2008-28-25

Saturday, August 23, 2008

Reduced fuel prices – desperate action to win P44 voters

Most of my friends from Sibu were damn serious when they told me yesterday that there was consensus within the community not to pump their tanks until end of the month because the PM Abdullah Badawi said so – fuel price to remains until 1st Sept 2008. They were so adamant that they would rather take motorbike than to fill a drop of petrol into their car’s tank. I laughed at their silliness and even call them idiot. Of course we were so close that we can curse and name-call each other. I had pumped my tank full yesterday because the warning light was on. And guess what, the flip-flop PM Badawi did it again today when he suddenly announced petrol and diesel price will drop by 15 sen (to RM2.55 a liter) and 8 sen (to RM2.50 a liter) respectively at midnight today.

Before I manage to curse the PM I received calls from my Sibu friends – obviously with great pride because they would be buying cheaper petrol than me. I retaliated by saying I only made a loss of RM4.50 based on the 30 liters that I pumped yesterday – just nice for a plate of char-kuey-teow. I guess bad (or rather childish) habit never dies and in this case the strange hobby of the PM with his forever flip-flop decision. Less than three days ago, he almost swears on the grave of his grandfather that if there’s indeed a revision in fuel price, it would be on 1st Sept 2008 - the earliest. And today, he has the cheek to announce the fuel price reduction. It was so obvious that such decision was a desperate attempt to fish for votes in the current P44 Permatang Pauh’s by-election.

Sure, such price reduction is good for the people but such flip-flop decision has already sent scary message to the investors. Don’t laugh at what Anwar said during his campaign speech because foreign investors are indeed by-passing Malaysia in favor of other countries. Immediately the next question on everybody’s lip is – would the price of foods and other essential goods be reduced accordingly? I doubt so. Nevertheless this might be the only time you see a price reduction after the initial increment – petrol. So applause to the ruling government but please vote for Anwar next Tuesday nevertheless *evil grin*. It’s high time this country needs a two-party system for a truly check and balance mechanism to safeguard the nation and people’s interest.

If you look at the ruling party’s strategy in this by-election you would notice that it still hasn’t change a bit, still arrogant (or rather give-up?) and adopted an obsolete game-plan. Play racial cards, give away money to schools, hijacked Lee Chong Wei, use electronic and print media to promote cheap propaganda, took a ride on LRT, utilized ACA (anti-corruption-agency) to its advantage etc. In short the ruling government still thinks the voters are stupid. But who can blame them when they’re in disarray and the whole government is not working towards revitalize the country’s economy? With the inflation hitting the roof (26-year high of 8.5 percent) and small businesses affected, its’ no-brainer that the Chinese and Indian voters are expected to give their votes to the opposition.

It’s a trend nowadays that whenever the government announces or denies something, the opposite usually holds the truth. If only we have such a pointer or indicator in stocks investment. Therefore the central bank’s governor might be resigning since the official denied it. At least I heard that Dr Zeti has resigned for the second time (her second attempt) from the top post.

Other Articles That May Interest You …

• Watch out BN, you don’t want to wake up Dirty Harry
• Governor Dr Zeti to resign, getting rid of final gatekeeper?
• Fuel hike from RM1.92 to RM2.70, Char-Kuey-Teow RM7.50?
• Stop beating around the bush and Call a Spade a Spade
• Oil price hike – Badawi’s greatest Economic Challenge

Friday, August 22, 2008

Watch out BN, you don’t want to wake up Dirty Harry

Looking at the persistent daily low transaction volume, there’s really nothing much you can do but to ignore the stock market for the time being. I know I’ve said this numerous times but it’s wise that you take a break. Smart monies are not flowing in and unless you wish to get slaughtered, you should just follow the big boys or the market makers. Sometimes if you do not know what to do, then do nothing. If you’re not ready to trade, then don’t trade. If you couldn’t find any good trade, then don’t trade. If you haven’t done your research and homework, then don’t trade. I would rather let go of a trade than to jump into it if I’m not ready.

If you’re hungry for money during the current hungry ghost festival, then go straight to P44 Permatang Pauh. What? The boring by-election again? Hey! Like it or not the candidates are just warming up. The latest news has it that a component party (MCA?) of the ruling government is giving away easy money in return for intelligence feedback. If you’re Chinese you’ll get RM50, if you’re Indian you’ll get RM150 and if you’re Malay your prospect is RM200. Not sure why the different rate but I suppose that’s the order in terms of the intelligence’s value. So go and peek or spy at your neighborhood and pass the information back to the ruling government in exchange for some pocket money?

Prime Minister stole the news today when he took rides on the commuter KTM and Putra LRT train service to get a feel of the transportation problems faced by the people. Big deal! If only he took the LRT train yesterday when there was problem he might not be able to smile. He should try it during peak hour without body guards and the shoe-polishers around him. Don’t stop there yet – try the bus as well and see if he can afford the smile. Where were the monies saved from the previous fuel hike (the 30 cents per liter hike) which was supposed to be used to improve public transportation? Yeah right, the global oil prices shot up and it vaporized into the thin air. But the joke was that the PM was too scared to go to P44 to help his candidate that he preferred to gain some publicity back in the capital.

And boy, the mother of by-election’s campaign is getting dirtier. Despite his promise not to hit below the belt the deputy PM Najib did just that when he can’t resists the temptation to link Anwar with sodomy during his campaign. Frustrated, Anwar threatens to “open can of worms” against Najib. Anwar was referring to the latest allegation of him ogling at the wife of Larut member of parliament (MP) and Deputy Housing and Local Government Minister Hamzah Zainuddin a decade ago. Anwar warned Najib that he would not hesitate to expose "Port Dickson"(scandal) if the latter did not stop the personal attacks against him.

He said "I am being very patient all this time, but I would like to warn them not to push me beyond the limit. If I open my mouth on personal matters, Najib will be kept busy answering them for a very long time. I have refrained from doing so, as this is not a personal battle but about the political future of the country … Remember, I too was in the government and I was privy to a lot of information. Najib knows what I know and he knows what I am talking about. Don't push me to respond or he will regret it”.

It doesn’t take a genius or rocket scientist to guess which “Port Dickson” scandal that Anwar was referring to. Thanks to Google Inc. (Nasdaq: GOOG, stock) now everyone can find out what was the Port Dickson “dark secret” so go figure. It has something to do with the person caught in bed with a famous singer in a Port Dickson hotel room. But then Anwar might have under-estimate the second most powerful man in Malaysia. If he dared to screwed the Mongolian before passed the second-hand shoe to Abdul Razak Baginda (as alleged by Balasubramaniam) do you simply think the deputy PM would give it a damn about him together with the singer, ZZ, at Port Dickson?

Grow up Anwar! You can’t fight the 50-year-old corrupt organization which you were part of it before. Now the ruling government has started to trap your Perak Exco members with corruption, never mind that the housing project doesn’t exist in the first place, and soon the whole Perak government might just collapse. So what if the ruling government abuse military airplane to hijack Lee Chong Wei and force him to go to the Permatang Pauh for cheap campaign publicity? Unless Chong Wei was willing to kiss his hard-earned RM300,000 and monthly RM3,000 pension reward goodbye, he actually has no choice but to act as a clown when he should be with his parents in the first place. So, let’s see if the P44 voters would give the ruling government another kick on its arse again. But watch out BN (ruling government, National Front) – you do not want to wake up the Dirty “Anwar” Harry because he has a huge “Magnum”.

Other Articles That May Interest You …

• Eyes on Lee Chong Wei to deliver the first Gold Medal
• Brother of RM24 billion vessel scandal to unseat Anwar?

Wednesday, August 20, 2008

PERWAJA – example why you should avoid IPO for now

Looking at how all the heavyweights, including the PM himself, rushed to P44 Permatang Pauh to try their best (or luck) to fish for as many votes as possible for the coming by-election this is no doubt the mother of all by-elections. Two PM-in-waiting are fighting tooth and nail – one tries to return to the Parliament while the other tries to stop him. While Anwar’s supporters are already complacent that their charismatic leader could win easily a sudden drop of postal votes could spoil the result and give a perception that Anwar’s popularity had shrunk. Despite the huge resources machinery and dirty tactics from ruling government the turnout for its talk was nowhere near the one conducted by Anwar.

Sure, Anwar is no angel and when he was sent behind bars for sodomy 10 years ago, many applaud. Anwar was as dirty as the current ruling government when he was part of the team back then. But people are ready to give him a chance –hoping he’s a different person now after his suffering behind bars. In fact the people has no other choice but to look at Anwar as the only hope they have since the ruling government under Abdullah Badawi’s leadership is still screwing up the country’s economy after the Mar-2008 general election. In order to cling to power there’s no other choice but to perform an express sodomy part II to stop the ambitious Anwar.

Just how bad did Abdullah’s team screwed up the country’s economy? Bad enough that the ruling government has no other way but to slap IPPs to raise money via Windfall-Tax and it won’t be the last. The government will announce its budget for 2009 on August 29 and there’re already speculations the government will raise gaming taxes by 5 percentage points. Who said it’s hard for the government to raise money *grin*. The local currency is already going down the toilet bowl and HSBC Holdings Plc. predicts that the currency (ringgit) will weaken to 3.5 per dollar at the end of this year *hooray!*. A weaker ringgit against the dollar is definitely good news to people who’re making U.S. dollar before converting it back to ringgit.

There is another “don’t” in the current bearish stock market sentiment – restraintfrom applying for IPO (initial public offering). While there’s no definite guarantee that your IPO investment will follows the drain chances are high that you would lose your money. Perwaja Steel Sdn Bhd (KLSE: PERWAJA, stock-code 5146) which finished the day as the top loser – lost 42 sen or 17% (closed at RM2.48) over its IPO price of RM2.90 *ouch!* is a good example. Despite the claims that the company which was hit by RM3 billion losses (scandal) in 1996 has turnaround for the better, it couldn’t convince many old timers judging from the low oversubscription of only 1.8 times. At least I’m not convinced. In short the listing timing as well as the company’s background were the main reasons why investors should avoid this stock in the first place.

Sometimes you need to read analysts’ report with a pinch of salt. Hwang-DBS’s target price for Perwaja was RM5.00 a share (6 times FY2009 earnings per share) while other brokerage values the company at RM5.75 per share (7 times FY2009 EPS). If indeed the company could register a net profit of RM452.1 million for FY2008 and RM460.2 million for FY2009 then those who dumped the stocks today must be idiot. In comparison iron and steel companies listed on U.S. are traded between P/E (price per earning ratio) of between 6 to 16 times. Maybe Malaysian’s steel companies worth only half of the lowest P/E company from U.S. Of course you’ve to beware of BRIC’s (Brazil, Russia, India and China) demand for such commodity.

Other Articles That May Interest You …

• MASTEEL, the Southern Bank of Steel Stocks
• Steel-Man Eric Acquitted – Are you Surprise?

Monday, August 18, 2008

Forget about oil prices, it’s the Inflation you should worry

Tropical Storm Fay, the sixth storm of the 2008 Atlantic season, caused some worries that it could disrupt oil operations in the Gulf of Mexico although nobody expect it could match the Katrina. Nevertheless oil prices were up as high as $115.35 a barrel today in electronic trading on the New York Mercantile Exchange. However the main attention should be on 9th Sept 2008 at Vienna – the day OPEC will be holding its next official meeting to discuss about oil production.

With the recent strength in dollar and subsequently the plunge in oil prices, the meeting will generate some serious debate or argument on whether OPEC should agree to cut its official output limit. Iran's oil minister recently said he thinks the market is oversupplied and that additional barrels should be removed if producers prefer a balanced market while Kuwait's oil minister said there won't be any cut in production. Since the decision by Saudi Arabia to raise its output by 500,000 barrels per day in June and July to prevent the oil prices from escalating further, the black gold which hit its peak of $147.90 on July 11 has plunged 24% ever since.

The unknown factor is whether Saudi Arabia will reverse its decision or decide to do something in order for the global oil prices to tumbles further (and affect the kingdom’s profit). OPEC would like to have a steady supply-demand balanceand definitely not a ridiculous high price which could lead to demand destruction. Therefore the focus is on the OPEC meeting as well as how the dollar will performs as a stronger dollar will pull down oil prices and vice-versa.

In OPEC’s monthly oil report, the organization forecast world appetite for oil this year would grow by 1 million barrels a day, a reduction of 30,000 barrels a day from its previous forecast for demand growth for 2008. It also said growth for 2009 will be 900,000 barrels a day, which it said would be the lowest growth in world demand since 2002 – reported AP. There are already reports that the demand for steel is already slowing during the current Beijing 2008 Olympic Games and this is yet another yardstick that the demand for oil could just be cooling down.

The Consumer Price Index for all items shows the inflation rate averaged 2.6% a year from 1992 through 2007 but has doubled since January, reaching an annual rate of 5.6% in July. It was estimated that by next year, the monthly figure could hit double digits, and the inflation rate for 2009 overall could triple 2007's 2.85%. What this means are American consumers will be facing double-digit inflation as early as 2009 simply because China is no longer the cheap manufacturer as it used to be.

Under the pressure from U.S. the Chinese government has let its currency float upward by a whopping 21% against the dollar since de-pegging it in July 2005 (followed by Malaysian Ringgit). Oh yeah! If you haven’t been living in a cave for the last couple of weeks you should know that the Malaysian government is set to lower the petrol price – probably by RM0.20 a liter (from the current RM2.70 a liter).

Sunday, August 17, 2008

Eyes on Lee Chong Wei to deliver the first Gold Medal

Michael Phelps won his record eighth gold medal at the Beijing Olympics 2008 breaking a tie with Mark Spitz for most golds in a single games. In 1972, Spitz entered four individual events and three relays and set world records in all seven events - 100m freestyle, 200m freestyle, 100m butterfly, 200m butterfly, 4×100m freestyle, 4×200m freestyle relay and 4×100m medley relay. American retired swimmer Spitz, now 58, hail Phelps as "the best Olympian of all time". That’s for the U.S. but to the entire nation of Malaysia all eyes are looking at Lee Chong Wei to bring back the first-ever gold medal in the history of Malaysian sports.

Tonight Lee Chong Wei will play against world number one Lin Dan of China. With silver medal in his bag the RM300,000 is secured but compared to RM1 million (gold medal), Chong Wei would rather have the gold medal for the nation.The pressure is definitely on Lin Dan and not Chong Wei. If this game were to be played in Malaysia, my money would be on Lin Dan but with the local crowds chanting for nothing more than gold medal from Lin Dan, I think Chong Wei stand a 50:50 chance. He has beaten Lin Dan before and as long as he can stay focus and not get distracted, Chong Wei could deliver the points. Super Dan’s bad temper could be his weakness and it would be fun if Chong Wei could force him to lose it and start whacking everyone on sight with his racket *grin*.

Talking about number, it is seventh lunar month according to the Chinese calendar and the wandering spirits and hungry ghosts are roaming every corner of the streets after the gates of the afterworld were opened. Ghost or not the temperature is surely getting hotter with P44 Permatang Pauh by-election gaining steam. Anwar needs to win big and anything but a reduced majority would be a victory for the ruling government. It’s a litmus test for de-facto opposition leader Anwar Ibrahim if the people are still thirsty for a new government either by middle of Sept 2008 or the next general election. But things are getting freaking dirty.

Thousands of police were mobilized to control the situation. Already supporters from ruling government were yelling “Sodomy! Sodomy!” while Anwar’s supporters were having fun singing “Altantuya! Altantuya!” But with police’s accusation that out of 8 ceramahs only 5 has police permits and all of these belong to UMNO, fingers were pointed at the police who took sides. Anwar was not taking this election lightly and he prepared the people (mentally) who attended his talks to take the RM500 offered by ruling government but voted for him (Anwar) instead. It would be interesting to see if Samy Vellu could help to swing the Indian votes or to deliver more damages instead.

Anyway, should Lee Chong Wei succeeded in securing a gold medal tonight I hope the PM Abdullah Badawi could move his heavy buttock to the airport to greet and congratulate the national hero. Nothing less is acceptable lest he wish to be seen as practicing double-standard and a racist *grin*. Lee Chong Wei also should deserve a Datukship for that matter, not that it’s a privilege nowadays. The PM would have nothing to lose but everything to gain by doing so as he could claim credit for the country’s first-ever Olympic gold medal – at least his predecessor Mahathir didn’t manage to do so during his 22-year dictatorship.

Other Articles That May Interest You …

• Brother of RM24 billion vessel scandal to unseat Anwar?
• Races are on for Gold Medals, Black Gold and the Throne

Friday, August 15, 2008

Brother of RM24 billion vessel scandal to unseat Anwar?

Local banks are selling the ringgit again – head of currency trading at Affin Bank Berhad said today. This is cool *grin* - at 5pm, the ringgit was lower against the greenback at 3.3295/3325. But who can blame the currency traders after the news broke that Europe’s biggest economy powerhouse, Germany, contracted for the first time in almost four years in the second quarter. Adding salt to the wound was the United Kingdom’s unemployment which rose the most in almost 16 years. In U.S. the latest consumer prices shot up in July at twice the expected rate pushing the inflation to 17-year high.

The joke of the town was that remisiers (brokers), dealers, traders or investors should just stay at home with coke and popcorn – enjoy the Beijing Olympic 2008 at channel 318 (Astro). That was why when the Bursa Malaysia Berhad (KLSE:BURSA, stock-code 1818) and Securities Commission were busy debating the decade-year-old issue on whether the stock trading hour should be shortened in view of the low daily transaction volume, almost all the brokers were believed to support such proposal. At least the remisiers do not need to sit in the office waiting to “die” (to quote a statement from a broker).

So where are all the focuses now that the local stock exchange is still in such a boring mode? Olympic Games and the political gossips of course. When the ruling government announced the name of Ariff Shah Omar Shah as the potential giant slayer against opposition de-facto leader and PM-in-waiting Anwar, I was scratching my head. Not because he was already an existing state assemblyman but because his name rang a bell. Later I found out that this fellow is the brother of a decade-old scandal – Amin Shah Omar Shah. In case you do not know who this genius is, he was the person who managed to siphon billions of dollars of taxpayers’ money down the drain. He was once the superhero who owned PSCI.

In 1998, PSC Industries Bhd (KLSE: PSCI, stock-code 8133) signed a RM 24 billion deal to build 27 patrol vessels for the Malaysian Navy. The 10-year contract also gave PSCI exclusive rights to service Malaysian navy’s entire fleet. After 7 years (2005) into the deal and despite government’s advancement of more than RM 2.5 billion to PSCI, it still couldn’t deliver even one complete ship which could meet the basic standard. Boustead Holdings Berhad which is majority owned by Lembaga Tabung Angkatan Tentera finally bailed out PSCI. And where is this sucker Amin Shah? He has gone MIA (missing in action) since booted out from PSCI board although he’s still loaded with money and I bet he’s still enjoying the fun of flying between Dubai and London (he’s in exile?).

It’s funny that the ruling government couldn’t find any other candidate to face Anwar. It could meant that nobody dares to face the giant although the ruling government has all the resources in terms of money and machinery. Tactics were set to reduce opposition’s 13,398-vote majority if not to capture the seat. The fact that the polling day was fixed on a working day speaks volume about ruling government’s intention to prevent voters from turn up to vote. Ruling government is playing reverse psychology-game, trumpeting that Anwar will win handsomely and easily. With such tactic it hope opposition parties and supporters would be complacent. The more people who think that Anwar will win no matter what, the higher the chances are for the ruling government to create surprises.

Other Articles That May Interest You …

• Stock Which You Should Avoid At All Costs - PSCI

Wednesday, August 13, 2008

The Myth behind Big Mac Index – better to get Honda

Frisolac 1 Gold costs RM49.50 today when it was only RM45.00 two months ago – a whopping 10 percent increase within a span of only 2-month. With the current high petrol price, it’s not worth scouting around hoping to find cheaper Frisolac at some secluded shops. That’s a freaking high inflation if the basket of inflation was set to better reflect the actual daily consumption goods. People are getting used (or rather forced) to pay more but sadly served with smaller portion of foods. Politicians from ruling government are still screaming the country’s economy and fundamental are in superb condition though.

You’ve heard how some poor parents are substituting pricey infant formula with diluted condensed milk, rock sugar water or even black coffee and plain tea to feed their poor little infants. Instead of switch gear to boost economy and attract foreign investors, the ruling government still plays the racial card to stay in power. Guess it’s easier to move a mountain than to change a 50-year-old’s mentality. After an eight-day losing streak, its longest since its peg to the dollar was scrapped in July 2005, the ringgit finally staged a technical rebound today. The ringgit climbed 0.3 per cent to 3.3170 per dollar as of 4.45 pm in Kuala Lumpur compared to 3.3372 yesterday *phew*.

Worry not because politicians such as Second Finance Minister Nor Yakcop is ready to point his finger-of-blame to the strengthening of U.S. dollar. However there’re speculations that the Asian central banks have step in to help stabilizetheir currencies including Malaysia Central Bank (Bank Negara) today. Depending on whether you’re earning U.S. dollars or local currencies, the weakening ringgit or other regional currencies could be a blessing. Now, before you jump the gun and pull the trigger at me, you should take a step back and evaluate if things were really getting any better when the local currency (such as ringgit) was strong. I doubt so and if you care to buy shop for groceries or other daily goods you would noticed it makes no difference if local currency is strong or weak. Of course now certain quarters have obvious excuse to raise prices again.

Strangely there are economists who will tell you Asian currencies are mostly under-valued including Hong Kong. The reason – Big Mac Index says so. The Big Mac Index is based on the theory of purchasing-power parity (PPP), which says that exchange rates should move to make the price of a basket of goods the same in each country. The so-called basket however contains a single product – a Big Mac hamburger.

Based on July 2008 Big Mac Index, it appears that Norway’s Kroner is the most over-value currency – about 121 percent which means it costs more than double just to get that piece of burger. Sweden, Switzerland, Iceland, Denmark, Britain, Turkey and Canada are some of the countries which you should avoid their McDonald’s outlet. However if you happen to be in Kuala Lumpur then grab as many Big Macs as you can because it is freaking cheap due to its cheap currency (ringgit) which is under-value by a mind-boggling 52 percent, never mind that a piece of the burger will costs you RM5.50 *ouch*. In Indonesia it will costs you Rupiah 18,700 for a hamburger but still cheaper compared to Singapore.

But a Honda Accord in USA will only burn about US$21,000 (RM69,000 based on RM3.30 to a dollar) in your pocket while it would easily costs you more than double in Malaysia. Therefore I can’t argue that US dollar is under-value using Honda Accord Index, can I? And definitely I’m not going to load Hondas into my garage. As I’ve mentioned before, I would welcome the weakening of ringgit or the strengthening of dollar and I’m sure other U.S. options or stock traders will feel the same, no?

Other Articles That May Interest You …

• Governor Dr Zeti to resign, getting rid of final gatekeeper?
• Fuel hike from RM1.92 to RM2.70, Char-Kuey-Teow RM7.50?
• Things are getting uglier; I wish ringgit goes back to 3.80
• Why Can’t Public Enjoy the Benefits of Strong Ringgit?
• Oil price hike – Badawi’s greatest Economic Challenge
• Maths Genius Sufiah enjoys Sex career, no Regrets

Monday, August 11, 2008

Races are on for Gold Medals, Black Gold and the Throne

The week ended with a spectacular Beijing Olympic 2008 opening ceremony held in the China’s National Stadium – known as the Bird’s Nest. The date chosen was also said to be very auspicious, Aug 8th 2008 or 08-08-08. Some 34.2 million viewers watched the Opening Ceremony, smashing the previous record of 27.3 million for NBC's coverage of the 2000 Summer Olympics from Sydney, Australia, according to Nielsen Media Research. The largest U.S. television audience for a Summer Olympics Opening Ceremony however was 39.77 million for the 1996 Atlanta Games.

China, known as the “Middle Kingdom” spent multi-billions of dollars to make the event one of the successful in the history of the Olympic Games. China’s GDP growth has been expanding on double-digit figures since 2003 and the fastest growing economy in the world is set to overtake Germany as the world’s third largest powerhouse this year. China’s reserves peaked at US$1.81 trillion as at end of June-2008 and this was one of the important tickets most Chinese stock speculators (or rather gamblers) believed would shield the country’s economy from a bubble burst – if there’s any. Even if the stock market were to crash, it would only happen months after the Beijing Olympic 2008 – goes the argument.

For the time being people are not talking about the stock market; which had consolidated since its peak but rather on the Olympic Games. Forget about Russia and other European countries because the race is between China and USA for the top place in terms of gold medals. China might have the advantage of home support but traditionally USA would warm-up at the early days and speed to the finish-line towards the closing of the games. China is also under pressure to deliver as many gold medals as possible and the country needs more than Yao Ming to emerge top on the overall medal count. A victory would be sweet and the kingdom hopes its 20 billion Yuan Bird’s Nest stadium could bring good fortune.

Not only the races are on between China and USA for the gold medals but the global oil prices are also on its race to reach $100 a barrel, at least that’s what many analysts were predicting. To achieve $100 a barrel of oil the U.S. dollar would need as much Viagra as possible. Oil prices dove to $115 a barrel on Friday with people screaming lower demand around the world and the belief that commodities may have peaked. Nevertheless many analysts are watching if the black gold would sustain below the crucial level of $117 a barrel for days or weeks to come.

On the local front, Anwar is also on the race to win the upcoming Permatang Pauh’s by-election. Former premier Mahathir doesn’t think the ruling government could wrest the seat from the de-facto opposition leader though. After denied the rumors that he might offers himself as an independent candidate for the by-election, Mahathir also said he might consider migrating to another country (to his buddy Robert Mugabe’s Zimbabwe?) if Anwar becomes the next Prime Minister of Malaysia. He might be sarcastic but if he was serious with his statement then he might believes that Anwar’s threat (of becoming the next PM) is a real one after all.

Dow Jones recorded another 300-points gain on Friday but KLCI might not make it accordingly. Maybe the ruling government should listen to Mahathir’s advice that the days of Malaysia being known as a low-cost labour country were over, and it is time for companies to pay higher wages to its employees *applause*. But the ruling government prefers to play racial cards and rumors are circulating that the Bar Council’s President Ambiga was in fact one of the actress assigned to ensure the controversial forum on “Conversion to Islam” attracted as much “attention” as possible *grin*. In the meantime it’s advisable to enjoy the Olympic Games than to monitor the local stocks movement.

Other Articles That May Interest You …

• Many happy faces but Dow is still below 12,000 level
• Twilight Zone is zapping people and money away
• Stop beating around the bush and Call a Spade a Spade

Friday, August 08, 2008

Are you a good Negotiator or a good money Spender?

There’re always two sides of the same coin. Certain people argued that you can’t re-negotiate a contract particularly in relation to the IPP. They asked how I would feel if I’m one of the IPPs owners. They strongly condemn any changes to the lop-sided agreement and would blacklist Malaysia as their investment destination if anyone dares to review the agreement. Whoa! We have scary and violent “investors” who would form the first-line of infantry to protect the interest of IPPs. I envy Syed Mokhtar Albukhary (MMC Corp), Lim Kok Thay (Genting Group), Francis Yeoh (YTL Group) and Ananda Krishnan (Tanjong Inc.).

Sure, it was not the fault of these tycoons when a bunch of idiots from the ruling government were sent to the negotiation table. Wait a minute! they are not idiots though if you really study how fool-proof the agreement was drafted in the first place. Where else could you find IPPs in other parts of the world which could seal such a deal – sell every single unit of electricity generated with zero inventories left for the next day? Fine, you don’t like the agreement to be re-negotiated then I guess it is fine to slap them with Windfall Tax then. And since U.S. practices such (windfall tax) creative way to tax certain companies, I suppose critics won’t say Windfall-Tax is unacceptable. All right, I’ve to declare that I don’t own a single share in any of these IPPs *grin*.

If you view these IPPs holistically you will see that indirectly such a business model does not help the country, the people and the economy especially during such challenging time. There’s a tipping point along the chain whereby the macro and micro economy could collapse when the string was overpulled. Unfortunately the ruling government runs the country as if it’s one huge piggy bank and suddenly they woke up from the slumberland with little money left to spend. Armed with scalpels they need to operate on cash-rich companies and where else to go if not those IPPs, the same cronies that had benefited for so many years? Do I feel sorry for the IPPs owners? Not at all! Should I pity minority shareholders? Definitely but I suppose as minority you can’t do much, can you?

Speaking of minority shareholders, I was surprised that the Minority Shareholder Watchdog Group (MSWG) finally showed their little fangs when it says it is against the Maybank-BII deal for three reasons: the bank was late in entering the market, the pricing and the timing. The Watchdog Group barked and asked Malaysia biggest lender Malayan Banking Berhad’s (KLSE: MAYBANK, stock-code 1155) board of directors and senior management to step down if the bank fails to get back its RM480 million deposit for the PT Bank Internasional Indonesia (BII) (JAK: BNII) deal. I’m not very sure if the bank was late in entering the market but the pricing was definitely not right. Any successful investors such as Warren Buffett would tell you that any time is a good time to enter the stock market provided the price is right.

Hence if Maybank could just negotiate a good price and not proudly gave away 4.6 times book value as if they could print money from their home, investors might just respect the level of competency the top decision makers this country possess. Furthermore RM480 million is a lot of money, mind you. Also, can someone throw this Second Finance Minister Nor Mohamed Yakcop into the dustbin? He defended Maybank-BII deal initially saying it was necessary to catch up with neighbouring Singapore. He further screamed “This is a golden opportunity … It will bring long-term benefits”. Today surprisingly he told reporters that it was not for the Finance Ministry to intervene (Maybank-BII deal) since it was a commercial agreement. It’s dangerous to have a silly person who thought that you can compete with Singapore just by paying top dollar for such acquisition.

Other Articles That May Interest You …

• Maybank’s losses before it can even make a penny
• MPs grill Maybank CEO – let the worms come wriggling
• Why you should avoid Maybank stock – Money Sucked Out
• Hanky-Panky in Maybank-BII deal? How about MAS?
• Maybank’s stock punished after $2.7 billion BII purchase
• Windfall Tax - Punishment or Desperation for Money?

Wednesday, August 06, 2008

Many happy faces but Dow is still below 12,000 level

There were many happy faces who long the stocks especially in the last hours of trading when all the major indexes had gains of almost 3 percent. Dow Jones alone shot up more than 330 points. In a widely expected rate decision, the central bank reported that "economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports." Now some analysts are convinced that Bernanke’s team will keep rates on hold until the early part of 2009.

Meanwhile crude oil finished the day just above $119 a barrel - its lowest settlement price since early May after it tumbled as low as $118 a barrel Tuesday. Light, sweet crude for Septemberdelivery fell $2.24 to settle at $119.17 a barrel on the New York Mercantile Exchange, the lowest close since May 2. Oil traders think U.S. economic slowdown and high energy costs are forcing consumers to cut down on demand for gasoline and other related petroleum-products. Many also think China’s economic demand has finally slowed down. The dollar's six-week highs against the euro also contributed to oil's decline.

But the excitement is not over yet. As with other instruments, oil prices were filled with speculators and this time around hedge funds who long oil-related contracts are being punished. Already a large hedge fund SemGroup LP folded after losing $2.4 billion in bad bets on oil futures. Other funds were seen busy dumping huge amount of natural gas contracts to free up cash.

So, Anwar was right after all when he mentioned that the oil prices had reached its peak during his debate with ruling government’s Information Minister recently. Interestingly the ruling government now is toying with the idea of lower the petrol prices now. Nevertheless I’m more interested to see if Dow Jones can climbs back to above 12,000 mark.

Other Articles That May Interest You …

• Oil Prices Debate – Shabery slaughtered by Anwar

MMC overpaying SATS, Albukhary sucking money out

On paper the proposal to inject Senai Airport Terminal Services Sdn Bhd (SATS) into MMC Corp Berhad looks yummy. Besides container haulage company JP Logistics Sdn Bhd, the MMC Group’s two main ports - Port of Tanjung Pelepas (in southwest Johor) and Johor Port (in Pasir Gudang) could provide the logistics synergies with the addition of freight (SATS) into the group. MMC will issue 696.4 million new shares at an issue price of RM2.80 per share to pay for SATS.

However it didn’t take analysts hours to realize that the all-share RM1.95 billion deal was too pricey and hence the stock price was severely punished. The stock price tumbled more than 20 percent, its biggest plunge since Sept 1998, after analysts dump the shares and downgrade the stock. It’s another plan by tycoon Syed Mokhtar Albukhary to transfer the ownership of SATS to MMC Corp – also controlled by him. The problem of the deal – SATS is a loss-making company with unaudited losses of RM25mil and net tangible asset (NTA) of RM295mil as of FY08 June 30. SATS’ FY07 audited accounts are not any impressive - a negative NTA of RM64 million.

Furthermore by issueing new shares, the MMC Corp’s floating share is expected to increase by 23% and such dilution is not something that you should be proud of. Analysts think MMC was paying too high a price of 6.6 times NTA for a loss-making business. But that’s how the tycoon makes instant money, not to mention the intention to “use-up” the money to the maximum before the next windfall-tax comes and take it away. It would be great if MMC Corp.’s financial statement could be designed to look as bad as possible. Before the authorities come knocking on the door asking for money, it’s wise to transfer it elsewhere. Berjaya owner Vincent Tan was a specialist in moving his money around within his empire.

Sure, SATS acquisition comes bundled with 2,718.68 acres of land as the sweeteners but these lands are not located anywhere near KLCC or MidValley so the deal is still a lousy one, frankly speaking. So what if SATS had a 50-year a government concession to manage Senai Airport? SATS handled pathetic 1.6 million passengers only in 2007 and nobody in their right minds would think Senai Airport could flourish in anyway into the future. Hmmm, Maybank should be able to smile now that its local buddy is over-paying for SATS.

Other Articles That May Interest You …

• Maybank’s losses before it can even make a penny
• Windfall Tax - Punishment or Desperation for Money?
• Transmile’s sudden Spring to Life, what’s in the pot?
• How much could Primus Pacific expand EON Capital?
• Syed Mokhtar only interested in RM597 million

Monday, August 04, 2008

U.S. auto sales tumbled, Proton to develop hybrid car?

One of the biggest items on the table for next week is definitely the FOMC meeting and its policy announcement slated for Aug 5th at 2:15 ET.The Bernanke boys are expected to do nothing and let the rate unchanged at 2.00 percent. There’re hundreds of companies that would be releasing their earnings and amongst the big boys are Cisco System, Warren Buffett’s Procter & Gamble, Whole Foods, Transocean and Archer Daniels Midland.

It would be a bumpy week after General Motors Corp. which is burning a whopping of US$1 billion in cash every month reported a $15.5 billion second-quarter losslast Friday, the third-worst quarterly performance in its nearly 100-year history. GM blamed its July sales which fell 26 percent on high gas prices. Nissan Motor Co. also reported slower sales - its net profit for the quarter dropped 42.8 percent while BMW AG reported a 33 percent profit decline. U.S. auto sales slumped to a 16-year low in July as automakers failed to keep up with consumers' growing demand for smaller, more fuel-efficient vehicles.

While everyone is on the mood for the Beijing Olympic Games 2008 scheduled to start on 08-08-2008, economists and analysts are still debating whether the demand for oil will fall after the event. However a member of Kuwait's top oil council, Khaled Boodai, said despite the falling prices from record $147 to $125, the black oil is unlikely to fall below $100 per barrel as strong demand from economies such as China and India would provide the support. Boodai also said Kuwait’s proven oil reserves stood at 100 billion barrels and not just 48 million barrels as reported by industry newsletter Petroleum Intelligence Weekly (PIW) in 2006.

On the local front, Malaysia PM Abdullah Badawi claimed that national carmaker Proton Holdings Bhd (KLSE: PROTON, stock-code 5304) is developing a new, fuel-efficient hybrid car to beat rising costs and address environmental concerns. Fighting a survival series to stay on power, Badawi also claimed he had already test-driven the car and urged the company to continue researching energy-saving techonologies. Well, I’m surprise that Proton has the “local” knowhow and expertise to develop hybrid cars when it can’t even fit all its models with the standard life-saving feature – Airbag. But then how hard could it be to import such (hybrid) technologies elsewhere.

Of course everyone hope Proton could really develop something on its own this time around but the next question would be the maintenance cost. Would such hybrid car cost more to maintain after the recent controversial Proton Perdana V6 scandal which shows the maintenance cost was higher than the car’s price after the fourth year?

Other Articles That May Interest You …

• Perdana V6, Mercedes Benz, Camry or Accord?
• King of AP Kings Nasimuddin dies, Proton to beg VW?
• Move aside iPod Nano, here come Tata Nano
• Can Proton just make up its mind on the partnership?

Friday, August 01, 2008

Twilight Zone is zapping people and money away

One of the reasons that have gotten foreign investors flabbergasted yet amusing at the same time was how the Malaysian government enjoys playing the game of “Now you see it; now you don’t”. Get real, the ruling government basically has no time to manage the country’s economy with the naughty-boy Anwar keeps barking that he’ll be back by September this year for the throne that was taken away from him 10 years ago. You saw the bull running and now it’s gone. You saw private investigator P. Balasubramaniam (hired by Abdul Razak Baginda) P. Balasubramaniam claimed (via his “Statutory Declaration”) that Deputy PM Najib had a sexual relationship with Altantuya and now he’s gone.

You also saw the doctor from hospital Pusrawi who examined Saiful (claimed to be sodomised by Anwar) and found his treasure-hole was still virgin has disappeared. The country’s biggest lender, Malayan Banking Berhad, (KLSE:MAYBANK, stock-code 1155) might join the gang and it was estimated aboutRM480 million (US$148 million) in deposit would possibly vanished if the regulatory issue is not resolved by September. It appears many more exciting things will happen from now till September this year. Whether PM Abdullah Badawi was sincerely concern about people’s welfare or it was a decision hopefully could increase his plunging popularity prior to Anwar’s assault, the government spread the news that the fuel price could go down on 1st September. It was reported that the petrol price of RM2.70 a liter could shed 6 sen based on global oil prices of RM129 a barrel. Crude oil costs have fallen about 23 dollars since Malaysia introduced a 41-percent fuel price hike in June 2008.

People that I talked to believed it was a political gimmick in view of the coming by-election in Permatang Pauh. Forget about the previous general or by-elections. This time around UMNO is expected to display their dirtiest and most expensive by-election ever seen in the history of the country. UMNO needs to wrest the seat badly or at least reduce the opposition majority by huge number else it would be seen as another slap to Abdullah Badawi’s face, not to mention Anwar’s threat of coming back to claims his throne. The independent Merdeka Center research firm found that 54 precent people surveyed were displeased with PM Abdullah Badawi while 42 percent were satisfied with him. Interestingly people are not too optimistic with Deputy PM Najib either as their new PM as well.

By hook or by crook the ruling government needs to prolong its survivability and at the same time create as much diversion as possible from their problems. Hey! What happens to the RM4.6 billion PKFZ (Port Klang Free Zone) scandal that the Mr Clean Ong Tee Kiat promised to spill? Everyone is waiting for explosive news, preferably a new one every week. Who knows, maybe Anwar could be arrested next Monday on sodomy charges, never mind the many pieces of proofs you could pull out from the hat. Who cares if there’re hundreds of witnesses who were watching Anwar having his “Teh Tarik” on the day Saiful alleged his little hole was penetrated.

Other Articles That May Interest You …

• Maybank’s losses before it can even make a penny
• A week full of Tensions, Rumors, Sex and Lies
• Malaysia’s Biggest Scandal – Business as Usual

Tuesday, July 29, 2008

Maybank’s losses before it can even make a penny

Iwas having lunch appointment with my fellow friends from Singapore the other day and the conversation somehow found its way to the topic of politics and economy. While Malaysia celebrated its’ highest annual inflation rate (7.7 percent) in 27-year last month thanks to the government’s fuel hike, the same rate of inflation has already reached Singapore’s soil. Singaporeans are grumbling about the high inflation as well especially the hike in the GST. They also grumble about high price of health-care and they admire how lucky Malaysians are in enjoying RM2.00 medical fees from the government hospital *grin*. I told them that they should be thankful because their government takes good care of the basic necessities such as education, transportation, housing and even allowance for their kids but they seemed to be unsatisfied and want more *sigh*.

Then our conversation entered the topic of Anwar and it appears Singaporeans are enjoying the latest happenings very much and you should hear with your own ears their admiration for RPK (Raja Petra Kamarudin). They wish somehow they could have their own version of RPK but then I told them their version of RPK would be freaking boring compared to Malaysian’ simply because their politicians, police and other agencies are too obedient and are not as creative as Malaysian *feel proud for a moment*. My Singaporean friends agreed and asked me whether it was true that there were hanky-panky in the Malayan Banking Berhad’s (KLSE: MAYBANK, stock-code 1155) US$2.7 billion offer for PT Bank Internasional Indonesia (JAK:BNII) as per-rumors. I wish I could tell them straight on their face that the transaction was as clean as Clorox.

Based on the latest development in the banking industry, it seems Maybank is set to incur great losses before the Malaysia’s biggest lender could even make its first penny from the controversial acquisition. Maybank’s stock was dumped by institutional investors after it agreed to pay exorbitant price for BII in Mar 2008. And now the bank said it had received a letter from Bank Negara Malaysia (Central Bank) that due to recent changes of take-over rule enacted by the Indonesian Government on June 30, its approval given under Section 29 of the Banking and Financial Institutions Act 1989 (BAFIA) for the proposed acquisition via its letter dated March 25 has been revoked.

Under the New Take-Over Rule, Indonesia's capital market has raised the threshold for tender offers in takeovers to 50 percent from 25 percent and requires a buyer to sell some shares to ensure the target company will have a 20 percent free float within two years after the tender offer. It was reported that Maybank had a meeting with Indonesia's Capital Market Supervisory Agency to ask for a waiver from the new ruling but its appeal was rejected last week. Considering that Maybank had paid a whopping 23 percent premium on BII’s shares, the highest premium ever paid by a foreign buyer for an Indonesian bank, could Maybank suffer the same quantum of losses from potential stock selling down? It’s no fun to lose money before you can even make a penny out of it, don’t you think? Sure, blame it on Indonesian authorities again.

Other Articles That May Interest You …

• MPs grill Maybank CEO – let the worms come wriggling
• Why you should avoid Maybank stock – Money Sucked Out
• Hanky-Panky in Maybank-BII deal? How about MAS?
• Maybank’s stock punished after $2.7 billion BII purchase

Sunday, July 27, 2008

Perdana V6, Mercedes Benz, Camry or Accord?

The latest fiasco about the Proton Perdana versus Mercedes Benz was really the much awaited dessert after the heavy meal of Anwar’s sodomy conspiracy. Already people are getting sick and tired of the sodomy case and without Anwar’s DNA, the part-2 of the supposedly Indiana Jones thriller will not make it to the box-office. Without a proper script-writer (and budget) to create suspense and new plots, the story is so “low-class” that it’s not qualified to be screened at Cineplexes. But if it’s true that the semen found inside Saiful’s poor little hole was from his uncle and not from Anwar, then cinema-goers might find reason to spend the little money left for some entertainment.

Back to the little story about Proton Holdings Berhad’s (KLSE: PROTON, stock-code 5304) top range Perdana V6 Executives. It’s awesome just how much the cost of ownership is to maintain a V6 and taking the cue from the estimatedRM132,357.36 maintenance cost for a single car from 2004 as reported, it would whack a cool RM33,089.34 a year just to ensure the national car can roll on the road. Holy cow! That’s really a good money generator for Proton and could easily put Mercedes Benz and BMW to shame. No wonder the Terengganu’s Chief Minister (Menteri Besar) was quick to conclude it would be more economical to change the fleet to 14 RM245,000 (I thought such model costs at least RM340,00 each?) Mercedes E200 Kompressors (for RM3.43 million) as it’s no brainer that in the long run the Germany car was the solution to prevent such huge “leakages”.

Of course people started to curse the Chief Minister for being lavish during such period but can you really blame him for such a shocking maintenance cost? The Anti-Corruption Agency (ACA) was surprisingly fast in their action to probe into the high costs of maintenance with the Chief Minister cheekily told the ACA to be equally efficient into other high-profile projects such as the prestigious Monsoon Cup sailing event and the Islamic Civilisation Park. Obviously irregularities can be seen all over the place in this Proton Perdana V6 Executives’ maintenance cost case. Rumors that government officers brought along their own vehicles together with the “state vehicle” (Perdana V6) for repairs or services and lumped together the total cost to be charged and thus enjoy free-ride are blowing.

Nevertheless you do not need a rocket scientist to jack-up the repairs or services charges at other workshops since Proton said its records showed that there had been no warranty claims made on that particular vehicle (cost more than RM100,000 in repairs and maintenance) since October 2004. However Proton Holdings Bhd managing director Syed Zainal Abidin Syed Mohamed Tahir claimed the average maintenance cost for each Perdana car sent by the Terengganu Government was only RM542 per year (huh?). So some geniuses must have pocketed the differences. Terengganu Chief Minister might be having fun poking at Prime Minister Abdullah Badawi’s head with the purchase but the irritated PM could not do anything judging from his decision to allow the state to keep its Mercedes-Benzes to be used for foreign dignitaries.

The question is do you have that many foreign dignitaries or VVIPs visiting Terengganu? If not wouldn’t it be more practical to sell or auction it off? I’m sure many interested parties would snap the Mercedes Benzes even at 20 percent discount. At least by selling it off the state could cut lost and it’s better to lose RM686,000 than to spend RM3.43 million keeping the cars in the cold storage. But then how could the PM say anything else when he himself spent huge amount of money on yacht and luxury jet? Maybe the government should consider Toyota Camy or Honda Accord for reliability.

Other Articles That May Interest You …

• Oops I Did It Again - Malaysian Prime Minister
• Does Malaysia PM Owns RM30 Million Yacht?

Tuesday, July 22, 2008

Nuclear Plant – Tenaga’s new Toy worth RM10 billion?

Tokyo Stock Exchange suspended its stock index futures and options trading from 9:21 am to 1:45 pm after hit by computer system glitch, thanks to programming mistake by Fujitsu. Tokyo Stock Exchange’s managing director Yoshinori Suzuki immediately told reporters that the trading house is considering seeking compensation from giant Fujitsu. Fortunately they managed to identify the problem and the resolution fast or else Bursa Malaysia’s CEO Yusli might just laugh and justify that Bursa’s recent one-day failure was acceptable after all.

Investors are dumping Apple Inc.’s stock as of this hour after the iPod and iPhone maker issued cautious guidance despite earnings that beat Wall Street’s expectations by 11 cents a share. Revenue jumped 38 percent and earned $1.07 billion for the quarter with iPod sales up 12 percent and over 717,000 units of iPhone shipped.

Anyway, it appears Malaysian utility player, Tenaga Nasional Berhad’s (KLSE:TENAGA, stock-code 5347) is toying with the idea of constructing the country’s first nuclear power plant at a cost of USD$3.1 billion (about RM10 billion). Apparently the government has asked Tenaga to look into such option with the escalating global oil prices. Deputy PM Najib had said in June that the country may consider nuclear power as a long-term strategy to meet its’ demand. A task-force has been setup and the first blueprint is expected to be revealed in August 2008.

Although the plan is at its infancy stage the public is expected to object to such a dangerous toy, not so much of the nuclear plant itself but more on the operation and how the small nation could survive any deadly radiation from possible negligence. Malaysian especially the government officers (to certain extent its servants) is known to have first class infrastructure but third class mentality. Of course with the proven system deployed in other developed countries there should be little problem in building such a mega structure but could Tenaga handle such a deadly generator?

If the 1986’s Chernobyl’s nuclear reactor disaster were to happen again, you can be sure that all the Asean countries would become sitting ducks. The question is whether Malaysia is ready mentally to operate and maintain such toy.

Other Articles That May Interest You …

• Stop beating around the bush and Call a Spade a Spade
• Oil Prices Debate – Shabery slaughtered by Anwar
• Windfall Tax - Punishment or Desperation for Money?

Monday, July 21, 2008

Gamuda and IJM Corp on their way to Merge soon?

Gamuda Berhad’s (KLSE: GAMUDA, stock-code 5398) was as good as dead the moment it’s Managing Director Lin Yun Ling threw in the towel and cashed-out from the company he co-founded. Of course the stock would not die the same way as junk stock PECD Berhad (KLSE: PECD, stock-code 5093) but the impact was great enough to wipe out millions of market capitalization. Unlike PECD, the branding of Gamuda enables the stock to stay afloat but just like the Titanic tragedy time is running out and the rescue boats better arrive soon or else.

TheEdge reported that Gamuda’s single largest shareholder, Perak royal family via Generasi Setia (M) Sdn Bhd., who has a stake of 7.5 percent had given its consent to sell its holdings to a Persian Gulf fund. The Middle Eastern group was rumored to be potentially acquiring 23% or more in Gamuda. After the acquisition this Persian Gulf fund which is believed to be none other than Abu Dhabi-Kuwait-Malaysia Investment Corp (ADKM)might launch another round of M&A (merger and acquisition) to combine Gamuda and IJM Corp. Interestingly Utama Banking Group (KLSE: UBG, stock-code 6831) which has acquired Putrajaya Perdana Bhd and Loh & Loh Corp Bhd from ADKM has invited ADKM to become its partner in the construction and infrastructure business.

Just like how the government was rushing against time to gain Anwar’s DNA profile / sample to fabricate evidence in this second episode of sodomy, Gamuda’s shareholders are rushing against time to put up a new business roadmap. While the government has Anwar’s 10-year-old DNA profile, it can’t be used just in case an independent foreign expert was to be called to re-check the evidence. It would be an embarrassment if the world were to know a decade-old DNA was used as evidence that Anwar had left his “semen” on Saiful’s underwear *grin*. So, just like the government badly needs Anwar’s new DNA profile, Gamuda badly needs new management and direction profile in order to deliver the message that Gamuda is not dead, yet.

ADKM, a unit of Abu Dhabi Investment Authority is said to have received the clearance from Securities Commission to own 35 percent in UBG Berhad. However IJM Corp’s Managing Director who is also a Certified Public Accountant, Krishnan Tan Boon Seng, was said to be unhappy with the offer price and if Gamuda were to merge with IJM then nothing less than an attractive premium should be proposed on the table. Nevertheless with the bearish market especially in the construction sector, Gamuda might just be able to find an acceptable bargain.

Other Articles That May Interest You …

• Stop beating around the bush and Call a Spade a Spade
• Dubai Investment Group realized their mistake, finally
• PECD Stock - Why You Should Run Away, Fast

Sunday, July 20, 2008

Stop beating around the bush and Call a Spade a Spade

There’re many ways to skin a cat and in the case of ambitious Anwar Ibrahim, the de-facto opposition leader whose chance of becoming the next Prime Minister is now or never, his marketing plan to topple the ruling government of half a century was inviting troubles. The ruling government might be out of creative ideas but instead of doing nothing it was worth a try to reuse the decade-old sodomy conspiracy against Anwar though obviously they can’t have his eyes blackened and his half-cracked body beaten again. No doubt the whole idea was a cheap conspiracy from the start – at least that was the perception of the public.

However the paranoid ruling government couldn’t just let Anwar off the hook without having some fun. It’s been such a long time since the police attracted the global intention and what better way to show its muscle than to mobilize a contingent of ten police cars inclusive of about 20 balaclava-clad masked commandos (UTK) to arrest Anwar. But the game didn’t stop there and Anwar claimed he was stripped naked and had his private parts examined and even measured – front and back. Hospital Kuala Lumpur director Dr Zaininah Mohd Zain denied the PKR leader was asked to strip. Regardless whether the ruling government hated Anwar so much that they even wanted to know if Anwar’s little brother was superior than theirs’; the country’s economy is obviously stripped naked in the eyes of foreign investors.

For the first half a year since end of 2007 till now foreign investors has been dumping the local stocks. For example companies such as Bursa Malaysia Berhad (KLSE: BURSA, stock-code 1818) and MRCB saw their stocks’ holdings by foreign investors reduced by 10 percent within the period. Many more stocks are waiting to be dumped and if any more ruling government comes out to give false statement that foreign investors are still attracted to the country’s so-called fundamentals, throw your stinking slippers at them. They’re just a bunch of irresponsible and incapable leaders who are out to deceive the market and to cheat small-time retail investors of their hard-earned money. They do not take full responsibility of their own actions the same way the Bursa Malaysia’s CEO Yusli Yusoff (or the board?) passed the blame on his team-mate, the CIO Yew Kim Keong.

Even so, the rumor is circulating that Yew has been made the “scapegoat” and that the powers-that-be had directed a deliberate halt to prevent a heavy selldown in the market that day. CIO Yew might be the closest person in the hierarchy to get the “axe” and he had personally taken responsibility for the technical failure but didn’t CEO Yusli also claim responsible for the embarrassing incident? Let’s see if Bursa’s vendor, Hewlett-Packard (M) Sdn Bhd, will be asked to bear the damages in whatever forms for not being able to deliver the SLA (service level agreement) based on the RTO (recovery time objective) and RPO (recovery point objective) agreed upon.

And talk about responsibility, it’s high time for the government to call a spade a spade and nothing else. Former twice Finance Minister Daim Zainuddin was equally frustrated and concerned on how the country’s economy is being managed, not that he cares since he had ventured out of the country long time ago. Daim might not crazy about political powers, though I’m sure he won’t complains if he were to be offered the Finance Minister position again, but to have him mentioned that the economy is sick should raise your eyebrows. The 70-year-old Daim’s favorite collections might be money and women but he knows and acknowledged the current 4 - 5 percent inflation figures released by the government is flawed as the actual prices of daily items have appreciated by no less than two-digits increment.

The infamous former Finance Minister once tried to own banks in Malaysia but luck seemed to be not at his side mainly due to political reason. Daim took control of Malaysian French Bank as early as 1982 from its owner when the French government nationalized all French banks but Malaysian laws did not allow foreign owned banks to operate in the country. Daim later sold tha bank to Multi-Purpose Holdings Berhad in 1984. He later acquired UMBC (United Malayan Banking Corporation), the country’s third largest bank but had to sell it when he accepted the position as Finance Minister. When he was called by former premier Mahathir to help solve the country’s financial problem during the 1997-1998 Asia-Crisis and appointed as Finance Minister for the second time, Daim was forced to sell his controlling stake in Hock Hua Bank in 1999.

Since his resignation as Finance Minister in 2001 (for the second time) Daim has quietly acquired Swiss-based ICB (International Commercial Bank Group) Financial Group as part of his ambition to become a banker, finally. His ICB made huge profits and headlines when it partnered Singapore’s Temasek Holdings in a Sorak Financial Holdings Pte Ltd consortium to acquire Indonesian bank PT Bank Internasional Indonesia (BII) (JAK: BNII) only to sell it to Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) for a whopping $2.7 billion – 5-fold profit.

Daim Zainuddin doesn’t think U.S. subprime problems could turn for the better anytime soon and with U.S. national debt breaching US$10 trillion, we could revisit the 1929 depression if the wrong button is pressed. So, if you were to ask me what to do in such a bearish stock market I can only subscribe to the decades-old strategy – keep lots of cash, lots of them for the next Crazy-Sales!

Other Articles That May Interest You …

• Stocks weaken further, radar & focus on Anwar’s arrest
• Bear the Responsibility? Walk the Talk, KLSE
• Governor Dr Zeti to resign, getting rid of final gatekeeper?
• The law of Gravity works either in Stocks or Politics
• MPs grill Maybank CEO – let the worms come wriggling
• Maybank’s stock punished after $2.7 billion BII purchase
• The Rise, Fall and Re-emerge of Rashid Hussain Again?
• The Rise of CELCOM Empire, Tales You Should Know

Thursday, July 17, 2008

Local stocks are temporary Game Over, eyes on GOOG

Just before the election early this year lots of beautiful numbers were being trumpeted to the investors about how rosy the economy was, never mind how serious was the U.S. subprime crisis back then. The incredible Malaysia was immune from almost all other external factors, so went the marketing talks. Even after the unexpected poor result that saw the ruling government lost the precious two-third majority, finance minister was still optimistic about the growth although the big-talks had since been shut-off. In the latest twist the MIER (Malaysian Institute of Economic Research) has finally revised its growth forecast for the Malaysian economy to 4.6 per cent this year from 5.4 per centearlier.

The reason for the 0.8 percent drop in growth was blamed on external factors (high oil prices) and the current political instability (finally they admitted it) but the serious note came from MIER’s executive director who said that the country’s major trading partners are slowing down – a sign of trouble in FDI (foreign direct investment). The country’s stock exchange operator, Bursa Malaysia Berhad (KLSE: BURSA, stock-code 1818), reported a 56 per cent fall in second-quarter net profit as volumes shrank when it only posted a net profit of RM28.6 million (US$8.87 million) for the three months ended June 30 compared with RM65 million in the year-ago period. Basically the local stocks are on temporary life-support and depends very much on Dow Jones to determine its’ trading direction the next morning.

Meanwhile all the eyes will be on Microsoft Corp. (Nasdaq: MSFT, stock) and Google Inc. (Nasdaq: GOOG, stock), both of which will be announcing their earnings after the closing bell today. While I do not like to trade Microsoft’s stock or option for obvious reason, Google’s consensus estimates this time around is $3.87 billion in sales (42.1 percent year-on-year growth) and earnings of $4.74. Bernstein's Jeff Lindsay is calling on Google to report revenue of $4.04 billion and EPS of $4.91. Doug Anmuth at Lehman is estimating revenue of $3.93 billion and EPS of $4.90 billion while Citi's Mark Mahaney is estimating revenue of $3.82 billion and EPS of $4.72 per share.

Interestingly Google is sitting on the cushion of $512 support but the analysts are expected to put on their glasses on its paid-click as well as earnings from DoubleClick. The last quarter earnings saw how foreign revenues brought in strong result to the company and this time the same expectation is on the horizon. As tomorrow is the Friday’s expiration for options the volatility is expected to be very high. However I noticed the bet on the Call Option seems to be on the boring level. Yahoo Inc. (Nasdaq: YHOO, stock) is expected to perform the opposite way from Google after the earnings – Google’s gain is Yahoo’s lose.

Wednesday, July 16, 2008

Stocks weaken further, radar & focus on Anwar’s arrest

Local stock market sentiment was crushed over the arrest of de facto opposition leader Anwar Ibrahim, less than 15 hours after he appeared live on television in a debate with Information Minister. The turnover or transaction volume traded plunged to 315 million shares from 395 million yesterday. The ING Investor Dashboard Survey reported that Malaysian investor sentiment registera 82 per cent drop, the second largest dip after Thailand.

Gosh! It appears the journalists could forget about taking leave if the current trend of explosive news were to continue till the year-end. Let’s get one thing straight, I do not think Anwar is Gandhi and it would be too insulting to even compare both of them. The fact remains that Malaysian’s politic is one of the dirtiest the world ever seen. It has come to a stage whereby you simply can’t differentiate between the sheep and the fox. But people need to make a choice because your life, your children’s future or even your career depends very much on it, whether you like it or not.

If the government couldn’t manage the country and economy well, it’s a matter of time before the storm hits us, again. Go ahead and blame the Dow Jones’ performance, oil speculators, opposition parties or even the President of the United States for having this strange hobby of yet another attack on Iran for the current market's weakness. Assuming the figure released by Petronas that over RM400 billion was paid to government since 1974 is correct, I somehow still can smell huge leakages over the years. And what’s wrong to have two-party system in this country? Since the local ministers like to subscribe to the idea of comparing the country with others such as Singapore when talk about oil prices and African countries when talk about development, why not compare to U.S. when talk about two-party system to achieve better transparency and accountability? At least you have a choice.

Now, you might not care because it didn’t happen to you but to deploy a contingent of ten police cars, half unmarked and half patrol, with about 20 balaclava-clad masked commandos (UTK) to arrest Anwar is simply outrages, not to mention a waste of tax money. According to Anwar’s statement, the above occurred as he entered the neighborhood of his home, returning from the Anti Corruption Agency after giving a statement pertaining to the police report that has been filed regarding suppression of material facts in the case involving him in 1998. However theStar reported that the arrest was carried out by Bukit Aman's Serious Crimes Division and not by the Special Action Force (UTK).

The question is do you need such a massive mobilization to arrest the de-facto opposition leader; lest the time is indeed running out to put him behind bar to prevent him from running for by-election and possibility forming the next new government? Osama bin Laden could be furious to learn that Anwar was given such a grand welcome because he himself might not enjoy such recognition. Funny they never mobilize the Polish PT-91M tanks for such exercise, what a waste. It might be a desperate move to provoke the opposition to take to the street the same way it happened 10 years ago when Anwar was accused of the same old sodomy charges – so that an emergency rule can be declared?

The latest news reported that Anwar was taken to Hospital Kuala Lumpur in an attempt to get his DNA sampling. The same nightmare has come back haunting his wife so let’s hope the PM Abdullah Badawi’s promise that the PKR de facto leader will not be dealt a 'black eye' this time around is good enough. But then he didn’t promise “two” black eye, did he *grin*? Home Minister Syed Hamid Albar dismissed Anwar’s claims that the accusations levelled by a former aide were a government conspiracy but he’s pretty sure the opposition supremo is likely to spend the night in detention. No wonder Anwar looked disturb during yesterday’s debate. He probably knew the debate could be his last political speech to the public before he revisits his old sweet home in jail.

Other Articles That May Interest You …

• Oil Prices Debate – Shabery slaughtered by Anwar
• KL under siege – frighten of own shadow of collapse?
• A week full of Tensions, Rumors, Sex and Lies

Oil Prices Debate – Shabery slaughtered by Anwar

After watching the debate between opposition de-facto leader Anwar Ibrahim and Information Minister Shabery Cheek, I finally understand why the Prime Minister Abdullah Badawi and his deputy Najib refused to enter the ring but instead sent the Information Minister instead. Anwar had earlier challenged both the PM and his deputy to debate with him – two against one. It is without doubt that the sleepy PM would be cooked alive while his deputy would be trembling like Mr Bean the moment the word Mongolia being mentioned. So a soldier was sent to the battlefield.

Obviously Anwar won the applause for tackling the questions the smart way and chewed up Shabery alive. Anwar wasn’t so convincing with his opening statement and to a certain extent looked quite nervous, probably he felt somewhat intimidate with the presence of police force outside the building where the debate was taking place. Hey, who can blame him for being suspicious of an arrest immediately after he step out of the building? After all, about 15 police officers were sent to his house in an apparent effort to harass and intimidate his family members especially his grandchild even though he had promised to co-operate to give his statement to the police earlier on. In fact the smart police had even obtained a court order barring Anwar from coming within three miles (five kiilometers) of Parliament but strangely the police station to which Anwar was suppose to attend is located inside this perimeter. So Anwar was perplexing whether to go or not to go.

Today, Petroliam Nasional Bhd (Petronas) Group announced that it posted a record profit of RM61bil for the financial year ended March 31, 2008, which was a 31.5% increase from RM46.4 billion a year ago. Petronas Group’s revenue rose 21.2% to RM223.1 billion from RM184.1 billion; its total assets rose 15.2% to RM339.3 billion from RM294.6 billion while shareholders’ funds rose 17.6% to RM201 billion from RM170.9billion. Its’ chief executive officer Tan Sri Hassan Merican said the national oil corporation also decided to pay out a special dividend of RM6 billionto the Federal Government.

For the year, Petronas Group paid out RM67.6 billion (63.1% of the Petronas Group profits) to governments, bringing the group’s total payments to governments to RM403.3 billion since its incorporation in 1974. Of the RM67.6 billion payment for the year, he said RM62.8 billion was paid to the Federal Government comprising RM30 billion dividends which included a RM6 billion special dividend, RM20.6 billion in the form of petroleum income tax, RM5.4 billion in corporate income tax, RM2.1 billion in export duties and RM4.7 billion of royalty payment.

Anwar revealed the magic figure when he claimed he could immediately reduce the petrol price by RM0.50 a liter tomorrow if he were to form the government today. He justified that Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) has to pay 40 percent excess capacity (inline with what StockTube has wrote in previous articles and also the reason why I believe the country do not need another white elephant – Bakun dam project) to government’s cronies (the IPPs) and if the excess could be reduced to only 20 percent and plug the corruption leakages, the government could spare RM3 billion which can be used to reduced the petrol price by RM0.50 a liter. Make perfect sense I would say.

Credit should goes to Shabery at the initial debate because he argued well but as the debate continues the vessel seems to be losing steam and focus when he started to launch personal attack at Anwar, while the latter slowly gained his composure. Shabery also never learnt from the past mistake by constantly compared Malaysia with Venezuela, Iran and other countries in an attempt to run away from the question raised by Anwar’s representative – where was the promise from the RM0.30 petrol hike in 2006 to improve public transportation? Shabery went around beating the bush by repeatitively say the global oil prices affect all the countries including Malaysia. Of course we knew that Mr Shabery dim-witted but in the process Petronas also enjoy the fruits, no?

It was funny that Shabery chose to compare Malaysia with Norway andFinland who do not practice subsidies but have shown good economic performance. I almost fell off my sofa laughing – Norway’s GDP per capita is $55,600 while Malaysia’s only $14,000. The Information Minister also on numerous time tried to confuse the illiterate village people who might be watching the debate that we cannot take all the money from Petronas because the company needs to re-invest despite Anwar’s clarification that he wasn’t suggesting so but merely to efficiently use the “money paid” from Petronas’ taxes. Frankly if we can really reduce the petrol price by RM0.50 a liter by taking only RM1 billion from the RM67.6 billion paid to government on top of the RM2 billion saved from IPPs leakages and other area of corruptions, I strongly believe it would work marvellously in solving the current inflation.

At one point Shabery tried to create fear and confusion (and hope to score some points) when it was his turn to ask Anwar question about his subsidy policy when the country would have no more oil to export by 2015. Of course the well-equipped Anwar cheekily questioned Shabery from where did he get the fact that it was a sure thing that there would be not more oil after the date as the job of Petronas is to continuosly explore more oil fields; the same way when it was predicted 30 years ago that the country’s reserve would be empty by 2005 (smart ass).

The soldier who was sent by Abdullah Badawi to be slaughtered tried to trap Anwar by accusing him as dirty as his accusation since he was part of the government when the concept of IPPs started together with the lopsided PPA (Power Purchase Agreement). Anwar replied that he didn’t agreed to the IPPs clause in pushing all the 100% of electricity generated into the throat of TENAGA (regardless whether the utility body needs it or not) so much so that former TENAGA boss Ani Arope resigned in protest.

But the funniest part was when Shabery’s representative asked a stupid question when it was his turn to do so. Come to think of it, it was more like an attack statement rather than a question. He (can’t remember this dumbo’s name) accused Anwar of deviating from the original topic of oil by linking it to IPPs. Every Tom, Dick and his dog know that IPPs is related to oil and gas but it’s super-strange that such a stupid person was chosen as the government’s representative. No wonder we won some rocks while Singapore won an island. Remember I said in stock market – Bull and Bear makes money, Pig gets slaughtered? Well, that’s precisely what happened to poor Shabery. But expect the government-controlled media to report otherwise. Maybe the police will stormed into Anwar’s house tonight out of frustration and give him the perfect panda-eye.

Other Articles That May Interest You …

• KL under siege – frighten of own shadow of collapse?
• Windfall Tax - Punishment or Desperation for Money?
• Windfall Tax - why Discriminate and Petronas not in?
• Still steamy hot with fuel hike? Why not kick Badawi’s arse?
• SIME aborts cable, no more cheese or the Rats move it?
• Fuel hike from RM1.92 to RM2.70, Char-Kuey-Teow RM7.50?

Tuesday, July 15, 2008

KL under siege – frighten of own shadow of collapse?

Desperate people not only do desperate things but also stupid and childish things as if they are begging to be laughed at. Malaysia has been the laughing stock for quite some time but things got more hilarious with today’s total lock-down by the police. Roadblocks were setup at numerous access points into the capital of Kuala Lumpur as if Osama bin Laden had sneaked into the country planning to blow-off the Petronas Twin-Towers, causing massive traffic jams. The excuse given by the police who often labeled as the bully – opposition was planning a huge demonstration which of course didn’t materialize.

It’s both funny and puzzling that the police could mobilize such massive police presence and barbed wires on the Parliament bridge to scare and intimidate the people but is still helpless in their efforts to rescue missing kids such as Sharlinie. If only the police was half as efficient in locking down the capital to search for Sharlinie, maybe we could have another happy family since. Somehow I sensed some similiarities in today’s military-style exercise to the recent Grand Saga’s gangster method to rob and hurt the innocent civilians. While Grand Saga recruited thugs to take care of their concreate slabs in their effort to block residents of Bandar Mahkota Cheras (BMC) going home via short-cut, today we witnessed the ruling government used the police to setup road-blocks and barbed wires to intimidate potential peaceful demonstrators – if what the bald headed minister claimed is true.

As expected the Parliament Speaker Pandikar Amin refused to allow the debate on a "crisis of confidence in the government." The speaker who is a member of the ruling government even shooed the opposition Member of Parliaments away yelling that they have make the Parliament a laughing stock, after they (opposition) staged a walk-out. You can’t blame the speaker for not knowing that the country has long been a laughing stock but the panic behaviour of the ruling government was simply mind-boggling. The police even obtained a court order barring Anwar as well as the public from coming within three miles of Parliament – a sign of a very frightful ruling government of the shadow of collapse. Isn’t the Parliament a symbol of democracy?

Of course the authorities’ fingers including the Prime Minister Abdullah Badawi’ were all pointed at the opposition but could the ruling government the shepherd boy who “cry wolf”? Was the war-zone created necessary? Perhaps it was a good publicity to attract tourists in their effort to boost tourism industry but motorist who were caught in the traffic jam were not amuse at all. It goes to show that the ruling government will do anything to stay in power, the same way Mahathir’s buddy - Zimbabwe’s President Robert Mugabe stubborn way to stay in power.

People on the street do not really care who the Prime Minister is as long as the PM knows the basic 101 of economy and can drive the country forward. Stop deceives the public that big fish can be caught with the detention of two top Immigration Department officers by the Anti-Corruption Agency. Stop playing the Consumer Price Index because every Joe Public knows how retarded the PM is in economy. Get someone qualified and clean to revitalize the economy and the stock market will take its course. With 24 months to go before the PM passes the baton to his deputy only new sets of policies that promote transparency, accountability, efficiency, good governance and justice could save him from going down the history as the weakest and useless PM the country ever had. When everyone prospers nobody would care about the demonstration.

Other Articles That May Interest You …

• Windfall Tax - Punishment or Desperation for Money?
• A week full of Tensions, Rumors, Sex and Lies
• Greed & Corruption turn the country into Gangster-State?
• Does Anwar has all the missing pieces to create history?
• BBC HardTalk too Hard & Hot for Malaysian Syed Albar

Sunday, July 13, 2008

Windfall Tax - Punishment or Desperation for Money?

It’s funny that the brother of deputy Prime Minister expressed his pessimism of the country’s economy so much so that he urged the government to review the windfall tax imposed on independent power producers (IPPs). Huh? The CEO of CIMB group is protecting the IPPs who are making tons of money because of lopsided agreement which saw the electricity generated being pushed into Tenaga Nasional Berhad’s (KLSE: TENAGA, stock-code 5347) throat, regardless whether TENAGA needs it or not?

Wait a second. Didn’t Nazir’s brother, deputy PM Najib screamed there was no problem with the country economy and everything was in freaking good condition despite investors closing their trading book “temporary” and wait for a better time to pour their money? The trading volume on the Kuala Lumpur Stock Exchange has already shrunk to new low. Attack where it hurts the most and in this case the pocket of CIMB’s CEO. Of course this guy was worried about the stagflation – stagnant economy with escalation inflation. Going by the rate the economy is being run, you should not be surprise if such virus (stagflation) could arrive at the nation’s doorstep soon.

Nazir has all the reasons to worry because his bank (second largest lender) and investment bank would be badly affected should there be no new capable leader who knows how to manage the country’s economy emerges soon. The country’s economy built over the decades is not only affecting the CIMB’s CEO but almost all the CEOs of the public listed companies. It’s mind-boggling that thegovernment’s coffers are drying up so fast that it has to take such desperate measure to slap IPP with a 30% windfall levy in excess of 9% ROA (return on asset). Depending on which angle you look at IPP you either love them (their stocks) or hate them (their greed). On the other hand who can blame them when it was the former premier Mahathir who encourage such a bias PPA (Power Purchase Agreement) in the first place? And to think that TENAGA always took the easy way out tackling its revenue problem by increasing the electricity tariff could easily sent your blood boiling.

Investors were speculating that the cash-strapped government’s windfall tax was actually a way to punish the stubborn and arrogant IPPs who always uses the PPA to resists compromise for a fairer deal. It’s hard to say if Tenaga would put people above the monetary interest even if tycoons who own the IPPs such as Syed Mokhtar Albukhary (MMC Corp), Lim Kok Thay (Genting Group), Francis Yeoh (YTL Group) and Ananda Krishnan (Tanjong Inc.) were not involved in the power generation business. No doubt these tycoons have been making easy and guaranteed money, some were issued licenses since 1993 such as YTL Power, Malakoff, Tanjong and Genting Sanyen, and it’s about time to contribute back windfall tax to the government’s coffers. But why now and not 10 or 5 years ago when the tycoons were laughing all their way to the bank? Interestingly, most of these billionaires were closely linked to former premier Mahathir.

Critics said the government was short-sighted and too anxious to get hold of the estimated RM540 million from the windfall tax on IPPs without looking at the bigger picture. Since the date the tax effective (1st July 2008) MMC Corp Berhad’s stock which controls Malakoff Berhad has lose over RM1 billion in market capitalization while Francis Yeoh’s YTL Power International Berhad was poorer by RM330 million. It wasn’t a surprise plunge since Malakoff and YTL Power made up the lion share of IPP market segment with 40 and 17 percent respectively. One of the losers is EPF (Employess Provident Fund) who besides holding a gigantic huge chunk of the debt papers issued by IPPs, also owns 30 percent shares in MMC Corp which in turns own Malakoff Berhad who is expected to pay more than RM200 million annually for the windfall tax. Malakoff is screaming that the company will close shop within 3 years due to groups’ huge borrowing – a staggering RM1.2 billion annual interest for its RM16 billion debts. Investors who weren’t happy with MMC’s RM16 billion privatization of Malakoff exercise two years ago have all the reason to cheers and smiles now, out of vengeance.

With the estimated power excess of about 40 percent (and the extra 2,400 megawatts from Bakun dam?) being absorbed by Tenaga, maybe this windfall tax is a good strategy to wipe out some of the IPPs and subsequently reduceTenaga’s “electricity inventory”. At least now the IPPs are more willing to open their gate of negotiation and make the whole messy IPPs business model more efficient. Of course if you’re shareholders of such IPPs or benefiting from its business one way or another then you’re feeling the great pinch of the shares sell-off, the same way most of the brokers, analysts and CIMB CEO are feeling now. But then the flip-flop government might make a U-turn out of pressure from corporate figures. It appears peoples are grumbling that after taking money from the poors-on-the-street the government is now refocus their attention to the corporate world – for money.

Other Articles That May Interest You …

• Tales of Corporates’ Compensation, do GLCs qualified?
• Windfall Tax - why Discriminate and Petronas not in?
• Could the country pushed to the brink of Recession?

Thursday, July 10, 2008

Candies for Najib, Badawi’s tactical move to stay longer

Strangely I couldn’t claim my RM625 rebate on the 1st July 2008 even though I’ve renewed my road-tax and insurance about two weeks before the expiry at the end of June. I was told that some processing need to be done before they can hand-over my money and it would take about four working days. Slightly panic I had no choice but to wait and finally I’ve gotten the money. I’ve spent it all though but on my mortgage although I was tempted to use it to pamper myself with the Apple’s new 3G iPhone which is scheduled to be on sale tomorrow. Guess the iPhone has to wait.

Another day another bombshell - Malaysian Prime Minister Abdullah Badawi finally announced his retirement date – mid 2010, another two years away. I began to respect this so-called sleepy head because it appears he has all the quality of a master with all the ingenious strokes of political movement, just like the legendary chess player Kasparov. He might not have the braincells like Mahathir in managing the country’s economy and he might sleeps more hours than newborn babies but I bet he was actually planning his next political moves during his nap *grin*.

Come on, if you think he would quietly handover the throne to his deputy Najib then you were born yesterday. Tons of things can happen within a span life of two years. Unlike his father Najib is known as an obedient boy. He was given the easy ride on a silver platter because of his father and in the process he is not a fighter but expects to be spoon-fed. If it’s not because former premier Mahathir owed his father a great favor, Najib would not be where he is today. But then he’s someone who cannot be trust as well. Everyone knows this and Badawi knew this but the recent political landscape has changed too much beyond recognition. With foreign investors getting out in droves, the situation doesn’t benefits the ruling government a bit.

Furthermore Badawi could have sensed that his deputy might just pull a rabbit from his hat to challenge him for the President seat. Badawi could have the financial muscle but this time around, money might not be able to solve UMNO’s internal problem. It would be super embarrassing for him to be booted and the only honourable exit route was to copy what Mahathir as done to him about five years ago. The plan was to offer some sweets to Najib with the hope to buy some time (for the next action) and his (Najib) temporary loyalty. Yes, this is an ingenious move because it would be suicidal for Najib to challenge his boss after Badawi promised to handover the President chair lest Najib fancy people call him ungrateful. But would Najib be able to see the shine and walk the corridors of powers ultimately?

If you still believe Mahathir is not senile, then you gotta believe his prediction when he blogged that Najib will never become the next Prime Minister. Hey, with the Altantuya’s scandal still linked to Najib it doesn’t take a rocket scientist to conclude such prediction, not that Badawi would like the scandal to disappear overnight. Of course Badawi said he still needs two more years to deliver his promises to the people. Yeah right, if he cannot do anything for the last five years what makes you think he can performs the magic in a short period of two years? He might look dumb but definitely he would have written on his chest not to make the same mistake as Mahathir – handover the baton to the wrong person. Surely Najib would not give a love pat on Khairi’s shoulder and praise how gorgeous he was after Najib became the next Prime Minister, would he? What’s the best way to cripple your enemy if not to lure him into a cage and burn him alive? Who says it’s not possible to slaughter a tiger by pretending to be a pig-let? Badawi will stays longer than the planned two-years. It would be interesting to watch stock market's reaction to such news tomorrow.

Other Articles That May Interest You … 

• A week full of Tensions, Rumors, Sex and Lies
• External and internal factors point to gloomy economy

Wednesday, July 09, 2008

Dow Jones gained but VMware founder booted

Dow Jones industrials gained more than 150 points as the oil prices tumbled more than nine bucks for two days of trading alone. Phew! I thought the oil prices will shoot up to $200 as what some experts predicted. But hey, this is not the end of the story yet – just like stock or option trading, commodities are no difference from the ups and downs. And so you’ll hear this is just a correction, a huge one if you were to ask me, and the bear could turns to bull again. However if you look at where the DJIA is currently, even if the oil prices drop another ten bucks the Dow might not be able to go above 12,000 markconfidently.

As the earning season starts, it will take many good and extraordinary earning results to give a jab to the gloomy stock market. World’s third largest aluminium producer Alcoa Inc. posted stronger-than-expected second-quarter earnings but the profits fell 24 percent due to high costs of raw materials. Meanwhile EMC Corp.’s shares tumbled $1.75 (11.5 percent) to $13.39 as something funny and strange happened. If you’re in the IT, then chances are you should have at least heard of VMware if not familiar with the product. VMware was and still is the leader in the so-called virtualization software. The software is so useful and powerful especially to technical support in multiple type of OS (operating system) emulation. It can emulate from Microsoft, Linux, Solaris to even Mainframe OS from your normal desktop or notebook provided you’ve sufficient hard-disk and memory resources.

The prospect of the software attracted the attention of EMC Corp, the leader or “Taikor” in the storage market, who then acquired 86% of VMware for $625 million in 2004. However as with the risk of and M&A, the EMC’s Chief Joe Tucci never saw eye to eye with VMware’s founder Diane Greene as far as how VMware business should be run. Diane Greene knew that she no longer needed and before VMware finish announcing its chief executive was stepping down, the company pulled references to the co-founder off its Web site and installing the biodata of its incoming chief executive, Paul Maritz (a legendary former Microsoft executive).

But what really puledl the EMC stock down was the lower revenue projection for the financial year 2008 - modestly below previous guidance of 50% growth. I supposed it’s hard to stay independence especially if you still wish to strike deals to sell your solutions to your parent’s competitors.

Tuesday, July 08, 2008

Bear the Responsibility? Walk the Talk, KLSE

So, the rumors of troubles ahead of last Sunday’s “One Million People Protest Rally” organised by the Opposition in Petaling Jaya is just a rumor. Maybe the poor turnout as what the deputy PM Najib proclaimed helped to contain the situation but nevertheless the spectators were given free “butt” entertainment. As what I’ve blogged not many moons ago, this time around people are not so “obsessed” with protest or demonstration despite the staggering 40.6 percent fuel hike because of the RM625 rebate. That’s human nature as people have yet to feel the pain in the long run and RM625 is a huge amount of money (at least to some) compare to the little extra they’ve forked out “so far”.

In a way the government was smart in giving out this little carrot or else I can’t imagine the possible havocs that could have erupted. Talk about havocs, it appears the stock market investors, traders, gamblers and speculators are still talking about last Friday’s embarrasing system failure. The crisis has also invited tons of speculations and jokes. Whether there was indeed hardware or software mulfunctions, the damage to the Kuala Lumpur Stock Exchange’s (Bursa Malaysia) reputation has been done. Some people nevertheless think the stock exchange has done a marvellous job in handling the crisis. Yeah right, as if their lame excuse of hard-disk failures was super-convincing.

As usual, the mentality of the Bursa’s CEO reflects certain degrees of Denial Syndrome disease when he was quick to say other stocks exchanges had failed before, without naming any of the past cases. CEO Yusli of course later said he is willing to bear the responsibility but did not go any further from the statement. It would be too much for him to resign, considering the country’s culture, but heads need to be rolled. Why not start with the head of IT (information technology)? The head of IT should know how critical the trading systems are and how such mission critical hardwares and softwares should be protected and made available 24x7. Furthermore the top IT management was paid handsomely in terms of bonus during the good time and now accountability needs to take its course.

And if the required systems availability couldn’t meet the SLA (service level agreement) agreed due to dependency, then let’s cross the IT border for more heads. With huge IT allocation, I don’t think Finance was stingy but if there was then you have more names in your list. How about Audit? Who are the committee members of the (DR) disaster recovery team? To declare that the DR works only when all the components fail but not when one component such as the stock trading system fails is an insult to our intelligence. Let’s think over it. If there’s any truth to it, then manually fail all the components in order for the so-called DR to kicks in so that "all the systems" can be failed over to the backup system. It’s either all or none at all.

But then the whole DR design is flawed, don’t you think? I bet Hewlett-Packard Co was the main contractor who designed the DR system so let’s cannabalise the company as well, shall we? Hmmm, I heard they have the obsolete Tandem system also. I also heard they’re running the world-class Symantec-Veritas Netbackup data protection softwares to protect the lifeblood of the data. So the backup data are basically useless I suppose. Why bother to backup then.

Other Articles That May Interest You … 

• Stock Exchange down, CEO lies about computer glitch?

Sunday, July 06, 2008

A week full of Tensions, Rumors, Sex and Lies

In times of uncertainty rumors fly as fast as those spirits released from the underworld as per-according to Chinese Ghost Day which traditionally falls on the thirteenth day of the seventh month in the lunar calendar. I’ve lost count of the number of calls I received last Friday reminding me to stock up essential goods. The rumor – this Sunday, 6th of July 2008, could be another day of, well, troubles. I supposed people felt the local political tensions are building up especially between two Prime-Ministers-in-waiting – opposition de-facto leader Anwar and Deputy PM Najib.

Another interesting rumor I heard over the phone was the story behind local Stock Exchange’s embarrassing system failure. Apparently people believe the KLSE was deliberately shut-down in order to prevent a major panic sell-off after the bombshell dropped by private investigator (hired by Abdul Razak Baginda) P. Balasubramaniam when he claimed (via his “Statutory Declaration”) that Deputy PM Najib had a sexual relationship with Altantuya. It was not a normal sexual intercourse, mind you, but one which was almost the same with what Anwar was accused of doing – anal intercourse. The only difference is that Anwar did it to a man while Najib did it to a woman, so goes the accusations.

Interestingly people somehow find it hard to believe that Anwar had revisited his previous hobby, sodomise a person from the same sex but believe almost whole heartedly that Najib had indeed sodomise a person from the opposite sex. Not sure if anal intercourse, regardless if performs it with the person from same or opposite sex, is an offence but I heard that in actual fact giving a blow-job is an offencewhich could send you to the jail. I know what you’re thinking – didn’t the former MCA top gun Chua Soi Lek who was caught with his pants totally down was given such an acrobatic pleasure?

Of course Najib denied P. Balasubramaniam’s Statutory Declaration (SD) but what was more mind-boggling was the retraction of the SD by Balasubramaniam less than 24 hours after he disclose it publicly on Thursday. And now the private investigator is reportedlymissing since Friday (after his second SD denying Najib’s involvement with the Mongolian translator) together with his wife and three young children. Surely they can’t be C-4ed, kidnapped, arrested or sent to unknown places to shut their mouths, can they? Perjury of not, the worst thing that could happen to Balasubramaniam is to face the maximum seven years’ imprisonment instead of watching his family members vanish into the air.

Despite the unbelieavable politicking for the past few days one person can finally smile and sleep happily. For months PM Abdullah Badawi didn’t have good night sleeps, until now. The story-line is pretty straight forward. Somehow Malaysia has an incapable PM, probably the weakest (and laziest?) since independence, who would like to stay on till his term ends four or five years from now. However his deputy saw the opportunity to seize the throne after his sleepy boss led the ruling coalition to its worst performance ever. The deputy who initially pledged his support to his boss come rain or shine was spotted making a small U-turn. It wasn’t that suprise though as the deputy has great track records of switching sides at the eleventh hour as can be seen during UMNO’s Team-A and Team-B struggle for power ten years ago.

Badawi might look weary and drowsy as if he has taken flu-syrup most of the time but this time this is what saves him or at least buy him some time. His strategy to release Anwar from prison seems to pay off as he simply cannot fight a battle against Najib, Muhyiddin and Razaleigh all at the same time. Now that Anwar is engage with a No-Holds-Barred war with Najib, the PM can even enjoy the show with popcorns and cokes. Heck, he might even survives the next general election if the Rottweiler and Pit-Bull were to fights till both dies. And with the Inspector-General of Police Musa Hassan’s warning to rope in army to help police in public order, the country is just inches away from emergency declaration.

How hard is it to have UMNO-military-police rule over the land? Just recruit the same thugs who were paid to guard the concreate slabs belonging to Grand Saga to do some damages and chances are it is game over for anybody who dares to challenge the PM. If you watched how somber he was during question-and-answer session after Balasubramaniam’s explosive revelation, you might believe he was at lost then. For all you know the PM was the mastermind of the whole episode and might be smiling all his way to the bed that very same day.

Other Articles That May Interest You …

• Stock Exchange down, CEO lies about computer glitch?
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Thursday, July 03, 2008

Stock Exchange down, CEO lies about computer glitch?

Frustration and cursing were all over the day when the local stock exchange, Kuala Lumpur Stock Exchange (KLSE), was down for the day – the worst in the exchange’s history. Initially Bursa Malaysia Securities said trading would be suspended for at least the morning trading session from 9am to 12.30pm following a multi hardware failure in its core trading system. The exchange blamed the problem on computer glitch and promised the trading would resume in the afternoon session but after lunch the system was still down until end of the day’s trading hour.

Now, Bursa Malaysia chief executive Yusli Mohamed Yusoff confidently told reporters that the day-long closure, which resulted from the failure of a computer hard disk, will resume tomorrow. I’m not sure what else the CEO will blame if the so-called technical problem couldn’t be resolve from tonight until tomorrow before the opening bell. Dealers already warned the country’s benchmark index could fall sharply when trade resumed (tomorrow). A dealer at a foreign brokerage said people who couldn’t sell today will dump their stocks first thing in the morning tomorrow. Another dealer said the market is bearish and most of futures contracts are being short and predicted the index could easily plunge 5 percent tomorrow.

When you thought the excitements from the local political landscape is due to take a rest after opposition de-facto leader Anwar was accused of sodomy “again” days ago, suddenly P. Balasubramaniam, the private investigator hired by Abdul Razak Baginda released a shocking statutory declaration alleging the police haddeliberately omitted pertinent information about the Altantuya Shaaribuu murder case.

In the declaration, he claimed that he had told the police that Razak said he was introduced to Altantuya by Datuk Seri Najib Tun Razak at a diamond exhibition in Singapore and that Najib told him that he (Najib) and Altantuya had a sexual relationship and that "she was susceptible to anal intercourse."Balasubramaniam said Razak told him that Najib had asked him (Razak) "to look after" Altantuya aka Aminah because he did not want her to harass him now that he was deputy prime minister.

While Bursa CEO Yusli was cool about the trading problem today saying it was normal, Prime Minister Abdullah Ahmad Badawi said the technical glitch gave a bad impression to foreign investors but denied that the stock exchange was suspended due to current political uncertainties. Now, Yusli might be able to bluff normal people out there but any first year I.T. student would fall off the chair laughing at the reason give - the failure of a computer hard disk. This silly excuse is out-dated and cannot be used at the current I.T. age considering hard-disk would have multiple backup or fallback plans in place with the importance of Bursa Malaysia as the stock exchange of the country.

Heard of RAID-5, RAID-1, RAID 0+1, mirroring, clustering, replication, data protection and disaster recovery plan Mr Yusli? Of course he heard of it and obviously these were in place else he should be sacked immediately. Bank Negara (Central Bank) and Securities Commission should have audit their DR (disaster recovery) plan, no? It’s puzzling to hear such ridiculous statement from the CEO. Come on, tell us the actual reason and we might just forgive the stock exchange but to lie and follow the foot-steps of politicians is simply unacceptable.

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Wednesday, July 02, 2008

Another yardstick on Economic’s Health - Starbucks

When I tried my first sip on that RM10.00 or US$3.00 “Ice Blended Mocha” from Coffee Bean more than 10-years ago, I was hooked. It was a trend back then to have a cup of those dark brews at least once a week but I was basically almost had it everyday. When Starbucks arrived thanks to tycoon Vincent Tan, I tried the new brew but somehow I still prefer Coffee Bean. Personally I found that Coffee Bean’s aroma and taste was “stronger”, not to mention it was slightly cheaper than Starbucks. If my old memory serves me right they have this special card to collect the leaf-stamp everytime you spend a cup of Coffee Bean, regular or large. When the card is fully stamped, then you can get a cup of Coffee Bean free although I’m not sure if such thing exists now.

In U.S. Starbucks was the favorite among the hippies and youngsters. The green-and-white mermaid brand was so popular that when it was introduced in China in 1999, the trademark-logo was immediately imitated by Chinese firm Xingbake (although the Chinese firm claimed otherwise) – the same name used by Starbucks in China. Eventually Starbucks Corp. won a two-year legal fight after a Chinese court found that a local coffee store chain had violated its trademark. Subsequently Shanghai Xingbake had been ordered to stop using its name and to pay the US retailer 500,000 yuan ($62,000) in damages.

Anyway, it appeared the glory time is over with the announcement Tuesday that Starbucks Corp. will close 600 stores next year as a result of weakening U.S. economy. I had stop playing this stock for quite some years and never looked back. And when I read about the stores’ closure, I was surprised how much the stock has depreciated since then. Although Starbucks did not specify which stores will be closed, the company said 70 percent are those opened post-2006. In another words the new decision will affect 19 percent of U.S. stores and an estimated 12,000 workers (about 7 percent) globally.

Some analysts had predicted Starbucks (Nasdaq: SBUX, stock) could get intotrouble with the over-expansion plan and Starbucks Chief Financial Officer Pete Bocian finally acknowledged that between 25 and 30 percent of a Starbucks shop's revenue is cannibalized when a new store opens nearby – a very close statement to mean saturation. Starbucks has 16,226 stores around the world with 7,257 in the U.S., 1,867 abroad and 7,102 by partners.

So, how significant is this piece of news? Remember I mentioned that basically all the sectors are dependent on consumers? Hence such Starbucks decision to close 600 stores is a good yardstick to tell you how much the consumers are spending and how slow the economy is. Starbucks coffee is considered a luxury items or nice to have kind of beverage and if the addicts are no longer buying the coffee, it just goes to show how bad the business is doing. Nevertheless I still love Coffee Bean.

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Tuesday, July 01, 2008

More plans for 3G iPhone from AT&T, costlier service

Many people outside of U.S. can’t wait for the iPhone to reach their shores and ended up cracking or unlocking the phone so that the cool gadget could work with their local telco. U.S. residents meanwhile criticized Apple Inc. and AT&T because the two-year contract requirement with AT&T actually costs more than the first generation iPhone. So when Steve Jobs announced the price cut to $199 and $299 for 8GB & 16GB respectively, there were mixed feelings.

Today AT&T announced new pricing details for people who do not wish to tie-up with the carrier – at a whopping $599 and $699 for the 8GB and 16GB iPhone respectively. This means it would be $400 more than the price with a two-year plan but still this will only be available in the future. But with the $199 and $299 version (new 3G iPhone) to go on sale on July 11th, it is expected the number of units of iPhone could multiply for overseas shipment (after being unlocked). However if you wish to enjoy the $199 and $299 3G-iPhone offer in U.S. there’re some pre-requisites:

• iPhone customers who purchased before July 11
• Customers activating a new line with AT&T
• Current AT&T customers who are eligible, at the time of purchase, for an upgrade discount

If you’re not any of the above, then you’re not eligible for an upgrade discount which means you still can purchase the new 3G-iPhone but at $399 and $499 for 8GB & 16 GB respectively. AT&T also announced Tuesday that iPhone 3G buyers will have no choice but forced into more costly service plans than those offered alongside the original iPhone - plans will now start at $70 for a month for a package that includes 450 minutes and no text messages.

Other Articles That May Interest You …

• AAPL stock down, Jobs’s health problem? Just a bug
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External and internal factors point to gloomy economy

While it’s entertaining and exciting to read the spectacular development in Malaysian politic with the latest twist of which the former Deputy Prime Minister was accused of sodomy “again”, you got to pay a little attention to the global economy because if it’s going to slow down continuously chances are you might want to thank for what you’re having now. If you think the fuel pumps are going to remain at RM2.70 a liter for the rest of this year, think again. If you think unemployment will not get any worse and you won’t be affected, think again. If you think Malaysian economy will reverse overnight for the better after Anwar somehow miraculously managed to become the new PM, think again.

European countries hit a record yearly inflation of 4 percent in June putting pressure on the ECB (European Central Bank) to raise interest rate from 4 percent to 4.25 percent – possibly this Thursday. The problem with such rate hike is the indirect impact on the global oil prices which already hit a record of $143.67 a barrel Monday. If the interest rate is hiked the US dollar will be weaken and thus could send the black oil higher, possibly above $150 in a very near future.

Meanwhile in Switzerland where my brother is working, the Bank of International (BIS) Settlements warned the global economy could face a deeper downturnthan anybody could imagine mainly due to rising inflation and problems on financial markets. I bet not many people know about BIS. Widely known as “central bank” of central banks, BIS was established by the Hague agreements of 1930 with the role to make monetary policy more predictable and transparent among its 55 member central banks. It does not provide financial services to individuals or corporations but administer the transaction of monies according to the Treaty of Versailles viainformation sharing and economic research.

Last year BIS has warned the global economy is so vulnerable that another 1929 Great Depression could repeats itself again – if the multiple credit instruments combined were to burst. Besides, nobody foresaw the 1929 Great Depression or 1997-1998 Asia Economy Crisis, did they? According to BIS, 2006’s record issuance of $470 billion in collateralized debt obligations (CDO) and a further $524 billion in "synthetic" CDOs alone could spark an ugly sight. CDO's are bond-like packages of mortgages and other forms of debt.

But BIS said nothing beats the risk from China which may, without the giant realize it, have repeated the disastrous errors made by Japan in the 1980s when Tokyo let rip with excess liquidity. It was estimated that some 40 percent of China's state-owned enterprises are loss-making thus exposing the banking system to likely stress in a downturn. China’s growth was unstable, unbalanced, uncoordinated and unsustainable.

By the way, don’t forget tomorrow (1st July 2008) is the first day for the second batch of motorists to claim their RM625.00 rebate. Move your lazy ass to the nearest post-office dude.

Other Articles That May Interest You … 

• Holy Cow! The Sodomee-Sodomite is back, lazy CopyCat
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• It’s Wise to Claim your RM625 Rebate Soonest Possible
• Could the country pushed to the brink of Recession?

Sunday, June 29, 2008

Holy Cow! The Sodomee-Sodomite is back, lazy CopyCat

What’s your chance of winning the lottery or to make it more mind-boggling – the chance of winning it twice? If you ask former Deputy Prime Minister Anwar Ibrahim, he will gladly tell you that it was as easy as snapping your fingers. Yes, history repeats itself and it appeared Anwar’s strange habit never dies and he’s back to sodomy again *grin*. Somehow the 10-year cycle not only applies to stock market but also in politics. Anwar was sacked by former premier Mahathir in 1998 and subsequently found guilty on the charge of sodomising Anwar's former family driver, Azizan Abu Bakar, on Aug 2000.

Anwar was freed in 2004 after the Federal Court acquitted him of the sodomy charge. However it was not because justice prevailed but rather a strategic political move by Abdullah Badawi to prevent his deputy Najib’s challenge for the top post. And now a man, 23-year-old Mohd Saiful Bukhari Azlan, who had started working at PKR (Anwar’s own party) about three months ago had lodged a police report alleging sodomy by the PKR leader.

Just like in 1998 when Anwar was at the climax of his career but was sacked as Deputy PM to kill his political ambition by Mahathir, the charismatic leader is now going through the same process for the same reason, never mind its 10-years into the future. Frankly I almost fell off my chair when I first read the report fromMalaysiakini and the location the alleged sodomy took place, not too much because of the allegation *yawn* but more of the laziness on the part of the government to think of a better way to frame Anwar. To copy blindly from Mahathir’s creativity to fabricate such an allegation is simply outrages. Be creative and put some hard work so that we can enjoy another story plot please.

It’s not too hard to frame a politician – create some stories about Anwar’s corruption when he was Finance Minister or probably his unauthorized subscription for prostitutes during his time serving jail. Best still accuse him as the terrorist group Al-Qaeda’s commander for the Asia-Pacific region who is currently building nuclear bomb for Iran, North Korea and Myammar. People might believe Anwar was capable of anything but sodomy. If there were only 50% of people who believe the sodomy story 10 years ago, now there could be only 5 percent. However as the saying goes – who cares if it’s an old trick / idea as long as it works?

But desperate people do desperate things so could it be the same people who were exposed by RPK as being present at the Altantuya’s murder scene plotted this latest amusing story? Maybe Anwar invited troubles when he claimed he hadevidence implicating Inspector-General of Police Musa and Attorney-General Abdul Gani Patail in the misconduct, including fabrication of evidence in the cases launched against him after his sacking from government in 1998. According to latest news from Malaysiakini the frightened Anwar is hiding inside Turkish Embassy due to assassination threat. Hey, can you trust the Turkish since the PM had business relationship (bought a luxurious yacht) from them *grin*?

Could it be that Anwar managed to secure majority hoppers from BN (National Front) coalition that such conspiracy has to be executed to prevent him from becoming the next Prime Minister no matter how flawed the plan was? Just what is happening to this country? You don’t like your lover to continue asking money from you – you terminate her with military C4 explosive. You don’t like people to demonstrate against your policy – you put them into ISA indefinitely. You don’t like your deputy to challenge you for the top post – you fabricate and accuse him of sodomy. You don’t have money for you political game – you increase toll rate, electricity rate, water rate, fuel price etc. You’re on the brink of losing power – you reuse the sodomy tactic. Simply awesome!

Bottom line – even if Anwar indeed sodomised the young chap again, nobody would believe it simply because the public has lost confidence in the present day government who practices corruption, inflation worshipping, intimidation, cronyism and nepotism instead of good governance, transparency and accountability; yet incapable of running the country efficiently and effectively. Instead, the public would believe it was a conspiracy by the government to cook up Anwar alive.

Other Articles That May Interest You … 

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Saturday, June 28, 2008

Governor Dr Zeti to resign, getting rid of final gatekeeper?

Bank Negara Malaysia (Central Bank) Governor Tan Sri Dr Zeti Akhtar Aziz’s resignation as director from the Board of Khazanah Nasional Bhd effective from Apr 21 has raised a few eyebrows. It’s not everyday you read resignation in the name of “to avoid any potential conflict of interest” simply because the Barisan Nasional (National Front) encourages its top guns to spread their tentacles as far as possible. Of course nobody knows which party Dr Zeti voted in the recent Mar 2008 general election but her intellectual should easily be above people such as the Member of Parliament from Kinabatangan.

Dr Zeti has been holding the portfolio (Governor of Central Bank) since 2000 after took over from his predecessor Ahmad Mohamad Don who resigned together with his deputy Fong Weng Phak in 1998 because of a rift between Ahmad and former premier Mahathir. Dr Zeti who was then an assistant governor of the central bank took over as acting governor. Just like former Deputy PM Anwar (now the de-facto opposition leader), Ahmad Don has been known to prefer a tight policy recommended by IMF (International Monetary Fund) to which Mahathir rubbished as a silly policy not suitable for Malaysia.

The daughter and the only child of the country’s famous academician Royal Professor Ungku Abdul Aziz who was known for his contribution during his service as the Vice Chancellor of University Malaya, Dr Zeti has extraordinary blood legacy. Her grandfather, the late Datuk Jaafar Mohamed was the first Chief Minister of Johor while UMNO founder the late Datuk Onn Jaafar was her granduncle.

Her achievement or rather her most controversial implementation was the capitaland currency controls designed to contain and hopefully to tackle the so-called currency speculators whom Mahathir blamed for the 1997-1998 Asia Economic Crisis. Current Second Finance Minister Nor Yakcop was said to be the architect of the capital control plan but he was more famous for his role in gambling a whopping RM30 billion away in foreign exchange (forex) speculations. In fact Bank Negara was named the global top three players in forex back then. Despite the huge losses which occurred between 1992 and 1994, Nor Yakcop (was then the head of forex trading) together with his partners - the late Bank Negara (Central Bank) governor Jaffar Hussein and former Finance Minister Daim Zainuddin, no action was taken against either one of the three musketeers. The joke was that George Soros was the person on the other end who made the profit from Bank Negara’s losses thus Mahathir’s crazy attack on George during 1997 Crisis.

Anyway, right after Dr Zeti resigned as director from the Board of Khazanah Nasional the rumor was blowing strong that she might quit her post as the governor of Bank Negara soon. Nor Yakcop today denied such rumor but I would rather believe Samy Vellu is clean in the Maika scandal than to trust him, hence take it with a pinch of salt. It appears that in certain financial matter such as the interest rate, it is hitting huge boulder as far as final decision maker is concerned. Obviously Dr Zeti sees thing from a different angle compared to Nor Yakcop who is a politician. It’s not difficult to imagine a central bank governor having a hot and spicy argument with a finance minister in the meeting room. What really pissed Dr Zeti off was certain decisions being made that bypassed her authority and you can’t blame the old lady jumping up and down when certain boys from level-4 smiling cheekily at her. Could the country see the final gatekeeper of billions of dollars removed and open the door of the vault for its’ spectacular view?

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Friday, June 27, 2008

Slaughter Day for Financial, Automotive and Tech stocks

Bad news, bad news and more bad news – that’s what happened from the opening till the closing bell on Wall Street. It was as if the Dow Jones was released from the cage after years and bloods are all it needs. That’s right, the Dow plunged almost 360 points to their lowest level in almost two years and bloods are all over the trading floor. The Dow dropped 358.41 points (3.03 percent) to close at 11,453.42 - its lowest finish since Sept. 11, 2006. Nasdaq followed and tumbled 3.33 percent or 79.89 points to 2,321.37.

The bad news - OPEC President Chakib Khelil told a French television station thatoil could rise to between $150 and $170 per barrel this summer before pulling back later in the year, instantly sent the oil futures past $140 a barrel (140.39 in after-hours trading). The goods news – Khelil said the oil prices will unlikely to reach $200 a barrel. Libya poured fuel into the fire by saying it may cut oil production. As expected investors ran helter-skelter finding shelter in Treasury bonds. Not to be left out technology sector added spices to the already bearish market when Oracle Corp. and BlackBerry maker Research In Motion Ltd. warned that the traditionally slow summer months could prove particularly difficult this year.

Citigroup Inc. and Merrill Lynch & Co. were punished after a Goldman Sachs analyst cut his rating on the stocks to "sell". Goldman warned investors and traders to expect less from the financial especially the brokerage sector in the current economy climate. Yeah right, as if we do not know. Goldman Sachs also gave automotive industry a kick when it cut General Motors Corp.’s rating from “Neutral” to “Sell” saying things could still get worse for the North American automotive industry as a whole. The Detroit-based automaker immediately saw its shares plunged to their lowest price in more than 33 years to close at $11.43 or 10.77 percent lower while Ford shares hit another 52-week low.

The greedy me didn’t let go of a suppose-to-be scalp position on AAPL Aug 175 Put Option yesterday. Who can blame me when the market was one hell of havoc?

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Thursday, June 26, 2008

Fed maintains rate, stock trading guerilla warfare style

Remember the Isaac Newton’s law of gravity? Well, it’s happening to the U.S. interest rates now - the series of rate reductions since Sept 2007 is about to make a U-turn. Federal Reserve held interest rates steady Wednesday and hinted that the next direction for rates could be up. Investors and economists think Bernanke would probably start boosting rates as early as 5th Aug 2008, its next meeting. If not then the next possible calendar date would be 16th Dec meeting, which is most likely given the housing market is still bleeding and needs time to recover.

The sign could be short-term but the report that showed U.S. stockpiles of oil and fuel were larger than expected was taken as evidence that soaring gasoline prices have crimped demand in the U.S. thus the stabilization in oil prices. Prices were also influenced by another EIA report that predicted oil production will increase in Azerbaijan, Brazil, Canada, Kazakhstan and the United States in coming years. It also predicted such effect will pull oil prices down to around $70 a barrel by 2015. Since such prediction is as good as consulting fortune teller, it’s wise not to take it as the Holy Grail.

Nevertheless managed to scalped Baidu.com, Inc. (Nasdaq: BIDU, stock) for some pocket money. It’s hard to let your positions run as most of the stocks zig-zag almost on daily basis. Hence, when your buy signal triggered for day-trade just go in, scalp it and run with your money. It’s not the time yet to become a hero. It’sguerilla warfare out there.

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SIME aborts cable, no more cheese or the Rats move it?

If not for the news that Sime Darby Berhad (SIME: stock-code 4197) decided not to play the game of undersea cable, I would have forgotten about the highly controversial Bakun project. It was almost a year ago when I wrote about this to-be-white-elephant project unless of course the government could convince foreign investor to eat-up the 2,400 megawatts. Yes, only foreign investor particularly Rio Tinto (NYSE: RTP, stock) could take up the electricity in such scale simply because Rio Tinto is in the power-hungry mining industry producing aluminium, copper, iron ore, coal, gold etc. That would only works if the company could get dirt cheap electricity generated from Bakum dam.

So far besides MOU (memorandum of understanding) between Rio Tinto Alcan Group and Cahya Mata Sarawak Bhd (CMS), nothing much has been heard about the joint venture. SALCO (Sarawak Aluminium Co Sdn Bhd's) was the name for the joint venture proposed which was suppose to build the RM7 billion aluminium smelter plant and in the process hoped to be able to consume 900 to 1,200 megawatts of power. The plan was to transmit the remaining 1,600 MW (megawatts) to Peninsula Malaysia via underwater cables, never mind that currently Tenaga Nasional Berhad’s (KLSE: TENAGA, stock-code 5347) has excess of 40% of un-used capacity.

Despite owning 60% stake in the revived undersea cable project, Sime Darby was said to be slow and reluctant to sign on the dotted line with its consortium partners namely Tenaga Nasional Bhd and the Ministry of Finance, which have a 20% stake each. Sime Darby does not have the expertise and was expected to depends heavily on Japan's Sumitomo Corp. (TYO: 8053) which was offered the $1.5 billion deal to lay a 700-kilometer long submarine cable from Sarawak to Peninsula Malaysia.

Today, Sime Darby announced it will not invest in an undersea cable project saying it did not fit with its business strategy (sure and to take such a long time to realize this?). However Sime Darby will proceed as a contractor for the dam. It was a puzzling decision considering the company was so eager with the project two months ago. With this development the targeted deadline in 2013 will surely be missed, not that the project was feasible in the first place. Why backed off from the project when in fact it was an easy meat – subcontract the whole damn dirty jobs to Sumitomo (or whoever is interested) and take whatever left as pure profit.

Could the escalating cost (blame the turtle please) eat into the profit margin so much so that there’s not much money to be made by Sime Darby? Could there be technology problem to the ambitious mega-project that building the 700-kilometer cable would take ages that might surpass the 2013 deadline? Unless the agreement is not bias in Sime Darby's favor why worry (about future escalating costs)? But then the government is almost bankrupt *grin* so don’t expect extra pocket money if you cannot deliver. Of course there’s speculation that the government is cutting almost all mega-projects’ cost to be relocated to “somewhere else.” So before you rejoice that billions of dollars will be saved, it could be smoke gets in your eyes.

Other Articles That May Interest You … 

• Mega-Sales needed to attract Rio Tinto to revives Bakun
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• SIME Won RM15 Billion Cable Project
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Wednesday, June 25, 2008

StockTube clocked 1,000 posts, expect weak 2Q earnings

Basically all the stocks’ performance depends on one factor – consumers. It’s a no-brainer statement but many investors or traders tend to forget this. Every sector from airlines to healthcare would be affected, one way or another. Let’s look at the big brother Uncle Sam. According to Thomson Reuters the U.S. corporate profit outlook doesn’t looks well and with the second quarter earning season around the corner, profits are expected to fall at a rate of 10.2 percent thanks to financials and soaring gasoline prices.

United Parcel Service Inc, the world's largest package-delivery company with market capitalization of over $63 billion cut its second-quarter profit outlookciting high fuel costs and a slack U.S. economy. FedEx Corp didn’t do any better when it posted a quarterly loss and gave a weak profit outlook for its fiscal 2009. Financial sector is still licking wounds from subprime foray. Federal Reserve Chairman Ben Bernanke and his gang is expected to keep talking tough about inflation but will not do anything to the interest rate for the time being.

The only thing that Bernanke would not like to see is a repeat of 1970s crisis when the Feds allowed inflation to get out of control and only contained after Paul Volcker pushed up the interest rate thereafter. With the Dow Jones floating aimlessly below 12,000 it’s doubly hard to bet on stocks based on earnings. I’m not saying all the stocks would suffer but you need to check from more barometers to make fast bucks trading stocks or options betting on earnings. Too much short-sells contracts and you better watch your back even if the stocks have been consistently beat earnings estimates.

By the way, there’s a small achievement here over at StockTube when this blog hit the 1,000 posts milestone. Started on Oct 2006 StockTube survived the last 21 months of blogging averaging 1.6 posts or articles per day, till today.

Tuesday, June 24, 2008

Airline Stocks – Can See but Cannot Touch, Not Yet

Before the invention of internet on the scale we’re seeing today there were not many nice and exciting stocks investing game around. If my old memory still serves me right, the games available during the old time were developed for MS-DOS, the oldest Microsoft operating system. Somehow I was hooked to this simulation games on stocks, never mind the design was rather primitive. The joy of making huge amount of money from investing stocks was indescribable. What you need to do was to enter the stocks and shares to buy and randomly the game will tell you the result after the opening bell together with the news that effect such result.

It was a simple game but it was my first exposure to stocks and since then I‘ve never looked back. Strangely I found out that to make millions of dollars in profit you cannot ignore airline and steel stocks. It was a risky business – either you go bust or become very rich. Of course you didn’t have technology stocks back then. Talk about airline stocks, do you know that Google Inc. (Nasdaq: GOOG, stock) can basically buy over all of U.S. major airlines and still has many billions left inside the pocket? Of course Google will not do that but using market capitalization as yardstick, Google which has a mind-boggling US$171 billion could swallow companies such as Delta Airlines Inc., UAL Corp, U.S. Airways Group Inc., Northwest Airlines and Continental Airlines Inc.

Since the escalation of oil prices airline stocks has been beaten down; so much so that it is hard to tell if the stocks are ripe to pick. Simple moving average tells you the beating is not over yet but certain analysts (such as from Lehman) are bullish on the sector. No doubt the airline stocks look awfully cheap but one should remind oneself that such stocks are at the mercy of global oil prices, jet fuel to be precise. If I’m not mistaken, during my time playing the MS-DOS simulation stocks game many times the airline stocks went bankrupt. Chapter-11 is the last word investors would like to hear. Warren Buffett once tried his luck with a company which is now known as U.S. Airways but got burnt and since then he has been telling people to stay away from airline stocks.

Of course you might argue that the airline industry in the 90s was very different from now. Furthermore Warren’s style of holding on to his stocks almost “forever” does not work on airline stocks. Some might argue that if the 911 didn’t kill U.S. airlines and economy, what justifications are there to say airlines will, well, go under Chapter 11 again? As an investor or trader what are the options available to you? You can allocate your money elsewhere and forget about airline stocks temporarily or you can try to become hero and scream that the airline industry is in such a bad shape now that it can’t get any more worse but to go up.

I bet many people poured lots of monies into AirAsia Berhad’s (KLSE: AIRASIA, stock-code 5099) when the stock breached the psychology level of RM1.00 a share. What happens to the stock today? The stock still drops. Besides the childish fights between AirAsia CEO Tony Fernandes and Malaysia Airline System (KLSE: MAS, stock-code 3786) CEO Idris Jala, both airlines are struggling to stay afloat. However credit should be given to AirAsia when the company managed to stay profitable with profits rose to RM161.3 million (from 86.9 million ringgit in the same period a year ago) for the three months ended Mar 2008; on revenue growth of 31.8 percent to RM535 million despite escalating jet fuel.

AirAsia might be innovative by exploring ancillary income to cover the rising cost of jet fuel which has surged almost 100% when other airlines including MAS chose the path to raise fuel surcharge but the fact remains the airline companies are chasing the shadow of oil prices which could hit $200 a barrel – that’s if you choose to believe such oil prices could happens. If AirAsia’s plan to raise ancillary income from current 9% to 13% to its revenue succeed, that’s RM360 million which could pays many liters of jet fuel. Having said so, it’s still too early to munch both stocks – either MAS or AirAsia. Fundamental aside, I believe technical analysis is telling us the support level is still very cloudy at this moment.

Other Articles That May Interest You … 

• Tony is cold sweating over Copy-Cat MAS’s free seats
• MAS to acquire AirAsia - Can’t Beat so Eat them Alive?
• Tony’s AirAsia, to Privatise or Not to Privatise
• Monopoly No More, AirAsia to fly to Singapore

Monday, June 23, 2008

When Scandal and Crisis are thicker than Stocks

Whoa! I was out of town for a short break and when I came back there were so many happenings, not the same type of happenings you get during clubbing mind you. Some friends suggested we should try one more round of cheap foods before it disappears thanks to the recent 41 percent fuel hike. At first we thought of Penang food but we concluded that despite the tasty foods the prices are no longer cheap not to mention the shrunk portion. So we ended up in Ipoh, a town you can consider if you desire peaceful retirement because the houses and foods are still cheap, relatively. Not sure if it was the fuel hike effect but the journey was exceptionally smooth along the PLUS highway.

We tried Dim Sum at Fu-shan restaurant because it was highly recommended although some said the best is still at Ming Court. All the tables were almost full when we reached there at about 10:30am. Frankly there’s nothing to shout about but then I was comparing with Dim Sum from Concorde Hotel’s Xin Cuisine (I missed the Dim Sum Sifu who has since left Xin Cuisine). It could be that we were late but there were not many Dim Sum varieties left at Fu-Shan. The stuffings were quite generous and fresh but taste wise it was only so-so – maybe they changed their chefs or the fuel hike has indirectly affect it. Not satisfied we went to whack some birds, salted chicken to be precise. Not sure if they used kampong chicken because it was such a small bird but the herbs and spices stuffed plus the aroma made us hungry again.

Long story short we decided to push some western foods into our stomachs to stop our giant’s appetite and ended up with a dozen donuts instead, from Big Apple. Anyway, let’s stop talking about food because it only makes you hungry and that means you can’t save money for the fuel. Dow Jones plunged 220 points last Friday to below psychology level of 12,000. It’s still too early to say good-bye to 12,000 and the next couple of trading sessions would provide clearer direction if the U.S. is indeed heading for the worse. With or without Saudi Arabia’s increase in oil production, investors were running wild and scare of interest rate hike thanks to inflation. Although not many expect the Feds would do so (raise interest rate) until the fall or early next year, almost all believe the chances of Feds lowering rates is almost zero.

Locally, all the eyes are set on Bank Negara (Central Bank) but it appears the central bank’s governor Zeti might not be able to have a free hand in deciding the OPR (overnight policy rate) with the joker Second Finance Minister Nor Mohamed Yakcop around flexing his muscle. However for once I agreed with this guy who admitted that raising interest rate works only during “real” inflation whereby prices skyrocket due to increases consumption. It’s true that during such time when the prices of goods were caused mainly due to cost-pull factor (he dare not mentioned the recent fuel hike), any interest rate hike would only worsen the situation. Can you imagine your bank suddenly decides to slap you with higher interest rate on your existing housing loan? Provided you had chosen a fixed rate option, chances are your wallet could further drains you up on top of higher fuel hike, foods, entertainments, tyres, spare parts and almost 99% of other stuffs.

But the hottest news was the mind-boggling statutory declaration (signed at the Kuala Lumpur High Court on Wednesday) by RPK that the wife of Deputy Prime Minister, Rosmah Mansor, was among three individuals who were present when Altantuya was murdered on October 19, 2006. RPK claimed the other two individuals as one acting colonel Aziz Buyong, who is described as ‘a C4 expert’ and the latter’s wife, known only as Norhayati. RPK also claimed that apart from PM Abdullah and Khairy who have been given a copy of the military intelligence’s report, one of the Sultans (Malay Rulers) has also been briefed about the matter and is fully aware of the allegation. Wow! Now this is what I called “explosive revelation”. It appeared instead of waiting for the trial-day, RPK chose to strike and attack like a snake hoping to paralyse the Deputy PM. Damn! I can swear you can sell the whole plot to FOX Broadcasting Company for the next season of 24 and make good money out of it. And suddenly you hear and read all the analysts scrambled to declare the stock market is officially affected by political concerns. Heck, where are those earlier “Buy” calls from the stockbrokers?

Other Articles That May Interest You …

• Ten years after 1997 Crisis, another Window of Opportunity?
• Malaysia to have new PM – who is the faster runner?
• Stocks to remain volatile, political landscape is instable
• The King’s Consent Untold Story – watch 24 series

Friday, June 20, 2008

POS Malaysia, New Scandal after Transmile Irregularities?

Seriously if not for the name Robert Kuok, Transmile Group Berhad (KLSE:TRANMIL, stock-code 7000) could turn to penny stock today – name speaks volume. Despite huge debts amounting to RM535.8 million thanks to accounting irregularities discovered about a year ago, the tycoon continues to hold on. Rumors had been flying around for some time that Robert Kuok might take the company private but it won’t be so easy with the half a billion debts. The former Chairman, former MCA President Ling Liong Sik, just packed up and leave through the main door quietly. He didn’t even bother to clarify the scandal during shareholders’ meeting (AGM) causing the shareholders running mad over the whole incident.

Yes, the scandal erupted about a year ago and so far it is business as usual. A couple of top guns were charged but all the heads are still intact. Chances are high that the case might be dragged until everyone forgets the whole episode, until the next scandal emerges. Now talk about the next scandal, it appeared that while Transmile was busy convincing the lenders to accept the 243.8 million new shares priced at RM2.20 apiece, Transmile shareholder Pos Malaysia & Services Holdings (KLSE: POSHLDG, stock-code 4634) might be courting a new scandal on its own. Your dog or cat would tell you that the huge new shares would dilute the floating shares and hence the stock price would be affected so invest at your own risk.

Pos Malaysia has decided to hold on to its 14.99 percent stake in Transmile but will review its air cargo arrangement with Transmile when the contract expires end of March 2009. But there’re bigger problems brewing inside Pos Malaysia. The company saw its chairman (Adam Kadir) and managing director (Idrose Mohamed) resigned over speculations that there’reirregularities in land sales and award of contracts. Obviously if there were indeed such irregularities, Khazanah Nasional Berhad which holds 32.2 per cent of Pos Malaysia was not amused at all which lead to the probe by Anti-Corruption Agency at its office on Wednesday.

While everybody knows about the story behind Transmile, the second contract given to another air cargo firms raised some eyebrows. The company mentioned was Gading Sari Aviation Services Sdn Bhd, a helicopter rental company owned by royal family of Pahang. RPK claimed that Gading Sari Aviation Services which is owned by Tengku Abdullah, the son of the Sultan of Pahang does not even own any aircraft but strangely managed to secure the contract from Pos Malaysia. The juice of the scandal was that despite the contract being terminated on 31 Mar 2008 someone with great power forced Pos Malaysia to reinstate the contract. And guess who made that call? It was none other than someone from the Deputy Prime Minister’s office.

But was it true that Gading Sari Aviation Services does not own any aircraft at all? In Jan 2007, news broke that a cargo aircraft from Kuala Lumpur crash-landed at Kuching International Airport. The Boeing 737-200 aircraft was reported to be belonging to Gading Sari Aviation Services Sdn Bhd. So did RPK miss something here? Maybe since then, the company has disposed the remaining aircraft(s) and ended up with toy-planes *grin*. Anyway something else could happen soon because there were already such reports / complaints.

You might have heard cases whereby motorists who went to claim their RM625 cash rebate was shocked to find out that their money has been cashed out by unknown people (ghost riders?). With speculation that RM1 billion was passed to the hand of Pos Malaysia for the rebate system, it’s a matter of time before those greedy eyes were rolling with dollar-sign. One thing leads to another and before you could spell your name you might hear another scandal, not that “scandal” is something abnormal in this country.

Other Articles That May Interest You …

• Transmile’s sudden Spring to Life, what’s in the pot?
• No fees but shareholders fuming Ling Chicken Out
• Learn from Mistakes - better days ahead for Transmile
• Ling Liong Sik Resigned (or Fired?) from Transmile
• Married-Deal - A Defect in Stock Transaction
• A case of Little Crime overshadows Big Crime
• TRANSMILE in Loss since 2005, Lower 2004 Profit

Thursday, June 19, 2008

Ten years after 1997 Crisis, another Window of Opportunity?

After the recent 12th general election on 8th Mar 2008 that saw the once giant National Front (Barisan Nasional) tumbled without knowing what hit them, I’ve wrote that the political landscape has changed and one should really take this into consideration before commit any more money into the stock market. Of course I also wrote that I would definitely consider Sime Darby for RM5.00 a share, Maybank for RM3.00 a share, Berjaya Toto for RM2.00 a share, Public Bank for RM5.00 a share and DIGI.com for RM5.00 a share – if only these stocks fall to such mouth-watering level. But it never did, at least not yet.

And many readers were smiling and giggling at my target prices (above). Yeah, I just plucked it from the sky *grin* but was the number realistic? Hmm, if my memory serves me right Maybank’s share price plunged lower than that during 1997 Asis Crisis. Even then, the largest lender which was founded by Malaysian business tycoon Khoo Teck Puat with a few partners failed to attract buyers. What you saw was consistent selling and the more former premier Mahathir whacked currency speculators, the more punches were thrown at the stock. So was there any difference back then and now?

Slightly more than 10-years ago, nobody believes the 1997 Asia Crisis could spread to such a magnitude. Majority of stock investors or traders were badly burnt simply because they did not or refused to believe it was the end of the Super Bull Run which started in 1993. We can debate until the cows come home if the economy impact of 1997 Asia Crisis could match the current political crisis in Malaysia. You might argue that the 1997 crisis was a global one while current 2008 political crisis is a domestic issue but you have to add in the spices of global oil crisis, global food shortage, U.S. economic crisis and so on. Mix all these ingredients together and you’re looking at a possible new problem never seen in the history of the nation before, the same way we didn’t expect the 1993 Super Bull Run and 1997 Economic Crisis to happen (to such magnitude) back then.

If today’s 16-points drop in the KLSE is any indicator to goes by, chances are high that such plunge is only the tip of the iceberg if the second wave of politic tsunami is coming soon. To borrow a statement from Second Finance Minister Nor Yakcop who said SAPP’s latest move is irrelevant because it was just a small party, you can imagine how KLSE will performs should bigger parties such as PBS (Parti Bersatu Sabah) and UPKO (United Pasokmomogun Kadazandusun Murut Organisation) decide to dance to SAPP’s tune. Together, SAPP, PBS and UPKO could pull 9 Parliamentary seats out of ruling government BN. However SAPP has no intention of hitting PM Abdullah Badawi under the belt. A vote of no confidence is enough to send psychological blow to the PM who is perceived to be the weakest PM the country ever had.

It’s hard to blame Sabahan after years of requests for autonomy such as 20% oil royalties and problems of illegal immigrants fall on deaf ears. From one of the richest state Sabah now is the poorest state despite huge resources such as timbers and black gold which were systematically squandered and plundered. It appeared the federal government does not have any intention to solve the estimated 2 million of illegal immigrants from Philippines and Indonesia with more than half of them hold Malaysian identity cards thus enjoying all the rights of citizenship including voting rights.

Neverthless one cannot discount the possibility that SAPP’s latest stand was just a bait to flush out potential traitors within the ruling government. The latest BN supreme council meeting (reported by MalaysiaKini) decided not to take any action against SAPP, for now. Either the whole episode was another drama or the government cannot afford the domino effect of other Sabahan parties take the same route. Whatever it is, the stock market will continue to be gloomy. This could be the window of opportunity to buy cheap stocks since 1997 crisis – provided you’ve the cash. Meanwhile just enjoy the show with popcorns and coke.

Other Articles That May Interest You … 

• The law of Gravity works either in Stocks or Politics
• RM625 Rebate to be scrapped soon? Flip-Flop is Contagious

Wednesday, June 18, 2008

The law of Gravity works either in Stocks or Politics

Guess the law has been proven right again – whatever goes up must comes down and vice versa. This does not applies only to stock investing or option trading but also to other fields such as politics and lifes. You experience ups and downs throughout the journey of your life and so the end of the political game could be on the horizon for Malaysia Prime Minister. SAPP (Sabah Progressive Party), one of the component parties in the once mighty BN (National Front) has finally announced that it has lost confidence in Prime Minister Datuk Seri Abdullah Ahmad Badawi.

Short of quitting the front, it was perhaps the best way to get the party kicked out instead of pulling out and risk being labeled a traitor. With only two Members of Parliaments and four state representatives, SAPP started the ball-rolling and could lead the way to form bigger independent group(s) with the option of joining the opposition Pakatan Rakyat (People’s Alliance). Anwar could be telling the truth after all (about forming the next new government) but it could also due to an articlethat exposed the hidden RM3 billion (in RM500 and RM1,000 notes) which were smuggled out of the country more than 10 years ago by none other than former Finance Minister Daim Zainuddin. But would the motion be allowed in the Parliament in the first place?

Anyway, it was fun to see how the local stock market took the beating today. And talk about Isaac Newton’s law of gravity it appeared Apple Inc. (Nasdaq: AAPL,stock) has reverse the selling pressure due to rumors on Steve Jobs’ health. Morgan Stanley raised its price target on Apple Inc. shares to $210 from $185, saying it expects the company's iPhone unit sales to double in 2009 at the new $199 price point. Morgan Stanley further said it expects 27 million iPhones to be sold in calendar year 2009 with average revenue of $550 per unit.

Regardless of criticisms that the lower prices of new 3G iPhone would slash Apple’s own profits, Steve cleverly took the game to another level – volume game. People were grumbling that “owning” the $199 to $299 iPhone was actually more expensive because of the new two-year contract required from AT&T but it’s not yet clear if the same rule will applies in other countries. I asked Maxis the other day if they support or have any schedules to support iPhone to which the answer for both questions was “No”. Of course come this July, the cheaper iPhone will be available in 70 countries excluding Malaysia. You can crack it to work with current local GSM network but I wouldn’t want to take the risk as I’m sure I wouldn’t be able to sleep if my iPhone decides to malfunction.

With $199 to $299 Steve Jobs had literally declared war with competitors in a big wave. While Apple grabbed handset share from rivals Research In Motion Limited (Nasdaq: RIMM, stock), AT&T Inc. (NYSE: T, stock) is giving its competitor such as Verizon Wireless and Sprint Nextel a run for their money. Already there’re speculations that other carriers might lower service costs by as much as 40% in the second half of the year – hoping to retain customers from industry’s onslaught as well as the escalating cost of gas. Stock-wise, it would be interesting to see if AAPL could breach the $184 again after the recent panic sell-off.

Other Articles That May Interest You …

• AAPL stock down, Jobs’s health problem? Just a bug
• It’s 3G iPhone with GPS and $200 cheaper but old model
• AAPL breached $184 with second hurdle at $192

Tuesday, June 17, 2008

Tales of Corporates’ Compensation, do GLCs qualified?

Remember the advices from your mum and dad when you were a kid that you should study hard in order to get a good job? Assuming most of the readers are not above 50-years-old, you might laugh at the older advises to get a job with a bank because basically it was a job synonym with golden-bowl – meaning your job was secured for the rest of your life. At the current age however it was no longer adequate to get a job, let alone hope to secure one simply becausejob security has long joined the T-Rex as the extinct-species.

If you want to become rich but would not roam outside of “Employee” quadrant, then the only option is to sit on the very top of corporate hierarchy. The supply is scarce so you need to fight for it, play lots of politic, polish many pairs of shoes, pray for lucks and forget about self-dignity. It’s a dog-eat-dog world out there so to be at the right place at the right time and to rub the right shoulders are the key to success. Khazanah Nasional Bhd, the government investment arm, has confirmed the rumors by several blogs when it come out in defence of the proposed salary hike for top officials in government-linked companies (GLCs) today.

Referring to Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) the top officials were said to be given hefty salary increases (up to 100 percent?) in times of economic chaos due to recent 40.6% fuel hike and 18% - 26% electricity hike for homes and business users respectively. The subject of compensation or salary reviews is generally very subjective. For example most of the CEOs from oil and energy industry got their raises last year bigger than in other industries and judging by the current oil prices ($139.89 on June 16), this bunch of lucky fellows would again experience another round of windfalls this year.

According to a study by research firm Equilar the median total compensation of 12 CEOs at the largest U.S.-based, publicly traded oil companies, increased by more than four times the rate of that of executives in the Standard & Poor's 500-stock index as a whole. For the U.S. companies in the study, total compensation includes base salary, bonus, stock options etc. Topping the list of non-U.S. executives was Chairman John C.S. Lau of Canada's Husky Energy Inc. (TSE:HSE), who was awarded $26.25 million in 2007, up from just $4.25 million in 2006. However analysts say these CEOs are receiving pay raises based more on factors they don't control such as skyrocketing oil prices than on managerial skills.

It’s true that these CEOs are reaping tens of millions of dollars each year easily mainly due to escalating oil prices – a classic example of being at the right place (or industry) at the right time with lots of lucks. So, using the same argument shall we conclude that the top officials from TENAGA should be accorded the same salary raises? First of all the oil CEOs cannot control the spiralling oil prices butTENAGA can choose not to cry like a baby asking for tariff hike in the first place. How hard could it be to sit on the TENAGA CEO’s chair when the task is to increase company’s profit by asking for candies from papa (government) all the time?

Secondly, judging by how the utility company squeezes your grapes to dry only to pass the juices back to IPP (independent power producers) goes to show TENAGA would have a very long journey before it can settle its’ long-term loan. And to think that Bakun Dam project would push more un-use electricity into TENAGA’s throat despite current utilization of only roughly 50 percent is simply perplexing. Do we really need an army of workers fixing a bulb on the street? I bet even by slapping the windfall tax on IPPs, these IPPs are still smiling all their ways to the bank. So, when Khazanah managing director Azman Mokhtar said the salary increses were performance-based, incentive-driven and self-funding but not taken (money) away from anybody; you can’t help but to think if this is the remaining intellectuals talking from their brains.

Other Articles That May Interest You …

• RM625 Rebate to be scrapped soon? Flip-Flop is Contagious
• Windfall Tax - why Discriminate and Petronas not in?
• Could the country pushed to the brink of Recession?

Monday, June 16, 2008

RM625 Rebate to be scrapped soon? Flip-Flop is Contagious

Did you enjoy the Father’s Day yesterday? Strangely I found that most restaurants are not as packed as during Mother’s Day celebration. Guess the labour pain makes the difference although with the current escalating cost of living, thanks to the “competent” government we have now, the fathers’ effort in shouldering the burdens of putting foods on the table are equally painful. While I was savouring my meals yesterday, I can’t help but overheard a conversation from table next to us.

An older guy asked another young chap (presumably his brother) whether he has collected the RM625 to which the young chap replied no. The young chap then raised his voice and ridiculed those people who were rushing to the post-office for the money. He said that these people were so stupid to queue for hours when in fact everybody has abundance of time to do so (till Mar 31 2009). The older guy was obviously offended; smacked the young chap’s head and ask him “How do you know the government will not change the policy before then? What are you gonna do if the government announces the whole thing will be scrapped?” The young chap just replied “I hope they won’t.” I just grinned and continue with my butter-crap.

So, you see it was a proposition that people can never win. The government was damn sure they could save RM13.7 billion from the fuel hike. As long as the fuel pumps say RM2.70 a liter for petrol and RM2.58 a liter for diesel, the government can pretty sure confirmed the RM13.7 billion would be in their pocket. Whether they would use this RM13.7 billion or only RM13.7 million for the welfare of the people is totally beyond your control. On the other hand not all the people will get to dry the money stashed inside the post-office because there’re still someignorant people who thought the RM625 rebate is “guaranteed”. It’s not easy for a newbie to make RM625 profit investing stocks during current climate, let alone to earn such interest from the bank within a year period in fixed-deposit etc. Hence the government wins again from this pool of naive people. You mean you’re so loaded that you do not wish to claim “your money” for now?

You might scream why so “kiasu” or “kiasi” or whatever but if you care to read the newspaper today, I bet you couldn’t smile anymore. Barely two days after people flocking to the 683 post offices claiming their rebate the government is now considering fuel card plan to “improve” subsidy rebate system. Of course to use the word “replace” would sparks new criticism and mad rush to the post-offices thus the word “improve”. It was reported that the Government is looking at adopting a system whereby motorists can buy a fixed amount of subsidised fuel each month and pay for the rest at market rate.

The new flip-flop Domestic Trade and Consumer Affairs Minister Shahrir Samad said the fuel subsidy rebate system would be fine-tuned for the convenience of the people. He said the present cash rebate system was not the perfect long-term solution using the crowds of people rushing to collect their rebates as an excuse. Here’s the keyword he said “We don’t know whether it will be continued or not”. First of all, what do you expect the people to do Mr Minister when the public do not trust even the highest decision maker, Prime Minister, himself? Secondly to blame it on rushing crowds is tantamount to slap government’s own face – another proof that the government does not possess proper planning and execution skills despite 50 years administering the country. Thirdly, the flip-flop mentality is slowly but surely infecting the rest of the ministers. Boy! This disease is highly contagious! If post-offices cannot handle the crowds, then get the banks to do the job, period.

Now, if the government indeed is planning to change the rebate system again, what can the public expect to see? Somehow the government found out that to pay a one-off RM625 per vehicle is eating into their flesh (or rather the coffers). So by implementing something similar to fleet card system, the government is giving out only one-twelth of the RM625 per month for the next twelve months – RM52 (RM625 divided 12 months) in the form of a card. With this card, you can pump roughly RM52 or 67 liters of petrol per month at the rate of RM1.92 per liter (old rate). Beyond RM52, you’ve to buy petrol at market rate which is RM2.70 a liter (presumably the rate stays). Do you fancy such system or prefer to get the RM625 cash instead?

When everyone was speculating that Gerakan would leave BN (National Front), opposition de-facto leader Anwar Ibrahim dropped a bombshell when he was picked by Malaysiakini that it is MCA MPs who will defect after all. Former premier Mahathir also dropped another bombshell that PM Abdullah Badawi inherited RM1.4 billion (only?) from him, hoping such statement would pressure Badawi to explain the treasure whereabouts. Political landscape is gaining momentum and with months to go before the D-Day, all the eyes are on Anwar. Have you take a look at the low daily transaction volume in the Kuala Lumpur Stock Exchange? Basically everyone is running away with their cash and there’s no reason for you not to do the same – either from the stocks (if profitable) or RM625 cash rebate. How I wish tomorrow is 1st July 2008.

Other Articles That May Interest You …

• It’s Wise to Claim your RM625 Rebate Soonest Possible
• Still steamy hot with fuel hike? Why not kick Badawi’s arse?
• Windfall Tax - why Discriminate and Petronas not in?
• Smart people become Jokers after joining BN, how come?

Sunday, June 15, 2008

It’s Wise to Claim your RM625 Rebate Soonest Possible

As I was renewing my road-tax and insurance today, I noticed that the staffs were busy chatting and explaining to their customers about the hottest news of the day – claiming the RM625 cash rebate for cars below 2000cc. Indeed it was the busiest day in the history of local post offices nationwide. Although the 683 post offices would continue to disburse the hard-cash for eligible vehicle owners from today (Saturday, being the first day) till Mar 31 2009, obviously people were not taking chances.

So, while I was checking the quotation for my renewal I asked the staff / officer how could I claim my rebate (RM625), just to double-confirm in case the procedure contains silly requirements such as to bring my dead grandfather along to prove I’m not a permanent resident *grin*. A lady who sat next to me heard what I asked and immediately offered her expertise. She was so eager to offer what she knew, so much so I can see the sparkle in her eyes. She told me all you need to bring is your Identification Card (I/C) and your thumb-print hence don’t leave your fingers at home. Fill up a form, wait for a while and you should get your lovely cash. You can opt to have the money (order) sent via postal to your address but who would be so dumb to choose such method right?

By now the lady was so excited about the whole rebate thing I can swear she could continue for another 5 hours but it’s nice to hear what people on the ground was thinking about this whole fuel-hike-rebate program. She advised me not to claim the rebate today as almost all the post offices are stuck with people. Boy! Malaysians who are known to do things last-minute have suddenly change for the better. If today is the last-day for income-tax submission then I would understand why everybody was flocking to their nearest IRD. But then who can blame them considering the current political landscape. Anything can change within 24 hours and you don’t wanna bet your RM625 on the table that the flip-flop Abdullah Badawi will not wake up one morning and yell “I think I’ve to stop this rebate”.

That was exactly what this lady was telling me – best to take the money soonest possible. This reminds me of a practice in stock investing or option trading – during uncertainties, it’s wise to lock-in profit or to take the money off the table and run. It makes perfect sense since it’s not everyday that you get to claim such rebate. The lady continued to lecture me that an individual can claims (rebate) up to five vehicles. I asked her if she knows whether this rebate is a one-time off thing or it’s an annual event. She seemed caught for a while and admitted she wasn’t sure but she heard it could be either. So, while everyone was happily collecting the RM625 rebate not many know if this wonderful event can be repeated next year. And that’s precisely why people started queuing as early as 7 a.m. today. It was reported that about RM116 million were successfully distributed today. I hope the post offices have enough security guards as that would means each post office is practically an ATM machine with an average RM170,000 of cash stashed inside.

In fact, it is advisable to download the form here, fill it up and bring it to the post office to save your time. The server is either loaded with people downloading the form or the web server itself was already sucks from day one because it was freaking slow. However I’ve captured the screen shot from Pos Malaysia on a sample of how you should fill the form. Go to the nearest post office, preferably during weekday, as soon as possible and get the money. A bird in the hand is better than two in the bush. So it’s better to have the RM625 in your pocket than to leave it in the government’s hand.

Other Articles That May Interest You …

• Still steamy hot with fuel hike? Why not kick Badawi’s arse?
• Windfall Tax - why Discriminate and Petronas not in?
• Could the country pushed to the brink of Recession?
• Fuel hike from RM1.92 to RM2.70, Char-Kuey-Teow RM7.50?

Friday, June 13, 2008

AAPL stock down, Jobs’s health problem? Just a bug

After Google offer the oxygen tank to Yahoo Inc. in order to cut off Microsoft from acquiring the latter, Yahoo is like a drug addict who has nowhere else to go but back to Google for the fix. Now that Microsoft is off from the deal, Yahoo is firefighting at its own backyard – rebellion among its own shareholders. The last effort to beg Microsoft to return to negotiation table hoping to get back the $33 a share offer failed. Yahoo thus has no other choice but to let Google handle some of its advertising sales announced Thursday.

However the extra $800 million annual revenue from Yahoo-Google partnership was not enough to pacify shareholders. The antitrust concerns might prevent such partnership so Yahoo is really in the limbo. Without doubt the person whom many shareholders are pointing their fingers at now is Jerry Yang who was accused for letting his emotional attachment blur his judgment during the Microsoft negotiations (Jerry Yang demanded $37 that forced Ballmer to back-off completely).

It’s almost no-brainer that given the option, it’s obvious the choice is on Google’s stock instead of Yahoo – the shares plunged $2.63, or 10.1 percent, to finish Thursday at $23.52. While it was a bullish day for Dow Jones, it was a gloomy day for Apple Inc. I bet you were scratching your head why the stock plunged for no apparent reason. It couldn’t be due to the announcement by Steve Jobs that there won’t be any new model for iPhone. The stock did drop but rebounced thereafter since investors found consolation that the price-slash would make up for the volume.

The culprit was the rumors that Apple’s ultimate captain Steve Jobs is having health problemalthough his past (four years ago) pancreatic cancer had been treated. Steve is largely viewed as irreplaceable at Apple and a slight rumor could spell doom to the stock. During Monday's WWDC keynote presentation, Jobs was spotted looking rather thin thus ignited the rumors. The Wall Street Journal picked the story up and things snowballed thereafter. An Apple spokeswoman was quick to clarify that Jobs was hit with a “common bug” in recent weeks and is taking antibiotics but he still felt it was important to participate in the Apple conference.

That’s the problem with a company dependent solely on a single key individual. So it was natural for the stock to be punished and shed some 4 percent from its previous close. The stock should be able to climb back in no time – that’s if majority choose to think it was not such a big hoo-haa after all. 

Other Articles That May Interest You … 

• It’s 3G iPhone with GPS and $200 cheaper but old model

Thursday, June 12, 2008

No further fuel hike for 2008 yet nobody rejoicing?

Wall Street tumbled more than 200 points to its lowest close since mid-March thanks to surging oil prices which was traded as high as $138.30 a barrel on the New York Mercantile Exchange. The culprit – U.S. Energy Department data Wednesday showed that gasoline supplies grew last week but that crude oil inventories fell more than analysts expected – a sign that U.S. energy demand is still growing despite more than $4 a gallon gasoline. On the other hand Fed confirmed the economy remains “generally weak”.

Venezuelan President Hugo Chavez says he expects oil prices to keep climbing and predicts they could reach $200 a barrel. Sure, he blamed it on the falling U.S. dollar, U.S. continuous threat to bombard Iran and U.S. own bad management on economy except himself. As the fifth largest oil supplier to the U.S. Chavez could scream as loud as he likes but maybe he should helps to convince the OPEC members to increase production. In practice they don’t really have to increase the output but merely a statement will surely helps to bring down the oil prices.

It’s hard to hate Chavez although he seemed to have the vocal voice comparable to former premier Mahathir in condemning the West especially U.S. He’s an angel when you talk about fuel price. In fact Venezuela is perhaps one of the cheapest, if not the cheapest, countries that you could get your fuel at RM0.16 a liter.Malaysia’s latest hike of 78 sen or 40.6 percent a liter has pushed up the country onto the world map as perhaps the most expensive amongst the oil producing countries.

Very few rejoice after the government announced that there will be no further increase to the price of fuel in the country this year even if the global price of oil reaches US$200 (RM654) per barrel. Perhaps the PM was worried more and more people are engaging in unhealthy activities in order to change their lifestyles. Cool, license for the global oil prices to shoot above $200 a barrel but then there’s another reason why people didn’t brouhaha now the same way when it was raised. Obviously people are not confident with their flip-flop PM Abdullah Badawi who might just increase the fuel price to RM4.00 anytime armed with the silliest reason you could ever think of. Hence might as well take the announcement with a pinch of salt.
Petronas suggested that the subsidy should be removed completely. I agreed and I’m sure all the people would stop grumbling provided the government enforces the following:

• Since the government likes to compare with Singapore, the government should just increase all our salaries by 3.5 times since that’s how much Singapore’s GDP per capita is compared to Malaysia. I believe you would be very happy to receive monthly salary of RM7,000 from current RM2,000 and I doubt you would demonstrate even if the fuel price increases to RM4.00 a liter.
• Revamp the income tax structure to imitate Singapore’s
• Abolish all the tolls
• Abolish the road tax
• Abolish renewal of driving license
• Abolish import duties on all non Malaysian made car

Last but not least, improve the damn public transportation before recites the same old expired excuses again. What happened to the billions of dollars saved from the previous 30 sen a liter hike in 2006? Why I’ve a bad feeling that somhow Scomi Coach Sdn Bhd would benefits the most from the so-called transportation system improvement?

Other Articles That May Interest You …

• Still steamy hot with fuel hike? Why not kick Badawi’s arse?
• Windfall Tax - why Discriminate and Petronas not in?
• Could the country pushed to the brink of Recession?
• Fuel hike from RM1.92 to RM2.70, Char-Kuey-Teow RM7.50?

Wednesday, June 11, 2008

Dare to catch falling knife Genting now? It could be cheaper

The talks of selling off its power assets to concentrate and rebrand Genting Group (KLSE: GENTING, stock-code 3182) as the pure casino player has been going around for some time. Singapore would be Genting’s new flagship in its plan to hedge its current hilltop Genting Highland, what more with the current political volatility. Of course this doesn’t mean the new government, should Anwar succeeded in topples existing government, would put a barricade preventing people from going up the hill the same tactic used by Grand Saga.

Political’s potential impact on Genting

In reality, Genting Berhad alone contributed hundreds of millions in taxation to the government. For the financial year ended 2007 alone the company paid a whoppingRM662 million in tax to the nation’s coffer and it would be extremely stupid for the new government to kill the goose that lays golden eggs. But people especially investors are simply nervous with the prospect of PAS, a component of opposition Pakatan Rakyat (People’s Alliance) led by Anwar Ibrahim, which is said to be the kingmaker (hell, there’re so many kingmakers nowadays) would goes berserk and wants the only licensed casino in the country to close for good. Even if PAS could not force its way through (closing casino), a simple proposition from the Islamic Party to convert Genting’s license renewal to monthly basis would spark a major sell-off.

However we wouldn’t know until the time comes and for the time being, let’s focus on Genting stock which has been consistenly plunging since the early of the year 2008. First the support level of RM7.80 was breached and about four months later the support of RM6.40 gave way. Since then all hell breaks loose and it appears the falling knife is having fun without any sight of new support. In fact if you believe in the theory “Buy on Rumors and Sell on News” then you wouldn’t have nightmares because you would have locked in profits after the company won the Singapore’s Sentosa Integrated Resort Project or at least after the share split of 1 into 5. Easier said than done huh? Well that’s the theory but in practice human tends to fall in love in their stocks easily. People would rather divorce their spouse than to say goodbye to their stocks.

When would Genting exit non-gaming business?

Recent speculations that Genting was exiting the power generation failed to excite the stock. Besides Tenaga Nasional Berhad’s (KLSE: TENAGA, stock-code 5347) other interested parties include Malakoff Bhd, Tanjong Plc and Standard Chartered private equity fund. Genting should be able to walk away with at least RM3.3 billion if it decided to let go of its lucrative power assets in Malaysia, China and India. It makes business sense for Genting to focus on its business in Singapore which is chewing up to S$6 billion (RM14.2 billion) after its initial budget skyrocketed by additional S$800 million. Furthermore power business contributed only 6 percent of Genting’s profit.

About a year ago, speculations were circulating that Genting’ may sell its oil palm business entity, Asiatic Development Berhad, with IOI Corp Berhad (KLSE:IOICORP, stock-code 1961) being the acquirer but the rumors evaporated thereafter. I’ve wrote earlier that Genting is not the stock to choose if you’re looking for good dividend yield stock. For the first quarter ended Mar 31, 2008 Genting’snet profit dropped 33% to RM439.4 million from RM656.7 million a year earlier despite a revenue increase of 7% to RM2.16 billion from RM2.02 billion. If not for the plantation business whose pre-tax profit more than doubled to RM133.5 million from RM57.8 million, Genting’s earnings could be worse. Earnings per share fell to 11.87 sen from 17.78 sen. So, Genting’s management is in dilemma as to the plans to exit non-gaming business now.

GIL and Genting Berhad stocks – not yet

People were talking about the shift in focus to its Singapore operation and Genting International Plc (SIN:G13) immediately comes into picture. But do you really need to rush in for the Singapore-listed GIL (Genting International Plc) stock now? Without profit stream from the new casino, GIL is merely penny stock since revenue from UK operations was pathetic. Some research house might forecasted Genting’s net profit for FY2008 and FY2009 to come in at RM1.6 billion and RM1.7 billion respectively but in reality people are worried that more and more money are being transferred from Malaysia to Singapore – for obvious reason.

If Genting were to decide to exit its power and plantation business, majority of the money liquidated would flows back to Singapore’s operation. But before the egg almost hatches, it’s still too early to think about GIL. How about local Genting Berhad itself? You might be mouth-watering that Genting stock is currently trading at multiple of 10.1 times its earnings – a very attractive price indeed. Well, it’s a freefall now and if you’re lucky the stock could stop bleeding at the support level ofRM5.10 but beyond that you might scream “it’s cheaper at RM4.30”.Nevertheless the fact remains that Genting is super-sensitive to current political landscape and with the alternative in Sentosa, Genting had secured a better hedge option.

Other Articles That May Interest You …

• The Richest Malaysians, Robert Kuok scored the perfect 10
• Malaysian Casino King, Lim Goh Tong, passed away at 90
• Chua Ma Yu sets to make Good Money Again
• Which Stocks to Invest - GENTING OR Public Bank?
• Shadow Of Macau Triads Haunting Singapore?
• TOP Reasons Why Genting Agreed To Partner Stanley Ho
• Top Reasons Genting Is A Winner
• Genting International-Star Cruises Consortium Won

Sime Darby Mini-Crisis, Two Fired and Three to Resign

Less than four months into a five-year term, South Korean President’s approval ratings have plunged to new lows with opposition politicians threatening to boycott Parliament. Everything started when Lee decided to remove restrictions on U.S. beef which sparked widespread protests over food safety. Mad cow disease or not, Lee was seen as too eager to please his country’s close ally U.S. hence lifted the ban on U.S. beef imports for the first time since it was re-imposed last year but backfired and opened up a crisis that could threatens a free-trade agreement (FTA) between the two countries.

All the top aides of President Lee have offered to resign to shoulder the blame for a political crisis over US beef import. If not tackled correctly, it’s a matter of time before President Lee’s turn to submit his own resignation. I suppose you can only see such honorable actions in several countries within Asia – South Korea, Japan, India and Australia to name a few. The culture of taking full responsibility by resigning is rather non-existent in country such as Malaysia especially from top corporate figures, what more from politicians. They would rather glue themselves to their comfy chairs or chain themselves to the pillars than resign to take responsibility over their mistakes.

Unless sacked, they would play dumbs. Remember the chairman of Transmile Group Berhad (KLSE: TRANMIL, stock-code 7000) who was fired but claimed he resigned voluntarily? Of course after practically wiped out, certain politicians from the National Front component parties offered to resign but retracted later (old scripts recycled). However there are bunches of expired yet greedy veteran politicians who chained themselves to the Presidents’ chair shamelessly. Anwar pledged to resign if he fails to reduce petrol price after he becomes the new Prime Minister; even if the price of crude oil went above US$200 (RM650) per barrel. Time will tell if he could deliver although he didn’t commit a specific quantum of reduction.

On the corporate side, it appears two top guns were fired – group CFO and Vice President of the world’s largest listed palm oil producer, Sime Darby Berhad (SIME: stock-code 4197). Razidan Ghazalli (group CFO) and Muhammad Mohan Kittu Abdullah (Vice President) were sacked with immediate effect after an inquiry into RM120 million ($36.78 million) of futures trading losses at Golden Jomalina Food Industries (was then a subsidiary of Golden Hope Plantations). Razidan was Golden Hope's finance director while Muhammad was general manager of Jomalina when the losses occurred.

The losses were discovered in August 2007, about9-months after the Super-Merger announcement that saw the merger of Kumpulan Guthrie Berhad, Sime Darby Berhad and Golden Hope Plantations Berhad creating the biggest listed palm oil producer in the world in terms of output and market value under a new company called Synergy Drive. It’s mind-bloggling that immediate stern action was not taken after the discovery but rather after more than six-months until now. Now, the question is would Sime Darby initiate any legal charges on both of them or will both of them walk away free men? Were they allowed to trade the futures in the first place? Can someone tell me that Golden Jomalina Food Industries was in the future trading business?

In an attempt to cool the situation Sime Darby saidappropriate provisions have been made and the group did not expect any impact on its future profitability. The story has not ended and now it seems rumors are circulating that Sime Darby's plantations integration adviser, Datuk Sabri Ahmad, formerly group chief executive of Golden Hope also opted to resign from the group together with Dr Anhar Suki (Head Engineering Services) and Azmir Yahya. Looking at the top guns involved, was there any more hidden story behind this transaction besides what was reported? Were they made the scapegoats of a decision agreed collectively? No matter what RM120 million is no small amount and heads need to roll for the pleasure of investors.

Other Articles That May Interest You … 

• No fees but shareholders fuming Ling Chicken Out
• Ling Liong Sik Resigned (or Fired?) from Transmile
• The Composite Index, Plantation Stocks and the Wolf
• Plantation Merger & Acquisition Heating Up
• Guthrie, Sime, Golden-Hope Shareholders Under-Offered

Tuesday, June 10, 2008

It’s 3G iPhone with GPS and $200 cheaper but old model

Steve Jobs unveils the new iPhone - $200 cheaper with 3G and GPS minus the videoconferencing. The rumors of a newer iPhone model also failed to materialize. The 16GB and 8GB model now will only cost you $299 and $199 respectively which will go on sale July 11 2008. This is enough to thrill smartphone fanatics especially when the 16GB is only RM956 (assuming US$1 = RM3.20) while the 8GB, RM636. With all the features and the branding of carrying one around, it would be a sin not to own one.

Now that iPhone support satellite navigation and faster Internet access, Steve Jobs’ initial hope to hit the company's target of selling 10 million iPhones by the end of 2008 could comes true after all. Apple Inc.’s (Nasdaq: AAPL, stock) Chief Executive said Apple has sold 6 million iPhones since the first model launched nearly a year ago and 700,000 since March. However that was not enough to satisfy investors when Apple shares fell $4.03, or 2.2 percent, to close Monday at $181.61 with many were seen taking their profits after a four-month run-up in Apple's stock price.

iPhone 3G supports Microsoft Exchange ActiveSync right out of the box, runs the incredible third party apps created with the iPhone SDK, and will be available in more than 70 countries around the world this year. The iPhone 2.0 software include the ability to do real-time mapping and track your progress with GPS technology, delete multiple email messages, search for contacts, new scientific calculator, turn on parental control restrictions for specified content, save images directly from a web page or email them to your iPhone and easily transfer them back to your photo library on your Mac or PC.

AT&T Inc., the exclusive U.S. carrier for the iPhone, said service for it will start at $39.99 per month, plus $30 for unlimited data - a $10 increase over the cheapest EDGE-only plan for the first-generation iPhone plus you need to sign a new two-year plan. The iPhone 3G is about 0.02 inches thicker and about 0.1 ounce lighter than its predecessor. You now can choose either glossy black or white backing but owners of the first generation iPhone sweared they preferred the old brushed-metal finish which was scratch-proof.

The new iPhone also claimed to be able to delivers 5 hours of talk time using 3G (calls and data use, compared to voice-only over EDGE), along with 7 hours of video and 24 hours of music. As for 3G Jobs said that the iPhone turns GPS off automatically when it's not in use so as not to drain the battery. Hmm, that would be nice since your boss would not be able to track you down. I’ll definitely gonna get hold of this babe once it’s available here.