Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
Friday 12 November 2010
Integrax wants to exercise option to acquire LMT
Published: 2010/11/12
PORT operator Integrax Bhd (9555) wants to exercise an option to take over Lumut Maritime Terminal Sdn Bhd (LMT) from Taipan Merit Sdn Bhd but the latter says it has no legal right to do so.
In a filling to Bursa Malaysia Bhd yesterday, Taipan Merit parent Perak Corp Bhd said the option belongs to the non-defaulting party.
Given the termination of a shareholders' agreement by Taipan Merit on October 28 this year, the non-defaulting party was Taipan, Perak Corp added.
Taipan Merit is wholly owned by Perak Corp, which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak.
In a filling to Bursa Malaysia Bhd yesterday, Taipan Merit parent Perak Corp Bhd said the option belongs to the non-defaulting party.
Given the termination of a shareholders' agreement by Taipan Merit on October 28 this year, the non-defaulting party was Taipan, Perak Corp added.
Taipan Merit is wholly owned by Perak Corp, which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak.
In its statement, Integrax said it did not recognise Taipan Merit's notice of termination of the agreement.
Integrax said it had made an offer to buy out Taipan Merit's 50 per cent plus one share in LMT under the purported option.
It gave Taipan Merit 30 days to transfer all its LMT shares and indicate a share sale price.
Integrax, together with subsidiary Pelabuhan Lumut Sdn Bhd (PLSB), has also served a notice to arbitrate the termination of the shareholders agreement.
In this regard, Perak Corp said it will inform Integrax of its choice of arbitrator in due course.
Meanwhile, Integrax director Harun Halim Rasip said the fallout between PLSB and Taipan Merit was centred on the Brazilian iron ore company Vale's request.
The latter had asked LMT to provide an interim port facility for a 10- year period at Lekir Island Satu, next to Vale's own jetty.
While Perak state officials saw it as a good deal, a majority of Integrax's board was against the move.
Read more: Integrax wants to exercise option to acquire LMT http://www.btimes.com.my/Current_News/BTIMES/articles/pinr/Article/#ixzz151NAP2Xd
Integrax offers to buy out Taipan Merit
Published: 2010/11/11
INTEGRAX Bhd has made an offer to buy out Taipan Merit Sdn Bhd at 50 per cent plus one share in Lumut Maritime Terminal Sdn Bhd (LMT), along with notice to arbitrate the termination of shareholders agreement by Taipan Merit.
The offer to acquire Taipan Merit's shares sees Integrax exercising its option under a shareholders agreement between the two parties which allows for the transfer of the shares, Integrax said in a statement today.
"At the same time, Integrax does not recognise Taipan Merit's notice of termination of the agreement," it said.
Taipan Merit, a wholly-owned unit of Perak Corp Bhd which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak, been given 30 days to transfer all its shares in LMT to Integrax and to indicate a share sale price.
The submission of the notice to arbitrate cited three points, including notice of termination of shareholders agreement, the reappointment of Amin Halim Rasip as chief executive officer of LMT despite objections by Integrax and Taipan Merit's usurpation of the management of LMT.
Taipan Merit had terminated a shareholder's agreement with Integrax end-October which Integrax alleged was in breach.
-- BERNAMA
http://www.btimes.com.my/Current_News/BTIMES/articles/20101111185105/Article/index_html
INTEGRAX Bhd has made an offer to buy out Taipan Merit Sdn Bhd at 50 per cent plus one share in Lumut Maritime Terminal Sdn Bhd (LMT), along with notice to arbitrate the termination of shareholders agreement by Taipan Merit.
The offer to acquire Taipan Merit's shares sees Integrax exercising its option under a shareholders agreement between the two parties which allows for the transfer of the shares, Integrax said in a statement today.
"At the same time, Integrax does not recognise Taipan Merit's notice of termination of the agreement," it said.
Taipan Merit, a wholly-owned unit of Perak Corp Bhd which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak, been given 30 days to transfer all its shares in LMT to Integrax and to indicate a share sale price.
The submission of the notice to arbitrate cited three points, including notice of termination of shareholders agreement, the reappointment of Amin Halim Rasip as chief executive officer of LMT despite objections by Integrax and Taipan Merit's usurpation of the management of LMT.
Taipan Merit had terminated a shareholder's agreement with Integrax end-October which Integrax alleged was in breach.
-- BERNAMA
http://www.btimes.com.my/Current_News/BTIMES/articles/20101111185105/Article/index_html
A matter of time before Maybank woos OSK?
Published: 2010/11/12
Maybank has long wanted to grow its investment banking business regionally and OSK offers it the platform to do so
Read more: A matter of time before Maybank woos OSK? http://www.btimes.com.my/Current_News/BTIMES/articles/mayosk/Article/index_html#ixzz151Kl78z5
Maybank has long wanted to grow its investment banking business regionally and OSK offers it the platform to do so
THERE are compelling reasons for top lender Malayan Banking Bhd (Maybank) to take over OSK Holdings Bhd (5053) and analysts wonder if it may just be a matter of time before Maybank officially starts courting the regional investment banking and brokerage group.
Maybank has long wanted to grow its investment banking business regionally and OSK offers it the platform to do so.
A takeover will also enable Maybank to go regional with its brokerage business.
Unlike its closest rival CIMB Group Holdings Bhd, Maybank does not have a brokerage business outside Malaysia.
OSK has quietly but aggressively expanded beyond Malaysia in recent years, and now has a presence in Cambodia, Singapore and Indonesia.
Maybank's investment banking business including brokerage, contributes less than 5 per cent to the group's overall earnings and this is something it needs to improve on.
Maybank has neither confirmed nor denied a recent report that it is keen to buy OSK, saying only that it is always on the lookout for opportunities to be a regional player.
OSK, meanwhile, said it had not entered into any serious or exclusive talks with any party on equity or strategic partnerships.
"This is still preliminary at this stage as there are no formal approvals to commence negotiations, but at face value, the deal looks compelling for Maybank if it intends to spruce up its broking business regionally," noted HwangDBS Vickers Research' banking analyst, Lim Sue Lin, in a report yesterday.
A takeover would also immediately catapult Maybank to become the country's top broker by value and volume.
OSK ranked top in terms of trading volume as at October this year with an 11 per cent market share, compared with Maybank's 5.5 per cent share.
OSK booked a RM112 million net profit last year, and while the earnings enhancement to Maybank would be relatively small, in terms of ranking and regional presence, "Maybank would be charting new territories," Lim noted.
Still, while there are strong reasons for Maybank to buy OSK, it remains to be seen if the latter's controlling shareholder and group managing director Ong Leong Huat, who has a 31.5 per cent stake, will want to sell.
Given that he has steadily built up the business and is grooming his son, who already works with OSK, to takeover and grow it further, indications are that he will not let go unless there is an irresistible offer.
If the transaction is priced at two times the book value, the total price tag for OSK would be around RM2.2 billion, said Lim. (OSK's book value as at June this year was RM1.68 a share.)
OSK's share price, which has been on the rise of late, surged 5.4 per cent to RM1.97 yesterday, its highest close in 39 months. Maybank fell 1.8 per cent to RM9.10.
The last investment banking transaction in Malaysia, in 2007, was done at one-time book value. This was when Hong Leong Investment Bank bought Southern Investment Bank from CIMB for RM65 million.
Investment banking transactions before that were done at between 1.2 times and 1.4 times book value, analysts said. But the targets, including Southern Investment Bank, were small whereas OSK is a regional franchise.
Apart from Ong's 31.5 per cent stake, OSK's shareholding structure is fragmented, with shareholders each holding less than5 per cent.
Analysts believe a hostile bid for OSK is unlikely. "It isn't Maybank's style. Also, it does not make sense to make a hostile bid for an investment bank as it is the people that you want, not the assets and liabilities," said one, pointing out that OSK's staff may leave in the event of a hostile takeover.
Maybank has long wanted to grow its investment banking business regionally and OSK offers it the platform to do so.
A takeover will also enable Maybank to go regional with its brokerage business.
Unlike its closest rival CIMB Group Holdings Bhd, Maybank does not have a brokerage business outside Malaysia.
OSK has quietly but aggressively expanded beyond Malaysia in recent years, and now has a presence in Cambodia, Singapore and Indonesia.
Maybank's investment banking business including brokerage, contributes less than 5 per cent to the group's overall earnings and this is something it needs to improve on.
Maybank has neither confirmed nor denied a recent report that it is keen to buy OSK, saying only that it is always on the lookout for opportunities to be a regional player.
OSK, meanwhile, said it had not entered into any serious or exclusive talks with any party on equity or strategic partnerships.
"This is still preliminary at this stage as there are no formal approvals to commence negotiations, but at face value, the deal looks compelling for Maybank if it intends to spruce up its broking business regionally," noted HwangDBS Vickers Research' banking analyst, Lim Sue Lin, in a report yesterday.
A takeover would also immediately catapult Maybank to become the country's top broker by value and volume.
OSK ranked top in terms of trading volume as at October this year with an 11 per cent market share, compared with Maybank's 5.5 per cent share.
OSK booked a RM112 million net profit last year, and while the earnings enhancement to Maybank would be relatively small, in terms of ranking and regional presence, "Maybank would be charting new territories," Lim noted.
Still, while there are strong reasons for Maybank to buy OSK, it remains to be seen if the latter's controlling shareholder and group managing director Ong Leong Huat, who has a 31.5 per cent stake, will want to sell.
Given that he has steadily built up the business and is grooming his son, who already works with OSK, to takeover and grow it further, indications are that he will not let go unless there is an irresistible offer.
If the transaction is priced at two times the book value, the total price tag for OSK would be around RM2.2 billion, said Lim. (OSK's book value as at June this year was RM1.68 a share.)
OSK's share price, which has been on the rise of late, surged 5.4 per cent to RM1.97 yesterday, its highest close in 39 months. Maybank fell 1.8 per cent to RM9.10.
The last investment banking transaction in Malaysia, in 2007, was done at one-time book value. This was when Hong Leong Investment Bank bought Southern Investment Bank from CIMB for RM65 million.
Investment banking transactions before that were done at between 1.2 times and 1.4 times book value, analysts said. But the targets, including Southern Investment Bank, were small whereas OSK is a regional franchise.
Apart from Ong's 31.5 per cent stake, OSK's shareholding structure is fragmented, with shareholders each holding less than5 per cent.
Analysts believe a hostile bid for OSK is unlikely. "It isn't Maybank's style. Also, it does not make sense to make a hostile bid for an investment bank as it is the people that you want, not the assets and liabilities," said one, pointing out that OSK's staff may leave in the event of a hostile takeover.
Read more: A matter of time before Maybank woos OSK? http://www.btimes.com.my/Current_News/BTIMES/articles/mayosk/Article/index_html#ixzz151Kl78z5
Integrax wants to exercise option to acquire LMT
Published: 2010/11/12
PORT operator Integrax Bhd (9555) wants to exercise an option to take over Lumut Maritime Terminal Sdn Bhd (LMT) from Taipan Merit Sdn Bhd but the latter says it has no legal right to do so.
In a filling to Bursa Malaysia Bhd yesterday, Taipan Merit parent Perak Corp Bhd said the option belongs to the non-defaulting party.
Given the termination of a shareholders' agreement by Taipan Merit on October 28 this year, the non-defaulting party was Taipan, Perak Corp added.
Taipan Merit is wholly owned by Perak Corp, which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak.
In a filling to Bursa Malaysia Bhd yesterday, Taipan Merit parent Perak Corp Bhd said the option belongs to the non-defaulting party.
Given the termination of a shareholders' agreement by Taipan Merit on October 28 this year, the non-defaulting party was Taipan, Perak Corp added.
Taipan Merit is wholly owned by Perak Corp, which in turn is 52.54 per cent controlled by Perbadanan Kemajuan Negeri Perak.
In its statement, Integrax said it did not recognise Taipan Merit's notice of termination of the agreement.
Integrax said it had made an offer to buy out Taipan Merit's 50 per cent plus one share in LMT under the purported option.
It gave Taipan Merit 30 days to transfer all its LMT shares and indicate a share sale price.
Integrax, together with subsidiary Pelabuhan Lumut Sdn Bhd (PLSB), has also served a notice to arbitrate the termination of the shareholders agreement.
In this regard, Perak Corp said it will inform Integrax of its choice of arbitrator in due course.
Meanwhile, Integrax director Harun Halim Rasip said the fallout between PLSB and Taipan Merit was centred on the Brazilian iron ore company Vale's request.
The latter had asked LMT to provide an interim port facility for a 10- year period at Lekir Island Satu, next to Vale's own jetty.
While Perak state officials saw it as a good deal, a majority of Integrax's board was against the move.
Read more: Integrax wants to exercise option to acquire LMT http://www.btimes.com.my/Current_News/BTIMES/articles/pinr/Article/#ixzz151NAP2Xd
Jeremy Grantham Interview
Airtime: Thurs. Nov. 11 2010
In an extended interview, Jeremy Grantham, chairman of Grantham Mayo Van Otterloo (GMO), talks to Maria Bartiromo about the markets, the economy, and his investment strategy.
http://www.gmo.com/America/
Thursday 11 November 2010
Malayan Banking Berhad
Date announced 20/08/2010
Quarter 30/06/2010 Qtr 4
FYE 30/06/2010
STOCK Maybank
C0DE 1155
Price $ 9.1 Curr. PE (ttm-Eps) 16.87 Curr. DY 6.04%
LFY Div 55.00 DPO ratio 102%
ROE 13.7% PBT Margin 28.7% PAT Margin 19.3%
Rec. qRev 4737314 q-q % chg 3% y-y% chq -3%
Rec qPbt 1359094 q-q % chg -7% y-y% chq -265%
Rec. qEps 12.89 q-q % chg -11% y-y% chq -173%
ttm-Eps 53.95 q-q % chg 130% y-y% chq 384%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 15.00 Avg. L PE 10.00
Forecast High Pr 10.33 Forecast Low Pr 6.71 Recent Severe Low Pr 6.71
Current price is at Middle 1/3 of valuation zone.
RISK: Upside 34% Downside 66%
One Year Appreciation Potential 3% Avg. yield 8%
Avg. Total Annual Potential Return (over next 5 years) 10%
CPE/SPE 1.35 P/NTA 2.31 NTA 3.94 SPE 12.50 Rational Pr 6.74
Decision:
Already Owned: Buy Hold Sell Filed; Review (future acq): Filed; Discard: Filed
Guide: Valuation zones Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
Hong Leong Bank Berhad
Date announced 19/08/2010
Quarter 30/06/2010 Qtr 4
FYE 30/06/2010
STOCK HLBank
C0DE 5819
Price $ 9.55 Curr. PE (ttm-Eps) 14.01 Curr. DY 2.51%
LFY Div 24.00 DPO ratio 35%
ROE 15.4% PBT Margin 66.7% PAT Margin 58.2%
Rec. qRev 517802 q-q % chg 2% y-y% chq 5%
Rec qPbt 345131 q-q % chg 33% y-y% chq 66%
Rec. qEps 20.77 q-q % chg 32% y-y% chq 51%
ttm-Eps 68.17 q-q % chg 11% y-y% chq 9%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 12.00 Avg. L PE 10.00
Forecast High Pr 10.44 Forecast Low Pr 7.83 Recent Severe Low Pr 7.83
Current price is at Middle 1/3 of valuation zone.
RISK: Upside 34% Downside 66%
One Year Appreciation Potential 2% Avg. yield 3%
Avg. Total Annual Potential Return (over next 5 years) 5%
CPE/SPE 1.27 P/NTA 2.16 NTA 4.43 SPE 11.00 Rational Pr 7.50
Decision:
Already Owned: Buy Hold Sell Filed; Review (future acq): Filed; Discard: Filed
Guide: Valuation zones Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
PPB Group Berhad
Date announced 25/08/2010
Quarter 30/06/2010 Qtr 2
FYE 31/12/2010
STOCK PPB
C0DE 4065
Price $ 18.5 Curr. PE (ttm-Eps) 9.18 Curr. DY 3.95%
LFY Div 73.00 DPO ratio 54%
ROE 16.9% PBT Margin 56.1% PAT Margin 54.7%
Rec. qRev 581092 q-q % chg 15% y-y% chq -30%
Rec qPbt 325903 q-q % chg 8% y-y% chq -25%
Rec. qEps 26.80 q-q % chg -72% y-y% chq -20%
ttm-Eps 201.58 q-q % chg -3% y-y% chq 93%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 10.00 Avg. L PE 7.00
Forecast High Pr 25.73 Forecast Low Pr 15.68 Recent Severe Low Pr 15.68
Current price is at Middle 1/3 of valuation zone.
RISK: Upside 72% Downside 28%
One Year Appreciation Potential 8% Avg. yield 7%
Avg. Total Annual Potential Return (over next 5 years) 15%
CPE/SPE 1.08 P/NTA 1.55 NTA 11.93 SPE 8.50 Rational Pr 17.13
Decision:
Already Owned: Buy Hold Sell Filed; Review (future acq): Filed; Discard: Filed
Guide: Valuation zones Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
Carlsberg
Date announced 11-Nov-10
Quarter 30/09/2010 Qtr 3
FYE 31/12/2010
STOCK CARLSBG
C0DE 2836
Price $ 5.85
Curr. PE (ttm-Eps) 14.56 Curr. DY 3.09%
LFY Div 18.10 DPO ratio 73%
ROE 21.4% PBT Margin 14.2% PAT Margin 10.3%
Rec. qRev 329492 q-q % chg -1% y-y% chq 36%
Rec qPbt 46825 q-q % chg 15% y-y% chq 60%
Rec. qEps 11.15 q-q % chg 11% y-y% chq 57%
ttm-Eps 40.18 q-q % chg 11% y-y% chq 87%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 14.00 Avg. L PE 12.00
Forecast High Pr 7.18 Forecast Low Pr 4.69 Recent Severe Low Pr 4.69
Current price is at Middle 1/3 of valuation zone.
RISK: Upside 53% Downside 47%
One Year Appreciation Potential 5% Avg. yield 6%
Avg. Total Annual Potential Return (over next 5 years) 11%
CPE/SPE 1.12 P/NTA 3.11 NTA 1.88 SPE 13.00 Rational Pr 5.22
Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
Coastal
Date announced 24/08/2010
Quarter 30/06/2010 Qtr 2
FYE 31/12/2010
STOCK COASTAL
C0DE 5071
Price $ 2.35
Curr. PE (ttm-Eps) 4.39 Curr. DY 1.28%
LFY Div 3.00 DPO ratio 7%
ROE 36.4% PBT Margin 35.0% PAT Margin 34.8%
Rec. qRev 138619 q-q % chg -2% y-y% chq 46%
Rec qPbt 48583 q-q % chg 13% y-y% chq 44%
Rec. qEps 13.32 q-q % chg 11% y-y% chq 43%
ttm-Eps 53.55 q-q % chg 8% y-y% chq 65%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 2% Avg.H PE 5.00 Avg. L PE 4.00
Forecast High Pr 2.96 Forecast Low Pr 1.90 Recent Severe Low Pr 1.90
Current price is at Middle 1/3 of valuation zone.
RISK: Upside 57% Downside 43%
One Year Appreciation Potential 5% Avg. yield 2%
Avg. Total Annual Potential Return (over next 5 years) 7%
CPE/SPE 0.98 P/NTA 1.60 NTA 1.47 SPE 4.50 Rational Pr 2.41
Decision:
Already Owned: Buy Hold Sell Filed; Review (future acq): Filed; Discard: Filed
Guide: Valuation zones Lower 1/3 Buy; Mid. 1/3 Maybe; Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
Unknown consequences of QE2
Unknown consequences of QE2
2010-11-09 14:11
With oil hitting a two-year high, gold rallying to an all-time peak, and most global stock and commodities markets in a sharp upswing, the US Federal Reserve (Fed) has proved its capability to drive up the world's inflation expectations.
Yet, unfortunately, it remains unknown if the Fed's announcement last Wednesday to purchase $600 billion of Treasuries has any chance of succeeding in effectively reviving the sluggish US economy. Moreover, the second round of quantitative easing, or QE2, has given rise to international concerns that the move will only increase global economic uncertainty.
Last Friday, Zhou Xiaochuan, governor of China's central bank, pointed out that the Fed's move was "not likely" to benefit the global economy, because there may be a conflict between the international role and the domestic role of the US dollar.
The Fed's move to print more money may help boost employment and maintain a low inflation rate domestically, but it will bring a flood of liquidity to the global economy, especially to emerging economies, and drive inflation expectations to dangerous levels.
Last week, German Finance Minister Wolfgang Schaeuble criticized the Fed's capital-injection for its potential to "create extra problems for the world" and cause "long-term damage".
Equally worried was Robert Zoellick, president of the World Bank, who even suggested a modified global gold standard to guide currency movements.
Admittedly, a return to using gold as an anchor for currency values is probably premature, even though gold prices are more solid than ever. But it is now quite obvious that the current international system cannot afford doing nothing about the latest US attempt to revive its economy with the help of the central bank's printing press.
If US policymakers turn a deaf ear to such international criticism over its latest attempt to stimulate its economy's slow recovery, they will risk undermining other countries' efforts to normalize their monetary and fiscal policies for a lasting recovery.
Worse, the phenomenal inflationary impact that QE2 has so far exerted on the global market could be just the tip of the iceberg. There will undoubtedly be unknown consequences of printing such a large amount of US dollars, a key international reserve currency that is widely used in international commodity trade, capital circulation and financial transactions.
The international community should make it an issue for serious discussion at the G20 summit in South Korea later this week. It is necessary to drive home the message that neither a country, nor the world as a whole, can reflate its way out of a crisis as wide and deep as the one that we are all still suffering from.
Monetary policies divide world into two camps: QE camp and non-QE camp
Monetary policies divide world into two camps
Updated: 2010-11-09 06:50
The US Federal Reserve acted last week on its much-anticipated second round of quantitative easing (QE2) by buying an additional $600 billion of Treasuries through June 2011. This expands on its record stimulus package and is an effort to reduce unemployment and avert deflation. Originally, it was reported that purchases might be higher but after a series of encouraging economic data and earnings reports, the case for a one-off large scale QE no longer seemed appropriate. Since December 2008, interest rates have remained low at 0 percent to 0.25 percent with core inflation at almost zero.
The impact of QE2 provides a welcome level of support for the US economy. Effectively, the US Fed has repaired its own balance sheet through purchases of treasuries in exchange for its mortgage-backed securities (MBS) and agency debt. By exporting its own inflationary pressures overseas through excess liquidity, corporate balance sheets may also improve on the back of higher asset prices. With the ability to change and act accordingly through securities purchases, the Fed has given itself the option to wait and see how the US economy will recover and to what extent assistance will be needed.
QE2 will increase inflationary pressures for some emerging countries and their asset prices will remain at high levels. The US Fed is using QE2 to increase the money supply in order to reduce the debt burden. US policymakers have accepted some levels of inflation in hopes of boosting domestic consumption and reducing the country's level of unemployment.
We believe the world falls in two camps: the first being the "QE Camp" including the US, UK, and Japan; the second being the "non QE camp" consisting of emerging market economies which is led by China.
In the "non QE camp", China has recently raised interest rates by 0.25 percentage point for both lending & deposit rates on the back of renewed inflationary concerns. In its third quarter macroeconomic report, the People's Bank of China raised warnings of rising food prices, wages and commodity prices. China's consumer price index (CPI) climbed to 3.6 percent year-on-year in September and is expected to rise to 4 percent year-on-year in October. This exceeded the Central Government's goal of keeping inflation below 3.5 percent - it was at 3 percent at the beginning of the year. The rising CPI is eroding the purchasing power of the people and the higher price of food, energy, rent, and wages, could weaken China's competitiveness.
Additionally, gasoline prices are at high levels and adverse weather conditions have created a shortage in soft commodities leading to further price increases in that segment. In 2010, China suffered from a series of droughts and dust storms. Moreover, floods in China began in early May 2010. Consequently, most soft commodities including agricultural goods such as corns, experienced record high prices.
China will be carefully watching the inflation level as it deals with other important issues such as the inflow of hot money, and yuan revaluation. The so-called "hot money" inflow has been a prolonged issue for China as this will directly inflate asset prices. As previously discussed, the yuan is also another major concern and China will have to gradually appreciate its currency according to the relationship between exports and domestic demand.
As we are approaching the year's end, central bankers around the world will watch carefully the impacts of QE from the "QE Camp" and monetary tightening from the "non QE camp". A measured pace of intervention by central banks and other regulators is what we have seen this year and expect to continue until year-end.
The author is a visiting professor at the Asian International Open University, an international financial commentator at NOW business news channel and founder of www.wongsir.com.hk.
http://www.chinadaily.com.cn/hkedition/2010-11/09/content_11519088.htm
Updated: 2010-11-09 06:50
The US Federal Reserve acted last week on its much-anticipated second round of quantitative easing (QE2) by buying an additional $600 billion of Treasuries through June 2011. This expands on its record stimulus package and is an effort to reduce unemployment and avert deflation. Originally, it was reported that purchases might be higher but after a series of encouraging economic data and earnings reports, the case for a one-off large scale QE no longer seemed appropriate. Since December 2008, interest rates have remained low at 0 percent to 0.25 percent with core inflation at almost zero.
The impact of QE2 provides a welcome level of support for the US economy. Effectively, the US Fed has repaired its own balance sheet through purchases of treasuries in exchange for its mortgage-backed securities (MBS) and agency debt. By exporting its own inflationary pressures overseas through excess liquidity, corporate balance sheets may also improve on the back of higher asset prices. With the ability to change and act accordingly through securities purchases, the Fed has given itself the option to wait and see how the US economy will recover and to what extent assistance will be needed.
QE2 will increase inflationary pressures for some emerging countries and their asset prices will remain at high levels. The US Fed is using QE2 to increase the money supply in order to reduce the debt burden. US policymakers have accepted some levels of inflation in hopes of boosting domestic consumption and reducing the country's level of unemployment.
We believe the world falls in two camps: the first being the "QE Camp" including the US, UK, and Japan; the second being the "non QE camp" consisting of emerging market economies which is led by China.
- The former has and will continue to loosen its monetary policy in efforts to revive economies, devalue currencies and inflate asset prices.
- The "non QE camp" is focused on containing inflationary pressures through tighter monetary policies.
In the "non QE camp", China has recently raised interest rates by 0.25 percentage point for both lending & deposit rates on the back of renewed inflationary concerns. In its third quarter macroeconomic report, the People's Bank of China raised warnings of rising food prices, wages and commodity prices. China's consumer price index (CPI) climbed to 3.6 percent year-on-year in September and is expected to rise to 4 percent year-on-year in October. This exceeded the Central Government's goal of keeping inflation below 3.5 percent - it was at 3 percent at the beginning of the year. The rising CPI is eroding the purchasing power of the people and the higher price of food, energy, rent, and wages, could weaken China's competitiveness.
Additionally, gasoline prices are at high levels and adverse weather conditions have created a shortage in soft commodities leading to further price increases in that segment. In 2010, China suffered from a series of droughts and dust storms. Moreover, floods in China began in early May 2010. Consequently, most soft commodities including agricultural goods such as corns, experienced record high prices.
China will be carefully watching the inflation level as it deals with other important issues such as the inflow of hot money, and yuan revaluation. The so-called "hot money" inflow has been a prolonged issue for China as this will directly inflate asset prices. As previously discussed, the yuan is also another major concern and China will have to gradually appreciate its currency according to the relationship between exports and domestic demand.
As we are approaching the year's end, central bankers around the world will watch carefully the impacts of QE from the "QE Camp" and monetary tightening from the "non QE camp". A measured pace of intervention by central banks and other regulators is what we have seen this year and expect to continue until year-end.
The author is a visiting professor at the Asian International Open University, an international financial commentator at NOW business news channel and founder of www.wongsir.com.hk.
http://www.chinadaily.com.cn/hkedition/2010-11/09/content_11519088.htm
Can you picture China in five years (2011-2015)?
Can you picture China in five years (2011-2015)?
Will it still be difficult to buy a house in big cities like Beijing? Will the income gap between the rich and poor narrow or widen? Is the growth model relying on exports or domestic consumption? How about the investment environment in China? In what areas will the government provide policy support? Are we prepared for an aging Chinese society? Is China ready to shoulder its global responsibilities?
There are no easy answers to these questions, which nonetheless need prudent analysis and well-informed strategies, to realize the ultimate goal of development, reform and opening up.
What goal? “To give all Chinese people a happy life,” in the words of Chinese Premier Wen Jiabao.
The Communist Party of China (CPC) Central Committee's Proposal on Formulating the Twelfth Five-year Program (2011-2015) on National Economic and Social Development was adopted at the Fifth Plenary Session of the 17th CPC Central Committee, which ended Oct 18. The draft is subject to approval by the National People's Congress, China's top legislature, when it convenes its annual session next year.
This special coverage focuses on the proposal and the extensive issues that will shape the country's development over the next five years.
http://www.chinadaily.com.cn/china/2010-11/08/content_11513304.htm
Will it still be difficult to buy a house in big cities like Beijing? Will the income gap between the rich and poor narrow or widen? Is the growth model relying on exports or domestic consumption? How about the investment environment in China? In what areas will the government provide policy support? Are we prepared for an aging Chinese society? Is China ready to shoulder its global responsibilities?
There are no easy answers to these questions, which nonetheless need prudent analysis and well-informed strategies, to realize the ultimate goal of development, reform and opening up.
What goal? “To give all Chinese people a happy life,” in the words of Chinese Premier Wen Jiabao.
The Communist Party of China (CPC) Central Committee's Proposal on Formulating the Twelfth Five-year Program (2011-2015) on National Economic and Social Development was adopted at the Fifth Plenary Session of the 17th CPC Central Committee, which ended Oct 18. The draft is subject to approval by the National People's Congress, China's top legislature, when it convenes its annual session next year.
This special coverage focuses on the proposal and the extensive issues that will shape the country's development over the next five years.
http://www.chinadaily.com.cn/china/2010-11/08/content_11513304.htm
Latexx Partners 3Q net profit up 23.5% to RM17.62m
Latexx Partners 3Q net profit up 23.5% to RM17.62m
Written by Joseph Chin
Wednesday, 10 November 2010 13:45
KUALA LUMPUR: LATEXX PARTNERS BHD [] reported a set of stronger earnings at RM17.62 million in the third quarter ended Sept 30, an increase of 23.5% from RM14.27 million a year ago.
It said on Wednesday, Nov 10 revenue rose 60.7% to RM129.87 million from RM80.84 million. Profit before tax rose 41.3% to RM20.16 million from RM14.27 million. Earnings per share were 8.19 sen compared with 7.33 sen. It declared an interim dividend of 2.5 sen per share.
For the nine-month period, revenue increased 73.1% to RM390.53 million from RM225.59 million from the previous corresponding period. Profit before tax and profit after tax increased by 93.9% and 72.0% respectively to RM67.53 million and RM59.89 million.
“The increase in the group’s revenue and improvement in the net profit of the current year was mainly due to the increase in overall sales volume, driven by the strong demand of gloves and the group’s expanded capacity from 4.5 billion pieces per annum to 7.0 billion pieces per annum.
“The stronger performance was also attributed by measures taken to improve the effectiveness and efficiency in operation control; as well as intensified and aggressive marketing strategy,” it said.
http://www.theedgemalaysia.com/business-news/176830-latexx-partners-3q-net-profit-up-235-to-rm1762m.html
Written by Joseph Chin
Wednesday, 10 November 2010 13:45
KUALA LUMPUR: LATEXX PARTNERS BHD [] reported a set of stronger earnings at RM17.62 million in the third quarter ended Sept 30, an increase of 23.5% from RM14.27 million a year ago.
It said on Wednesday, Nov 10 revenue rose 60.7% to RM129.87 million from RM80.84 million. Profit before tax rose 41.3% to RM20.16 million from RM14.27 million. Earnings per share were 8.19 sen compared with 7.33 sen. It declared an interim dividend of 2.5 sen per share.
For the nine-month period, revenue increased 73.1% to RM390.53 million from RM225.59 million from the previous corresponding period. Profit before tax and profit after tax increased by 93.9% and 72.0% respectively to RM67.53 million and RM59.89 million.
“The increase in the group’s revenue and improvement in the net profit of the current year was mainly due to the increase in overall sales volume, driven by the strong demand of gloves and the group’s expanded capacity from 4.5 billion pieces per annum to 7.0 billion pieces per annum.
“The stronger performance was also attributed by measures taken to improve the effectiveness and efficiency in operation control; as well as intensified and aggressive marketing strategy,” it said.
http://www.theedgemalaysia.com/business-news/176830-latexx-partners-3q-net-profit-up-235-to-rm1762m.html
FTSE Bursa Malaysia KLCI Index Market PE is now at 16.3.
Morgan: Cut stock holdings in SE Asia (BT)
Wednesday, November 10, 2010
Morgan Stanley recommended “cheap” stocks in South Korea and China and advised reducing holdings in Southeast Asia after rallies drove indexes in Indonesia, the Philippines and Malaysia to record highs.
“Korea and China are examples of markets that are not in any way expensive,” Jonathan Garner, Morgan Stanley’s Hong Kong-based chief Asian and emerging-market strategist, said in an interview in Singapore yesterday. “We don’t find it difficult to find large-cap Chinese stocks which are attractive and we are quite happy to recommend.”
China’s low earnings volatility and “relatively contained” inflation make it more “attractive,” Garner said. Oil driller Cnooc Ltd and coal producer China Shenhua Energy Co are on the brokerage’s focus list of companies. In contrast, high earnings growth expectations are embedded in valuations for some Southeast Asian markets, leaving them “no margin of error” for unexpected interest rate increases, he said.
The Shanghai Composite Index has climbed 33 per cent from its July 5 low as fund flows to emerging markets surged. Stocks in the gauge are valued at 17.7 times estimated earnings, less than half the multiple of 43 when the market peaked in 2007. South Korea’s Kospi Index has risen 16 per cent this year, adding to last year’s 50 per cent jump. The gauge is at 11 times estimated earnings, the lowest in Asia after Pakistan and Vietnam.
In Southeast Asia, benchmark indexes in Indonesia, the Philippines and Malaysia are among Asia’s best performers this year. The rally drove the Jakarta Composite Index to 18.4 times earnings, the Philippine Stock Exchange Index to a multiple of 15 and the FTSE Bursa Malaysia KLCI Index to 16.3.
Wednesday, November 10, 2010
Morgan Stanley recommended “cheap” stocks in South Korea and China and advised reducing holdings in Southeast Asia after rallies drove indexes in Indonesia, the Philippines and Malaysia to record highs.
“Korea and China are examples of markets that are not in any way expensive,” Jonathan Garner, Morgan Stanley’s Hong Kong-based chief Asian and emerging-market strategist, said in an interview in Singapore yesterday. “We don’t find it difficult to find large-cap Chinese stocks which are attractive and we are quite happy to recommend.”
China’s low earnings volatility and “relatively contained” inflation make it more “attractive,” Garner said. Oil driller Cnooc Ltd and coal producer China Shenhua Energy Co are on the brokerage’s focus list of companies. In contrast, high earnings growth expectations are embedded in valuations for some Southeast Asian markets, leaving them “no margin of error” for unexpected interest rate increases, he said.
The Shanghai Composite Index has climbed 33 per cent from its July 5 low as fund flows to emerging markets surged. Stocks in the gauge are valued at 17.7 times estimated earnings, less than half the multiple of 43 when the market peaked in 2007. South Korea’s Kospi Index has risen 16 per cent this year, adding to last year’s 50 per cent jump. The gauge is at 11 times estimated earnings, the lowest in Asia after Pakistan and Vietnam.
In Southeast Asia, benchmark indexes in Indonesia, the Philippines and Malaysia are among Asia’s best performers this year. The rally drove the Jakarta Composite Index to 18.4 times earnings, the Philippine Stock Exchange Index to a multiple of 15 and the FTSE Bursa Malaysia KLCI Index to 16.3.
Foreign, retail buys spur Bursa trading
Main points:
- Last month, foreign funds bought RM10.6 billion worth of stocks and sold some RM8.8 billion of them.
- In contrast, domestic funds bought RM12.8 billion worth of stocks and sold some RM14.2 billion worth of stocks.
- Last month, retail players bought RM7.6 billion worth of stocks and sold RM7.7 billion worth of stocks.
- Retailers accounted for 48.04 per cent of the 25.2 billion shares traded in October.
- Apart from sentiment, cheap credit has also helped stir the layman's interest in equities.
- According to Bank Negara Malaysia, up to September this year, some RM35.6 billion, which is an increase of 8.1 per cent over the same period a year ago, was lent by banks for purchase of securities.
By Francis Fernandez
Published: 2010/11/11
The momentum is in the larger capitalised stock, and the buying has been steady, says Jupiter Securities' head of research
Malaysia's stock market drew more buyers than sellers among foreign investors in October while small or retail investors made up almost half of the trading volume, data from Bursa Malaysia showed.
Jupiter Securities head of research Pong Teng Siew expects the trend to continue this month, as local institutions like the Employees Provident Fund need to sell to raise income for dividends.
"They need to sell to pay dividends. But, because the market is strong the local institutions will also be buying stocks," Pong told Business Times in a telephone interview.
It is also clear that foreign funds are buying although they have yet to do so in large quantities.
"The momentum is in the larger capitalised stock, and the buying has been steady," said Pong.
Last month, foreign funds bought RM10.6 billion worth of stocks and sold some RM8.8 billion of them.
In contrast, domestic funds bought RM12.8 billion worth of stocks and sold some RM14.2 billion worth of stocks.
Meanwhile, Lee Cheng Hooi, Maybank Investment Bank's head of retail research for equity markets, said that retailers were also strongly back in the market.
Lee added that opportunities are abundant in the market, and retailers should focus on laggards and lower-priced stocks.
Last month, retail players bought RM7.6 billion worth of stocks and sold RM7.7 billion worth of stocks.
Retailers accounted for 48.04 per cent of the 25.2 billion shares traded in October.
Yet another indicator of retailers coming back to the market is the rise in volume on Bursa Malaysia's FBM Small cap index, which measures the performance of stocks with smaller market values.
This has led to a surge in demand for stocks below RM1. Over the past three months, from the 17 stocks that have gained more than 100 per cent, 13 of them are priced below RM1.
Among the penny stocks that have notched gains of 200 per cent or more are Scope Industries Bhd, Karambunai Bhd, Petaling Tin Bhd, Majuperak Holdings Bhd, Ho Wah Genting Bhd and Cuscapi Bhd.
Apart from sentiment, cheap credit has also helped stir the layman's interest in equities.
According to Bank Negara Malaysia, up to September this year, some RM35.6 billion, which is an increase of 8.1 per cent over the same period a year ago, was lent by banks for purchase of securities.
Pong says the bulk of the money went to large corporations to fund takeovers, and retailers are getting their purchasing power from loans provided by stockbroking firms.
Read more: Foreign, retail buys spur Bursa trading http://www.btimes.com.my/Current_News/BTIMES/articles/forexx-2/Article/index_html#ixzz14vh6GpgX
Wednesday 10 November 2010
Taking more than their fair share
Typically, funds that have a performance fee will also have a ''base'' fee - the usual asset-based fee. Usually, the performance fee will be a percentage of the returns above the market returns. Investors should be paying a base fee that is less than the base fee charged by funds without performance fees. A performance fee should not be triggered until a fund manager has recovered earlier losses.
Typically, funds that have a performance fee will also have a ''base'' fee - the usual asset-based fee. Usually, the performance fee will be a percentage of the returns above the market returns. Investors should be paying a base fee that is less than the base fee charged by funds without performance fees. A performance fee should not be triggered until a fund manager has recovered earlier losses.
Key points
* Asset-based fees eat into returns because of the compounding effect.
* Asset-based fees can be ''lazy'' income for fund managers.
* Performance fees may be better for investors.
* Fund managers who ''churn'' their portfolios increase tax costs for their unit holders.
John Collett
November 10, 2010
Small business owner Brian Taylor learnt a costly lesson on asset-based fees.Photo: Tamara Dean
Percentage fees charged by fund managers can be a lazy way to riches - for fund managers that is, not investors.
The percentage fees charged by fund managers keep coming out of investors' capital regardless of the direction of markets. What's worse for investors is that it keeps coming out even if the fund manager loses more money during market downturns than the market itself.
According to a report from the Australian Institute of Superannuation Trustees, percentage fees end up rewarding fund managers for accumulating funds under management, not necessarily for producing good returns. The study, which mostly concerned Australian shares, recommended super funds move to a fixed dollar fee plus a performance fee when negotiating fees with active managers of share funds.
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At the time of the release of the report in September, the institute's chief executive, Fiona Reynolds, said: ''We need a fee model that does more than reward fund managers for managing an ever-expanding pool of assets, even when they have not contributed to that growth. In a compulsory system where you have legislated growth of 9 per cent, this is a licence to print money.
''If we are serious about reducing costs across the super sector, we can't ignore investment fees.''
Investment markets rise and fall and fund managers cannot be held responsible for that. But the way they are paid has a big bearing on how well investors will do. Generally, investors will be better off with managers who are paid for performance, provided the performance fee is well structured.
Asset-based fees compound over time, just like interest on an investment. It's what the managing director of managed funds discount broker 2020 Directinvest, Michael Lannon, calls the ''reverse miracle of compound fees''.
Take fairly typical total fees of 2 per cent a year for a small investor and assume an investment return of 7 per cent a year. Lannon says that over five years, 7.3 per cent of the investment return will be paid in fees; over 10 years it's 17.2 per cent and 31.5 per cent over 20 years.
TAX EFFICIENCY
The tax efficiency of fund managers is also receiving attention from superannuation fund trustees. Fund managers who ''churn'' their portfolio increase taxes for investors compared with those managers who buy and sell shares with less frequency.
The returns and fees of managed funds are mostly reported on a pre-tax basis rather than after-tax returns. Two managed funds with the same gross return could have very different after-tax returns - the returns that investors actually receive in their hands.
Last year, the health and community services industry fund, HESTA, required the Australian share-fund managers it hires to manage the money in a way that maximises after-tax returns. Simple steps can be taken by managers to increase the tax efficiency of their funds, such as making better use of franking credits, holding on to shares for longer to take advantage of discounted capital gains tax and decreasing the frequency of share trades.
HESTA expected the move would add tens of millions of dollars to the value of its Australian share portfolio by measuring and paying fund managers on their after-tax performance.
More managed funds have performance fees but they tend to be boutique managers who believe they can outperform the market. Performance fees are also found among managers investing in market sectors, such as small companies, where there is the potential for large ''excess'' returns over and above market returns.
Typically, funds that have a performance fee will also have a ''base'' fee - the usual asset-based fee. Usually, the performance fee will be a percentage of the returns above the market returns. Investors should be paying a base fee that is less than the base fee charged by funds without performance fees. A performance fee should not be triggered until a fund manager has recovered earlier losses.
Key points
* Asset-based fees eat into returns because of the compounding effect.
* Asset-based fees can be ''lazy'' income for fund managers.
* Performance fees may be better for investors.
* Fund managers who ''churn'' their portfolios increase tax costs for their unit holders.
Anger over asset fees
Brian Taylor runs a successful small business and had about $1 million that he wanted to perform better than it could as cash.
Five years ago, on the advice of an IPAC Securities financial planner, he invested the money mostly in two balanced funds that would increase the capital by more than inflation without taking on too much risk. He enjoyed almost a year of good returns before the global financial crisis hit. He is naturally disappointed in the performance of his investment and understands the role of the GFC in most of the poor returns but says the investments did not perform as well as he was led to believe.
What infuriates him is the amount he has paid in fees and tax. He redeemed his money and ended his relationship with IPAC in July.
Based on the fees stated in his original statement of advice, Taylor estimates that he has paid about $86,000 in fees - about 10 per cent of his original capital - during the five years that he was with IPAC. He also had to pay a tax bill on his investments of $35,000 in one year.
Taylor has been in repeated contact with IPAC Securities and its parent, AXA, asking for a refund of fees and for a return of the capital that he started with and the tax bill he paid.
Both IPAC Securities and AXA reviewed his complaint and have written to him to say that they are satisfied that he was not misled. They say the advice was sound and relatively conservative; that all fees and charges were clearly disclosed and the investment risks explained.
Taylor says it has been a costly lesson of how asset-based fees compound over time and take capital away.
''These percentage-fees-on-assets for no performance have been the real killer for me,'' Taylor says.
And rather than paying asset-based fees, he says, in retrospect, he should have paid fees that were based on performance.
Related:
Another look at AhYap's concern over the performance fees of i Capital Global Fund & i Capital International Value Fund
Prices set to rise as glove makers protect profit margin
Prices set to rise as glove makers protect profit margin
By Ooi Tee Ching
Published: 2010/11/10
THE average selling price of rubber gloves, at US$30 (RM93) per 1,000 pieces, is set to trend higher because manufacturers need to protect profit margin, Supermax Corp said.
"We are quoting selling prices more frequently. We do it on a weekly basis to better match the volatile currency movement and rising raw material costs. We need to preserve our profit margin," said executive chairman and group managing director Datuk Seri Stanley Thai.
In the recent quarterly reporting season of March to June, many rubber glove manufacturers suffered lower earnings from slower than expected cost pass-through of rising latex prices and weakening US dollar.
Yesterday, latex-in-bulk rose 12 sen to close at RM8.42 a kg at the Malaysian Rubber Exchange.
Rising rubber prices bode well for rubber tappers.
Rural and Regional Development Minister Datuk Seri Shafie Apdal had reportedly said that with rubber prices at an all-time high, smallholders were reaping a monthly gross income of RM4,000.
Thai acknowledged rubber tappers' good fortune and noted manufacturers' extra security measures in securing latex supply.
"At current pricing, our daily supply of four tankers of latex is worth RM1 million on the road. Latex is very precious. These tankers are fully-insured against hijacks," he told reporters in Kuala Lumpur yesterday.
Asked if latex supply is somewhat hampered by floods in southern Thailand, he said: "The flood might have affected dry rubber supply at low-lying warehouses but there's no supply disruption for wet latex as these are stored in raised tankers."
Thai revealed that costlier natural rubber latex had prompted many rubber glovemakers to switch a bigger portion of their production lines to make synthetic rubber gloves.
Thai said Supermax will churn out more powder-free nitrile gloves.
"Nitrile gloves used to make up a quarter of our total output. We're raising it to be a third," he said.
On fuel supply, Thai said rubber glovemakers had, again, appealed to the government to allocate more natural gas quota to them.
"We recently met with Pemandu (Performance Management & Delivery Unit) for the National Key Economic Area on rubber sector and highlighted some infrastructure gaps. The industry needs another 100 million mmBtu/hourof natural gas," he added.
Read more: Prices set to rise as glove makers protect profit margin http://www.btimes.com.my/Current_News/BTIMES/articles/rub09/Article/#ixzz14tQpZDua
----
Hartalega gains on Q2 net income jump
Published: 2010/11/10
Hartalega Holdings Bhd, a Malaysian rubber-glove maker, rose to its highest level in more than three months in Kuala Lumpur trading after posting a 49 per cent jump in second-quarter net income.
Its shares gained 1.3 per cent to RM5.60 at 9:10 a.m. local time, set for their highest close since July 19. -- Bloomberg
Read more: Hartalega gains on Q2 net income jump http://www.btimes.com.my/Current_News/BTIMES/articles/20101110092520/Article/index_html#ixzz14tRxFudG
----
Latexx Q3 profit rises 41.3pc
Published: 2010/11/10
Latexx Partners Bhd's pre-tax profit rose 41.3 per cent to RM20.17 million for the third quarter ended Sept 30, 2010 from RM14.28 million in the same quarter last year.
Its revenue jumped 60.7 per cent to RM129.88 million from RM80.84 million previously.
For the first nine months ended Sept 30, 2010, Latexx''s pre-tax profit surged 93.9 per cent to RM67.53 million from RM34.83 million in the same period of 2009.
The company's revenue increased 73.1 per cent to RM390.53 million from RM225.59 million previously. - Bernama
Read more: Latexx Q3 profit rises 41.3pc http://www.btimes.com.my/Current_News/BTIMES/articles/20101110170400/Article/index_html#ixzz14tSABzaC
By Ooi Tee Ching
Published: 2010/11/10
THE average selling price of rubber gloves, at US$30 (RM93) per 1,000 pieces, is set to trend higher because manufacturers need to protect profit margin, Supermax Corp said.
"We are quoting selling prices more frequently. We do it on a weekly basis to better match the volatile currency movement and rising raw material costs. We need to preserve our profit margin," said executive chairman and group managing director Datuk Seri Stanley Thai.
In the recent quarterly reporting season of March to June, many rubber glove manufacturers suffered lower earnings from slower than expected cost pass-through of rising latex prices and weakening US dollar.
Yesterday, latex-in-bulk rose 12 sen to close at RM8.42 a kg at the Malaysian Rubber Exchange.
Rising rubber prices bode well for rubber tappers.
Rural and Regional Development Minister Datuk Seri Shafie Apdal had reportedly said that with rubber prices at an all-time high, smallholders were reaping a monthly gross income of RM4,000.
Thai acknowledged rubber tappers' good fortune and noted manufacturers' extra security measures in securing latex supply.
"At current pricing, our daily supply of four tankers of latex is worth RM1 million on the road. Latex is very precious. These tankers are fully-insured against hijacks," he told reporters in Kuala Lumpur yesterday.
Asked if latex supply is somewhat hampered by floods in southern Thailand, he said: "The flood might have affected dry rubber supply at low-lying warehouses but there's no supply disruption for wet latex as these are stored in raised tankers."
Thai revealed that costlier natural rubber latex had prompted many rubber glovemakers to switch a bigger portion of their production lines to make synthetic rubber gloves.
Thai said Supermax will churn out more powder-free nitrile gloves.
"Nitrile gloves used to make up a quarter of our total output. We're raising it to be a third," he said.
On fuel supply, Thai said rubber glovemakers had, again, appealed to the government to allocate more natural gas quota to them.
"We recently met with Pemandu (Performance Management & Delivery Unit) for the National Key Economic Area on rubber sector and highlighted some infrastructure gaps. The industry needs another 100 million mmBtu/hourof natural gas," he added.
Read more: Prices set to rise as glove makers protect profit margin http://www.btimes.com.my/Current_News/BTIMES/articles/rub09/Article/#ixzz14tQpZDua
----
Hartalega gains on Q2 net income jump
Published: 2010/11/10
Hartalega Holdings Bhd, a Malaysian rubber-glove maker, rose to its highest level in more than three months in Kuala Lumpur trading after posting a 49 per cent jump in second-quarter net income.
Its shares gained 1.3 per cent to RM5.60 at 9:10 a.m. local time, set for their highest close since July 19. -- Bloomberg
Read more: Hartalega gains on Q2 net income jump http://www.btimes.com.my/Current_News/BTIMES/articles/20101110092520/Article/index_html#ixzz14tRxFudG
----
Latexx Q3 profit rises 41.3pc
Published: 2010/11/10
Latexx Partners Bhd's pre-tax profit rose 41.3 per cent to RM20.17 million for the third quarter ended Sept 30, 2010 from RM14.28 million in the same quarter last year.
Its revenue jumped 60.7 per cent to RM129.88 million from RM80.84 million previously.
For the first nine months ended Sept 30, 2010, Latexx''s pre-tax profit surged 93.9 per cent to RM67.53 million from RM34.83 million in the same period of 2009.
The company's revenue increased 73.1 per cent to RM390.53 million from RM225.59 million previously. - Bernama
Read more: Latexx Q3 profit rises 41.3pc http://www.btimes.com.my/Current_News/BTIMES/articles/20101110170400/Article/index_html#ixzz14tSABzaC
Latexx
Date announced 10-Nov-10
Quarter 30/09/2010 Qtr 3
FYE 31/12/2010
STOCK LATEXX
C0DE 7064
Price $ 2.78
Curr. PE (ttm-Eps) 7.32 Curr. DY 0.72%
LFY Div 2.00 DPO ratio 7%
ROE 35.5% PBT Margin 15.5% PAT Margin 13.6%
Rec. qRev 129878 q-q % chg -3% y-y% chq 61%
Rec qPbt 20168 q-q % chg -16% y-y% chq 41%
Rec. qEps 8.19 q-q % chg -21% y-y% chq 12%
ttm-Eps 37.96 q-q % chg 2% y-y% chq 76%
Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5%
Avg.H PE 8.00
Avg. L PE 6.00
Forecast High Pr 3.88 Forecast Low Pr 2.40 Recent Severe Low Pr 2.40
Current price is at Lower 1/3 of valuation zone.
RISK: Upside 74% Downside 26%
One Year Appreciation Potential 8% Avg. yield 1%
Avg. Total Annual Potential Return (over next 5 years) 9%
CPE/SPE 1.05
P/NTA 2.60
NTA 1.07
SPE 7.00
Rational Pr 2.66
Decision:
Already Owned: Buy Hold Sell Filed Review (future acq): Filed Discard: Filed
Guide: Valuation zones Lower 1/3 Buy Mid. 1/3 Maybe Upper 1/3 Sell
Aim:
To Buy a bargain: Buy at Lower 1/3 of Valuation Zone
To Minimise risk of Loss: Buy when risk is low i.e UPSIDE GAIN > 75% OR DOWNSIDE RISK <25%
To Double every 5 years: Seek for POTENTIAL RETURN of > 15%/yr.
To Prevent Loss: Sell immediately when fundamentals deteriorate
To Maximise Gain & Reduce Loss: Sell when CPE/SPE > 1.5, when in Upper 1/3 of Valuation Zone & Returns < 15%/yr
The FBM KLCI has risen more than 20% since the beginning of the year.
Year-to-date, several Asian markets including Indonesia and the Philippines have broken passed their record levels while the FBM KLCI has risen more than 20% since the beginning of the year.
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