Make Money Online: 2006-12-28

Tuesday, December 26, 2006

Brokers Are Equally Confuse With Short-Selling Procedures

Do you understand the rules pertaining to the soon to be available short-selling of 70 stocks identified by Bursa Malaysia (Kuala Lumpur Stock Exchange) announced (after several postponements) recently? Frankly, I DON'T and neither do my broker (there were "Errr ...", "I think ...", "Actually ...", "Hmm ..." etc when I asked my broker today).

Below are some information from Business Times, which I would categorize as generic info:

(1) What are Approved Securities for RSS?

The Approved Securities for the re-introduction of RSS consists of 70 stocks on the main board based on the criteria set. Goto here to refer the 70 stocks identified: Stocks You Need To Know For Short-Selling

(2) Will this list of Approved Securities change?

Yes, the list of Approved Securities will be reviewed approximately every six months i.e. June and December.

(3) What are the criteria for the selection of RSS Approved Securities?

Securities which must satisfy all the following criteria:
** Average daily market capitalization of more than RM500 million for the past three months;
** At least 50 million shares in public float;
** Average monthly volume traded of more than 1 million units for the past 12 calendar months.
** However, Bursa may not declare a securities as Approved Securities notwithstanding that it fulfills the criteria above.

(4) What are the new features of RSS?

Feature-1: The Up-tick Rule whereby RSS orders can only be keyed in at a price greater than the last traded price
Feature-2: RSS orders must be executed through designated RSS Trading Accounts
Feature-3: Gross short transactions are limited to 10 per cent of the total number of listed shares of a particular Approved Securities.
Why set the 10 percent limit? I understand the reason behind this but it should be un-limited if the exchange is serious about making this short-selling a mature instrument in the market.

(5) What happens when the 10 per cent limit is reached?

RSS activities for a particular Approved Security for RSS will be suspended for four market days from the day the limit is reached. Normal trades for the particular security will continue.
It must be joking on this - do you think the market will collapse with the limited 10% shares being shorted at the first place? If the speculators indeed have intention to pull their investment out, a combination of selling their portfolio and consistently short the index-linked counters one after another will do the trick. Let's get real.

(6) What happens to orders already entered prior to the above suspension?

Orders already entered will be matched in full unless withdrawn by the broker. The 10 per cent limit is a trigger point to commence action to suspend RSS activities.

(7) What do investors need to do if they are interested to short-sell any of the RSS Approved Securities?

Investors interested to short-sell any of the RSS Approved Securities would need to open a designated RSS trading account with their brokers.
All trades have to be executed via this designated RSS trading account.
Before any short-selling orders can be executed, investors must provide a confirmation to the broker:
(i) that they are not an associate pursuant to section 3 of the Securities Industry act 1983, and
(ii) that they have borrowed the RSS Approved Securities or have procured confirmation from an Authorized SBL Participant that RSS Approved Securities are available for borrowing.
How do you go about borrow these shares for short? Do I have to pay any fees to borrow this shares? How much do I have to pay then? My broker is confuse and not sure himself about this part, to him there's only one word - TROUBLESOME.

(8) Participating Organizations (POs) have the obligation to obtain confirmation from the client as stated under the previous question. Would a verbal confirmation be sufficient?

Yes, verbal confirmation is permitted provided that the verbal confirmation is taped. Therefore, if a Participating Organization allows verbal confirmation, it must put in place phone taping system to record such verbal confirmation.

(9) Can an investor borrow securities and do RSS at different POs?

(10) Will the RSS screen accept a sell order using a non-RSS trading account?

(11) Are purchases allowed in an RSS Trading Account?

Yes, purchases are allowed in an RSS trading account provided it is executed after the execution of any RSS of an approved securities for the following purposes:
(i) For a contra either in full or partially, the RSS trade provided such a contra is executed on the same market day of the RSS of an approved security;
(ii) For the return of the borrowed securities
Purchases shall not exceed the total amount of net short positions of the approved securities on a market day

(12) Can a client sell overbought securities in the RSS account?

Yes, provided the overbought position of the securities arose from a mistake and the sale is subsequently reported by the Executive Director Dealing to the Exchange with explanation on how the mistake arose.

# TIP: If you understand the complete procedure of the short-selling, I would appreciate very much if you can share/comment your knowledge here.

# TIP: I would rather wait to see how the authorities will solve problem(s) which might arise from this new short-selling instrument. I just hope more information can be published for investors' digestion - talk about getting Malaysia Stock Exchange on the global presence.

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Why Options Trading Is A Great Leveraging Tool?

The moment we (you and me) know what is money, how to count it and the power of money, we all wish we have more of it - in fact lots of it so that we can buy whatever we wish to have. Ever dreamt of how you can print it yourself when you were kids? I did. But the moment I was made to wash my dad's car to earn pennies (boy! it was hard work though as a kid I enjoyed it) I knew it's not easy to earn this piece of note. And when we grew-up we learnt the word "investment" and how we should invest in order to grow our money. And the first thing I learnt was "Stocks" - buy stocks hoping it'll go up in value and sell it to realize the profit/money.

But we never being taught that to buy stock, there's only 1 (one) way you can make money - that's the stock has to go UP. We seldom being taught we can make money shorting the stock as well (human being like being optimistic and bullish somehow gives a good-feel compare to bearish). Furthermore you need to have quite a sum of cash in order to buy stocks. So, stocks were planted into our sub-conscious mind as the first financial instrument to make money. Of course you have other investment means such as properties, unit-trust, currency trading, insurance so on and so forth - but stocks are the preferred one.

For investors with a high level of risk tolerance, options provide great opportunity to use relatively small sums of money to leverage sizable positions. For a fraction of what it would cost to buy large blocks of shares, investors can buy calls (if you think the stock will goes up) giving them the right, but not the obligation, to buy shares at a specific price (strike). But let me warn you, unlike stock, options do not pay cash dividends nor give you the voting rights. The worst thing that can happen is the options may expire worthless - an options buyer risks losing the entire amount plus commission paid.

Options are a great tool for leveraging - for example: a stock which trades at $40 per-share would require $20,000 to buy 500 shares. Using options, you can buy 10 (ten) 40 call contracts at $7. So, for just $7,000 (10 contracts x $7 x 100 shares per contract), you owns the rights to buy 1,000 shares of stock at $40. If the stock price is $60 at expiration, the options will be worth $20 each ($60 - $40) or $20,000 (10 contracts x $20 x 100). You will have a profit of $13,000 on a $7,000 investment.

Stock Price --- Stock Profit (Loss) --- Option Profit (Loss)

$ 20 ----------------> ($10,000) ------------> ($7,000)
$ 30 ----------------> ($ 5,000) -------------> ($7,000)
$ 40 ----------------> $ 0 ---------------------> ($7,000)
$ 50 ----------------> $ 5,000 ---------------> $3,000
$ 60 ----------------> $10,000 --------------> $13,000
$ 70 ----------------> $15,000 --------------> $23,000

In contrast, if you invest in stocks, you will have profit of $10,000 on a $20,000 investment ($60 - $40 x 500 shares). However the risk is high on options trading. If the stock doesn't move, you will lose the entire investment of $7,000 for the $40 calls if it expires. But if you bought the stock instead of option, you lost nothing because you still own the stock (unless the stock's company went bust).

That's the power of LEVERAGING in options trading.

# TIP: Though options trading has the risk of expiry, research and invest in fundamental strong companies together with sufficient time-value are some of the keys to success.

Other Articles That May Interest You ...

Investing The Right Stocks - Earnings
Investing The Right Stocks - Sales Growth
Options Trading : Assignment
Options Trading : Exercise
Options Premium 101
Options Investing 101 : Part 1 / Part 2 / Part 3
History Of Options : Part 1 / Part 2

Hong Kong Beats New York For Second Place

Hong Kong surged past New York this year and became the world's second most popular place, after London for companies to float new stock listings. Hong Kong has raked in HK$307.7 billion, orUS$39.57 billion, in IPOs, nearly twice as much as the HK$165.7 billion raised last year, according to Hong Kong Exchanges & Clearing Ltd.

London (LON : LSE) was the world leader for IPO equity raised, with $48.92 billion raised, according to the World Federation of Exchanges. Hong Kong was second and the New York Stock Exchange lagged back in third with $33.61 billion.

Two main factors which contributed to this are:

Hong Kong is next door to mainland China's booming economy
Tough new U.S. accounting rules discouraged companies from listing in America.

Frederick Ma, secretary for financial services and the treasury said Hong Kong was already benefiting from a new clustering of businesses drawn to the city because of its success in finance. The world's top 70 banks are operating there, he said. In 1995, the city only had 200 chartered financial analysts, but now it has 3,000 - ranking it No. 4 in the world behind the U.S., Canada and Britain.

However, Hong Kong is heavily dependent on listings by mainland Chinese companies which make up nearly 50 percent of the total market capitalization of $1.59 trillion, according to Hong Kong Exchanges & Clearing.

Shanghai is still a minnow compared to Hong Kong, which has average daily turnover of $4.21 billion - 12 times the volume of Shanghai but many believe Hong Kong will lose some of this investment as Chinese firms might decide to float more shares on the Shanghai Stock Exchange in the coming years.

One thing Hong Kong needs to be more aggressive about doing is attracting IPOs by companies that have operations in China but are owned by firms in the U.S., Canada, Germany and other places, said Ronald Arculli, chairman of Hong Kong Exchanges & Clearing.

Sunday, December 24, 2006

Miss Nevada Ask For Second Chance As Christmas Present

Katie Ress, the 22-year old former Miss Nevada USA who was stripped of her crown when party pictures of her hit the internet of which she was stripping off her jeans to show her thong said these were “hurtful and embarassing times”. The pictures were from an “isolated incident from my teenage years” that she considers “one night of poor judgment.”

Late Thursday,21-Dec-2006, Rees was dethroned. “Katie Rees has been relieved of her duties as Miss Nevada USA

2007,” said Paula M. Shugart, president of the Miss Universe Organization, which owns the Miss USA pageant, according to the Associated Press.

"The pictures were disgusting," Miss USA co-owner Donald Trump told Larry King on CNN Thursday night. "These pictures were pretty far out there and that is not representative of Miss USA. We had no choice but to terminate her."

It seems Katie was doing the same underage partying Miss USA Tara Conner did which almost costs her the crown. And now, Katie Rees wants a special Christmas present from Donald Trump: a second chance. I guess Donald Trump does not have much choice but to grant Katie the second chance since the billionaire granted the same wish to Tara Conner or else Donald will be known as the guy who practiced double standard when it comes to beauty queens.

Earlier, Donald Trump announced Miss USA Tara Conner, who had come under criticism amid

rumors she had been frequenting bars while underage, will be allowed to keep her title. "I've always been a believer in second chances,"Trump, who owns the Miss Universe Organization with NBC said. Trump later said Conner would be entering rehab.

Conner won the title in April and has been living in New York. Recent media accounts of heavy drinking brought a storm of criticism since she was underage at the time. In a tear-choked voice, Conner said, "In no way did I think it would be possible for a second chance to be given to me." Turning to Trump, she said, "You'll never know what this means to me, and I swear I will not let you down."

Through The Trump Organization, Donald owns Trump International Hotel & Tower, Trump Tower, 40 Wall Street, Trump Entertainment Resorts (Nasdaq : TRMP), Trump Taj Mahal, Trump Plaza, and Trump Marina. So, will Trump play his card as in "Apprentice" and say it firm on the face of Katie"I'm sorry Katie, but you're FIRED !"

Is Malaysia Ready For A Bigger Magnitude Of Disaster?

It's Christmas Eve and most people (including me of course) are getting ready for the celebration in less than 24 hours. Allow me to take a break from the usual blog on the stocks, option and financial matters as I think the current crisis which hit some parts of the not so-lucky Malaysia should be given coverage (I have not forgotten the Tsunami which killed hundreds of thousands of life in 2004).

Malaysia's worst floods in 37 years have displaced nearly 100,000 people amid food shortages, looting andcriticism of the government's handling of the crisis.Eight people, all in the worst-hit state of Johor, have now died in the floods, which the government described as the worst since 1969.

Malaysian weathermen warned the floods, which hit the southern states, could spread to thecentral and northeastern parts of the country if the unusually heavy monsoon rains persisted.

Lootinghappened in the towns of Kota Tinggi and Segamat of Johor and reportedly has spread to the states of Malacca, Negeri Sembilan and Pahang. There were also cases of rescuers demanding money (the going rate was between 50 and 100 ringgit - $14 and $28) from flood victims before rescuing them.

Flood victim Abu Rashid Maidin said he had to pay a boatman who came around with a boat to rescue his family who had beenstranded for two days. “I told the boatman that my family needed help and my wallet was missing. The boatman even told me that he was giving me a discount as others were willing to pay more,” he said. He had to borrow the money from his neighbor to pay for the 10-minute ride.

Housewife Sandy Lim, 42, claimed that soldiers had asked her neighbor to pay RM 4,000 to rescue her two-year-oldgranddaughter who was trapped along with her babysitter in the attic of a single-storey house in Kampung Abdullah. “How is she to raise RM 4,000 when all the banks are closed?” asked Lim.

Flood victims also complained of lack of food, clothing, blankets and water at many of the relief shelters.

Opposition leaders criticized the government's handling of the crisis, saying relief operations were in complete disarray.

Deputy Prime Ministrer Najib, who is also National Disaster Management and Relief Committee chairman, said so far, assistance had been given in the form of food and equipment when victims were evacuated to relief centers. Earlier Najib said Malaysia does not need international help as the country can manage the situation on its' own.

But with the multiple stories and incidents of victims being left on the roof of their houses for days without help and uniformed government officers demanding money for evacuation, was it the pride that prompted Najib to refuse to ask for help from other countries? Is it true the National Disaster team is in disarray as claimed by opposition? Why only a handful of rescue boats were sent to help out victims?

When there're major disaster erupts in other countries such as Indonesia and Philippine or elsewhere, Malaysia was acting in lighting speed in declaring to the world Malaysia is ready to send rescue team. There were numerous frontline with ministers sending off rescue teams who are so proud with their assignment holding Malaysia flag as if it was getting ready for the Oscar Academy award. Could it be more "glamour" to help others internationally but not so within Malaysia itself?

Could these lives be saved if the National Disaster Management has a proper procedure in execution? Why the military resources are not being used in full-swing (Najib himself is the Defence Minister)? Why does Malaysia need to setup some sort of funds every-time a disaster occurs? Doesn't the government have a ready fund for such disaster?

I'm not against charity or funds to help out victims but there're too many cases where the money contributed by public didn't reach the victims directly - for sure there're money disappeared somewhere, somehow. It was even discussed at Dewan Rakyat on funds misused for the 2004 tsunami and reported in the media. If you wish to donate, I would strongly advice to do sodirectly to hte victims themselves.

In time of disaster, politicians should set aside any agendas and pride but instead move ALL the machineries or resources available (inclusive from external) to save lives as nothing is more previous than the life of a human being regardless of races and ethnics. Nevertheless the question remains - is Malaysia government ready for a bigger nation-wide disaster in future?

# TIP: Get yourselves a list of DO(s) and DON'T(s) in preparation for such disaster or even bigger magnitude of crisis should it happen in future.

Saturday, December 23, 2006

Stocks You Need To Know For Short-Selling

Malaysian stock exchange operator Bursa Malaysia will reintroduce regulated short selling on Jan-3-2007 after a gap of nearly a decade. Short-sellers borrow shares and sell them in the hope of buying them back later at a lower price.

Not all the stocks listed in the Kuala Lumpur Stock Exchange (KLSE) will be eligible for short-selling. How are the stocks being selected are still mystery. However the rules pertaining to this regulated short-selling are still in grey area - hopefully the authorities will enlighten the public on the matter soonest.

Stocks which will join the belt of "Short-Selling" are the following:

Affin Holdings Berhad (KLSE : AFFIN, stock-code 5185)
AirAsia Berhad (KLSE : AIRASIA, stock-code 5099)
AmInvestment Group Berhad (KLSE : AIGB, stock-code 2288)
AMMB Holdings Berhad (KLSE : AMMB, stock-code 1015)
Asiatic Development Berhad (KLSE : ASIATIC, stock-code 2291)
Astro All Asia Network PLC (KLSE : ASTRO, stock-code 5076)
Berjaya Sports Toto Berhad (KLSE : BJTOTO, stock-code 1562)
Bumiputra-Commerce Holding Berhad (KLSE : COMMERZ, stock-code 1023)
Bursa Malaysia Berhad (KLSE : BURSA, stock-code 1818)
Dialog Group Berhad (KLSE : DIALOG, stock-code 7277)
DIGI.com Berhad (KLSE : DIGI, stock-code 6947)
DRB-HICOM Berhad (KLSE : DRBHCOM, stock-code 1619)
ECM Libra Avenue Berhad (KLSE : ECM, stock-code 2143)
EON Capital Berhad (KLSE : EONCAP, stock-code 5266)
Gamuda Berhad (KLSE : GAMUDA, stock-code 5398)
Genting Berhad (KLSE : GENTING, stock-code 3182)
GuocoLand Berhad (KLSE : GUOCO, stock-code 1503)
HongLeong Bank Berhad (KLSE : HLBANK, stock-code 5819)
IGB Corporation Berhad (KLSE : IGB, stock-code 1597)
IJM Corporation Berhad (KLSE : IJM, stock-code 3336)
IJM Plantations Berhad (KLSE : IJMPLNT, stock-code 2216)
IOI Corporation Berhad (KLSE : IOICORP, stock-code 1961)
KLCC Property Holdingd Berhad (KLSE : KLCCP, stock-code 5089)
Kuala Lumpur Kepong Berhad (KLSE : KLK, stock-code 2445)
Kurnia Asia Berhad (KLSE : KURNIA, stock-code 5193)
Lafarge Malayan Cement Berhad (KLSE : LMCEMNT, stock-code 3794)
Landmarks Berhad (KLSE : LANDMRK, stock-code 1643)
Lion Corporation Berhad (KLSE : LIONCOR, stock-code 3581)
Lion Diversified Holdings Berhad (KLSE : LIONDIV, stock-code 2887)
Lion Industries Corporation Berhad (KLSE : LIONIND, stock-code 4235)
Magnum Corporation Berhad (KLSE : MAGNUM, stock-code 3735)
Malayan Banking Berhad (KLSE : MAYBANK, stock-code 1155)
Malaysian Bulk Carriers Berhad (KLSE : MAYBULK, stock-code 5077)
Malaysian Plantations Berhad (KLSE : MPLANT, stock-code 2488)
Malaysian Resources Corporation Berhad (KLSE : MRCB, stock-code 1651)
Maxis Communications Berhad (KLSE : MAXIS, stock-code 5051)
Media Prima Berhad (KLSE : MEDIA, stock-code 4502)
MISC & MISC-F Berhad (KLSE : MISC, stock-code 3816)
MKLand Holdings Berhad (KLSE : MKLAND, stock-code 8893)
Mulpha International Berhad (KLSE : MULPHA, stock-code 3905)
OSK Holdings Berhad (KLSE : OSK, stock-code 5053)
PadiBeras Nasional Berhad (KLSE : BERNAS, stock-code 6866)
PLUS Expressway Berhad (KLSE : PLUS, stock-code 5052)
POS Malaysia & Services Holdings Berhad (KLSE : POSHLDG, stock-code 4634)
PPB Group Berhad (KLSE : PPB, stock-code 4065)
Proton Holdings Berhad (KLSE : PROTON, stock-code 5304)
Public Bank Berhad (KLSE : PBBANK, stock-code 1295)
Puncak Niaga Holdings Berhad (KLSE : PUNCAK, stock-code 6807)
Ranhill Berhad (KLSE : RANHILL, stock-code 5030)
Rashid Hussain Berhad (KLSE : RHB, stock-code 1309)
Resorts World Berhad (KLSE : RESORTS, stock-code 4715)
RHB Capital Berhad (KLSE : RHBCAP, stock-code 1066)
SapuraCrest Petroleum Berhad (KLSE : SAPCRES, stock-code 8575)
Scomi Marine Berhad (KLSE : SCOMIMR, stock-code 7045)
Shell Refining Co Berhad (KLSE : SHELL, stock-code 4324)
SPSetia Berhad (KLSE : SPSETIA, stock-code 8664)
Sunrise Berhad (KLSE : SUNRISE, stock-code 6165)
TA Enterprise Berhad (KLSE : TA, stock-code 4898)
Telekom Malaysia Berhad (KLSE : TM, stock-code 4863)
Tenaga Nasional Berhad (KLSE : TENAGA, stock-code 5347)
Time DotCom Berhad (KLSE : TIMECOM, stock-code 5031)
Titan Chemicals Corporation Berhad (KLSE : TITAN, stock-code 5103)
UEM Builders Berhad (KLSE : UEMBLDR, stock-code 4855)
UEM World Berhad (KLSE : UEMWRLD, stock-code 1775)
UMW Holdings Berhad (KLSE : UMW, stock-code 4588)
Unisem (M) Berhad (KLSE : UNISEM, stock-code 5005)
Utama Banking Group Berhad (KLSE : UTAMA, stock-code 6831)
Wah Seong Corporation Berhad (KLSE : WASEONG, stock-code 5142)
YTL Corporation Berhad (KLSE : YTL, stock-code 4677)
YTL Power International Berhad (KLSE : YTLPOWR, stock-code 6742

# TIP: Even after the short-selling started, do not rush in as it is "regulated" but the rules pertaining to this mechanism are still un-clear. The authorities still have much to fine-tune to make it a smooth instrument.

Other Articles That May Interest You ...

Is Bursa Malaysia Composite Index (KLCI) Sustainable?
Bursa Short-Selling Re-Schedule In Jan-2007

Yusli Should Ensure Bursa Malaysia Play Its Role As Well

Friday, December 22, 2006

2006 Tech's TOP-5 You Should Know

After the Dot-Com burst, the serious burnt investors who're still licking their wounds sweared never to touch technology stock again while the not-so-greedy investors who managed to sell to lock-in profit or even break-even took pride in themselves for being smart or lucky enough. But since then is technology still a growth sector?

Based on compilation from S&P (Standard & Poor) on the 2006 technology growth, there seems to be profit registered from these stocks but on a lower scale with some exceptions. To grow at exceptional rates, tech companies need to deliver exceptional performance.

Top-5 : Market Capitalization (as of 21-Dec-2006 closing price)

Microsoft (MSFT) - $ 294.72 Billion
Cisco Systems (CSCO) - $ 165.72 Billion
Google (GOOG) - $ 139.67 Billion
AT&T (T) - $ 135.15 Billion
Verizon Communications (VZ) - $ 107.09 Billion

Top-5 : Return On Equity (ROE)

Loral Space & Communications (LORL) - 176.1
Kulicke & Soffa Industries (KLIC) - 97.1
VeriFone Holdings (PAY) - 60.3
ImClone Systems (IMCL) - 48.3
Amkor Technology (AMKR) - 47.6

Top-5 : Change in Profit

CommScope (CTV) - 355%
ImClone Systems (IMCL) - 347%
ARRIS Group (ARRS) - 235%
Kulicke & Soffa Industries (KLIC) - 131%
Google (GOOG) - 86%

Top-5 : 12-Months Sales

Verizon Communications (VZ) - $ 87.32 Billion
AT&T (T) - $ 60.13 Billion
Microsoft (MSFT) - $ 45.35 Billion
Sprint Nextel (S) - $ 41.88 Billion
Motorola (MOT) - $ 41.52 Billion

Top-5 : 12-Months Profit

Microsoft (MSFT) - $ 12.94 Billion
AT&T (T) - $ 7.07 Billion
Verizon Communications (VZ) - $ 6.48 Billion
Cisco Systems (CSCO) -$ 5.93 Billion
Motorola (MOT) - $ 3.94 Billion

# TIP: If you're really crazy about investing tech-stocks you can be sure the above stocks will deliver the financial result - at least these stocks will not go BUST.

Will Currency Speculators Attack Malaysia Next?

The Malaysian ringgit hit its highest level against the dollar in nearly nine years today, Friday 22-Dec-2006, helped by this week's turmoil in Thai markets that has led some investors to switch funds to other Asian countries, according to dealers in Singapore.

According to Reuters data, the ringgit (MYR) rose as far as 3.5280 per dollar, a level last seen around March 1998. Malaysia ended the ringgit's peg to the U.S. currency in July 2005 under current Badawi administration who took over from Mahathir.

Despite rising in recent weeks, second Finance Minister Nor Mohamed Yakcop maintained that the authorities were not worried it was too strong against the dollar. I hope this minister knows and serious about what he said because according to dealers the currency was likely to head higher towards 3.5 per dollar in coming weeks.

But what if the ringgit keeps on getting higher and breach below 3.5 per dollar? What will the authorities do or what are the measures to combat such a trend? I doubt the Finance Minister is stupid enough to re-introduce currency control which Malaysia implemented during 1997 Asia Currency Crisis and cloned last week by Thailand authorities. But besides this measure, what other measure(s) does a country has?

Bank Negara Malaysia can help by weakening the ringgit, not that Bank Negara has not done this before, but to what extend and risk exposure should the country's reserve be used to stabilize ringgit? What if the speculators are indeed planning another round of attack? Are the relevant authorities ready to take on the challenge this round? We shall wait and see. Furthermore we're looking into New Year with a last digit of "7" which didn't bring prosperity if history were to use as yardstick - remember what happen during 1987 Global Financial Crisis and 1997 Asia Currency Crisis? What do you think 2007 will bring us?

In the meantime, the extra foreign cash from Thailand seems to benefit ringgit currency instead of stock market. Logically foreign funds would rather park these cash in currency than stocks because currency is more liquid - any silly mistakes again and the first thing investors will do is to press "ENTER" to sell ringgit immediately.

# TIP: Short US dollar against MYR for short-term gain.

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How ELMO Help You Make Profit Investing Mattel?

With a lot of giggling of their own, Good Morning America host Diane Sawyer and her colleagues unveiled the newest model in Mattel's (NYSE : MAT, quote) long-running Elmo franchise. The new T.M.X. Elmo laughs, slaps its knee, and rolls around on the floor before righting itself. "Again," it says. Already dozens of the new dolls are being offered for sale on eBay (Nasdaq : EBAY.quote) for as much as $93.99, more than twice the toy's $39.99 list price.

There was a long queue at Times Square Toy "R" Us store prompted it

to open an hour earlier than usual. The store sold out of its initial stock in two and a half hours, as cashiers in red Elmo T-shirts busily rang up sales. This year, Mattel refused to reveal Elmo's latest trick until the day the doll went on sale. To build buzz for the toy's 10th anniversary, boxes of the T.M.X. Elmo were shippedthe night before to retailers—most of which had agreed to buy it sight unseen.

Toymakers and retailers love frenzy-inducing items because they bring more traffic into stores and lift sales of other products. "There's a halo effect across everything," says Neil Friedman, president of Mattel Brands. Friedman knows what he's talking about: He released the first Tickle Me Elmo at Tyco Toys, which Mattel later acquired. The first Elmo became a toy biz phenomenon after it launched in 1996. But the industry hasn't seen a breakaway hit product like that since the fuzzy Furby doll craze in 1998.

Mattel hopes to change that with the latest version of its ten-year-old Elmo. The company is helping fuel a new Elmo frenzy by manufacturing fewer than it normally would, says Jim Silver, co-publisher of Toy Wishes, an industry trade publication. He estimates that the company is making about one-third fewer than its usual run of about 1.5 million Elmos. That has retailers champing at the bit. "I have never seen the item," says Robert Weinberg, senior vice-president for merchandizing at retailer KB Toys. "We really want a lot more." Here's a look at some other toy crazes over the years, from Hula-Hoops to Pokémon.

Everyone is looking for this Elmo but the trick of lower production and secrecy about the toy's ability makes it a success for this holiday. This will definitely bring superb revenue to Mattel for the coming quarter. Mattel is one of my favorite stocks which made good money for me during the last quarter pre-earning announcement. Mattel will be announcing its next quarter earning on Jan-29-2007 (BMC) and I'm pretty sure this stock will not disappoint me.

# TIP: Consider the Call Option with sufficient time-value to make some descent profit on this guy and have a good laugh on the way to the bank like the Elmo.

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Thursday, December 21, 2006

Will Vincent Tan Finally Moves His Stocks?

Berjaya Corporation Berhad, formerly known as Berjaya Group Berhad (KLSE : BJCORP, stock-code 3395) together with its Irredeemable Convertible Loan Stocks, ICULS (2005/2015) BJCORP-LC (stock-code 3395LC) triggered StockTube and MACD "Buy" signal today.

Berjaya-Corp closing price is the highest since almost a year ago with very high-volume. Stochastic just crossed and RSI moved into the bullish level of 74.5 while the ratio of bullishness is 2,449 Bulls: zero Bears. The ICULS meanwhile breached the all-time high of RM 0.13 since the listing in 2005 (after a complex restructuring involving Berjaya Capital Bhd (KLSE : BJCAP, stock-code 4499) and Berjaya Land Bhd) was trading with equally high-volume, Stochastic cross-over, bullish RSI and a ratio of 809 Bulls : zero Bears.

During the fiscal year ended April 30, 2006, the principal activities of Berjaya-Corp include financial services; manufacturing; property investment and development; hotel, resort and recreation; restaurants and cafes; marketing of consumer products and services, and investment holding. It's been a long time since Vincent Tan started to "move" his stocks which he normally did in the 1990s.

Vincent Tan is known to be very close to former premier, Mahathir, and it was said that he built his empire during this period with all the "support" from Mahathir. However after Mahathir retire, Vincent rarely make any appearance in public nor announce any major new projects within his empire. It's normal within Malaysia culture where business and politic are closely related.

# TIP: With expiry on 2015, Berjaya-ICULS has the attractiveness of time-value which will surely be preferred stocks to speculate.

Quek Buying Kencana But Should You Follow?

TYCOON Tan Sri Quek Leng Chan, owner of the Hong Leong Group, may emerge as a substantial shareholder of oil rig builder Kencana Petroleum Bhd (KLSE : KENCANA : stock-code 5122), sources said. According to Business Times, Quek may buy between 12 and 15 per cent of the company's shares from existing shareholders.

Kencana is one of seven companies licensed by state oil firm Petroliam Nasional Bhd to build offshore production platforms and reportedly has a 21ha fabrication yard in Lumut, Perak. The company, 53.5 per cent controlled by

Datuk Mokhzani Mahathir, is bidding for some RM3 billion worth of deals with probability win of 30 percent.

Stock price of Kencana Petroleum which is trading at a high of RM 1.17 today, 21-Dec-2006, - nearly triple compare to their initial offer price of 41 cents. The Kencana official said the group may raise more funds for expansion from a new placement or rights issue late next year.

Quek who recently sold his shares in OYL Industries Bhd to Japan's Daikin Industries Ltd for RM7.61 billion is cash-rich and need to invest the huge-pile of money. The companies controlled by Quek include:

BIL International Ltd (SIN, BIL), which recently announced a major venture into casino operations in the UK
Guoco Group Ltd (HKG : 0053)
Southern Steel Bhd (KLSE : SSTEEL, stock-code 5665)
Hong Leong Bank Bhd (KLSE : HLBANK, stock-code 5819)
Camerlin Group Bhd (KLSE : CAMERLN, stock-code 3751)
Hume Industries Bhd (KLSE : HUMEIND, stock-code 3328)
Hong Leong Industries Bhd (KLSE : HLIND, stock-code 3301)
Malaysia Pacific Industries Bhd (KLSE : MPI, stock-code 3867)

But just because Quek venture into oil & gas industries doesn't mean investors should blindly jump into the pool. Kencana is currently trading at 22.17 times (based on price at RM 1.14 as of writing time) its forecast earnings of 5.14 cents per share (ended 31 July 2007). As comparison to its' competitor such as Ramunia Holdings Berhad (KLSE : RAMUNIA, stock-code 7206) which is trading at 14.72 times and OilCorp Berhad (KLSE : OILCORP, stock-code 3697) trading at 13.85 times, it looks like Kencana is quite expensive.

Kencana is trading at current stock-price due to Quek's factor - it's fair enough to pay some premium but at 22 times, I would rather invest in either Ramunia or OilCorp which have lesser shares-floated which means the stock price will move faster should it decide to. But in Malaysia, anything can happen as investors are more emotional-driven rather than financial-conscious-driven.

# TIP: Wait for a pullback before you invest Kencana. DO NOT chase-up the stock price (unless you've reliable insider information, of course - which you can alert me by sending email to StockTube)

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Kencana Petroleum - A Cheap IPO Worth Investing

Which Industry Should You Get A Job From?

Can you tell me which company will pay an average $622,000 per employee in compensation (bonus) per year? This is what you're looking for after spending years in school, high school, college or university just to get that piece of paper right? So, besides choosing the right major, you better be wise in selecting which industry to enter so that you can shorten the journey of financial freedom. Before you decide, consider the following facts:

Employees at Morgan Stanley earned $264,715 per person in bonus
Lehman Brothers paid $334,000 per employee in bonus
Goldman Sachs rewarded an average $622,000 per employee in bonus

Goldman Sachs's (NYSE : GS, quote)chairman and chief executive, Lloyd C. Blankfein was paid a bonus of $53.4 million this year, 2006, the highest ever for a Wall Street chief executive. Together with his $600,000 salary, his income for the year totaled $ 54 million (from $ 38 million in 2005).

Earlier, Morgan Stanley(NYSE : MS, quote) paid its' chief executive, John J. Mack, $41.1 million bonus last week - a record that lasted less than a week. Lehman Brothers (NYSE : LEH, quote), on the other hand paid it's chairman and chief executive, Richard S. Fuld Jr., $11 millionin restricted stock.

Goldman Sachs stock price is up almost 60 percent for the year 2006 creating a $90 billion market capitalization, more than triple when it went public in May-1999. Thompson Financial today announced Goldman Sachs as the overall champion amongst the global M&A advisers, with combined value deals of more than $1 trillion, or about 29 percent of the value of all the year’s deals. Citigroup (NYSE : C, quote), which ranked No. 5 last year is in second place this year with total deal value of $987 billion, or a 27.3 percent market share. Morgan Stanley, J.P. Morgan Chase (NYSE : JPM, quote) and Merrill Lynch (NYSE : MER, quote) are in third, fourth and fifth places respectively.

Wall Street bonuses are expected to hit a record$23.9 billion in 2006 - a staggering amount which according to Associated Press will boost New York economy with bankers having no problem in spending $15,000 bottles of champagne, $40,000 BMWs and multimillion-dollar apartments.

With soaring revenues, profits and per-share earnings investment banks which generally pay about 45 to 50 percent of net revenue in bonus to its' employee is indeed the goose which lays golden eggs and should be your preferred industry if you're looking for a career-change now.

# TIP: Get a job with investment banks regardless of your field as you won't be able to get the amount of bonus or compensation elsewhere.

# TIP: Invest in investment banks stocks or consider option trading with sufficient time-value (at least 6 months expiry) as the year-end mergers will ensure good profit in the next quarter earning announcement.

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Wednesday, December 20, 2006

How Much Did Thailand Lose In 24 Hours?

It's as expected that the Thailand military appointed government has no other choice but to reverse their earlier decision to impose restrictions on foreign investments to curb speculation on the country's baht currency. The problem here is the inability of the new government to understand the Basic-101 of economic management - by imposing such a sudden and drastic move, the government was only asking for trouble or committing suicide as foreign investors are very sensitive and hate such immature measure.

But just how much did Thailand lose with such an announcement? Bangkok's The Nation newspaper headlined an estimated 820 Billion Baht or US$22.9 billion (euro17.3 billion) being wiped out from the SET plunge.

"It was really a big mistake on the part of authorities. It was a policy error. With the interim government, people are wondering what will happen," said Hak Bin Chua, economist at Citigroup in Singapore, of the decision to stem foreign capital inflows.

It'll be interesting to see if Thailand equity market can return back to its' pre-mini-crisis bullishness now the investors have some sort of idea how the country's economic is being administered.

#TIP : If you have close connection or know of insider news prior to such announcement in future, remember to SHORT the currency or stock market - you can be sure of tons of profit.

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Does Malaysia PM Owns RM30 Million Yacht?

Bernama today clarified that Malaysia Prime Minister Datuk Seri Abdullah Ahmad Badawi has denied buying a RM30 million boat as reported by a newspaper in Turkey recently. "The report is inaccurate. It is a lie. I don't know where it got such facts," he told reporters here when asked to comment on a newspaper report that he went to Bodrum in Turkey recently to see the boat which he ordered four months ago.

According to the report, the boat is made of Akuju, Maun, Sipo and Brimanya tree which is imported from South Africa and expected to be completed in 16 months. "I was in Turkey but did not see the boat," he said in reference to his transit in Turkey from Kuala Lumpur before coming here for a three-day official which ended Tuesday. Badawi denied again the allegation via TV3 1:30pm news.

Hurriyet however claimed that the yacht belongs to Malaysia Prime Minister as the Prime Minister ordered the boat himself 4 months ago as per translated by Rocky's Bru blog. Badawi was also reported to be enjoying himself very much fishing together with Ananda Krishnan, owner of Maxis Communications Bhd (KLSE : MAXIS, stock-code 5051) onboard a 40-meter-long luxury yacht "Obsessions".

With the recent 60% price hike in road tolls and the statement proclaiming that the government actually is sincere in sharing the burden with the citizens, it's only wise not to say one thing but did another thing behind the voters who are finding it hard to survive with the ever-increasing cost-of-living due to high-inflation.

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Road Tolls To Rise By 60 Percent

Maxis Second Attempt To Buy India's Hutchison Essar

Maxis Communications Bhd (KLSE : MAXIS, stock-code 5051) has made a bid for a controlling stake in India’s Hutchison Essar (http://www.hutch.co.in/), the fourth largest mobile operator, in an effort to further stamp its presence in the Indian market, according to press reports from India. Maxis’ bid is the second made by the Malaysian company after its initial US$13.5 billion bid with US private equity firm Texas Pacific Group was rejected.

Hutchison Essar, with over 22 million subscribers, is 52%-owned by Hong Kong-based Hutchison Telecommunications International (HTIL) and is valued at around US$14 billion (RM49.71 billion). It was reported that Egypt’s Orascom (CAI : ORTE) and India’s Reliance Communications (BOM : 532712) had submitted bids for Hutchison Essar after talk of the impending exit of HTIL from the Indian market before 2008.

The Financial Express of India reported that Maxis had engaged Standard Chartered as its adviser for the bid. It also said Reliance had tied up with four US private equity firms for its bid. The addition of Hutchison Essar to Maxis, which already owns 75% of Aircel Ltd, would make the company the third largest mobile operator in India with over 26 million subscribers.

India with a population of 1.1 billion people and only 10% penetration is a growing market and this is a very viable market for Maxis with the potential of the voice market. Maxis can choose to grow organically with Aircel (currently contributes 9% to Maxis’ turnover) but this bid could be for along-term investment.

On Dec 6, Maxis appointed Sandip Das of Hutchison Essar as chief executive officer of the company’s Malaysian operations from Jan 15, 2007. It had said then that Sandip would also play a key role in developing strategies for Maxis’ operations in India.

Panic Sell-Off Forced Thailand To Lifts Investment Controls

After being punished today, 19-Dec-2006, the Thai government is making a U-turn in liftingcontrols on foreign

investment in stocks after the market plunged nearly 15 percent, sending panic throughout regional bourses of worries about a repeat of 1997 Asian Economic Crisis. Investors dumped stocks in Hong Kong, India, Indonesia, Malaysia, South Korea and the Philippines amid contagion concerns today.

Associated Press reported minutes ago that Finance Minister Pridiyathorn Devakula announced the control will only apply to foreign investments in bonds and commercial paper as part of central bank's measures to stem the surge of speculative investment in the Thai baht.

The Stock Exchange of Thailand's benchmark SET Index closed down

14.8 percent at 622.14, after plunging as much as 19.5 percent earlier with the hardest hit sectors being banking, energy and telecommunications. The SET has reacted by calling for the central bank to review its decision to impose new rules aimed at weakening the baht, saying the move prompted foreign investors to dump Thai shares.

I'm glad Thai government has come to realize its' silly mistake and has the courage to correct it immediately. But I doubt they have a choice anyway, so the military government has to eat the humble pie whether they like it or not. The behavior of such drastic action (to impose investment control earlier yesterday) reflects a stern decision normally seen only within military culture.

I believe besides the pressure from Stock Exchange of Thailand and conglomerate businesses, the threat of being left out from the MSCI (Morgan Stanley Composite Index) investment weightage and probably advises from the King Of Thailand could forced the military government to make such a fast U-Turn.

So, what would happen tomorrow? Panic buying will swarm the stock market and don’t be surprise if the gain is a two digit figures. The psychology of the market - Greed & Fear will remains for centuries to come. In fact, it would be bullish to the other regional markets with exception of Thailand (you don't think the investors are forgiving after this incident, do you?) as the extra hot-money will need somewhere to park - where else do you think these money will land?

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Tuesday, December 19, 2006

Would You Like Short-Selling By Now?

Since Yusli, CEO of Bursa Malaysia (KLSE : BURSA, stock-code 1818) confidently declared recently that Kuala Lumpur Stock Exchange bull was the result of foreign investors jumping in to buy the stocks causing it to hit the 9-years high, I suppose Yusli can say the same thing about today's performance whereby KLCI (Composite Index) plunge more than 30 points (2.7%) at one time.

Earlier blog reported how The Bank of Thailand surprisingly announced a new measure to curb speculators with plans to

force speculators to keep their money in the country for at least one year or face stiff financial penalties, starting today, 19-Dec-2006. It was reported that as much as 950 million dollars of foreign capital flew into Thailand in the first week of December

This of course triggered a sell-off in the baht and the baht was last quoted at about 35.75 per dollar. There was also speculation that Thailand risked being dropped from international equities indices such as MSCI (Morgan Stanley Composite Index) with this latest move, just as Malaysia was in the late 1990s after it imposed capital controls on foreign investors.

Stock Exchange of Thailand (SET) index was seen plunging more than 10 percent at the open and forcing it to suspend trading. On the resumption of trade, the SET 50 crashed 85.89 points or 11.76 percent to close the morning session at 644.66, off a low of 630.16. It was the biggest one day fall in the 31-year history of the SET. Maybe it's time to get Thaksin back on the seat with this disastrous act by the military government.

Investors do not like a sudden restriction implemented overnight when free-flow of investment is the rule of the game, besides transparency of course. Fund managers just do not like being held for ransom with such autocratic regulation - no one like it as a matter of fact. How would you feel if all of a sudden the bank which you invested suddenly declared 30% of your money cannot be withdrawn and will remain with the bank interest-free for 1-year? If you prefer, you can withdraw but you'll only get two-thirds only - a pure loss of one-third or 33.33%? Isn't this equals to daylight robbery?

Malaysia has learnt it's lesson when it did the almost same things during the 1997 Asia Economic Crisis. And as a long and severe punishment, foreign investors ignored Malaysia equity market for almost a decade. And only with the recent China Remimbi Yuan revaluation did Malaysia follows. It's interesting to note that Thailand did the same silly mistake yesterday. I wonder if George Soros make some profit this round. I'm sure he would have - he's the guru of currency speculators. Maybe he dropped a tip/hint to Mahathir during their recent reconciliation - how much do you think Mahathir made (if he indeed speculate baht himself)?

Wouldn't it be nice if short-selling is allowed across the board in Malaysia Stock Exchange? All of us would be making tons of profit by now. Don't you agree?

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Kuala Lumpur Kepong Follows The Smart Move

As blogged earlier in StockTube, one after another palm oil plantation company starts to build its' shield when the mega-merger of Kumpulan Guthrie Berhad (KLSE : GUTHRIE, stock-code 3131), Sime Darby Berhad (KLSE : SIME, stock-code 4197) and Golden Hope Plantations Berhad (KLSE :GHOPE, stock-code 1953) set the tone on the direction of plantation sector within Malaysia.

This round it's Kuala Lumpur Kepong Bhd (KLSE : KLK, stock-code 2445) turn when it announced it is acquiring Swiss-based Dr W Kolb Holdings AG, a specialty oleochemical holdings company, for 135 million Swiss francs

(RM393.39 million). KL Kepong said on Dec-18-2006 that the purchase price included a net working capital of 30.9 million Swiss francs - reported Reuters & The Edge.

The Kolb group manufactures products for making detergents, industrial and household cleaners, personal care products, pharmaceutical diagnostics, paper, textiles, inks and paints. KL Kepong said Kolb’s downstream specialty oleo-chemical business with its larger product range and in-house technologies would be synergistic to the former’s oleo-chemical manufacturing business.

The company said it would supply fatty alcohol and fatty acids to Kolb, adding that the acquisition would enable KL Kepong to develop immediate market penetration in Europe.

Isn't it interesting that all the top big players in this sector seems to rush against time to expand or consolidate to make it bigger in terms of market value in order to make it difficult to be eaten alive?Who do you think will be the next to make similar announcement? First, it was IOI Corp, then Kuok Group and now KLK - I bet there'll be more to come. The next 3 companies could be Batu Kawan Berhad - RM 3.2 billion market capitalization, Asiatic Development Berhad - RM 3.0 billion market capitalization, United Plantations Berhad - RM 1.8 billion market capitalization.

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Thai Currency Under Attack Again After 1997 Crisis?

Thai Baht seems to be under attack again by currency speculators since the 1997 Asia Economic Crisis which started from the same place, same method and same culprit. But this time the problem is the rises of Baht.

The Bank of Thailand announced fresh measures on Monday, 18-Dec-2006, to try to curb thebaht's rise by forcing speculators to keep their money in the country for at least one year or face stiff financial penalties. From Tuesday, 19-Dec-2006, 30 percent of non-trade related foreign exchange sold for baht must be deposited interest-free with the central bank for a year.

The new rules, the central bank's third attempt since early November to block speculation in the baht, affect transactions worth more than $20,000. "Should any customers wish to repatriate their funds earlier than one year, they would be refunded only two-thirds of the amount," Bank of Thailand Governor Tarisa Watanagase said in a statement.

Tarisa said the new restrictions, described by one analyst as "draconian", were necessary because previous measures had failed to slow the appreciation of the baht, Asia's best-performing currency so far this year which had surged more than 16 percent this year.

Will this new measure benefit Malaysia with foreign investors switch over to Bursa Stock Exchange (KLSE)? Will Thailand adopt Malaysia's method of fixing its' currency if things get worst?

Monday, December 18, 2006

Call Warants Expiry Date, Strike Price & Exercise Ratio

One of the main problem with Malaysia stock market is the attitude of the authority, be it Security Commission or the Stock Exchange itself (better known as Bursa or KLSE) in creating more values to investors (retail of foreign) in terms of basic lifeblood in the form of "information".Despite screaming to the world back in 1995 that the country has embarked on an ambitious program to establish the Multimedia Super Corridor (MSC) to leapfrog Malaysia into the information and knowledge age, the program seems to be in static mode and not moving at all compares to neighboring countries.

Investors, including myself (how about you?) are quite frustrated when it's so difficult to find information pertaining to stocks information such as call-warrants strike/exercise price or its' expiry-date. The information actually exists but you need to dig deep inside their database - I suspect the webmasters are not doing their job or the head of I.T. doesn't really bother to go the extra miles to collect feedback from customers / visitors on how poor their information are for public viewing.

Frankly, I don't have problem finding any information pertaining to stocks listed in Wall Street (Dow Jones or Nasdaq). In fact the issue I'm facing is actually of "information over-load". I can extract information of a company such as the latest P/E, EPS, Sales Growth, Revenue, Net Profit Growth, Analysts Ratings, tons of research and news, past quarters earning result, ROE, Insider Trading and thousands more information without much difficulty.

Anyway, the attachment is the summary of all the call-warrants for the stocks listed in the KLSE of which I think is useful for your consumption before you decide to invest your hard-earned money. I'm attaching the companies name together with its' website should you need to investigate more on the respective company.

AirAsia Berhad - http://www.airasia.com/site/en/home.jsp
Astro All Asia Networks plc - http://www.astroplc.com
Berjaya Sports Toto Berhad - http://www.sportstoto.com.my
Bursa Malaysia Berhad - http://www.ijm.com
IOI Corporation Berhad - http://www.ioigroup.com
Kuala Lumpur Kepong Berhad - http://www.klk.com.my/
Magnum Corporation Berhad - http://www.magnum.com.my
Maxis Communications Berhad - http://www.maxis.com.my/
Malayan Banking Berhad - http://www.maybank2u.com.my/
MISC Berhad - http://www.misc.com.my.
Malaysian Plantations Berhad - http://www.mplant.com.my
Plus Expressways Berhad - http://www.plus.com.my/
Proton Holdings Berhad - http://www.proton.com
Resorts World Berhad - http://www.resortsworld.com/
RHB Capital Berhad - http://www.rhb.com.my
Scomi Group Berhad - http://www.scomigroup.com.my
Sime Darby Berhad - http://www.simedarby.com
Tenaga Nasional Berhad - http://www.tnb.com.my
Telekom Malaysia Berhad - http://www.telekom.com.my

Based on information above, you can calculate other financial data, example, Gearing = Underlying Security Price / (Call-Warrant Price x Exercise Ratio) - you can get the underlying security price and the call-warrant stock price quite easily from other medias.

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Sunday, December 17, 2006

What's The New Component In Branding?

What are the most important division / department that will drive and determine the success of a company? Don't be surprise if mostly answered "Sales" department but in actual fact it's the "Marketing" department. No doubt the salesman or woman are the people who bring in sales and revenue to the company but without the marketing which is responsible in creating the awareness of a specific product/services' thru branding, there's so much a company can do.

Successful branding is not only about advertising alone but also

involved indirectly in decision-making in producing quality goods at the right price for the targeted customers and then only repeatedly publish the products/services at media (television or print). The customer service or post-sales department together with marketing will then be responsible to evaluate and fine-tune it through letters, phone-calls, and surveys and so on to gauge the sustainability of the products.

Procter & Gamble (NYSE : PG,quote) is one of the good example of a company which have done marvelously in brand creation for products such as Pampers, Gillette, Duracell, Pringles and so on. But the internet has change the methodology of branding was being done previously - enter the world of "blogosphere". Blogs are where consumers post their word-of-mouth commentary in online communities, message boards and Web logs about anything they like/dislike.

Nielsen BuzzMetrics, an unit formed under A. C. Nielsen is a highly specialized component made from the convergence of technology, communications & business expertise.BuzzMetrics' scientists were said to have developed sophisticated search engines capable of retrieving phrases, opinions, keywords, sentences and images from the Internet commentary and conversation and then by analyzing vocabulary, language patterns and phrasing, a business intelligence report would be generated to help in marketing decision.

An influential blogger can undermine a brand pretty fast in the current age of internet. For example, complaints by bloggers about the poor level of service and quality of Dell Inc. (Nasdaq : DELL, quote) recently gained wide exposure. Toyota's (NYSE : TM, quote) hybrid Prius sedan on the other hand received positive comments which proved to be a plus to its' sales.

One of the threat to Nielsen BuzzMetrics' business could comes from the search giant, Google(Nasdaq : GOOG, quote), which promised to continue to innovate search technology to provide users with the fastest and most relevant search experience on the Web. According to Forrester Research (Nasdaq : FORR, quote), brand monitoring companies such as BuzzMetrics could be moving into the right position in tapping the $12-billion-a-year market research business.

Besides Google, BuzzMetrics’ current competitors are Umbria, based in Denver; Cymfony (http://www.cymfony.com/), in Watertown, Mass.; BrandIntel, in Toronto; Biz360 (http://www.biz360.com/) in San Mateo, Calif.; and MotiveQuest, in Chicago.

Other companies which recognize and leverage of BuzzMetrics include Sony's (NYSE : SNE,quote) online entertainment, Nike (NYSE : NKE, quote) and Coca-Cola (NYSE : KO, quote).

Saturday, December 16, 2006

Does Malaysia Needs Bakun Project?

For decades (first proposed in 1960s), there have been discussions concerning the controversial building of the Bakun Dam in the Malaysian state of Sarawak which would be the largest dam in southeast Asia if built but will also be the most expensive totalling RM 15.0 billion. After being indefinitely postponed in 1990, it was resurrected in 1993, only to be deferred again in late 1997, at the height of the Asian economic crisis but was revived again in 2001.

The Malaysian government has agreed in principle to let conglomerate Sime Darby Bhd (KLSE :SIME, stock-code 4197) take ownership of the2,400-MW Bakun hydroelectric project on the island of Borneo, reported The Edge financial news on 16-Dec-2006.

Sime was leading the consortium which built the half-finished dam, which is one of Asia's largest hydro-electric projects outside China and has suffered problems such as construction falling behind schedule and hefty cost overruns.

Sources also mentioned that the government has also agreed for a 650 kilometers RM 9.0 billionundersea cable project, with Sime leading the consortium undertaking the project. The Bakun dam will flood an area the size of Singapore when it is completed about four years from now, but its owner, the federal government, has yet to find a major buyer for its power.

Among the justifications the government had considered for the construction were:

a possible aluminium smelter in Sarawak.
redirect the power to the country's more industrialized peninsular via submarine cables.

It was reported the foreign partner for the cable project was likely to be Asea Brown Boveri (a Swiss power and automation firm), which was involved with the Bakun project in the mid-1990s initially.

Besides main power supplier Tenaga Nasional Bhd (KLSE : TENAGA, stock-code 5347) who will act as the sole customer for the supply, other companies that could be roped in for this project are expected to have relationship with UMNO, the key party in Malaysia's ruling coalition which include:

engineer and property developer Malaysian Resources Corp Bhd (KLSE : MRCB, stock-code 1651),
power plant operator Eden Enterprises (Malaysia) Bhd (KLSE : EDEN) and
Realmild Sdn Bhd (the investment arm of UMNO, the key party in Malaysia's ruling coalition)

Previously, foreign companies which have expressed interest in setting up a smelter in Sarawak include Rio Tinto (NYSE : RTP, quote), Alcoa (NYSE : AA, quote), BHP Billiton (NYSE, ASX :BHP, quote), Smelter Asia-China Aluminium International Engineering and Cahya Mata Sarawak Berhad (KLSE : CMS, stock-code 2852) and Press Metal.

Smelter Asia is owned by tycoon Syed Mokhtar Al-Bukhary, who has warm ties with former premier Mahathir while CMS, on the other hand, is a well-connected group with diversified interests in Sarawak led by Sulaiman Abdul Taib, the son of powerfulSarawak Chief Minister Taib Mahmud.

The dam was criticized due to theenvironmental impact of building such a massive project in Sarawak's rainforest. More than 10,000 people have already been resettled to make way for the construction. Smelters emit perfluorocarbon (PFC), which is detrimental to humans, animals and vegetation and has global-warming potential. The government is estimated to have already sunk RM 1 billion into the project, of which RM 500 million went to Ting Pek Khing's Ekran Berhad (KLSE : EKRAN, stock-code 3085) as compensation for it being scrapped.

"It's utterly unnecessary," said one Sarawak-based political analyst of the dam, declining to be identified for fear of repercussions. "The only people who need the dam are the Sarawak politicians and their cronies." Moreover, he added, Sarawak has a wealth of alternative energy resources such as natural gas. So, does the government really practice the prudent spending as promised before the last election? Or will this government put the previous government led by Mahathir to shame in terms of mega-projects that this country is so obsessed?

Friday, December 15, 2006

Biggest-Ever Foreign Acquisition In Britain

The Nihon Keizai business daily reported Japan Tobacco Inc. (TYO :JTI, 2914) announced on Friday it would buy Britain's Gallaher Group Plc (LON : GLH) for $14.7 billion in the biggest-ever foreign acquisition by a Japanese company. Japan Tobacco (50 percent owned by the Japanese government) agreed to pay 11.40 pounds per share for Gallaher, the maker of Benson & Hedges and Silk Cut cigarettes.

The takeover could help Japan Tobacco offset declining cigarette sales in Japan and reinforce its position as the world's third-largest tobacco firm behind Marlboro maker Altria Group Inc. (NYSE : MO, quote) and British American Tobacco Plc(LON : BATS). In Japan, where Japan Tobacco has a two-thirds market share, cigarette sales fell 1.3 percent in the six months to September from a year earlier to 2.02 trillion yen. Sales volume fell 4.7 percent to 140 billion cigarettes.

Shares in Japan Tobacco, which makes Mild Seven cigarettes and owns the Camel, Winston and Salem brands outside the United States, rose 3.1 percent to 597,000 yen on Friday.

Overseas cigarette sales have been Japan Tobacco's main source of profit growth. It bought RJR Nabisco's non-U.S. tobacco business for $7.8 billion in 1999, and in 2005 international sales volume overtook Japanese volume for the first time.

The deal is worth about 50 percent more than telephone operator NTT DoCoMo Inc.'s (TYO : NTT, 9437) $9.8 billion takeover of AT&T (NYSE : T) Wireless Group in 2000, the previous record for a Japanese international acquisition.

Japan Tobacco could sell off Gallaher's German and Austrian distribution businesses to Altadis for $1 billion to get around any antitrust problems, analysts said.

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Take Profit On VFC And RIG

Decided to lock-in my profit yesterday, 14-Dec-2006, on one of my favorite stock, Transocean Inc. (NYSE : RIG, quote) in following of my previous article Time To Relook At Oil Stocks dated 30-Nov-2006. Several reasons stated such as weather condition, U.S. inventories of crude oil and possible reaction of OPEC towards weakening dollar contributed to the decision to take position in energy / oil-related stocks.

The reason I like Transocean is the volatility of this share which can be very rewarding if you leverage your investment with option. In this case, my entry was Feb-2007 75.0 Call Option, giving me 3 months of time-value of which I'm comfortable with in-line with the facts that traditionally energy stocks are bullish during winter-period.

I still have positions is other energy-related stocks which have not yield the profits to my satisfaction yet. Hopefully I can cash it out before the coming Christmas.

V.F. Corporation (NYSE : VFC, quote) position was the pre-earning announcement position deployed with details here. I still can remember the day when VFC beat earning estimate and Nollenberger raises their target on VFC to $83 from $76. It was the same day where Google (Nasdaq : GOOG, quote) beat its' earning and earned the multiple upgrade from analysts of which made me some good money as well.

But you'll never know how the market will behaves. VFCgapped-up as expected on the morning, 20-Oct-2006, after the earning result but it was for a very short-period before turns to red.

And for the next couple of days, my position of Feb-2007 75.0 Call Option was in red. It's very important that you do your research and invest only in fundamental stock as the fair value of a good stock will always be reflected given the time. As such, I rang the register on 12-Dec-2006 as the profit met my target. Based on the chart on the left, can you see what will happen if only I hang-on for another 2 more days? I would have gain more profits - but I always smile and tell myself "Bull and Bear make profit, Pig gets slaughtered".

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Thursday, December 14, 2006

Kuok Group Consolidates To Defend Palm Oil Business

The Kuok Group, controlled by tycoon Tan Sri Robert Kuok, is undertaking a mammoth S$6.6 billion (RM15.18 billion) corporate exercise to merge several of its companies here and in Singapore, including Wilmar International Ltd (SIN : F34) and PPB Oil Palms Bhd (KLSE : PPB, stock-code : 6823).

As part of the deal, Wilmar has offered to acquire PPB Oil Palms, Kuok Oils & Grains Pte Ltd (KOG) and PGEO Group Sdn Bhd for about S$4.1 billion. Wilmar said the acquisition of the companies would be satisfied via the issue of 2.4 billion Wilmar shares based on their last transacted price of S$1.71 per share.

The proposed enlarged entity will emerge as Asia’s leading

agribusiness group and enable Wilmar to be the world's leading merchandiser and processor of palm oil. According to The Edge financial news, Wilmar via CIMB Investment Bank Bhd on Dec 14 made a conditional voluntary takeover offer (VGO) for PPB Oil Palms via the issue of 2.3 Wilmar shares for each PPB Oil Palms share, valuing the deal at S$1.8 billion based on PPB Oil Palms' paid-up capital of 445.42 million shares, or RM9.046 per PPB Oil Palms share. PPB Oil Palms' pre-suspension price was RM8.95.

It also made an offer to acquire a combined stake of 72% in KOG from Kuok group companies, Kuok (Singapore) Ltd, Harpole Resources Ltd and Greenacres Ltd, for S$1.3 billion via the issue of 785.92 million Wilmar shares. Wilmar also offered to acquire PPB Group Bhd subsidiary FFM Bhd’sentire 28% stake in KOG for S$522.6 million via the issue of 305.63 million Wilmar shares.

KOG is the Kuok Group's flagship company involved in processing and international trading of oil and grain products. As part of the exercise, Wilmar made an offer to FFM to acquire its 65.8% stake in PGEO for S$491 million via the issue of 287.12 million Wilmar shares.

It's funny all of a sudden all the palm oil plantation companies in Malaysia aggressively consolidating or expanding after the mega-merger of Kumpulan Guthrie Berhad (KLSE : GUTHRIE, stock-code 3131), Sime Darby Berhad (KLSE : SIME, stock-code 4197) and Golden Hope Plantations Berhad (KLSE : GHOPE, stock-code 1953). Learning from past lessons, it could be due to the realization among the Chinese-based plantation companies that they need to remain strong and as big as possible to prevent from being forced to consolidate with other smaller player but loose the control just like what happened to previous former Chinese-based banks such as Kwong-Yik Bank,Southern Bank and a handful others.

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Are Your Trades Being Sold By Your Own Broker?

In my previous article, I talked about "Are You Getting National Best Bid and Offer?" and why should you concern about this issue as it makes a difference in determining whether your trade is a profitable, exit-with-minimal-loss or break-even.

Let's continue and see why some brokers didn't get you the NBBO. When you place an order to buy or sell stocks/option, you normally do not care how the transaction is being routed and executed. You just need to know that it's "filled" or "done" or "successfully executed" or whatever name you want to call it right? Well, I'm sorry to say "Wrong" - how and where your order is executed can impact the overall costs of the transaction, including the price you pay for the stock/option.

Many online traders thought / assume they have a direct connection to the securities markets when in fact they don't. When you press the "ENTER" key, your order is sent over the Internet to your broker - who in turn decides which market to send it to for execution. During this period the price of the stock/option might change especially in a fast-moving or high-volume market.

Your broker generally has options on how and where to execute your trade:

For a stock listed in NYSE (New York Stock Exchange), your broker can direct the order to that exchange. Alternatively, he/she can direct it to a "third market maker" - which agreed to pay your broker attractive fees for doing so. Obviously this broker who sell your trade to a certain market-maker will not get you national best bid and offer because the third market maker need to cover their costs (to the broker) which is known as "Order Flow Payment".
For OTC (over the counter) stock, your broker may once again route it to Nasdaq market-maker which adopt the same principle in paying the broker for the order flow.
If you send a "limit-order" (an order to buy or sell a stock at a specific price), your broker may route it to ECN (Electronic Communications Network) that automatically matches your buy or sell orders at specified prices.
In order for your broker's firm to make money on the "spread" (difference between the purchase price and the sale price), your broker might decide to send your order internally (internalization) to the firm's own division to be filled.

Two years ago when the situation worsen, the US Securities and Exchange Commission (SEC) investigated a dozen brokerage firms, including Morgan Stanley (NYSE :MS, quote), Merrill Lynch (NYSE : MER, quote),Ameritrade (Nasdaq : AMTD, quote), Charles Schwab, Knight Trading Group and E*Trade Financial (NYSE : ET,quote), on suspicion they failed to secure the best available price for stocks for their customers.

In an Online Broker Survey previously done in TheStreet.com's, it was found that a wide majority of participants said they don't know whether their broker has anything to do with this practice. And nearly half say they don't know whether their broker is getting them the best possible price.

To find out if you're getting national best bid and offer:

Ask your broker about his firm's order routing practices or look for that information in your account agreement.
Ask your broker how his firm gets price improvement – that is, a better price than the currently displayed quote.
Ask if the order-flow, if exists, is provided free-of charge.
Ask more and more question as if you're investigating them.

TIP: To avoid buying or selling a stock at a price higher or lower than you wanted, ALWAYS place a limit order rather than a market order. A limit order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. When you place a market order, you can't control the price at which your order will be filled and this is when the market maker will ensure you do not get the best price

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Are You Getting National Best Bid And Offer?

So, you're an existing investor / speculator / punter (regardless of which category, your main intention is to make money) who has an account with a broker firm within your area. Or you're new to this exciting game of stocks investing and option trading of which you're very eager to get yourself started by planning to open an account very soon.

Regardless of whether you're an existing or new player in this game, you need to know more than just fill-up a paper or electronic form for submission. Now, let's talk about NBBO - short for National Best Bid and Offer. If you already knew about this, then you may skip the remaining info otherwise please understand what is these little 4 characters.

In short, National Best Bid and Offer (NBBO) is a SEC regulation requiring brokers to guaranteecustomers the best available ask price when buying securities, and the best available bid pricewhen selling securities.

The NBBO is updated throughout the day to show the highest and lowest offers for a security in all exchanges and market makers.

Why is this NBBO thingy important? Before online trading exists, there used to be wide difference between bid price and ask price - the difference between these two is known as spread. Who do you think set this spread at the first place? The "Market-Makers", of course, and the intention is obviously to make money out of the difference. By offering you the highest possible ask price when you buy and offering another person the lowest possible bid pricewhen he/she sell, the market-makers created a huge gap and made the handsome gain of the difference.

But with NBBO, this terrible news is haunting the market-makers as the competition to offer the best available ask price and bid priceincreases resulting in narrower bid and ask spreads. However the Securities & Exchange Commission (SEC) has found some brokers appear to be allowing payment for "Order Flow" (StockTube will talk about this in another article) to affect which markets they send their orders in pretext that customers prefer speed execution.

So, start checking with your broker if they're offering the NBBO - demand a black-and-white agreement to support this (normally brokers which honor NBBO have this stated within their agreement with the customers).

Investing Stocks Or Options - Consider Brokerage Fees

Unless you're big-time investors who buy in millions of dollars in a trade of which the brokerage fees is negligible, you should re-consider the amount of brokerage fees charged on your transaction.

Brokerages such as Merrill Lynch (NYSE: MER), UBS (NYSE: UBS), Morgan Stanley (NYSE:MS), and Citigroup's Smith Barney charge quite a sum for stock trades compare to their low-cost competitors which offer many of the same services.

For example, according to a Bloomberg article, buying

1,000 shares of a stock via telephone with Merrill Lynch can cost at least$120. Compare that with discount brokerages such asAmeritrade (Nasdaq:AMTD), which charges $10for most trades, orOptionsXpress (Nasdaq:OXPS), which charges around $13 to $15, or Fidelity or E*Trade (NYSE: ET), which charge as little as $8 or $6, respectively.

However trading online can bring down the fees, for example, Merrill was charging as little as $30 per online trade - yet this is still steep compared to other alternatives. So if you're investing $1,000 in a stock and you pay a $30 commission fee, you're forking over 3% of that investment's value.

Before you think of switching to other brokerage, consider the following:

Are you getting personalized service from this high-fees brokerage which justifies the cost?
Are they providing you with excellent support whenever you get yourself into trading problem?
For online-trading, how fast is the execution of your trade once submitted ? It does not serve any purpose if it takes ages for the transaction to be completed / filled.
Are you protected from the broker's Financial Failures?
Do you prefer web-based trading or client-based or the flexibility to have both?

Above are just a handful of considerations that an investor / trader should look at from a high-level view. Brokerage fees is the main determine factor which will decide whether your trades is a profitable or loss-trade - especially if your frequency of trade is high. There're more factors to be considered which StockTube will highlight in the coming articles.

StockTube-Reuters-VideoClip

Wednesday, December 13, 2006

Singapore's Wilmar To Bid PPB

Singapore-listed palm oil refiner Wilmar International (SIN : F34) plans to bid for Malaysian palm oil producer PPB Group (KLSE : PPB, stock-code : 4065), which the market values at $1.6 billion, a source close to the deal said on Wednesday.

Both companies are linked to the family of Malaysian billionaire Robert Kuok. The family is the major shareholder of PPB Group and Kuok's nephew, Kuok Khoon Hong, is chairman and a major shareholder of Wilmar. Wilmar Holdings, which owns 82 percent of Wilmar International, was co-founded in 1991 by Kuok Khoon Hong. Wilmar Holdings' other major shareholders include U.S.-listedArcher Daniels Midland (NYSE : ADM, quote).

The source told Reuters Wilmar was expected to offer cash and shares for the Kuok family's stake in PPB, which would trigger a mandatory bid for the rest of the company. The family owned 39.58 percent of PPB Group and Kuok-controlled firm Kerry Group another 5.94 percent as of March 2006, according to Reuters data.

"It will likely be a cash and stock offer," the source said. No other details were available. Shares in Wilmar, PPB Group and PPB's listed subsidiary, PPB Oil Palms Bhd (KLSE : PPB, stock-code : 6823), were all suspended from trading on Wednesday, pending an announcement.

As expected, the palm oil plantation companies have started to either consolidate, expand or find their own respective partners in face of the recent mega mergers of Kumpulan Guthrie Berhad (GUTHRIE : stock-code 3131), Sime Darby Berhad (SIME : stock-code 4197) and Golden Hope Plantations Berhad (GHOPE : stock-code 1953. The most recent being IOI Corp Berhad (IOICORP : stock-code 1961) acquisition of Pan Century Group for RM423 million.

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Road Tolls To Rise By 60 Percent

According to a source, Malaysia will announce on Thursday, Dec-14-2006, a sharp rise in road toll rates to help trim state subsidies in a move that could spark a public outcry and raise inflation. Tolls will go up by as much as 60 percent and will affect users of five highways in and around the capital, Kuala Lumpur.

"The new rates take effect on Jan. 1, that's our New Year present" the source, who declined to be identified, told Reuters. A spokesman for the Works Minister confirmed that an announcement would be made at a news conference at 3.15 p.m. (0715 GMT) on Thursday.

Under toll concession agreements that critics say favor operators, the government has to reimburse operators if traffic volumes and revenues fall short of pre-agreed projections. Most of the highways were approved in the 1990s by the administration of then Prime Minister Mahathir Mohamad, which made privatization and mega-projects one of its hallmarks.

Works Minister S. Samy Vellu said recently the government would have to fork out 2 billion ringgit ($565 million) in compensation to five highway operators if toll rates were not revised.

The operators include listed firms Gamuda Bhd (KLSE : GAMUDA, stock-code : 5398) andLingkaran Trans Kota Holdings Bhd (KLSE : LITRAK, stock-code : 6645). Litrak operates the 40 km Damansara-Puchong highway, where the toll is to rise 60 percent, to 1.60 ringgit from 1 ringgit now, the source said.

"The real toll is 2.10 ringgit, so the government is still subsidizing 50 sen for each user," the source said. Residents along the densely populated stretch had protested strongly against an initial proposal to levy a toll of 1.50 ringgit, forcing the government to fix it at 1 ringgit.

Some 418,000 vehicles used the highway daily on average, reflecting a 14.5 percent compounded annual growth rate for the past seven years, rating firm RAM said in a review of Litrak.

Government officials told that one reason for the shortfall in toll collection was due to motorists switching to alternative non-toll roads, the source said.

The toll hikes, however, will not apply to Malaysia's biggest toll-road firm, Projek Lebuhraya Utara-Selatan (PLUS) (KLSE : PLUS, stock-code : 5052), a PLUS spokeswoman said. PLUS' rate increase is fixed at 10 percent every three years and the next increase is not due until January 2008.

Have you ever come across any other countries of which the government is being held ransomby the road operators? This is better than the goose which lay golden eggs as the operators will definitely win with the "guarantee" huge profits from periodically toll-hike. It will definitely spark another round of inflation as the prices of goods will go up again with this hike. Previously the hike in fuel was being used as justification for numerous hikes started from transportation sector. Nevertheless, expect the stocks of these two companies to generate some interest tomorrow.

Aging Mahathir To Meet Soros Since 1997 Crisis

I read with great interest that Mahathir agrees to meet Soros after almost a decade of hostility due to the 1997 Asia Economic Crisis which created havoc to Malaysia stock market generally and wiped out billions of dollars of losses specifically to some of the top GLC (Government-Link-Companies). Before the crisis, it was reported that both Mahathir and Soros were good friends.

Dr Mahathir’s aide confirmed that the meeting with Soros, who is scheduled to make his first visit to Malaysia to deliver a talk on Challenges to Promoting a Global Open Society is on.

George Soros, the billionaire financier and philanthropist has been invited to address the London School of Economics and Political Science Alumni Society of Malaysia at a fund raising dinner in The Ritz Carlton Kuala Lumpur on Friday, Dec-15-2006. Soros himself was a graduate from the London School of Economics.

Soros said that he and Dr Mahathir had exchanged letters and a personal meeting was planned, depending on the former premier’s health who suffered a mild heart attack on Nov-9. In 1997, Dr Mahathir blamed the Asian financial crisis on Soros, whom he called a “moron” and later refused to meet him when the latter had indicated an interest to talk to the former premier.

During the crisis, Mahathir urged a ban on currency trading while Soros replies that intervening with convertibility of capital is a recipe for disaster and calls Mahathir a menace to his own country.

At a launch of fully computerized Kuala Lumpur Stock Exchange in 1997 and before some 1,000 guests, Mahathir declared that the currency crisis was the handiwork of "powerful predators" from abroad. A few days later, he banned the couple-of-months-old "short-selling" as he claimed it was being manipulated but didn't goes well with international investors and the Malaysia stock market was being punished further with continuous dumping of stocks by the investors.

The reverse decision on the ban of short-selling a week later didn't help, partly because Mahathir went on to blame the rapidly spreading contagion on foreign speculators in general, calling them"ferocious beasts", "racists" and "moron".

At the World Bank-International Monetary Fund meetings in Hong Kong, Mahathir asked that currency trading be made illegal. A month later at a rally in Trengganu state, Mahathir told supporters that the people perceived a connection between the fact that Soros was a Hungarian-born Jew, while the currency crisis victims in Malaysia and Indonesia were Muslim. That prompted three U.S. Congressmen to sumbit a resolution to a House committee asking Mahathir to apologize for his allegedly anti-Jewish remarks - or resign. He did neither.

Foreign investors with plenty of other options continued to pull money out of Malaysia. And domestic investors seemed to lose confidence too. At one time, the Malaysian ringgit fell to itslowest since it was floated in 1973 where it hit RM 4.58 to USD 1.00. Bank Negara announced that Sime Darby's banking unit needed over RM 1.0 billion in fresh capital besides government-run Bank Bumiputra Malaysia Bhd and two other finance companies. In a desperate move, Mahathir introduced the currency peg, which anchors the ringgit at 3.80 to the U.S. dollar in September-1998.

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Finally The Correction Started

Thank God the long overdue correction started yesterday in the Bursa Malaysia (Kuala Lumpur Stock Exchange) and according to most of the foreign analysts, this correction should continue for a couple more days before a pause to continue its' uptrend (if there's any). I think this is a very healthy correction - well, if it could gained 2 (two) digit point within a day previously, then a correction of the same magnitude is nothing to shout about.

I still noticed some habit never dies among investors (or should I used the word speculators / gamblers / punters?) - They never know when to stop and take profit. A classic example - what else if not the high-profile Genting Berhad (GENTING, stock-code : 3182). It's normal for short-term and budget investors to pin their hopes in the call-warrant, Genting-CA (KLSE : stock-code 3182CA) as a cheaper alternative.

I'm sure you must have learn the basic lesson in stock-market - "Buy on Rumor, Sell on News".After the announcement of the successful bid for the second casino in Sentosa, Genting-related stocks gapped-up, Genting Berhad share itself was up by more than 22% at one time - a sign of "celebration". Great, such a celebration is expected and understandable but as a serious investor, you should take the "Whole Monday" opportunity to lock-in profit. What happened after that is history, Genting-CA is down by another 12% as of the writing. I bet majority of the punters in this call-warrant doesn't know the difference between this share compare to the other normal-warrant or how the conversion works. What they know is there's a word "Genting" attached to it and it must be punted on.

Oh dear, if making money in stock-market is that easy. On the other hand, wouldn't it be nice to be able to short-sell this stock at the current correction stage? Nevertheless, I would like to share this (which I have on my past articles) with you:

Bull & Bear makes money, Pig gets slaughtered!!!

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Tuesday, December 12, 2006

Bursa Short-Selling Re-Schedule In Jan-2007

According to latest news from The Edge, Bursa Malaysia Bhd now plans to re-introduceregulated short selling in January after postponing it several times this year, and will later incorporate it as a feature into its new trading platform for equities which is expected to be ready by end-2007. Short selling however would initially be conducted under a “controlled environment”, said the chief executive officer Datuk Yusli Mohamed Yusoff.

To start the ball-rolling, it was reported that Bursa Malaysia would only allow short selling for 70 large companies stocks selected based on their size and liquidity. To make things complicated, the process of borrowing and lending of stocks can only be conducted through Bursa Malaysia that will then charge borrowers or lenders a 2.2% interest on the total value of stocks involved.

Yusli admitted this new ruling will not see immediate increase in the stock exchange trading volume.

I find this amusing as if the Stock Exchange is serious about this easy but made to look-difficult short-selling mechanism to increase the trading volume, it should be made not only easier to execute but should be given more incentive to be successful. Short-selling is a common instrument within mature market such as NYSE, Nasdaq, LSE and others as a complement to the traditional stock-buying.

Yusli should understand that the perception of short-sellers as the potential bad-guys who will cause the stock-market to goes down is an immature thinking. In fact it is quite reverse - if the stocks are bullish, short-sellers will ultimately need to cover their positions by buying stocks and this will push up the stocks price.

On the other hand if the global market is on downtrend, short-selling will not only allow investors (local and foreigner) to cover their long position but potentially make tons of profit which can in return be channel back to the equity market to potentially support the falling market. Imagine if all the investors are trapped in a bearish market because they can only long the stocks - without any mechanism to liquidate their portfolio, it's as good as losing these investors as continuous customers (who contribute in terms of brokerage fees) simply because they do not have any more money to invest. Sounds familiar?

That's what happened to Malaysia Stock Exchange for a couple of years since the 1997 Asia Economic Crisis. The question is will Bursa finally wake up and serious about promoting Malaysia stock-market globally as a destination for foreign investors?

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Have You Invested In Oil-Related Stocks Yet?

It's the annual repetitive cycle again around this time that energy or oil-related stocks will make its' charge again towards end of the year. So have you allocated some of your funds into these black-gold stocks yet? If not, why not?

Today Reuters reported that most OPEC members are in favor of a cut in oil output to combat excess supplies and to ensure prices stay above $60 a barrel. "Iran, like most OPEC members, does not consider an oil price of less than $60 a barrel as appropriate," said the Oil Ministry's news Web site.

U.S. heating demand is expected to be nearly 27 percent below normal this week, with warmer temperatures in most regions east of the Rockies, the National Weather Service said on Monday, which means fuel inventories are likely to remain ample.

Alberta Clipper storms typically bring snow, and then cold weather, but not this one. The storm will be taking a

track much farther north than usual, which will keep any snow in Canada, while sweeping mild air throughout the northern Plains on gusty, westerly winds. The air will turn a little bit colder across the region, but still not as cold as what you typically see across this area during the month of December.

So, besides the considerable supply surplus over demand and warmer temperature, theweakening dollar which reduces OPEC's purchasing power from dollar-denominated oil is another factor that could push OPEC to take further action to stem a 22 percent price slide since a record of over $78 in July.

My favorites have always been (in no particular order) the following, simple because the stock price is more volatile which translate to a good instrument when you do option trading:

EOG Resources, Inc. (NYSE : EOG, quote)
Schlumberger (NYSE : SLB, quote)
Transocean Inc. (NYSE : RIG, quote)
Halliburton Company (NYSE : HAL, quote)
Valero Energy Corporation (NYSE : VLO, quote)

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Volkswagen Close To Acquire 51% Proton?

Proton Holdings Bhd (KLSE : PROTON, stock-code : 5304), which is now evaluating a number of parties as strategic partners for its manufacturing operations, may decide to take in the Europe's largest carmaker, Volkswagen Aktiengessellschaft (FRA : VOW), as its' new partner.

According to a source reported by Asia Pulse, the German carmaker could sign a preliminary agreement to enable it to do a full fledged due diligence audit on Proton just before Christmas.

Volkswagen was reported earlier that it's desperate in finding a new assembling partner and Proton has the advantage of Malaysia's free trade agreement (FTA) with Japan to exportMade-in-Malaysia Volkswagen cars to Japan by 2010. Under the FTA, Made-in-Malaysia cars above the 2000cc can be brought into Japan on a commercial basis without duty.

Volkswagen, which has come up with 20 new models this year, is said to be the preferred choice as it was the only party willing to pump in money, which should help the cash flow at Proton. Volkswagen is believed to be willing to commit as much as RM2 billion (US$563.7 million) to acquire a 51 per cent stake in Proton's manufacturing arm.

Other parties that have expressed the same interest are PSA Peugeot-Citroen (EPA : UG),Mofaz Sdn Bhd, Naza Group and DRB-HICOM Berhad (KLSE : DRBHCOM, stock-code : 1619). While PSA Peugeot-Citroen is only interested in forming a loose alliance, the other three local companies were said to have a slim chance on the tie-up possibility as they're heavily involved in the local assembly - creating a conflict of interest scenario.

In actual fact, the sooner the partner is identified, the better it is for both the Proton company as well as to the Bursa Malaysia (Malaysia Stock Exchange) as the good news will definitely lift up the stock market's light since Proton has been struggling to solve its' financial problems.

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Yusli Should Ensure Bursa Malaysia Play Its Role As Well

Everyone – from the exchange to the brokers and public listed companies (PLCs) – has a role to play to ensure that the stock market continues to perform, said Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff today.

“The role of the PLCs is to perform well and do investor relations (IR), the role of the exchange is to make sure the market is safe and orderly and provide the infrastructure for trading.

“Someone in the middle of the chain should be selling the market – brokers, remisiers and institutional sales dealers - while analysts should be writing reports,” he said.

“It is not our job to promote the companies or the exchange. If companies which make millions a year cannot allocate a few hundred thousands for IR, they should remain a private company. Don’t take up space in our system,” he said, citing CLSA's regional conference, which some invited Malaysian companies did not want to attend and meet investors.

“Brokers, please do your job – research and talk to your clients. They are not doing it for free; they earn commission on every trade so I just can’t understand why, for instance, we are not seeing more marketing efforts.

Well said Yusli but I think Bursa Malaysia which is under your command should lead by doing the following:

Enhance Transparency - how many times have the minority investors got misguided (I guess the word cheated might not sounds polite) when a specific stock was manipulated by syndicate (regardless of insider-linked or not) which drove the share sky-high only to be so-called asked by Bursa Malaysia on the reason for the abnormal price movement. As usual the standard answer from this listed companies are "We're not aware of any new development which contributes to the price movement". And what will happen after that? Nothing at all, the cases just vaporize into thin air.
Allow only companies with Qualities to be listed - Malaysia stock-market were bombarded with too many companies without quality trying to get listed with the main intention of converting their shares into instant cash. Get real, how many of these companies have the long-term plan to benefit all the shareholders (biggest to smallest)? After the first year, the subsequent year seems to deviate (lower) too much from the projected revenue/profit as stated within IPO brochures.
Heavier punishment - not only should the listed-company which mislead the public be punish, the CEO, CFO, COO and all the C-level officers should be investigated and held responsible for any of their misdeed. Entrusted with the role of good management but used it as a way to enrich themselves above minority shareholders' interest is equivalent to crime of day-light robbery which entitled to severe punishment. How many minority shareholders lost the only shirt on their body when these companies were declared PN (Practice Notes) and de-listed thereafter?

Track and Report Insider-Trading - setup a special body to specifically monitor and report any insider-trading which might jeopardize the value of normal shareholders. Learn from U.S. on how they did this efficiently to protect the interest of the public generally and minority shareholders specifically. If the same Enron case were to happen in Malaysia, rest assures the whole Malaysia Stock Exchange will collapse faster than you can blink your eyes.

Reduce Brokerage Fees for online-trading - why should investors pay the same rate regardless of whether the transaction is being done through brokers or electronically via internet? It doesn't make sense at all when the brokers are doing nothing but to collect brokerage-fees just because the investors happened to open an account with him. The worst thing is most brokers are not research-oriented - it happens many times that retail investors are more knowledgeable than the brokers themselves about the fundamental and technicality of a specific stock. Don't trust me? Pick-up the phone and ask your brokers about it now.

There're many other measures which can be adopted to ensure long-lasting and healthy environment for investors (both locally and foreign) if Malaysia Stock Exchange is serious about long-term investment into the market.

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Monday, December 11, 2006

Top Reasons Genting Is A Winner

The top business news since last Friday were the official announcement of Genting International (SIN : G13) & Star Cruise Ltd (SIN : S21) winning the Singapore second casino on the Sentosa Integrated-Resort (IR) island projects and how everyone should keep an eye on this new casino giant. The news was pickup not only within Asia but international ranging from Wall Street, AP, Financial Times, Reuters, Bloomberg and so on.

There're numerous reasons which have been circulated from the rumor-mongers on the street to the top analysts speculating and reasoning why Genting International, a subsidiary of Genting Berhad (GENTING, stock-code : 3182) will win the second casino after lost a bid earlier for the first casino license in Singapore to Las Vegas gaming giant Las Vegas Sands Corp. (NYSE :LVS, quote).

Singapore, which pride of being able in transforming itself into the most developed country

within Asean despite having no natural resources whatsoever is fast losing its' long dependence on manufacturing sector which helps build the nation. China has taken over the place, so Singapore needs to divert to other sectors to keep the nation going forward. It has started Bio-Tech from the day its' neighbouring countries were still trying to digest the meaning of it. Its' Information Technology industry, despite being the latecomer compare to Malaysia's MSC (Multi-Media Super Corridor) is currently the leader within the region. The other two sustaining old sectors namely financial and business hubs and tourism heaven are facing tough competition. It needs to find a new "source" of revenue, and casino is the answer.

Let's digest some of the reasons why Genting won (without any particular order):

Singapore Government Strategy - Singapore, which has awarded (no one thought of Singapore's two licenses plan at the first place) the first casino license to Sands is cautious not to put everything into a basket (talk about smart government). The ideal situation would be to award one license to a western country (someone said it's a political reason from the perspective of the nation security) and another one to a strong, efficient and proven market player - Genting Group fit perfectly for this role. Furthermore, majority of Genting Berhad's customers at the hill-top casino are Singaporean - so why not bring this casino nearer to its' own territory with the benefits of tax-revenue? It makes perfect sense.
Political Pressure from Government of Malaysia - Since the current Prime Minister, Abdullah Badawi took over the office and walk the corridor of powers, the Malaysia policy towards Singapore has taken a 180 degrees to an improvement in bilateral relations. Cash-rich Temasek Holdings, the investment arm of Singapore Government which has over US $ 80 billion in business diversification has aggresively buying into Malaysia's assets such as Telekom Malaysia (TM, stock-code : 4863), Alliance Bank and the controversial Pantai Hospital (PANTAI, stock-code : 8036). The recent outburst from Deputy Prime Minister Najib Tun Razak has called for more reciprocity from Singapore in facilitating Malaysian acquisition of assets in the island republic as the number and size of acquisitions by Singaporean interests (especially Temasek Holdings) had far outweighed Malaysians’ acquisitions of Singaporean companies. This could add pressure to Singapore Government in Genting bid for the second casino project.
Genting is equally enthusiast to diversify - the willingness to pump more than S$ 5 billion into the project only shows how desperate Genting Group is in overseas diversification of it's huge cash-pile instead of relying on local markets within Malaysia. Besides, the talk of 30% and the most recently 60% of business shares allocation for Malay-Bumiputera ethnic under NEP (New Economic Policy) has cause much dis-comfort within chinese-based business communities (though not publicly voiced). What better way to safeguard Genting assets if not to relocate in disguise of diversification? The second generation of Lim Goh Tong, Lim Kok Thay is definitely not taking any chances if the decades built hard-earned billions is at stake. Anyway, he's learning fast from Robert Kuok what the Lim senior didn't.
Nusajaya - South Johor Economic Zone factor - the new US$ 4.8 billion project with the land size of roughly 2.5 times the size of Singapore launched by Abdullah Badawi is said to primarily tapping into Singapore's prosperity (Nusajaya is near the Second Link in southern Johor) and converting the area into the ambitious plan equivalent to Shenzhen or Singapore. There were rumors that Badawi was trying very hard during his recent visit to Japan talking to Tokyo Disneyland in order to bring Disneyland to Nusajaya. Singapore might see this as a threat (definitely not Disneyland but a casino) if Genting is not awarded the second casino in Sentosa IR.

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Sunday, December 10, 2006

Kuwait Finance House Close To Acquiring RHB?

A source was reported told Business Times that RAJA Teh Maimunah has left the Bahrain-basedUnicorn Investment Bank (UIB) to join Kuwait Finance House ( KFH ) in January 2007. She has been appointed as the chief corporate officer, overseeing the international business and corporate expansion of KFH, the source added.

Raja Teh was previously picked by UIB to head its Malaysian unit when the office was

established last year. She was formerly the senior vice-president of investment banking at RHB Sakura Merchant Bankers Bhd (ring a bell?). Recently there was rumor that KFH was talking into the possibility of acquiring Rashid Hussain Bhd (RHB : stock-code 1309).

The rumor was strengthen by news that KFH met Sarawak Chief Minister Abdul Taib Mahmud, whose family controls Cahya Mata Sarawak Bhd which controls Rashid's parent, Utama Banking Group (UBG : stock-code 6831).

Prior to RHB Sakura, she was with CIMB Bhd for 10 years.

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Kuwait Finance House Buying RHB?

AMAZON - Take Money Off The Table

I'd decided to ring the register last Friday, 8-Dec-2006 on the giant online-bookstore, Amazon(Nasdaq : AMZN, quote). Most of the analysts were shying away from this stock given that it hasn’t proven that it can grow profitably. In fact its' operating margins slipped to 1.7%, from 2.2% last quarter.

While the profit margin is thin, it has over-stepped into area not its' domain such as grocery, auto-parts and so on. on

27-Nov-2006, the P/E (price earning ratio) was at 48 times estimated 2007 earnings of 70 cents per share which is quite expensive. The down-side over-whelmed any upside, so I decided to buy "Put" position (Apr 2007 42.5 Put).

Though this stock might have more down-side after the consolidation from $ 42 to current $ 38.45, it's always advisable to take-profit whenever the opportunity exists. Always remember that:

Bull & Bear makes money, Pig gets slaughtered

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Amazon Game Over

Friday, December 08, 2006

Before Investing Gaming Stocks : Check The RevPAR

There're different types of terms being created and used as a standard to measure the performance or to forecast the potential revenue of a specific business sector. Of course this depends on whether the underlying factors which affecting the business is tangible or not. For example in telecommunication sector, companies normally use the term "ARPU" which means "Average Revenue Per User" during quarters' earning announcement to shareholders on how the company is performing.

Do you know what the term for gaming sector/industry is? It's RevPAR (according to Motley Fool), short for "Revenues Per Available Room". RevPAR is used to gauge the revenues that a company is making from each of

its hotel rooms (incorporates both occupancy and room rates).

For example, assume that a company managed 10,000 rooms last quarter, which were occupied three-fourths of the time at an average daily rate (ADR) of $120. The total revenues for the quarter would be calculated as follows:

10,000 rooms x 90 days in the quarter x $120 ADR x 75% occupancy rate = $81 million.
dividing $81 million in revenues by 900,000 (10,000 x 90 days) available rooms yields a RevPAR figure of $90

Some case-studies of the gaming industry's biggest players statistic:

Las VegasSands (NYSE : LVS, quote) - ADR : $221 - RevPAR : $217
MGM Mirage (NYSE : MGM, quote) - ADR : $140 - RevPAR : $135
Wynn Resorts (Nasdaq : WYNN, quote) - ADR : $271 - RevPAR : $257

Generally, an uptrend in RevPAR indicates a healthy pricing environment due to strong demand which will indirectly generate revenues in other departments as well. But relying on RevPAR figure alone can be mis-leading and detail financial figures in other accounting section should be looked at for overall picture. Additional things to keep in mind:

RevPAR says nothing about overall hotel revenues - MGM's per-room revenues of $128 are roughly half the $246 at Wynn Resorts, but with a much larger property portfolio, MGM's $491 million in total hotel revenues are far greater than Wynn's $64 million.
Use other financial data together with RevPAR - Wynn posted the highest RevPAR of the three last quarter, but it also reported the lowest growth rate. And though MGM Mirage generated the smallest RevPAR figure, the firm has now delivered positive growth in that department for thirteen consecutive quarters.
RevPAR includes hotel revenues only, and doesn't factor in money raked in elsewhere, such as in the showrooms, restaurants, shops, or casino.

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Mortal Kombat : Shanda vs Netease

Genting International-Star Cruises Consortium Won

The Genting International-Star Cruises consortium has aced the Sentosa integrated resort project. The result which was announced at a press conference earlier came as no surprise as analysts had picked Genting as a frontrunner right from the start. Genting International (SIN :G13), the international investment arm of Genting Berhad (GENTING, stock-code : 3182) has earlier expressed confident of winning a bid to operate Singapore's second casino resort from its Singapore Government.

Its $5.2b Resorts World At Sentosa will leverage on international brand names like Universal Studios, which will design 16 new rides specially for the resort.

Besides the Universal Studios theme park, there will also be 3 other water-themed attractions including a surf pool. "We wanted a large-scale family-oriented resort that would draw a large number of new visitors to Singapore," deputy prime minister S Jayakumar told a briefing where he announced the decision.

Visitors will be able to observe some 700,000 fish species in one of the world's largest oceanariums. Genting's proposal also includes six hotels and a spa with over 1,800 rooms for both leisure and business travellers.

Earlier, market watchers had picked Genting as a favourite to win due to its Asian experience. The resort is expected to attract 10 million visitors and generate $15b in tourism receipts by 2015. The Sentosa integrated resort is expected to be ready in 2010.

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D-Day For Genting's Sentosa Plan

D-Day For Genting's Sentosa Plan

The Singapore Tourism Board said in a statement that the government would announce the successful bid at a media conference which will start at 5.30pm today, 8-Dec-2006. A panel of government ministers will award the 30-year concession to run the integrated resort based on criteria such as the tourism and architectural appeal of each proposal.

Genting International, the international investment arm of Genting Berhad (GENTING, stock-code : 3182) has earlier expressed confident of winning a bid to operate Singapore's second casino resort from its Singapore Government.

The three bidders for the resort are:

Genting International which is partnering Universal Studios
Bahamas-based Kerzner International teamed with Singapore's CapitaLand
Las Vegas company Eighth Wonder teamed up with Melco International Development, as well as the Banyan Tree group and Starwood hotel chain.

Genting International's pitch is for a development called "Resorts World at Sentosa" which includes a $1.6b Universal Studios theme-park and 6 world-class hotels including one by American architect Michael Graves who plans to create a 460-room boutique hotel called The Michael Hotel.

Universal Studios will be in charge of the design of the theme park's area, while a core six-man team from Michael Graves & Associates will look into the design of the casino area which is expected to be enclosed with no natural light for a "discreet" yet "open" design.

"We believe Genting will be viewed as having greater market knowledge given it is the only bidder to have operated in Asia. Its Universal theme park component offers a clearly branded tourism strategy," said Merrill Lynch analyst Sean Monaghan.

Kerzner and CapitaLand have submitted plans to have 34 F&B outlets in its resort, taking up 21,000 square metres of gross floor area including restaurants run by celebrity chefs Gordon Ramsay and Nobu Matsuhisa. There will also be an Aquaventure waterscape park that will feature river rides powered by new technology, pools and fish habitats like the shark and stingray lagoons.

The consortium suffered a setback in October when Kerzner chief executive Howard "Butch" Kerzner, 42, was killed in a helicopter crash in the Dominican Republic.

The bid by Eighth Wonder is for a development called Harry's Island with a coral reef lagoon called Ocean Planet, a football stadium with a football-themed hotel, and a sports school run by coaches chosen by top Brazilian player Pelé, as well as themed development areas backed by familiar names such as wedding designer Vera Wang, well-being guru Deepak Chopra and spa group Banyan Tree.

Genting Group earlier lost a bid for the first casino licence in Singapore to Las Vegas gaming giant Sands, but analysts believe the Malaysian group stands the strongest chance in winning the Sentosa project.

Plantation Merger & Acquisition Heating Up

Less than a month after the mega-merger of Kumpulan Guthrie Berhad (GUTHRIE : stock-code 3131), Sime Darby Berhad (SIME : stock-code 4197) and Golden Hope Plantations Berhad (GHOPE: stock-code 1953), the contender IOI Corp Berhad (IOICORP : stock-code 1961)started its' chess-move in order not to be out-done by the new giant by acquiring Pan Century Group, operator of an edible oils refinery, for RM423 million from one of India’s conglomerates, the Aditya Birla Group.

The almost 30-years old Pan Century Group acquisition would make IOI, Malaysia ’s most valuable plantation company, and the world’s biggestvegetable oil-based fatty acid producer in the world. Both Pan Century Edible Oils and Pan Century Oleochemicals posted RM20.02 million and RM15.52 million in net profit with revenue of RM1.57 billion and RM285.55 million respectively for financial year 2005.

Aditya Birla has been among India’s largest companies for over 50 years, chalking up revenues of about US$10 billion (RM35.5 billion) and has a market capitalization of about US$15 billion (RM53.3 billion).

Aditya Birla group executive president and business head Ravi Kastia said the Malaysian palm oil business has been sold at a PE (price to earnings ratio) valuation of 12. Other companies which were eying Birlas' Malaysian palm oil business included SIME Darby, Kulim Malaysia BhD, among others.

With this latest move by IOI Corp, the other small players are waiting to be acquired while the middle-size plantation companies should start worrying about being eaten-up alive unless they start finding their own partner(s) from now onwards. As for investors, keep an eye on those small but well-managed companies as their current stock prices are very attractive. Who knows, Tan Sri Lee Shin Cheng might decide to flex his muscle again in the not so long future.

Some of the medium to small plantation companies and their market capitalization:

Batu Kawan Berhad - RM 3.2 billion
Asiatic Development Berhad - RM 3.0 billion
United Plantations Berhad - RM 1.8 billion
Kulim (M) Berhad - RM 1.47 billion
Tradewinds Plantation Berhad - RM 1.0 billion
Kwantas Corporation Berhad - RM 636 million
United Malacca Berhad - RM 621 million
Far East Holdings Berhad - RM 542 million
Sarawak Oil Palms Berhad - RM 370 million
Tanah Emas Corporation Berhad - RM 137 million

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Guthrie, Sime, Golden-Hope Shareholders Under-Offered

Bursa Malaysia (KLSE) stocks' price seems to rely and carry more weight on foreign research to the extent that stocks will only perform when it's being mentioned by this firm. The latest being Kumpulan Guthrie Berhad (GUTHRIE : stock-code 3131), Sime Darby Berhad (SIME : stock-code 4197) and Golden Hope Plantations Berhad (GHOPE : stock-code 1953) which announced their merger recently.

When Credit Suisse mentioned that the merged entity under Synergy Drive (initial from Sime Darby) should be valued at RM 7.40, a whopping 41% potential upside from the issue price of RM 5.25, the stock price of Sime Darby sky-rocket to its' 9-years high of RM 7.70 (above the RM 6.46 offered by Synergy Drive). Golden Hope and Kumpulan Guthrie performed with the same magnitude as well.

So, what goes wrong here? If what Credit Suisse claimed is true, does that mean Malaysia's local research houses are incapable of evaluating such a simple fair-value for public knowledge? Credit Suisse even suggested that investors should buy Sime Darby's shares up to RM 8.20 and Golden Hope's up to RM 6.90. Either Credit Suisse over-project the fair-value or Synergy Drive is under-offering the fair value to the shareholders.

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Thursday, December 07, 2006

When Will The New Internet Hero Emerge?

Internet search giant Yahoo (Nasdaq : www.yahoo.com, quote)announced a management overhaul and an aggressive company restructuring with the appointment of chief financial officer Susan Decker in charge of ad sales but it wasn't enough to satisfy investors when the stock price took a dive of 2.1% yesterday, 6-Dec-2006.

Finally, Yahoo recognizes the need for change in order to survives the tough competition in internet business especially on the online advertising which is its' bread and butter. So far Yahoo has not thrown any punches to its' opponent, Google (Nasdaq : GOOG, quote), which happily eating up Yahoo's portion of cake since day-one like a hungry "pacman".

While Microsoft Corp. (Nasdaq : MSFT, quote) used its' huge cash to launch MSN just to give some kids' kicks to prevent Google from a smooth journey, Yahoo apparently just stood and bounced around without much fight. Microsoft never intend to build any serious threat to Google as it was happy with its' desktop business which it almost monopolize. Steve Ballmer admitted Google's success is primarily due to its' business model. While at the same time claimed Google is not a direct competitor to Microsoft, Ballmer prevents his kids from using Apple (Nasdaq :AAPL, quote) iPod or Google.

In fact, if the recent business development were to goes by, both Microsoft and Yahoo have acted more like a "follower" rather than a "leader" in their respective business domain. Microsoft which saw the success of Apple's iPod launch its' own version of Zune while Yahoo follows the step of Google in leveraging on conventional media advertising recently.

BusinessWeek has suggested 5 steps to get Yahoo back on track:

Simplify the already cluttered Yahoo's home page
Get new blood or transfusion in terms of new executive
Encourage free-flow of Creativity
Roll-out Panama fast - to compete with the Google's unstoppable Adsense
Stop the ever-growing manifestos

But, will there be any new kid who can make revolutionary changes to the existing internet business and become the "New Leader"? Microsoft used to become the de-facto and claimed the in the near future there won't be any newspaper as everything will be web-based - which didn't happen. Then Yahoo came out from the dot-com boom to declare as the new hero in the internet search engine only to lose out to Google which silently created something simple but powerful enough to almost monopolize the search and online advertising business.

It's a matter of time before someone innovates and changes the way business is conducted in the cyber-space with a better business model. Can that company be IAC/InterActiveCorp (Nasdaq :IACI, quote)? Does Ask.com has something up its' sleeve in preparation to take over from Google? It shouldn't be so hard to shake off Google as there's no "Loyalty" within search engine and online advertising business. As long as you can provide something simpler, easier, faster, more efficient and with values than existing platform, you're the "Winner".

Other Articles That May Interest You ...

Wednesday, December 06, 2006

Custom Home Theater With iPod

Digital Lifestyle Outfitters (DLO) has introduced the HomeDock Pro and HomeDock Deluxe, which lets custom installers easily add the functionality of the popular Apple iPod (Nasdaq :AAPL, quote) into any home integration network leveraging on the industry standard connectivity (RS-232) and an easy to use graphical interface.

The DLO HomeDock Pro is designed specifically for the Custom Home to view and navigate iPods music and video directly on a TV screen. This Pro version works with iPod nano, Video iPod, 4G iPod and iPod mini. Other features including multiple screen savers to prevent plasma burn-in, a turbo scroll that

quickly navigates through thousands of songs in seconds and room matching color themes to truly customize a users iPod experience.

The DLO HomeDock Deluxe is the consumer version which the company claims is the world's first iPod dock that lets you view, select and navigate your iPod's music on your TV screen. You can even customize colors and screen saversto fit your taste. Retailed at $ 149.99, it

works with iPod nano, Video iPod, 4G iPod and iPod mini. The control is via the included 18 Button Remote Control.

Other features :

Non-proprietary
Supports RS-232 and RS-485
IR remote jack
Raised iPod Connector
Charges iPod battery
Standby power mode
Multi-lingual
'Now Playing' Info including Song, Artist, Time Playing, Time Remaining, etc.

Will Boeing Ever Land?

I used to dream of having a plane toy when I was a kid simply because of the huge size of this monster. The only toy then was the 747 with the Boeing logo sticker staring at me proudly. Boeing used to be the only player who monopolize the aerospace industry till the Airbus came into picture but it seems Boeing still command the respect of being the "Big Brother" in this industry.

Boeing (NYSE : BA, quote) score another point when Lufthansa plans to

order Boeing’s new stretch version of the 747, in a decision that deals a severe blow to rival giant-plane maker Airbus.Lufthansa, Germany's largest airline and one of Airbus' biggest customers, is expected to announce on 6-Dec-2006 a firm order for 20 of Boeing's new 747-8 (known as Intercontinental) passenger airplanes valued at $5 billion at list prices with an option for another 20.

Boeing recently secured a $15 billion contract from the U.S. Air Force for search and rescue helicopters, prompting Lockheed Martin (NYSE : LMT, quote) and United Technologies(NYSE : UTX, quote)to filed complaints as the whole pie was given to Boeing alone.

When Democrats won control of Congress last month, there was saying that military spending will be cut and Boeing being one of the players will be affected. But Boeing just shot passed all the turbulence as there are plenty of opportunities elsewhere for growth.

Boeing last week indicated that it plans to sell up to $15 billion worth of military products to Indiaover the next 10 years. Japan will also likely to boost its defense spending given anxieties over an unstable North Korea.

The numerous production problems that caused Airbus to delay delivery of its all-new A380 up to two years have been a pleasant bonus for Boeing's 747 families of airplanes. FedEx (NYSE :FDX, quote) has decided to cancel an order for 10 A380s and replace it with an order for 15 Boeing 777s recently. "Federal Express is the largest air-cargo carrier in the world. They're a trend setter, and everybody watches their decision." said Jim Edgar, Boeing's director of cargo marketing.

It was a market that Airbus had hoped to monopolize with its A380, whichseats 555 people in three classes. The 747-8 Intercontinental can carry up to 460 passengers in three classes, but its fuel and aerodynamic efficiency means it can match the bigger A380's seat-mile costs.

Furthermore U.S. domestic airlines are expected to start upgrading their fleets in the months to come, and according to some analysts the year 2007 and 2008 should be profitable years for U.S. domestic airlines industry.

Of course, much of this news is already reflected in Boeing’s stock, which currently trades at 18.9 times estimated FY2007 earnings of $4.74 per share. Any pullback to the $80 to $88 price range would be an opportunity for investors to start accumulating. Alternatively consider investing in Call options with plenty of time-value.

Popular Foods That Might Kill You

On Dec. 5, New York City's Board of Health voted to ban the use of artery-clogging trans fats at all city restaurants, from local pizzerias to national chains to high-end hot spots. Restaurants will have to stop using frying oils with trans fats by July, 2007, and eliminate trans fats from all foods by July, 2008. But trans fats show up within your kitchen as well - margarine, candy bars, pound cake fresh from oven and so on.

What are trans fats? They are solid fats created by adding hydrogen into cooking oils.

Partially hydrogenated vegetable oils are used for frying French fries and chicken and for baking croissants, cookies, and donuts.

"Trans-fat raises the level of bad cholesterol in the body, which contributes to heart disease," says Dr. Robert Eckel, a professor of medicine at the University of Colorado and former president of the American Heart Assn.

"If New Yorkers replace all sources of artificial trans fat, by even the most conservative estimates, at least 500 deaths from heart disease would be prevented each year in New York City - more than the number of people killed annually in motor vehicle crashes," says Walter Willett, M.D., and chair of the Nutrition Dept. at the Harvard School of Public Health. "Trans fat from partially hydrogenated vegetable oil is a toxic substance that does not belong in food."

J. M. Smucker Co. released its Crisco Zero Trans Fat Shortening (alternatives to trans fat) two years ago. It said that the newly formulated oil didn't have additional saturated fat and would produce the same results as the original hydrogenated Crisco. And other big oil manufacturers including Cargill, Archer-Daniels-Midland (NYSE : ADM, quote), and Bunge(NYSE : BG, quote) are making substitutes.

So, why have some fast-food chains, bakeries, and food companies found it so hard to part ways with trans fat?

McDonald's (NYSE : MCD, quote) says there aren't yet good substitutes for trans fat and that switching may compromise thetaste of its food. Using trans-fat frying oils also allows fast-food chains to trim costs, since the same oil can be used for weeks.

Food companies such as Kraft (NYSE : KFT, quote) and Sara Lee(SLE, quote) also have stuck with trans fat in certain products, since it can help extend the shelf life of baked goods and other products.

But some other companies have committed to make the necessary changes. Wendy's (NYSE : WEN, quote) switched to a 0-gram trans-fat cooking oil in August at its 6,000 restaurants, and Yum! Brands (NYSE : YUM, quote), which operates 5,500 KFC and 4,200 Taco Bell restaurants, also committed to fry its chicken in trans-fat-free oil by April, 2007.

Tuesday, December 05, 2006

Stocks Which Triggered Buy Signal - 5Dec2006

After closing today, Bursa Malaysia (KLCI) Composite Index recorded another high with volume above 1.5 billion. It makes one wonder if this trend will ever stop for a while to catch some breathesI haven't seen any major correction except on the 1 day negative reaction in response to the U.S. major indexes retreats.

Some of the stocks which triggered (I won't be able to post detail analysis today due to time constraints) StockTube and MACD "Buy" signals today, 5-Dec-2006, together with uptrend characteristics (higher ratio of Bulls against Bears, Stochastic cross-over, bullish RSI etc) are :

Willowglen MSC Berhad (WILLOW : stock-code 0008)
PinWee Group Berhad (PINWEE : stock-code 7134)
Online One Corporation Berhad (ONLINE : stock-code 0074)
Leong Hup Holdings Berhad (LHH : stock-code 4839)
Fotronics Corporation Berhad (FONICS : stock-code 0071)
Damansara Realty Berhad (DBHD : stock-code 3484)
Cybertowers Berhad (CYBERT : stock-code 0022)
Bright Packaging Industry Berhad (BRIGHT : stock-code 9938)
Bertam Alliance Bhd (BERTAM : stock-code 9814)
AsiaEP Berhad (ASIAEP : stock-code 0039)

Friday, March 6, 2009

2006-12-28

Tuesday, December 26, 2006

Sunday, December 24, 2006

Saturday, December 23, 2006

Friday, December 22, 2006

Thursday, December 21, 2006

Wednesday, December 20, 2006

Tuesday, December 19, 2006

Monday, December 18, 2006

Sunday, December 17, 2006

Saturday, December 16, 2006

Friday, December 15, 2006

Thursday, December 14, 2006

Wednesday, December 13, 2006

Tuesday, December 12, 2006

Monday, December 11, 2006

Sunday, December 10, 2006

Friday, December 08, 2006

Thursday, December 07, 2006

Wednesday, December 06, 2006

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