors that the stocks from both Main and Second board are of quality companies, in reality you cannot hide the fact that there’re dozens of junk stocks of which the real objective for their listing were to whack good money from the public before let it rot naturally. This applies to both Main and Second board and if you’re interested in such junks just look at those penny stocks.

So it’s misleading to assume that by merging both boards, the listed companies will automatically become paradise with strong earnings and revenue. You wish to change the perception that all the stocks post-merger are of top-quality? Why not start from the respective agencies such as Bursa Malaysia Berhad (KLSE:BURSA, stock-code 1818), Securities Commission, Central Bank, Judiciary, Anti Corruption Agency (BPR) and others? There’re tons of companies that got listed without a sound business model, let alone a sustainable profit and revenue history. Underwriters were paid good money to drum up IPO in order to attract hot money from the public. Minority shareholders were taken as suckers.

I’m not against a unified board but the root of the problems to achieve such merger’s objectives should be studied and tackled. It’s like telling the public that all the policemen will not corrupt instantly simply because they put up the badge that says “I do not accept bribe”. And please do not assume the over 600 local and international delegates who attended the conference are as stupid as some Malaysian who thought it was the greatest achievement ever when the country blasted a space tourist up into the space.

Hmmm, what happen to the culprits who cooked up the accounting books? The recent 130 points plunge after the political tsunami should serve as a reminder of how fragile your investment is if most of the stocks are somehow tied to a “flawed framework” that related to politics. The only people who will suffer the most are the small investors and newbies who normally do not do their homework but assume blindly all the stocks are the same. At least with the separation of boards as of now, these idiots know the Second board stocks literally carry higher risks.

Other Articles That May Interest You … 

• Meritocracy & Judicial Independence in doing business
• Malaysia to have new PM – who is the faster runner?
• Ling Liong Sik Resigned (or Fired?) from Transmile
• A case of Little Crime overshadows Big Crime
• Stock Market Criminals – NATO, No-Action-Talk-Only
• Listed Co Not Trustable – Book-Cooking from Day-1
• TRANSMILE in Loss since 2005, Lower 2004 Profit
• Widespread Accounting Crisis – Government Equally Responsible
• Privatization Gaining Momentum - Junk Stocks Left

Fishing for the bottom? Don’t bother, just trade short term

Looks like good news are aplenty right after the Easter – JPMorgan Chase & Co. (NYSE: JPM, stock) ups its bid for The Bear Stearns Companies, Inc. (NYSE: BSC, stock) and stronger than expected housing reportpleased the stock investors. Like it or not the Feds would have no choice but to allow the shareholders of Bear Stearns enjoy some more fruits from the higher offer from $2 to $10 a share. Although this is the first report sales of existing homes increased after six months of decline, it’s no-brainer that a full recovery could be many months away.

The Dow jumps more than 180 points to close at 12,548.64. Most importantly is the fact that DJIA finally breached the 50-D Moving Average though it’s still below the 200-D Moving Average. The benchmark also appeared to be floating strongly above 12,000 level. As far as Monday’s trading day was concerned there were actually quite a number of attractive stocks looking at you, only if you care to look closely. One of them was Apple Inc. (Nasdaq: AAPL, stock) of which I mauled it – AAPL May 135 Call Option. If everything goes well, I might close the position on Tuesday.

Just like DJIA, Apple Inc. rose above the 50-D Moving Average, not to mention the price and volume triggered my “Buy” signal on Monday. Initially I was thinking of scalping the stock but I got greedy and executed the limit-order to a higher price – sadly it didn’t get triggered. Google Inc. and Baidu.com Inc. were equally attractive but their 50-D Moving Average spoilt my appetite. So, could the Dow have reached its bottom? That’s a million dollar question.

While many think so a handful of economists thought otherwise. I would like to hope so but I think the psychology of investors are pretty much have stabilize, which is important because it’s the perception that would influence the market’s direction. After the latest 0.75 percent interest rate cut to 3.00 percent, every Tom, Dick and your dog knows the Fed would probably cut the interest rate one more time, the most, before sit down and see how the situation will fare.

Hence, stock investors are mentally prepared and would probably start to re-look at their relatively “empty portfolio” but cash-rich-chest. Heck, nobody knows if the bottom has been reached so forget about fishing it. Assuming the DJIA has reach rock-bottom, the regional stock markets would probably see a rebound within one or two months. However it depends on internal stability – for example, I’m still skeptical about Malaysia stock market due to its new political landscape and the fragile looking government.

Other Articles That May Interest You … 

• Bear Stearns Bailout, should silly you blame Cramer?
• Could interest rate cut click like Magic and wake the Bull?
• Malaysia to have new PM – who is the faster runner?

Monday, March 24, 2008

Bear Stearns Bailout, should silly you blame Cramer?

Unless you’re living in Stone Age, you must have heard about one of the greatest mega-sale of the century – the $2 a share sale of The Bear Stearns Companies, Inc. (NYSE: BSC, stock) to JPMorgan Chase & Co. (NYSE: JPM, stock). Bear Stearns was facing collapse because of the U.S. mortgage crisis and the offer from JPMorgan, with the backing of the Federal Reserve Bank of New York, valued Bear Stearns at only $250 million – a whopping97.5 percent discount.

At $2 a share it’s as good as throwing your shares into the toilet. It’s little wonder that Bear shareholders are fuming at the outrages bid price. Who can blame them when suddenly their stocks investment shrunk by 97.5 percent in value? If you’re one of the investors or traders who have been following “Mad” Jim Cramer’s recommendations, you might want to strangle him for suggested (on 11 Mar 2008 on Mad Money) that “Bear Stearns is fine … Bear Stearns is not in trouble … Don’t move your money from Bear … Don’t be silly …” just before the collapse. Poor Cramer!!!

But before you actually reach for the gun and pull the trigger, you got to accept the fact that investments, regardless of instruments, carry certain degree of risk. To put the blame solely on Crazy-Jim is rather childish as sometimes you should follow your instinct and discipline. If your trade is already profitable (or the other way), there’s no harm to take it off the table. So it’s silly for Jim Cramer’s fans to follow blindly without doing one’s own homework.

In a twist to pacify angry Bear Stearns’ shareholders, JPMorgan today announced a sweetened offer, 400 percent or four times higher than the initial offer bid of $2 to $10 a share. However the Fed, which must approve any new deal, was balking at the new offer price on Sunday night. In the original deal, the Fed guaranteed to absorb $30 billion of Bear’s toxic assets while directed JPMorgan to pay no more than $2 a share for Bear to paint a picture as if it was not a bail-out plan. With this latest higher bid price, Fed is worry that critics would complain that tax-payers money are used to bail out Bear Stearns.

Interestingly Bear Stearn employees own more than a third of Bear’s stock and many longtime employees were reportedly could loose all the savings considering the stock was trading at $67 two weeks ago and as high as $170 a year ago. Anyway this is another classic example of why you should adopt a mixture strategy of long-term as well as short-term and middle-term investment instead of solely long-term. Most importantly do not forget the rule to lock in profit (if there’s any) or take some money off the table if you wish to put your trade to run.

Other Articles That May Interest You …

• Jim is still the Mad Cramer, make no mistake about it

Sunday, March 23, 2008

Meritocracy & Judicial Independence in doing business

Just what are the factors foreign investors are looking at before they pour in millions or billions of dollars of investment money into a country? There’re many but certain mandatory or fundamental foundations must be in place before these foreign hot monies would find their new parking lots. Suffice to say some of these factors are, in no particular orders - political stability, transparency, investment protection, cost of doing business, good governance, financial rules & regulations and others.

I’ve wrote about one of the reasons why you should stay sideline since the political stability has changed with the recent 12th general election result which saw the government lost two-third majority and five developed states as well as the possibility of a new Prime Minister in not very far future. Although the states won by opposition parties would see a swing of transparency for the better, it’s still too early to jump into the local stock market because a desperate Federal government could resort to silly actions to rock the boat.

Penang, the state now controlled by DAP government (opposition), has trumpeted open tenders to start the ball-rolling to attract foreign investors in the name of transparency. This was lauded by businessmen because the “entity of corruption” and “abuse of power” would essentially be eliminated and hence the cost of doing business would be lower. But one of the most important issues that hindered foreign investors from pumping in their money was the lack of investment protection. Who could blame them if the country’s judiciary pillar was and still tainted since the 1988 judicial crisis?

I read with great interest today’s news that the newly-appointed de facto Law Minister Datuk Zaid Ibrahim declared that the Malaysia Federal Government must make an open apology to those victimised by the judicial crisis in 1988 that led to the inappropriate sacking of the then Lord President Tun Mohd Salleh Abbas. Zaid’s next step to strengthen judicial independence and the delivery of justice by revamping the appointment and promotion process of the country's judges and magistrates is something which everyone has been waiting for decades.

Zaid recognized that capable judges of integrity were important to help lure foreign investors although I doubt he would have smooth sailing since stakeholders such as the Judges, Attorney-General, the Bar Council and law enforcers such as the police are “perceived” to be tainted from head to toe. Judiciary independence aside, from the micro point of view investors are likely to favor companies that can grow and survive on its own – without the intervention of government.

Thus, if the government has really repented of its past mistakes, it should, for example, let the national automaker Proton Holdings Bhd (KLSE: PROTON, stock-code 5304) runs its business independently. The legendary Carlos Ghosn, a Brazilian who gained the respect from the proud Japanese when he turnaround the once ailing Nissan Motor Co Ltd. has given an invaluable advice to Proton during a dinner lecture organized by Khazanah Nasional Bhd. Carlos mentioned, to the consolation of Proton, that small car manufacturer such as Proton could survive if they know the market and manage their business well but government intervention should be avoided at all cost or else the entity (Proton) would not know how to “fight” – precisely what the Proton's situation is right now.

An excellent tip indeed but it would be of no use if the government still consider meritocracy as a stone-age beast that should be killed at first sight. In actual fact the whole government system in doing business is flawed. Take for example the pampered Proton dealers who were offered one-off VSS (voluntary separation scheme) fee of RM150,000 per dealer to close down their dealership in a downsize plan in the middle of 2007. Surprisingly only 36 out of 102 dealers accepted the offer while the rest of the dealers were asking as much as RM500,000 instead justifying that they have invested RM200,000 to setup their operations. Should there be VSS in such a scenario in the first place?

This is amazing nevertheless! First you ventured into the highly lucrative protected dealership business (Proton was protected as if it’s endangered species) and made lots of money initially. Things changed a little and somehow automobile business took a slump. And amazingly you found yourself surrounded by parasites dealers who were asking for compensation to recoup their initial investment. This is probably one of the most lucrative, no matter how silly, dealership you can ever have - almost risk-free, no? First of all there’s no business in this world that can guarantee 100 percent profitability, let alone compensation of up to RM500,000 which is more than double the investment cost.

If these dealers could not even face the reality of business risk, one could only pray when the full globalization takes effect. And if you weren’t aware, the “compensation” came from the RM500 million “Automotive Development Fund” allocated in the Ninth Malaysia Plan – that’s your (taxpayers) money dude.

Other Articles That May Interest You …

• Malaysia to have new PM – who is the faster runner?
• New Proton Saga express review and photos
• Mirror mirror on the wall who’s the biggest liar of all?

Thursday, March 20, 2008

Malaysia to have new PM – who is the faster runner?

Going by normal circumstances, Malaysia stock market should have staged a gap-up post-election but the reverse happened when the KLCI (Kuala Lumpur Stock Exchange) gap-down instead by more than 130 points or more than 10 percent (investors who short the futures were smiling from ear to ear). Foreign as well as local boys were running helter skelter selling like crazy and searching for safety belt. The bear that didn’t eat for 50 years was suddenly out of the cage. I’ve wrote about the general election result’s effect on local stock market and also why the stocks are still gloomy, not to mention thepossible of second tsunami that could blow your head off.

The writing is on the wall – the local stock market is at its weakest point, so much so that it doesn’t needs a rocket scientist to predict the market direction. If you really need to know, tomorrow Friday, 21 Mar 2008, will be another sell-off day. Yeah right, I knew it because the Dow plunged 293 points after Wednesday closing. But that’s Wednesday and Thursday’s market (Dow) has not open yet (as of writing). It’s simple, when the Dow shot up 420 points after the Feds interest cut, the KLCI moved very little. Even if Dow reclaims the 290 points lost by end of trading today (Thursday), do you think the KLCI would stage a remarkable recovery? That’s not all.

KLSE has entered new bearish direction

In actual fact the Kuala Lumpur Stock Exchange (KLSE) is following a new pattern inline with the sudden changes in the political landscape. Foreign research houses Merrill Lynch & Co., Inc. (NYSE: MER, stock), Citigroup Inc. (NYSE: C, stock) and CLSA Asia Pacific are recommending a "SELL" on shares of stock exchange operator Bursa Malaysia Berhad (KLSE: BURSA, stock-code 1818). What was surprising was the fair value given by Merrill Lynch – a pathetic RM5.00 a sharealthough Citigroup and CLSA were more generous with their RM7.08 and RM8.00 respectively. Merrill said the fair value was based on the reason that falling trading velocity and lower clearing fees are expected to affect Bursa's earnings this year.

Cool, the new clearing fees was announced during the 2008 Budget on Sept 2007 which took effect from Jan 2008 and now all of a sudden these foreign research houses who possess top-brains are calling “SELL”? Get real, these foreigners are not stupid. They know the actual geo-political situation and the new risks associate with it. You don’t think they pay top salaries for their risk-management division for nothing do you? If you still do not know how these foreign investors play the game then you’re one of the suckers they would like to befriend with very much. These people will hit the “Sell” or “Buy” button before you can even blink your eyes and if they’ve a slight emotion not to do so, their system will do it for them - period.

Foreign Investors just “Wait and See”

Although late (10-days after the election), I’m glad Business Times finally publish the article that investors are adopting “wait and see” approach in Penang. Henry Butcher Malaysia said if the new state government implements the 'transparency and fair to all' administrative strategy, it may create more market confidence. Heck, in fact not only property or construction stocks should be downgraded but almost any sectors listed inclusive of utility, transportation, financial, telecommunications or even plantation to certain extent.

You can paint as rosy as you like but foreign investors, researchers and analysts do not rely purely on local pro-government printing and electronic media as their source of information. While these professionals recognize the influence and power of internet and therefore bloggers, the stone-age Malaysia government was and still thinks they could control the mindset of younger generation with the pathetic bias reporting methodology. Just ask Steve Jobs how a blog knocked off $4 billion off Apple Inc.’s (Nasdaq: AAPL, stock) market capitalization on May 16th 2007. And to have a Minister who accused bloggers as 'liars' and 'mostly jobless women'. Interestingly these same bloggers were the same people who contributed to the downfall of the government (National Front) in securing their two-third majority, not to mention additional four industrial states to the opposition parties.

Foreigners know Badawi’s instability and Risks

Now, what are the things that these foreigners had read that gotten them so worry? Forget about the so-called Cabinet revamp as it was purely a temporarily measure by Abdullah Badawi to prolong his tenure. It was a strategy to pull as many supporters to his side while booting as many threats out of his sight as possible.It’s Armageddon – either the PM survived or perished into the history as the weakest PM ever produced. By know you should know that there could be another wave of tsunami and if it really takes off, the political and business landscape will change again. Whether it’s for the better or worse will depends on who will be the winner.

Former Deputy Prime Minister who architected the first tsunami, Anwar Ibrahim, has hinted PM Abdullah Badawi that he’s moving toward forming new government claiming that coalition MPs (Member of Parliament) from Sabah and Sarawak had contacted him to discuss switching sides but Badawi is calling Anwar’s bluff.Iron Lady Rafidah Aziz was dropped and she almost quit bringing down with her the seat she won, not before accusing her beloved deputy of back-stabbing her. Abdullah’s own UMNO secretary-general has resigned. Two candidates refused to accept Deputy Minister’s post offered by Abdullah. Former Selangor Menteri Besar (Chief Minister) has quit.

Anwar and Razaleigh racing against time

The veteran UMNO leader Tengku Razaleigh Hamzah has offered himself to take over the top post from Abdullah. But the PM refused to hear that his government is about to be toppled but yet he sent spies all over the nation hunting down on members who might be “crossing over”. And if the latest update from Malaysiakini is reliable, it appears the first sign of defection could be on the horizon when Richard Riot has resignedfrom his party after being snubbed over a cabinet post. Despite winning 24 percent of the total 222 Parliament seats or 38 percent of National Front’s 140 winning seats, people from Sabah and Sarawak was given chicken-feed number of Ministryship, not to mention all the posts given are pathetically unimportant.

As if the lucky stars are smiling at Anwar, he just needs to promise a fairer power-sharing with Sabahan and Sarawakian, and the power would comes crumbling before Abdullah Badawi could wake up from his slumber. There’re speculations that Tengku Razaleigh is rushing against time to reach the throne before Anwar could step his foot but then Razaleigh’s agenda is still to protect the obsolete UMNO and its bias NEP (New Economic Policy) policy while Anwar is promising a fairer MEA (Malaysian Economic Agenda). Forget about the dictator Mahathir in wanting Abdullah to step down because his objective is purely personal.

This is precisely what the foreign investors are reading and it’s not a smart move to have positions in the local stock market now knowing that the landscape will most probably changes again. There's already speculation that Abdullah Badawi may not last till Aug 2008, the UMNO election, but instead could be facing the embarrassment of being voted out via a “vote of no confidence” when Parliament convenes on 5th may 2008. It’s all about who gets the highest number of supporters if the motion go through and in this case the 112 magic number – the simple majority to form the government.

Other Articles That May Interest You …

• The Good, the Bad, the Ugly and the Hero
• Second Tsunami - Anwar to form the next Government?
• Stocks still gloomy as tension runs and Lim slams PM
• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market
• BN lost 5 states and two third Majority – Badawi resigns?

Wednesday, March 19, 2008

V for VISA Inc. to start trading on NYSE - BUY!!!

Credit card giant Visa Inc. raised more than US$17 billion Tuesday in the largest share offering in US history but short of world’s largest IPO - the US$21.9-billion offering by Chinese bank ICBC (Industrial and Commercial Bank of China), on Shanghai and Hong Kong stocks markets in October 2006. Visa Inc. sold 406,000,000 shares priced at US$44 each, raising nearly US$17.9 billion and will begins trading on the New York Stock Exchange on Wednesday under the ticker symbol "V". So, watch out for the stock's performance.

The stock price was higher than the expected US$38 to US$42 a share, a sign of the strong demand for Visa's shares. After deducting underwriting discounts, commissions, estimated offering expenses and other miscellaneous costs, Visa expects net proceeds from the offering to be approximately US$17.3 billion. Underwriters of Visa's IPO have a 30-day option to purchase up to 40,600,000 (10% of IPO) additional shares, which would bring Visa an additional US$1.7 billion.
The IPO was led by JP Morgan Securities, Goldman Sachs, Banc of America Securities, Citibank, HSBC Securities (USA), Merrill Lynch, UBS Investment Bank and Wachovia Securities. Visa Inc. is actually owned by a consortium of banks and the biggest winner from the IPO is definitely JPMorgan Chase & Co. who happens to be Visa's biggest customer and shareholder. JP Morgan is expected to receive a whopping$1.25 billion from the IPO – just 20% of this amount is enough to pay for Bear Stearns Co.

Visa Inc.’s (NYSE: V, stock) rival, MasterCard Inc., went public two years ago and was trading at $210.25 Tuesday - quintupled since it went public. Visa Inc. however is bigger than MasterCard and is the world's largest electronic payment and credit card company. Visa processed 44 billion transactions totaling $3.2 trillion whileMasterCard Inc. (NYSE: MA, stock) only handled 23.4 billion transactions totaling $1.9 in 2006. Nevertheless Visa suffered an $861 million loss on revenue of $5.2 billion in its last fiscal year ended Sept. 30 2007 due to legal expenses.

This is definitely a great time to buy the stock (or options?) as long term investment. Even if Visa Inc. stock is to appreciate only half the value of MasterCard, it’s still a good investment, no?

Three-quarters of a point cut, one down one to go

Dow Jones Industrial Average soared a whopping 420 points, its biggest one-day gain in more than five years - since a 447-point advance on July 29, 2002. The question that demanded Federal Reserve’s answer was pretty simple, what’s the rate cut quantum – 50, 75 or 100 basis points. While many investors were hoping for a full point rate cut, Bernanke’s boys chose 0.75 point cut instead which is sufficient to send the Dow flying, at least for the time being.

With the central bank’s latest move, the fed funds rate is now at 2.25 percent - its lowest level since December 2004. Of course the good quarterly earning result from both Lehman Brothers Inc. and Goldman Sachs Group Inc. early Tuesday helped the overall stock market sentiment as well. If there’s another investment bank suffers the same fate as Bear Stearns Cos. which was being bought by JPMorgan Chase & Co. at a bargain price of $2 a share, you can bet your last dollar that havoc would rules the trading floor.

Now analysts and economists are predicting the Fed may cut rates only once more, perhaps by a more ordinary quarter-point at the next meeting. Then Ben Bernanke would be watching with popcorns and cokes if the Bush’s $168 billion rescue package (Economy Rescue Bill) that would send “Rebate Checks” to qualified American citizen’s doorstep around May 2008 will do the tricks.

Meanwhile the anxious President Bush said Tuesday that his administration is ready to intervene again to stabilize the economy, a tone many thinks the recession is just inches away from the doorstep - although Warren Buffett have told the world (early Mar 2008) the U.S. economy is already in a recession, even if it hasn't met the technical definition of two consecutive quarters of negative growth.

It’s too early though to say if the Dow would goes up and never look back with the latest rate cut. No doubt Google Inc. was affected and had erased some of my profits but it seems Baidu.com Inc. is still very much bearish.

Other Articles That May Interest You …

• Could interest rate cut click like Magic and wake the Bull?
• Getting $600 Free Money, dream of a lifetime

Tuesday, March 18, 2008

The Good, the Bad, the Ugly and the Hero

So, the sleepy Prime Minister has unveils a trimmed-down cabinet *yawn* albeit the line-up is a boring one which doesn’t offers much excitement from the previous old faces. There’s not a single soul made of admired professionals, technocrats or intellectuals who are not politician included in the administration (unless you consider former Maybank CEO Amirsham one of the top brains). No wonder the stock market plunged about 10 points immediatelyafter the announcement before recovered and registered a small gain of 2 points.

First, the good guys as perceived by the public. Lawyer Zaid Ibrahim who owns the country’s largest law firm and made it to the Forbes Asia Heroes of Philanthropy list is probably one of the few good guys from UMNO. Zaid was appointed one of the five ministers in the Prime Minister’s Department with the hope of revitalize the corrupt image of judiciary but will Nazri stands on his path? Another good guy is Ong Tee Keat from MCA who despite trying very hard to correct his former colleagues from UMNO was outnumbered severely.
Let’s talk about bad politicians from National Front. Yes, it’s a surprise that Abdullah dare to tell the former International Trade and Industry Minister, Iron Lady a.k.a A.P. Queen, Rafidah Aziz to fly kite. I bet Rafidah is still crying for losing the ability to generate Approved Permits (AP) but rest assure the “top-brain” Muhyiddin Yassin (transferred from Agriculture Ministry to Rafidah’s portfolio) could pick-up the skills pretty fast. Do you need any introduction as to the Education Minister Hishamuddin who couldn’t stop waving “keris” (traditional Malay dagger) threatening other ethnics? And to include the incompetent Azalina as the Tourism Minister simply shows how the government is shorts of quality and good people.Remember how a set of screw-driver was marked-up to RM224.94 when the street-value was only RM40.00?

The ugly side re-emerged with the reappointment of Muhammad Mohd Taib a.k.a. Mike Tyson as the Rural and Regional Development Minister which also raised many eyebrows. The former Selangor Chief Minister who does not speak a word of English was caughtsmuggling carrying millions of dollars into Australia (Brisbane Airport) without declaring it – was acquitted after he pleaded ignorance of the English language. Of all the dynasties, MCA President Ong Ka Ting’s plan to continue his legacy by “promoting” his own brother, Ong Ka Chuan, as the Housing and Local Government Minister seems to have succeeded. Worst still Ka Chuan could be the next MCA President.

Anyway, while the latest Cabinet announcement stole the limelight, IOI Corp Berhad (KLSE: IOICORP, stock-code 1961) continues to expand the group’s plantation land-bank. IOI Corp announced today that it bought controlling stakes in several plantation firms in Sarawak for RM439.9 million (US$138 million). The second largest listed palm oil plantation company added another 44,350 hectares (13,500 hectares are already planted with oil palm) to its land-bank.

With this latest acquisition, IOI Corp will have a total of 364,350 hectares under its belt. Back in Dec 2007, IOI Corp has prepared sufficient bullets to goes on buying spree – US600 million (RM2 billion) of bonds issued. IOI executive chairman Tan Sri Lee Shin Cheng had hinted the group’s RM2 billion raised is for strategic acquisitions. After today’s announcement, IOI Corp still has RM1.6 billion for further acquisitions and you can bet its chairman will take advantage of any weakness in palm oil prices to acquire more land-banks.

Since Dec 2007, IOI Corp market capitalization has shrunk from about RM43.62 billion to current RM40.73 billion, based on today’s closing price of RM6.65 a share. On the other hand, Sime Darby Berhad (SIME: stock-code 4197) market capitalization shrunk even faster when its value depreciate to current RM54.98 billion (based on today’s closing price of RM9.15) when it was comfortably at RM67.30 billion back in Dec 2008. In another words while IOI Corp has lost about RM2.89 billion, the recent general election effect has wiped out about RM12.32 billion off SIME’s value. Could IOI Corp somehow overtake SIME as Malaysia’s largest palm oil producer and new hero?

Other Articles That May Interest You …

• Second Tsunami - Anwar to form the next Government?
• Stocks still gloomy as tension runs and Lim slams PM
• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market
• IOI building muscle to become Stronger and Bigger
• Malaysia 2008 Budget Rumbling

Second Tsunami - Anwar to form the next Government?

If you think that the recent political landscape changes are more or less would remains until the next general election, think again. There could be second wave of tsunami hitting the nation’s shore and just like the first round, the second round could blow your mind off (if it becomes reality). While Prime Minister Abdullah Badawi is locking himself within his office and residence figuring out the solutions for a sudden spike in problems after the Malaysia 2008 general election aftermath, the opposition leader Anwar Ibrahim was nowhere to be seen until today.

Abdullah Badawi is scheduled to announce his line of cabinet members tomorrow. Although several old faces are expected to be dropped, do not expect the Prime Minister to spring surprises with great personalities to take over from them. As usual, the time is not ripe to enter the stock market yet simply because the earthquake measuring 8.9 on the Richter scale that hit the nation on Mar 8th has NOT ended yet. There were rumors and speculation that opposition leader and former deputy Prime Minister Anwar Ibrahim was secretly away to the East of Malaysia (Sabah and Sarawak) seeking extra parliamentary seats to form a new government.

That’s right – if you think the stocks are plunging due to Abdullah Badawi’s National Front coalition’s embarrassing defeat in maintaining two-third majority in addition to losing four crucial states to opposition parties, the stocks could be ready for another major freefall if the rumors that Anwar is very close to create another history in wrestling the government for the opposition is true. Days after the opposition parties (DAP, PAS and PKR) scored the mind-boggling victory, Anwar declared that PKR is the government in waiting instead of opposition. Of course you thought he meant the next 13th General Election which is five years down the road, didn’t you?

There’s a good reason why Anwar flew to East Malaysia especially Sabah as his preferred destination. Sabah is known for having politicians who can be bought easily, the same reason why Abdullah Badawi’s National Front able to control the state without much problem not many moons ago. The opposition parties DAP-PAS-PKR is just short of 30 parliamentary seats (they secured 82 seats) in the 222-member Parliament to form a new government and where is the best place to start his shopping spree if not Sabah? Both Sabah and Sarawak have 54 seats won by National Front mostly by UMNO.

Today, Anwar claimed that many lawmakers in the ruling coalition want to defect to his camp after their election debacle. International news portal such as AP and Internation Herald Tribune picked up the news that while Anwar welcome such defect, no bribes will be paid to make them to cross over. Anwar also refused to say if the numbers (of defect) would be enough to topple the National Front government. But that’s not all. MCA, another party component of National Front is reportedly trying to control the situation by appealing to party members against “jumping ship”.

Anwar reportedly was having an “urgent meeting” with top officials including members of parliament from his party, PKR, today which prompted speculation that something big is indeed brewing. Already netizens are speculating that either PKR has secured enough extra defects to form the next new government or PKR could be joining National Front through some sort of pacts (though unlikely). Looking at Anwar’s age and assuming his mission is to become the next Prime Minister soonest possible, the shortest route is still to form a new government himself with PKR as the springboard. But before he can achieve that, he needs to become a Member of Parliament.

However, political analysts will tell you it’s still too early for Anwar to kick Abdullah Badawi from the corridors of powers. It could take months before Anwar could launch his final assault to claim the throne, if there’s any. In the meantime, the opposition parties of PKR-DAP-PAS might need to formalize their alliance and announce officially the replacement of the obsolete and bias NEP (New Economic Policy) with MEA (Malaysian Economic Agenda). Nevertheless Anwar’s next move would be under microscope watch by Abdullah Badawi’s government.

Other Articles That May Interest You …

• Stocks still gloomy as tension runs and Lim slams PM
• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market
• BN lost 5 states and two third Majority – Badawi resigns?
• DAP captures Penang, PAS captures Kedah and more!
• The Rise, Fall and Re-emerge of Rashid Hussain Again?

Monday, March 17, 2008

Could interest rate cut click like Magic and wake the Bull?

The talk and definitely the hope of investors now is whether they’re seeing the worst of the Wall Street. Since Nov 2007 Dow Jones has been plunging from the high of 14,000 to slightly above 12,000. In fact the 12,000 is the psychology level that almost everyone is watching very closely especially the futures traders. Feds have been cutting interest rate non-stop (from 5.25 percent) to the current 3.00 percent while the latest move from central banks will see $200 billion to be pumped into the financial markets to help ease the strain from the credit crisis.

Months of anxiety of the direction of the world’s biggest market could come to an end, if experts believe so. As much as analysts would like to think that the current level is the bottom and the stock markets could only go up north from here, nobody dares to declare “confidently” that we’ve indeed seen the bottom and the beginning of a recovery would happens very soon. The news of bailout required by investment bank Bear Stearns Companies Inc. last Friday somehow shattered the already fragile little confidence left but Goldman Sachs somehow believes it was a small crisis confined within Bear Stearns itself and not the whole stock market.

The starts of first-quarter earning announcements could clear some uncertainties and would help to in finding the actual bottom. Bernanke’s boys are expected to cut the interest rate next Tuesday but as usual the question remains is by how much. Economists think one-half of a percentage point is expected while hope for a three-quarters or even a full point cut. Regardless of the rate cut’s quantum the U.S. dollar is expected to be at the losing end.

In fact there’s no magic formula as to the interest rate to be but in order to bring back the glory of Wall Street. It’s all about trying to hit the jackpot and see if the new interest rate could click with current situation and end the current recession.

Other Articles That May Interest You …

• Another 50 basis points cut but Dow still in red

Friday, March 14, 2008

Stocks still gloomy as tension runs and Lim slams PM

When you thought the excitement has died down after the 12th General Election which saw the ruling government reduced to merely simple-majority-government, it appears the thrill has just begun. After successfully captured another four states (Penang, Selangor, Perak and Kedah) plus the administrative hub of Federal Territory in addition to retaining one state (Kelantan), it’s time for opposition parties to divide the spoils. While the ruling government lead by Abdullah Badawi has not really recovers from their after-shock defeat, the opposition parties are having problems forming coalition government in Perak.

DAP (Democratic Action Party) which won the most seats in the Perak state legislature election, rejected the Sultan's appointment of Mohammad Nizar Jamaluddin from the conservative PAS (Pan Islamic Party) as the state chief minister when DAP chairman Lim Kit Siang said late Wednesday that the party would boycott the swearing-in ceremony though he later backed down and apologized. And now you have PKR cried foul over the allocation of state government posts.
Such inconsistencies have given ammunition to government controlled-media to launch attacks on DAP-PKR-PAS coalition parties whether they could actually rule the newly acquired states efficiently. Lim Kit Siang was bombarded by criticismjudging by hundreds of comments left in his blog with other bloggers called him childish and so on. But really, with his decades of experience since 1969 do you really think he was senile or crazy enough to make that disastrous statement? If you want to know the actual reason, just read what one of the Gerakan politicians said. It was all about “staging a show” to pacify the Chinese voters that Lim tried but fails to prevent a PAS candidate from being made the chief minister – period.

As usual the MCA, one of the component parties of National Front, through the brother of its President Ong Ka Chuan has started to slander DAP that voters feel cheated as by having a chief minister (Menteri Besar) from PAS it creates fear among non-Muslims. So the picture is much clearer now why Lim Kit Siang has to do what was necessary. If you think this Ong Ka Chuan is playing racist cards, wait till you hear it from none other than the Prime Minister himself.

Prime Minister warned Lim Guan Eng (opposition DAP who formed the government in Penang) that he was stoking racial tension over the issue of dismantling the New Economy Policy (NEP) in the island state. Lim retaliated today when heslammed Abdullah for seeking to provoke racial tensions with his allegations. Malaysiakini has the full version.

““I said we will have an open-tender system (in Penang). What’s the problem with that? Unless Abdullah doesn’t like open tenders but corruption, cronyism and inefficiency … I don’t understand what has it (abolishing the NEP) got to do with marginalising the Malay or the Indian community” said Lim Guan Eng. 

The Penang CM argued that the NEP was a source of corruption, citing the example of the unequal distribution of wealth, including shares which were‘swallowed up’ by a few selected individuals. In a sarcastic tone, Lim said the premier’s criticism could have been linked to his revelation yesterday that theRM25 billion project of the Penang Global City Centre (PGCC) had yet been approved by the local authorities. Lim suggested that the prime minister might be provoked by Utusan Malaysia, a Malay daily newspaper.

The latest disturbing and open-war occurred when Abdullah’s UMNO representatives in Penang who are now the opposition threatens to pull out every single mega project including the Rapid bus transportation facility in Penang.With obvious threatening tone, the UMNO said since the voters voted the opposition it only goes to show the people are anti-development and (they should be punished) by pulling out all the mega projects initiated pre-election. I think it’s very irresponsible on the part of Federal government to replay this game of “You’re either with me or against me” when the people has spoke out against corruption and escalating cost of living through the ballot-box.

Anyway, I hope you didn’t jump into the stocks of those companies that relied heavily on Penang’s mega-project, did you? The tension between the Federal and state government is expected to escalate further and we’re talking only about Penang state alone mind you. Wait till you hear how Kedah, Perak and Selangor opposition states starts their face-to-face confrontation with the federal government, that’s if Abdullah Badawi can survives beyond his own UMNO election in Aug 2008.

Other Articles That May Interest You …

• Stocks to remain volatile, political landscape is instable
• General Election’s effect on local Stock Market
• BN lost 5 states and two third Majority – Badawi resigns?

Thursday, March 13, 2008

Pocket money scalping Baidu, just take the money & run

Baidu.com, Inc. (Nasdaq: BIDU, stock) has a spectacular run today as if it had taken steroid. It’s been about 3 weeks since I last made some money from this stock. Time is bad and the stocks are volatile so it’s not easy to spot an opportunity. Decided to Open position on BIDU APR 270 Call Optiontoday when the stock was trading at about $272 and closed it at about $278. The stock is trying very hard to penetrate every level from $272, $274, $272 and now $280. I’m not going to wait and see my profit wiped out should the stock gives way all of a sudden.

It’s just slightly over 18 percent profit but I just love the challenge of scalping the options to make fast bucks. In actual fact the huge percentage gain today was giving me bad feeling that it might not survive. The Dow has been good to me since the opening bell but the S&P is in red now. Too bad Apple Inc. did not present a good trading opportunity today despite the news that it’s iPod Nano battery could gives the company a slight hiccup.

Can’t be too greedy - one has to run and take the money off the table else you might be punished severely. Trust me, it happened to me many times. Once you’ve locked the profit, just switch off your notebook or close your trading session. This is how I prevent from kicking myself should the stock goes further north (or south if you short it)

Other Articles That May Interest You …

• Apple iPod Nano a TimeBomb, check your gadget
• Have Profit Will Run, Make Money with Baidu in 1-Day

Wednesday, March 12, 2008

OptionPundit never lost money since Apr 2007

Gone were the days when you had no other choice but to only invest or trade your hard-earned money in your local stock market, a statement for non-US citizen of course. The problem - you can’t make money if the stocks are going down the drain. Thanks to internet you can now trade the matured U.S. stock market virtually anywhere and make money regardless of bull or bear. I like to trade the options simply because of the power of leverage. I received many emails from readers ranging from how to open trading account, which brokerage to how to fund your trading account. I’d written some articles to answer it and hope you enjoyed reading it.

OptionPundit Toolbox

While you might enjoy reading how StockTube made money trading options, the reality is I have to do tons of reading and research before I open new position or even to close existing position. There’re tons of tools out there that could help with your research. For example OptionPundit has a good collection of toolbox ranging from news, market indicators, resources links, technical charts and etc. One of the tools that you shouldn’t miss is definitely the real-time and historical insider trading tool. Try to key in “GOOG” and see how those chief officers were selling like mad.

OptionPundit via his OPN (that’s OptionPundit Newsletter) claimed to have madeannual returns of 127.8 percent - $10,000 would have ballooned to $22,789 based on seven factors to which I agreed. The past performance might be too good to be true but it’s true, according to his article. Of course one of the factors that I couldn’t agree more is to give freely back to the society. There’s one thing that both OptionPundit and StockTube agreed on the global oil prices. I had wrote why the oil prices might spikes to $90 and beyond back in Sept 2007 and OptionPundit believed (Oct 2007) the black gold would not stop until it reaches $100 a barrel. I guess both of us thinks alike when comes to making money trading options.

There’re good amount of articles such as how you can make money by deployingvertical credit spread. You can also make money by leveraging on time decay by deploying Iron Condor strategy. Just go here to read the rest of the interesting articles.

Option Pundit Newsletter – never lost money since

OPN, short for Option Pundit Newsletter is something that interests me because it claimed to provide low risk options trading suggestions that are available only to subscribers. And to be able to provide double-digit gains since April 2007 (except on Sept 2007) is something that should raise your eyebrows. Just how much does it cost? It’s US$148 monthly, US$399 quarterly or US$1,599 yearly (ouch!) to subscribe. OptionPundit will only charge if you make money though and thesubscription is on invitation. Maybe I should start charging StockTube readers with such service as well *grin*? What say you?
Since you do not have to pay a penny if you’re not making money, I guess the subscription is as good as free.

OptionPundit is crazy about Google as well

I though not many traders are crazy about Google but it appears OptionPundit is one of them and he is playing the earning game. As with any, strategies, there is certain risks associate with it and you better prepare for the worst case scenario. Obviously OptionPundit has done quite a thorough research on Google before jumping into it. As I had mentioned numerous times you got do your own homework before you can smell the aroma of US dollars.

As crazy as I was, OptionPundit made 361 percent profit and other profits on Google Inc. I might need to publish more profits and work harder in order to break my own record of 486 percent trading Google Inc.’s option. If only Google Inc. would nose-dive further *grin*. Sometimes it’s good to compete with another fellow trader though it’s actually your own self that you should be competing.Anyway below is one of the testimonials from OPNewsletter readers.

Apple iPod Nano a TimeBomb, check your gadget

You've heard about how cell-phone and laptop batteries explode like C4 and used by terrorist as weapon for their suicide mission *just kidding*. But it did explode in a smaller scale though. And just when everyone thought Apple’s products have the highest quality, something disturbing has been reported in Japan. If you own Apple Inc.’s iPod Nano, chances are you might be carrying a time-bomb. Go and check if the lithium-ion battery’s model number is MA099J/A, will you?

It appears Japan is investigating a possible defect in Apple Inc.’s iPod Nano after a report in Kanagawa Prefecture, Japan, that the gadget shot out sparks while recharging. Apple Inc. Japan refuse to comment though or to ascertain which part of the world the battery was manufactured (not China). There’s an estimated 425,000 iPods of the suspected model shipped into Japan alone and some 22.1 million iPods were sold during the holiday quarter ending December 31st 2007.

This is bad not only to consumers but to the Apple Inc.’s stock. Since it’ll take some time for confirmation and investigation, this might be a good opportunity to probably scalp and make some pocket money out of it. Not sure yet but please pay attention to Apple Inc. stock’s movement today.

Tuesday, March 11, 2008

Stocks to remain volatile, political landscape is instable

Stocks research firms (government officials are still stunned by Abdullah Badawi’s worst defeat in the history of the National Front since 1969) were scrambling to positively assure the investors that Monday’s 130 points plunge, the worst one day drop ever in the country’s stock market, was a temporary event. However the bear has somehow been energized with the latest political landscape simply because foreign investors normally shy away from uncertainties.

Today’s 30 points rebound reflects the fact that it’s still too early to jump in, not to mention it might takes weeks or even months before a clearer picture can be painted as to the direction of the local stock market. In short, volatility increases many folds. While investors are waiting patiently to see how the policies of three wealthiest states namely Penang, Selangor and Federal Territory would change inline with the new government (opposition), the same investors are waiting anxiously to see how Abdullah Badawi could resume control of his own coalition party.

It’s no secret that Badawi could no longer sleep as soundly as beforeconsidering that his position within UMNO has been weakened considerably. His deputy is waiting for him to throw in the towel while his other allies within the coalition namely MIC, Gerakan and PPP parties were literally wiped out to extinction, not to mention MCA is barely alive. Since such landscape has not occurs before, investors are watching with great interest. People familiar with local politics will tell you it’s too early to write the conclusion. In fact it opens up a new chapter as to the many possibilities both in politics and business.

There’re many things that could happen in the next couple of months.Regardless whether the pressure comes from his own deputy to quit or simply just to jack up the National Front’s two third majority, Abdullah Badawi might be forced to negotiate and invite opposition Anwar Ibrahim to rejoin UMNO (though Anwar reportedly reject such call). Such scenario will re-change the landscape again. Alternatively Badawi could dangle some carrots so that some opposition individuals cross over.

The opposite could happen as well and it would be interesting to see if Anwar could reinvent himself as the true political master by courting parties or individuals from National Front to join the opposition to make up the number to form the next government. If this happens it would be the greatest and interesting event that could goes down the history books. Furthermore the rest of the parties within National Front have been reduced to irrelevant, not that they are during the glory period in the first place. Even if UMNO could find a new leader who could put the house in order it will takes a long time to regain the trust from the people who voted them out.

Nevertheless external factors could relieve the local stock markets. Tuesday early trading in U.S. saw the Dow up 244 points after Federal Reserve and other central banks said they will pump $200 billion into the financial markets to help ease the strain from the credit crisis. Such example could help lift up the local stock market when it open on Wednesday. But the reverse could have the same impact if Dow decided to dives. And don’t forget that the oil prices have reaches above the $109 a barrel today, something that everyone is waiting anxiously if the government would crazily increase the fuel prices by huge quantum.

I guess the Prime Minister is too busy with his own problems, so much so that you can expect the fuel price to remains for the time being. In a way it’s a blessing in disguise that the National Front fare badly else you could be scrambling to the nearest station to fill up your tank.

Other Articles That May Interest You …

• General Election’s effect on local Stock Market
• BN lost 5 states and two third Majority – Badawi resigns?
• DAP captures Penang, PAS captures Kedah and more!

Monday, March 10, 2008

General Election’s effect on local Stock Market

Malaysia’s 12th General Election has ended but not without shocking and heart-breaking results. In other countries such as Italy, U.S. or Germany such result would have been considered normal but in Malaysia, such results are abnormal. It can be equate to people revolution against a 50-year-old government that squeezed the people with excessive corruption, so much so that nobody can deny people from all the ethnics (Malay, Chinese and Indian) swung their votes to the oppositions. The ruling government, National Front (popularly known as BN for Barisan Nasional), was caught off-guard. Suddenly the warlords from BN who used to think they were immortal, invincible yet arrogant were trembling with cold sweat.

Take for example the terrible and shameful defeat of former Works Minister, Samy Vellu, who was treated like God to many local Indian. He was invincible for almost 30 years as MIC president representing Indian community in the then strong BN government. Who would have thought he has to cancel his 72nd birthday celebration after his unexpected defeat? No gamblers who were betting in this round of election would bet against this heavyweight. But if you believe in “Karma” then you shouldn’t surprise that the time has come for the punishment to be bestowed upon this person.

He should have taken the honorable exit route together with former premier Mahathir in 2003. At least Samy would have “Tun”ship the same way Ling Liong Sik has gotten it. But I guess he couldn’t resist the temptation of “greed”. So serve him well. After his defeat all of my Indian friends that I talked to were rejoicing (about his defeat). It might sound cruel but it appears most of the Indian are celebrating as if it’s some sort of “Deepavali” festival. After his defeat, the rumors are circulating that Samy Vellu has flew out of the country.

Election result’s impact on the stock market

Anyway, let’s go back to the topic of stock market. What would be the effect of the latest general election result on the local stocks? One word to describe it – huge sell-off, as can be seen by the Composite Index which registered a loss of a whopping 130 points or more than 10 percent plunge. But it is expected considering that geopolitical landscape has changed and the ruling BN government no longer enjoys the two-third majority. In the name of political instability, foreign investors are selling like mad follows by local investment arms. 

Two types of stocks are being hit the most, political-linked stocks andgovernment-linked stocks. There’s difference between both mind you. Political-linked stocks are listed companies that are directly linked to BN itself such as Equine Capital, MRCB, UEM World Berhad, Scomi Group / Engineering, Bumiputra-Commerce Holdings Berhad and so on. Government-linked stocks are companies that are indirectly related to BN government such as Tenaga Nasional Berhad, Telekom Malaysia, Gamuda Berhad, Sime Darby and so on.

But really, you can’t find stocks that are not related to the government since there’s a requirement to give away 30 percent stakes in almost any listed companies to the ethnic Malay (in most cases ended up within the grip of small groups of UMNO politicians). That’s the reason why you’re witnessing a sell-off across the board today. Company such as Scomi which is related to Abdullah Badawi’s son Kamaluddin and ECM Libra which is related to his son-in-law Khairi Jamaludin should be avoided at this time. Equine Capital Berhad (KLSE:EQUINE, stock-code 1147) which became the talk of town due to its close relationship with Badawi, so much so that its’ boss was known as “Patrick Badawi” is another stock that you should avoid. MRCB and Equine Capital are two of the stocks that would be affected the most since their multi-billion projects in Penang would most probably hit the wall with the DAP taking over the state.

Would the stock market perish?

Get real, just because the oppositions captured 5 states does not mean it’s the end of the local stock market. In fact over the long run it’s good to minority shareholders as it produce transparencyand good corporate governance. You wouldn’t want to see another Transmile scandal in future, do you? With most of the big corrupted fishes swam away in every scandal, the time couldn’t be better to prevent such cases from happens again. Of course Tenaga Nasional that gave lame excuse of high operating cost to increase electricity rate without spending any effort to clean its own house will be affected.

The biggest headache (to BN) is the fact that oppositions had captured the most developed states within Malaysia namelyPenang (semiconductor and manufacturing hub) and Selangor (home to service-related companies). But rest assure that oppositions would not screw-up and make major changes to the existing investment. In fact oppositions are under tremendous pressure to not only maintain but to show to people that it could administer and perform better than previous government (BN) in preparation for their next assault to take over the government come next general election. Already there’re reports oppositions are stationing their people to prevent previous administration from taking away “files” pertaining to investment and possible hanky-panky transactions.

Reasons why foreign investors are selling

But foreign investors do not like such major changes as uncertainties are something which could affect their return on investment. In addition they knew how notorious the ruling government in holding back state allocation to give hard times to states controlled by oppositions. Any good corporate governance and transparency to be adopted by oppositions in their newly captured states would take time.

Also foreign investors are concern on the possibility that oppositions might object any new corporate policies to be introduced by ruling government BN for the sake of objection since the BN has lost its cherished two-third majority, the same way BN objected oppositions’ previous policies. It’s more of a tit-for-tat revenge that foreign investors are afraid of, never mind how noble and determined oppositions’ wish to prove otherwise. 

But that’s not all. The most severe consequences is the fact that Abdullah Badawi’s own fate is very fragile, never mind he stubbornly wish to cling to power despite calls for him to steps down to take full responsibility of the disastrous BN’s performance. Badawi is expected to face tough challenge when he faces his own party’s, UMNO, election this August 2008. In an interview with Malaysiakini, former premier Mahathir fired his latest salvo to Badawi asking him totake full responsibility.

Opportunity to accumulate stocks?

Instead of crying how the stocks are plunging, why not take this tumble as the fire-sales and opportunity to buy good and quality stocks at a bargain? I don’t think I’ll just let Sime Darby pass by if it were to drop to RM5.00 a share *grin*. How about IOI Corporation, Resorts and Genting Berhad? Yeah, let Maybank drop to RM3.00, Berjaya Toto to RM2.00, Public Bank to RM5.00 and DIGI.com to RM5.00 a share.

So, let’s cheers and pray that the stocks would drop further.

Other Articles That May Interest You …

• After IDR now NCER – Segregating Pies
• BN lost 5 states and two third Majority – Badawi resigns?
• DAP captures Penang, PAS captures Kedah and more!

Sunday, March 09, 2008

BN lost 5 states and two third Majority – Badawi resigns?

Something was obviously troubling the Election Commission chairman Abdul Rashid during the much awaited announcement from him early this morning. The lenses of camera were zooming on him but he was not ready. At one point the visibly upset Abdul Rashid was seen angrily showing finger signs to someone at the back of the camera (his staffs?) not to disturb him while he was going through some papers on hand before his speech. Maybe some top guns would like to ask for some “bonus phantom votes” to save their butts but the chairman obviously has none to spare.

Not after the opposition parties scored big, so big that the over 200,000 arm forces votes are insufficient to cushion and to some degree “save” Abdullah Badawi’s coalition top guns. Looking at example of how Teresa Kok (DAP candidate) won with over 30,000 majority, it doesn’t take a rocket scientist to tell you the 200,000 free vouchers are simply insufficient.

With sour and tired face as if he had just lost big in his bet on FIFA World Cup, Abdul Rashid quickly announced that his beloved Badawi’s Barisan Nasional (National Front) has won the simple majority to form the next government before making a quick exit. It was late and most journalists were tired and irritated but the Election Commission appeared to refuse to announce the official results, hinted something as big as tsunami was about to hit the National Front’s shore.

National Front losses BIG time

Yes, the arrogant BN (National Front) has lost five states – Penang, Kedah, Perak, Selangor and Kelantan (retains Kelantan actually). If the Federal Territory can be counted as a state, the opposition would have captured “six states”. The loss of Penang is particularly serious for Abdullah as it is his home state but the power of people is louder. The people are simply sick and tired of the forever rising inflation, mismanagement, crime rates and racial discord under Abdullah Badawi’s four year administration.

This is indeed a great victory to the oppositions (mainly PAS, the predominantly Chinese Democratic Action Party and the People's Justice Party) due to the fact that despite backed by money, a docile media and the whole of the government machinery at their disposal, the much humble and handicapped (by funding) opposition managed to strike consensus of one-to-one fights in this 12th general election.

MCA and Gerakan, two component parties of the ruling coalition party lost all their state seats when opposition DAP made a “clean sweep”, winning all seven parliamentary and 19 state seats that it contested in Penang. In declaring its victory, DAP secretary-general Lim Guan Eng said it will form the next Penang state government in cooperation and coalition with PKR - "a government for all Malaysians embracing Malays, Chinese, Indians and other races," stressing that it will not rule alone but together with PKR.

Oppositions’ victory a mark of new Landscape

The oppositions especially DAP is definitely surprise with its huge win this time, wiping the lame duck MCA speechless while literally sending Gerakan to extinction. DAP scored 100 percent victory in Penang, the same way MCA, Gerakan and MIC scored 100 percent defeat. Penangites were simply outrages with the previous administration and decided to vote with vengeance.

“We pledge that we will be fair, just and not discriminate against anyone. We pledge that we will assist those in need. We pledge that we will give equal opportunity to the talented people of Penang to prosper and develop Penang … We pledge that we will form a government of unity, united by our common love for democracy that respects basic human rights, political equality and socio-economic justice," said Lim.

Badawi – father of both Victory & Defeat

In the spirit of “Malaysia Boleh” (Malaysia Can), Abdullah Badawi has indeed turns it into Badawi-Boleh when he goes down the history as the single Prime Minister who leads the coalition to both greatest victory (in 2004) as well as worst defeat (2008) within a span of only four years. He has shown people that he’s not a quality leader which the nation was looking for. In contrary he’s weak, indecisive and simply couldn’t understand the basic economy to drive the country in the right direction.

Could the result be any different if he follows through from his 2004 biggest election victory by implementing promises made? Most likely, but he simply didn’t have the nerve to call the shot by setting a good leadership. For example he should just ask (forcefully) Samy Vellu to retire peacefully and probably send the creator of “Zakaria Palace” to face justice. He should probably axe some of the expired politicians. Low quality people such as the former Information Minister should be sent packing. But he did nothing at all and he’s paying the price now.

Badawi’s government is haywire and disarray 

Abdullah Badawi managed to squeeze through with razor-thin simple majority to form the government but he is as good as gone. If he indeed has awoken from his four years of honeymoon, he should know that his time is up and if he still has little dignity left he should resign and spend the rest of his life in Australia. Else he might end up with the same fate as the expired Samy Vellu who was booted out. I can’t imagine how he would address his 2,500 UMNO strong delegates come the next general assembly in August 2008.

As much as Badawi’s own UMNO is in a big mess, his buddy MIC is homeless.The top two leaders (President and Deputy) in MIC were virtually extinct, leaderless. Gerakan and PPP are facing the same problem – both presidents have been voted out by the power of people. MCA should thanks God that it survives this round of onslaught. Yes, the Ong brothers won their seats but I guess Ong Ka Chuan should just quit politic as he’s a liability since he never bring good luck to Ong Ka Ting. After lost in Batu Gajah in 2004 election, Ong Ka Chuan chickened out and seeked shelter in Tanjong Malim. He won but gains nothing as the opposition (DAP, PKR and PAS) captured the Perak state.

Opposition smart to adopt Blogs and Technology

Like it or not the internet generally and bloggers specifically have been giving free and great help to the oppositions, not to mention YouTube technology. Can you imagine the election result if the print and electronic media were to give fair coverage to oppositions? Jeff Ooi is on his way to become the first blogger to be sent to Parliament in the Malaysia history and I’m sure Raja Petra Kamarudin(the author of Malaysia-Today.net) could be sent the same way if he chose the same path as well. The IT-illiterate BN must be kicking themselves for belittling the bloggers. The power of blogs cannot be underestimate dude.

The result has shown once and for all that blogs and bloggers are a force to be reckoned with. You are only fooling yourself and digging your own graves by labeling bloggers as people who are jobless and have nothing better to do. Almost all opposition top guns have their own blogs while there’s almost zero from ruling coalition party. By engaging two way conversations oppositions automatically touching ground with grassroots voters virtually.

For example in the parliamentary seat of Wangsa Maju, opposition PKR’s Wee Choo Keong won by about 500 votes but I’m sure this great guy gotten hundreds of votes from the readers who read his blog else he could be slaughtered by the postal votes deployed against him.

BN to do analysis and post-mortem, what mortem?

Heck, if it’s not for the seats delivered from Sabah and Sarawak, BN or National Front could be seeing its last day in office. So get real and face the fact that the days of BN are numbered. Again it has proven that to put in the same people and party for over 50 years could only spell disaster due to complacent. Not only were the BN leaders arrogant, they chose to adopt denial syndrome which cost them their defeat this time. Too huge a majority breeds arrogance, mismanagement and corruption.

With more than two-third majority basically the BN could do anything under the sun without giving a damn to what you think. The main problem is the rampant corruption (too many scandals to quote) practiced by virtually the whole hierarchy within BN community. Even wonder why the Penang second bridge was not on their campaign agendas? And when you have a leader who knows nuts about the basic of economy but have a huge mouth for “foods”, there’s only so far you can go. Whether BN could be repaired is yet to be seen.

Oppositions to rule new states, exciting moment ahead

While the BN is in somber mode, the oppositions are careful not to go overboard with their preparation (and celebration) to take over some states for the first time.DAP’s Lim Guan Eng is sure to be appointed as new Chief Minister of Penang while PKR’s Abdul Khalid is likely to be sworn in as new Menteri Besar (Chief Minister) of Selangor. Kelantan remains where it is and the Kedah state would most likely be headed by PAS. The remaining tricky business will be Perak of which the Menteri Besar has not been identified yet.

While the federal government is poised to give hard-time and hold back allocation to the states won by the opposition, the task of administering Penang, Selangor and Perak should be a smooth sailing considering these states are revenue self-generation. The opposition is expected to perform well in these newly captured states’ administration in order to set a good example that they can actually manage them. In fact, they’re pressured to deliver excellent result to gain and maintain the voters’ confidence come the next general election.

Opposition cannot afford to lose focus as their goal is definitely to form the next country’s government in another 5 years. Whatever it is, the people power or“Makkal Sakthi” has spoken. It’s time for Abdullah Badawi to accept the reality that he’s no longer needed and should resign while there’s little dignity left.

Other Articles That May Interest You …

• DAP captures Penang, PAS captures Kedah and more!

Saturday, March 08, 2008

DAP captures Penang, PAS captures Kedah and more!

The date is 8th Mar 2008 and the time is 9:30 pm local time. Abdullah Badawi’s coalition party, National Front or popularly known as Barisan National, is suffering the biggest setback in the history of Malaysia politic. The landscape is changing and the Prime Minister (oops, he’s not yet officially the PM) could be scratching his head in disbelieve that he has just lost Penang, the only state with majority Chinese ethnic and Chief Minister. However due to obvious reason, local electronic media is not displaying the results from Penang.

You just got to give the credits to all the Penangites who showed their bravery, finally. There’re lots of factors that lead to such victory but the biggest contributing factor is the weakness in Prime Minister himself. Abdullah tried very hard to impress voters but in vain. He even threatens the voters in his live telecast yesterday about the possibility of chaos and instability should the voters reject his coalition party. Bad move indeed. He might think the voters are still as primitive as certain African countries. Besides Penangites I think the compliments should be extended to the Indian voters, thanks to Hindraf who miraculously awaken them.

At this hour it is still too early to say if the opposition can deny Badawi’s coalition party its two-third majority but the fact that DAP has finally managed to capture Penang from National Front’s grip is a big slap to Badawi’s face. Opposition (DAP 19, PKR 6 and PAS 2) captured 27 out of 40 seats in Penang while PAS retains Kelantan when it won 40 of the 45 state seats. Latest new also indicated that PAS captured Kedah when it won 22 out of 36 state seats. It’s definitely a tsunami that Abdullah didn’t expect (punishment for falling sleep on job) but the way the coalition lost is definitely shocking!!! It appears Abdullah Badawi is plunging the same way U.S. economy tumbled. DAP won (unofficially) the following parliamentary seats:

1. Bagan (Lim Guan Eng)
2. Tanjong
3. Bukit Glugor (Karpal Singh)
4. Ipoh Timur (Lim Kit Siang)
5. Batu Gajah
6. Petaling Jaya Utara (Tony Pua)
7. Seputeh (Teresa Kok)
8. Kepong
9. Bukit Bintang (Fong Kui Lun)
10. Cheras
11. Bandar Kuching
12. Sandakan
13. Segambut
14. Kota Melaka (Sim Tong Him)
15. Sarikei
16. Serdang
17. Klang (Charles Santiago)
18. Taiping (Nga Kor Ming)
19. Beruas
20. Teluk Intan (M. Manogaran)
21. Jelutong (Jeff Ooi, the first blogger to be sent to Parliament, won)
22. Bukit Bendera (Liew Chin Tong)
23. Batu Kawan (Dr P Ramasamy)

But the exciting news of all is the collapse of some heavyweights within Abdullah Badawi’s coalition party. Some of them are:

• Prof P Ramasamy knocked out outgoing Penang chief minister Koh Tsu Koon by a majority of 3,000 votes.
• PSM’s Dr D Jeyakumar knocked out the most-hated MIC president S Samy Vellu for the Sungai Siput parliamentary seat (a nice 72nd birthday present to Samy)
• Tony Pua reclaimed Petaling Jaya Utara by knocking out Chew Mei Fun (fried mee-hoon)
• Teresa Kok won her Seputeh parliamentary seat with a whopping 36,564 votes (my God)
• Khalid Ibrahim knocked out Tan Chai Ho in Bandar Tun Razak parliamentary seat
• Nurul Izzah, daughter of former deputy Prime Minister Anwar Ibrahim, knocked out “heavyweight” Shahrizat Abdul Jalil in the Lembah Pantai seat.
• DAP's Nga Hon Ming knocked out another National Front big gun, PPP’s M Kayveas in Taiping parliament seat
• Hindraf leader and ISA-detainee M Manoharan, on a DAP ticket, obtained 12,699 votes to win with a 7,184-vote majority
• The (Mis)Information Minister, Zainudin Maidin, lost his Kedah’s Sungai Petani parliamentary seat
• Former DAP leader Wee Choo Keong, has won the Wangsa Maju parliament seat in Kuala Lumpur for PKR by 500 votes

While the result from the bias electronic media is at snail speed, most probably because it is waiting for green light from the top management to do so, you can view the latest result from Malaysiakini. I bet the Abdullah Badawi’s coalition team is having emergency meeting now on how to salvage the situation should the results continue to tilt in favor of opposition. Would they activate their dirty backup plan to save the day?Desperate people do desperate things.

Now the million dollar question is: will DAP join National Front should the latter manage to form the government with simple majority, the same way “Gerakan” did? Would there be defections? But one thing is for sure on Monday. Stock market could be very volatile with previous political-linked counters plunging like a rock! Beware of those stocks that rely heavily on projects in Penang. Sell stocks related to Abdullah Badawi, if you manage to first thing in the morning.Badawi’s lucky number is not working!!!

# Latest Update (I'll update here onwards):

• DAP has named party secretary-general Lim Guan Eng as the next chief minister of Penang (source: MalaysiaKini 11:50pm Saturday)
• Opposition captures Selangor (DAP - 15, PKR - 11 and PAS - 9) with 35 seats out of 56 seats. Whoa!!! (source: MalaysiaKini 12:25am Sunday)
• Unofficial news - DAP, PKR and PAS have managed to deny the BN its two-thirds majority in the Parliament. DAP won 27, PKR 25 and PAS 24 bringing total of 76 seats, 1 more than the required 75 seats needed to do so. BN won 108 seats.
• Opposition has won 22 of 59 seats in Perak and might take the state as well (source: MalaysiaKini 1:20am Sunday)
• Opposition claims victory in Perak after it had won simple majority, 30 (DAP - 18, PKR - 6, PAS - 6) out of 59 seats. (source: MalaysiaKini 1:50am Sunday)
• Unofficial News!!! BN denied two-third majority when opposition won 82 parliamentary seats (PKR - 29, DAP - 28, PAS - 25). BN on the other hand won 130 seats. (source: MalaysiaKini 2:42am Sunday)
• DAP, PKR and PAS said that they will form the new government in Perak. Collectively the three parties have won 30 seats (DAP - 18, PKR - 6, PAS - 6) out of 59 seats. One seat (Teja) is yet to be decided. (source: MalaysiaKini 4:01am Sunday)