Wednesday, 21 November 2012
Tuesday, 20 November 2012
Are You Running With the Bull Market or Staying on the Sidelines?
Professors at the University of Pennsylvania’s Wharton School weigh the pros and cons of leaping into the stock market rally in a recent article in Knowledge@Wharton: “In or Out? The Case for — and Against — the Stock Market.”
For equity investors, Wharton finance professor Jeremy Siegel says pulling out of the stock market is a mistake.
“‘The public unfortunately lags (behind) what’s going on in the market,’ says Siegel, noting that rank-and-file investors tend to be bullish at the top of the market and bearish when the market is about to recover. ‘It is not unusual for the public to miss the first half to two-thirds of a bull market. Then they get in at the end, and they ride it down.’
“To sophisticated market watchers, the fact that most retail investors are staying out of the market right now is actually a positive indicator, since history shows that public flows in and out of the market are usually badly timed, Siegel says. ‘I still think this bull market definitely has room to run,’ he notes. ‘I can easily see stocks up another 20% to 30% from these levels in a year or two.’”
Not all of his colleagues agree with Siegel, the article notes.
“Wharton finance professor Richard J. Herring says the market outlook remains uncertain. ‘It is hard to imagine earnings continuing to grow since they are already at an historical high relative to GDP, and the economic outlook is tepid at best,’ he notes. ‘Many experts believe this is a market pumped up by QE3 and little else.’”
7 China stocks facing boom, not doom
By MarketWatch
HSBC weighed in on China's leadership transition Friday, identifying seven sectors -- and selected individual stocks -- as likely beneficiaries from the nation's new government.
Among them, the research house named: consumption, urbanization, innovation, environment, health care, culture and financial reform.
While the list offered similar investment ideas to those already mentioned by other research brokerages, the bigger standout was HSBC's bullish tone towards China's new administration.
It noted that events over the past week in Beijing suggest the new leadership is poised to deliver positive change, even though the final unveiling of the seven-member Politburo Standing Committee included a lineup that left out two reform-minded candidates.
The research house also said that the handover was an "orderly transition of power," and it praised a key political report presented by departing President Hu Jintao as making the "right noises about the country's direction in the next five years."
HSBC said the 90-minute address delivered to the Party Congress on Nov. 9 -– viewed as influencing the reform agenda for the incoming leadership -- made all the right noises, using the phrase "scientific development" 19 times, "socialism with Chinese characteristics" 79 times and "reform" 84 times. The phase "the people" appeared 145 times. The keywords show Beijing's sensitivity to the need for reforms, HSBC said.
Still, while HSBC praised the open talk about reform, it also cautioned that delivering such reforms won't be easy. In a nod to the challenges ahead, HSBC's outlook for China's economy calls for a slow recovery -- more "U-shaped" than "V-shaped."
It noted an improving backdrop, and that Chinese stocks were "fairly valued" rather than expensive.
Among selected ways to invest in each theme, it laid out its respective picks: Hengan International Group Co. , Zoomlion Heavy Industry Science & Technology Development Co. , Lenovo Group Ltd. , China Longyuan Power Group Corp. , Sinopharm Group Co. , Youku Tudou Inc. , and China Construction Bank Corp.
-- Chris Oliver
Follow The Tell blog on Twitter @thetellblog
http://finance.yahoo.com/news/7-china-stocks-facing-boom-032900464.html
Here's What The 'Fiscal Cliff' Tax Deal Is Starting To Look Like
The Economist | Nov. 18, 2012
Barack Obama and Republicans grope towards common ground on taxes...
THE election dust had barely settled when Barack Obama and his Republican adversaries returned to their traditional rhetoric over taxes. "Raising tax rates is unacceptable," John Boehner, the Speaker of the House of Representatives, declared on November 8th. The next day Mr Obama said "I am not going to ask students and seniors and middle-class families to pay down the entire deficit while people like me, making over $250,000, aren’t asked to pay a dime more in taxes."
Optimists, however, took note of what the men did not say: Mr Boehner did not rule out raising tax revenues. Mr Obama did not explicitly insist that the two top income tax rates, now 33% and 35%, return to 35% and 39.6%, as they are scheduled to do when George W. Bush’s tax cuts expire at the end of this year.
This has aroused hopes that the two men can find common ground on tax reform that leaves marginal tax rates where they are while raising new revenue by curbing credits, deductions and exemptions (collectively called tax expenditures), which distort economic activity. Numerous such proposals have been aired in recent years, some of which Republicans hated because they raised new revenue; others Democrats rejected because they gave a windfall to the wealthy.
One way this could be done is to target deductions that primarily benefit the rich. During the election campaign, Mitt Romney proposed paying for big marginal rate cuts by setting a cap on total deductions. The Tax Policy Centre, a think-tank, reckons a cap of $50,000 would raise $749 billion over ten years, comparable to the $800 billion that Mr Boehner entertained during failed negotiations with Mr Obama in 2011. Importantly, this fix would make the tax system much more progressive: 80% of the additional money would come from the top 1% of earners. This has helped draw interest from some Democrats.
A slightly different proposal by Martin Feldstein, a prominent Republican economist, and Maya MacGuineas of the Committee for a Responsible Federal Budget, a think-tank, would cap the tax benefit of itemised deductions at 2% of income for all households. Mr Feldstein reckons that would raise more than $2 trillion over ten years, although almost all families would pay more tax, not just the rich.
As it happens, Mr Obama has already proposed curbing tax breaks for the wealthy (see table). His budget would restore the limits on their exemptions and deductions that Mr Bush’s tax cuts eliminated. A separate proposal would limit the tax benefit of deductions for mortgage interest, charitable contributions, municipal bond interest, employer-provided health care, and individual retirement plans to 28%, even for taxpayers paying a 35% or 39.6% marginal rate.
Despite their superficial appeal, such proposals face daunting obstacles. Foremost is that they may not raise enough revenue to satisfy Mr Obama. In the run-up to formal negotiations due to begin on November 16th, Mr Obama signalled he would begin by asking for $1.6 trillion in revenue over the coming decade, as his latest budget does. At a press conference on November 14th, he said "it’s very difficult to see how you make up" the revenue lost from failing to restore the higher rates just by closing deductions: "The math tends not to work." But, he added, "I’m not going to just slam the door" on alternatives that accomplish what he wants.
The second obstacle is the calendar. Politicians are racing against a year-end deadline when Mr Bush’s tax cuts and other stimulus measures expire and automatic spending cuts are triggered. The collective fiscal tightening, if sustained, could push the economy into recession. Even if the two sides agreed that tax reform would be the main vehicle for raising more revenue, the task would be too complex to accomplish by year-end. A smaller deal would be needed to avert the cliff, leaving bigger tax and entitlement changes for next year. The challenge then would be to bind the hands of both parties to consummating a big deal next year.
For all the appeal of curbing loopholes, each has vocal and influential defenders. When the Obama administration first proposed its 28% cap on tax expenditures, "we got killed," Peter Orszag, Mr Obama’s first budget director, recalls, in particular by charities and non-profit groups. For Mr Obama and Mr Boehner, finding agreement with each other may very well prove to be the easy part.
Read more: http://www.businessinsider.com/fiscal-cliff-taxes-2012-11#ixzz2CcJe0KbY
Monday, 19 November 2012
Money Has Much Less To Do With Happiness Than We Think
Max Nisen | Nov. 12, 2012,
A recent NBER working paper from John Helliwell of the University Of British Columbia argues that focusing on the individual is wrong, and that the real source of happiness, ingrained by years of social evolution, is our interaction with other people.
Income matters less than the chance to connect with others, thereby improving our own lives and especially the lives of others. There is even evolutionary evidence that bulging human brains, and especially their prefrontal cortexes, have been crucial in allowing humans to be the most social beings, living better lives through co-operation.
Within workplaces, the importance of the social context dwarfs the impact of salary and bonuses. To work where trust in management is one point higher, on a 10-point scale, has the same relation to life satisfaction as a one-third higher income.
Essentially, money matters, but we're evolutionarily conditioned to be happiest when we feel like we're part of a community, are in a positive social context, and take actions that we feel benefit other people. That significantly surpasses how much we care about money, despite the amount society focuses on it.
It's a powerful effect, to the point where people that perform positive actions get more out of them than the people they're helping.
Read more: http://www.businessinsider.com/money-is-less-important-than-social-context-2012-11#ixzz2CcMDxUWk
How To Spend Time In Ways That Make You Happy
By Joshua Berlinger
How you spend your time could be the key to unlocking happiness.
Research on the subject was analyzed in a paper in ScienceDirect by Jennifer L. Aaker and Melanie Rudd of Stanford Business School and Cassie Mogilner of Wharton.
The psychologists identified five principles for good use of time:
1. Spend your time with the right people
People who spend time with other people tend to be happier, but equally important is with whom who they spend time.
"Interaction partners associated with the greatest happiness levels include friends, family, and significant others, whereas bosses and co-workers tend to be associated with the least happiness."
Still since people have to spend time at work, they can benefit from developing friendly relationships at the office.
2. Spend your time on the right activities
What you do with your time is crucial in determining happiness. Working and commuting seem to make people the most unhappy, while socializing is one of the best activities for increasing happiness levels.
Thinking of your time as an investment can be helpful. For example, asking yourself what are the chances that the value of that temporal expenditure will increase over time?" The study adds:
When deciding how to spend the next hour, simply asking yourself the question, “Will what I do right now become more valuable over time?” could increase your likelihood to behave in ways that more clearly map onto what will really make you happy. Note that this question is slightly different than asking, “What is better for me in the long run?” or, “What will lead to greater long-term happiness?” — two questions that often cause a tinge of guilt or moral dilemma. This particular question focuses less on perceived trade-offs between short and long-term happiness, and more on maximizing the value of the present moment.
3. Enjoy the experience without spending the time
Thinking about things you enjoy can be almost as effective as actually doing the activity which makes you happy: "the part of the brain responsible for feeling pleasure, the mesolimbic dopamine system, can be activated when merely thinking about something pleasurable, such as drinking one's favorite brand of beer or driving one's favorite type of sports car. In fact, the brain sometimes enjoys anticipating a reward more than receiving the reward."
4. Expand your time
Since time is fixed, it helps to focus on the "here and now."
Thinking about the present "slows down the perceived passage of time, allowing people to feel less rushed and hurried. Similar effects accrue when individuals simply breathe more deeply."
Having or perceiving that one has control over their time has been correlated to higher levels of happiness. "Having spare time and perceiving control over how to spend that time (i.e. discretionary time) has been shown to have a strong and consistent effect on life satisfaction and happiness, even controlling for the actual amount of free time one has."
5. Be aware that happiness changes over time
Happiness is affected by a myriad of intertwined factors: culture, time, and perhaps most importantly, age. Younger people, for example, "are more likely to associate happiness with excitement, whereas older individuals are more likely to experience happiness as feeling peaceful."
The amount of happiness one derives from social interactions changes as well. As people get older, " the value of spending time with interesting new acquaintances decreases, while the value of spending time with familiar friends and family increases."
Don't miss: All You Have To Do Is Smile >
More From Business Insider
- Money Has Much Less To Do With Happiness Than We Think
- All You Have To Do Is Smile
- You May Have To Choose Between A Happy Life And A Meaningful Life
Sunday, 18 November 2012
50 Unfortunate Truths About Investing
Sorry, but ...
1. Saying "I'll be greedy when others are fearful" is much easier than actually doing it.
2. The gulf between a great company and a great investment can be extraordinary.
3. Markets go through at least one big pullback every year, and one massive one every decade. Get used to it. It's just what they do.
4. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.
5. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."
6. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance. Which ones? I don't know, but I bet a few are famous.
7. On that note, some investors who we call "legendary" have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn't indicative of big returns.
8. During recessions, elections, and Federal Reserve policy meetings, people become unshakably certain about things they know nothing about.
9. The more comfortable an investment feels, the more likely you are to be slaughtered.
10. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.
11. Not a single person in the world knows what the market will do in the short run. End of story.
12. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn't -- his are much bigger.
13. You don't understand a big bank's balance sheet. The people running the place and their accountants don't, either.
14. There will be seven to 10 recessions over the next 50 years. Don't act surprised when they come.
15. Thirty years ago, there was one hour of market TV per day. Today there's upwards of 18 hours. What changed isn't the volume of news, but the volume of drivel.
16. Warren Buffett's best returns were achieved when markets were much less competitive. It's doubtful anyone will ever match his 50-year record.
17. Most of what is taught about investing in school is theoretical nonsense. There are very few rich professors.
18. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).
19. Related: Trust no one who is on CNBC more than twice a week.
20. The market doesn't care how much you paid for a stock. Or your house. Or what you think is a "fair" price.
21. The majority of market news is not only useless, but also harmful to your financial health.
22. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don't even try.
23. How much experience a money manager has doesn't tell you much. You can underperform the market for an entire career. And many have.
24. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.
25. Professional investing is one of the hardest careers to succeed at, but it has lowbarriers to entry and requires no credentials. That creates legions of "experts" who have no idea what they are doing. People forget this because it doesn't apply to many other fields.
26. Most IPOs will burn you. People with more information than you have want to sell. Think about that.
27. When someone mentions charts, moving averages, head-and-shoulders patterns, or resistance levels, walk away.
28. The phrase "double-dip recession" was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of "financial collapse" in 2006 and 2007. It did come.
29. The real interest rate on 20-year Treasuries is negative, and investors are plowing money into them. Fear can be a much stronger force than arithmetic.
30. The book Where Are the Customers' Yachts? was written in 1940, and most still haven't figured out that financial advisors don't have their best interest at heart.
31. The low-cost index fund is one of the most useful financial inventions in history. Boring but beautiful.
32. The best investors in the world have more of an edge in psychology than in finance.
33. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.
34. For most, finding ways to save more money is more important than finding great investments.
35. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.
36. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as "returning money to shareholders."
37. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are high.
38. Twenty years from now the S&P 500 (INDEX: ^GSPC ) will look nothing like it does today. Companies die and new ones emerge.
39. Twelve years ago General Motors (NYSE: GM ) was on top of the world and Apple(Nasdaq: AAPL ) was laughed at. A similar shift will occur over the next decade, but no one knows to what companies.
40. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement.
41. For many, a house is a large liability masquerading as a safe asset.
42. The president has much less influence over the economy than people think.
43. However much money you think you'll need for retirement, double it. Now you're closer to reality.
44. The next recession is never like the last one.
45. Remember what Buffett says about progress: "First come the innovators, then come the imitators, then come the idiots."
46. And what Mark Twain says about truth: "A lie can travel halfway around the world while truth is putting on its shoes."
47. And what Marty Whitman says about information: "Rarely do more than three or four variables really count. Everything else is noise."
48. The bigger a merger is, the higher the odds it will be a flop. CEOs love empire-building by overpaying for companies.
49. Investments that offer little upside and big downside outnumber those with the opposite characteristics at least 10-to-1.
50. The most boring companies -- toothpaste, food, bolts -- can make some of the bestlong-term investments. The most innovative, some of the worst.
50 Unfortunate Truths About Investing
By Morgan Housel November 14, 2012
http://www.fool.com/investing/general/2012/11/14/50-unfortunate-truths-about-investing.aspx
Saturday, 17 November 2012
Hong Leong Bank - Padding in ahead in 1QFY13 HOLD
FRIDAY, 16 NOVEMBER 2012
- We are maintaining our HOLD rating on Hong Leong Bank Bhd (HLBB), with a marginal change in fair value to RM15.80/share (from RM15.90/share previously). Our fair value is based on an ROE of 15.4% FY13F and an unchanged fair P/BV of 2.2x.
- HLBB managed to beat expectations in 1QFY13 with annualised net earnings coming in at 2.2% above our forecast, and 1.9% above consensus net earnings of RM1,873mil.
- HLBB has now adopted the Malaysian Financial Reporting Standards (FRS 139) for the first time with effect from this financial quarter. There was a write-back in the collective assessment amount by RM380mil (our forecast: RM450mil) or RM0.20/share, with an adjustment in the collective assessment rate (as a percentage of gross loans less individual assessment allowance carried forward) (CA rate) to 1.6% from 2.1%. This is in line with our forecast of 1.6%.
- Annualised loans growth was at 5.4%, lower than the company’s target loans growth of 10% to 12% for FY13F. This came mainly from a softer working capital segment, attributed to a reduction in utilisation of trade finance facilities in line with the generally weaker macro exports trend. NIM did better than expected with a 5bps improvement QoQ, in contrast to wide expectations of ongoing reduction in NIM. We believe NIM improvement came from higher LDR utilisation as well as deposit management. Non-interest income posted a strong growth of 23.7% QoQ in 1QFY13, mainly from treasury gains.
- Gross impaired loans declined by 3.3% QoQ in 1QFY13. Gross impaired loans ratio was at 1.6% as at end-1QFY13, compared with 1.7% in 4QFY12.
- Loan loss cover remains high, despite the write-back in the collective assessment balance carried forward, at 134.3% in 1QFY13. This compares to 4QFY12’s 158.2% before FRS139 adjustment, and the restated 133.4% for 4QFY12 post FRS139. There were loan loss provision write-backs totalling RM14.7mil in 1QFY13, mainly from continuing good recoveries.
- HLBB’s 1QFY13 surprised in terms of much better-than expected loan loss provisions, signalling that its asset quality remains strong. However, topline growth has slowed down perceptibly in 1QFY13, although this is probably a reflection of industry trend.
- We expect HLBB’s share price to be sustained on further evidence of:- (a) stronger-than-expected topline loan growth; (b) evidence of revenue synergy for its fee-based income from its expanded customer base; and (c) continued improvement in asset quality.
Source: AmeSecurities
Hartalega leads healthcare on revisions
| Publish date: Fri, 16 Nov 17:43
Hartalega Holdings Bhd leads on analyst revisions among eight companies in Malaysia's healthcare sector tracked by at least three analysts, data from Thomson Reuters StarMine shows.
The glove manufacturer has an Analyst Revision Model (ARM) score of 98, the highest in the sector. This score has increased 40 points over the past 30 days. It has high Smartholdings and Earnings Quality scores of 94 and 80 respectively. The former suggests a potential increase in institutional ownership while the latter implies good earnings sustainability over the next 12 months. Hartalega's forward 12-month EV/EBITDA and P/CF ratios beat industry averages by 2 per cent and 9 per cent respectively. Its quarterly net income grew 28 per cent to RM59 million between September 2011 and 2012 while its quarterly free cash flow rose 27 per cent to RM42 million during the same period. Seven of 13 analysts tracking the stock have raised EPS estimates on the firm for 2013 by an average of 3.3 per cent since Nov. 7. Eight of the 13 have also increased EPS estimates for 2014 by an average of 5.1 per cent during the same period. Of the 12 analysts rating the stock, seven give it a "strong buy" or "buy", four have a "hold", while one recommends a "sell" rating. Hartalega currently trades at an all-time high of RM5, around 86 per cent of its intrinsic value of RM5.79. The stock price has risen nearly 80 per cent over the past 12 months, while the broader index gained over 10 per cent during the same period, as of Thursday's close. On the other end of the spectrum, Adventa Bhd lags the sector with an ARM score of 22. - Reuters
http://www.btimes.com.my/articles/20121116174302/Article/
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Friday, 16 November 2012
The Verdict on Market Timing
Over a fifty-four year period, the market has risen in thirty-six years, been even in three years, and declined in only fifteen.
The words of John Bogle, founder of the Vanguard Group of Investment Companies on the subject of market timing.
Bogle said,
"In 30 years in this business, I do not know anybody who has done it successfully and consistently, nor anybody who knows anybody who has done it successfully and consistently. Indeed, my impression is that trying to do market timing is likely, not only not to add value to your investment program, but to be counterproductive."
- Thus, the odds of being successful when you are in cash rather than stocks are almost three to one against you.
- An academic study by Professors Richard Woodward and Jess Chua of the University of Calgary shows that holding on to your stocks as long-term investments works better than market timing because your gains from being in stocks during bull markets far outweigh the losses in bear markets.
- The professors conclude that a market timer would have to make correct decisions 70 percent of the time to outperform a buy and hold investor. I have never met anyone who can bat 0.700 in calling market turns.
The words of John Bogle, founder of the Vanguard Group of Investment Companies on the subject of market timing.
Bogle said,
"In 30 years in this business, I do not know anybody who has done it successfully and consistently, nor anybody who knows anybody who has done it successfully and consistently. Indeed, my impression is that trying to do market timing is likely, not only not to add value to your investment program, but to be counterproductive."
HDBSVR maintains Buy on HL Bank, TP RM17
Friday November 16, 2012 MYT 8:46:00 AM
KUALA LUMPUR: Hwang DBS Vickers Research (HDSBVR) is maintaining a Buy on Hong Leong Bank and a target price of RM17.
“This is based on the Gordon Growth Model (16% ROE, 5% growth and 10% cost of equity) and implies 2.3 times CY13 book value,” it said on Friday.
HDBSVR said HL Bank remains one of its top Buys despite share price already rising by 33% year-to-date.
It believes there is still value in extracting synergies from the rejuvenated business banking platform post merger with EON Cap.
HDBSVR said the bank's net interest income was weaker on-quarter as net interest income fell, albeit less than in the previous two quarters.
“Loan and deposit growth were subdued, with loans expanding only 1.3% q-o-q (led by mortgage) while deposits inched up 0.3%. Loan-to-deposit ratio at 73% is still the lowest among peers. Non-interest income was boosted by trading income from treasury operations.
“Excluding one-off items (EON Cap merger) in 4QFY12, expenses and cost-to-income ratio (44%) were stable in 1QFY13. Operating profit was lifted by lower collective allowance (CA) charge following the adoption of MFRS139, coupled with loan recoveries,” it said.
HDBSVR said excluding one-off adjustments for MFRS139, provisions were a mere RM4mil. Share of profit from Bank of Chengdu was 10% of pretax profit, within its expectation. Capital remains strong with Tier-1 and RWCAR (bank level) at 11.7% and 14.0%, respectively.
“We believe it is a good strategy to keep balance sheet liquid in a competitive operating environment but this may cause NIM to remain under pressure as excess liquidity which is typically placed in the interbank market carries lower yields. We are retaining our loan and deposit growth assumptions of 11% and 9%, which implies 73% loan-to-deposit ratio,” said the research house.
http://biz.thestar.com.my/news/story.asp?file=/2012/11/16/business/20121116084608&sec=business
Guan Chong Q3 earnings up 5.6% to RM27.4m, dividend 2 sen
Published: Friday November 16, 2012 MYT 1:54:00 PM
KUALA LUMPUR: Cocoa processor Guan Chong Bhd's earnings rose 5.6% to RM27.41mil in the third quarter ended Sept 30, 2012 from RM25.94mil a year ago, supported by a 5.9% increase in sales volume and improved profit margin.
It said on Friday the higher profit was achieved in spite of a 4.7% decline in revenue to RM348.47mil from RM365.72mil a year ago due to lower average selling prices of cocoa ingredients and the drop in cocoa bean prices.
Earnings per share were 5.76 sen compared with 5.44 sen. Its dividend was 2.0 sen compared with 4.0 sen a year ago.
Its managing director and CEO Brandon Tay Hoe Lian said the better earnings were despite the challenging markets in the US and Europe, and volatile prices for raw materials.
"GCB was able to weather the storm as we continued to find new markets and maintained an efficient cost structure for our plants in Pasir Gudang and Batam," he said.
On the 2.0 sen dividend, the company said it had paid 9.0 sen per share so far in FY12, or RM31.8mil, which was in line with its dividend policy of paying 25% of net profit to shareholders.
Guan Chong's nine-months earnings increased by 3.9% to RM94.02mil from RM90.47mil in the previous corresponding period. Revenue rose 2.5% to RM1.015bil from RM990.36mil.
Saturday, 10 November 2012
iCAP closed end fund: 87% of shareholders voted for the status quo
Saturday November 10, 2012 MYT 5:22:15 PM
Trio fail to get elected to iCapital.biz
By John Loh
KUALA LUMPUR: Andrew Pegge, Low Nyap Heng and a shareholder Lo Kok Kee failed to get elected to the board of iCapital.biz Bhd at its packed AGM on Saturday.
At the six-hour meeting, which started at 9am, shareholders overwhelmingly threw their support behind its fund manager andfounder Tan Teng Boo.
Some 87% of shareholders voted against the resolutions seeking board representations for Pegge, Low and Lo on Malaysia's only listed closed-end fund.
Earlier, Kingsnorth told journalists outside the AGM at a hotel here that Laxey, which owns 6.9% of iCapital.biz, had accomplished what it set out to do.
"The debate (about the discount between iCapital.biz's share price and net asset value) is good. The company is better for this.
"We are still the largest shareholder and will continue to express our views," he said.
Tan Teng Boo's interview on bfm on the latest development in iCAP
http://www.bfm.my/assets/files/MarketWatch/2012_11_09_MW_TanTengBoo.mp3
To fellow Shareholders of iCAP
Let us keep to the initial objectives of this fund.
Please cast your votes to send a decisive message in this AGM.
To fellow Shareholders of iCAP
Let us keep to the initial objectives of this fund.
Please cast your votes to send a decisive message in this AGM.
I throw my support for Tan Teng Boo to maintain the status quo in iCAP.
Also read:
Thursday, 8 November 2012
iCAP closed end fund manager responds to Laxey Partners accusations
http://icapital.biz/agm/FORMAL_RESPONSE_TO_LAXEY_PARTNERS_LTD_ACCUSATIONS.pdf
My comments:
Actually, those who are disgusted with ttb or iCAP can choose to sell their shares. I think this happened all the time. Those who favoured ttb or iCAP may be the buyers of these shares. I think this happened all the time.
The issue facing iCAP shareholders this Saturday is quite different. Laxey Partner has amassed a sizeable stake in iCAP. As a shareholder, they rightfully can request for changes. However, their motives may not be fully aligned to many long term shareholders of iCAP.
They are invited to state their case. How can they hope to reduce the market price - NAV gap? I thought this was a stupid thing really. This gap exists because of various factors. They should propose how they hope to reduce this gap without liquidating this fund.
Share buyback? Will this work? Doubtful ...
Dividends? Why? I would rather have my funds retained in iCAP to compound at a high rate of return.
As I have written earlier, ttb and his board of directors (hopefully they will be retained at this AGM) should stay focus on the performance of the NAV of this fund rather than wasting any time worrying over the market price - NAV gap of iCAP which I feel they have little or no control over.
If Laxey Partner wishes to pay a price closer to the NAV price, this gap would have narrowed. On the other hand, it was also this discount that allowed them to buy into this fund in the first place? Now they are going for their exit strategy. They are invited to be long term investors in this fund, just like the rest. Hope this will be realised on Saturday. 
Also read:
My comments:
Actually, those who are disgusted with ttb or iCAP can choose to sell their shares. I think this happened all the time. Those who favoured ttb or iCAP may be the buyers of these shares. I think this happened all the time.
The issue facing iCAP shareholders this Saturday is quite different. Laxey Partner has amassed a sizeable stake in iCAP. As a shareholder, they rightfully can request for changes. However, their motives may not be fully aligned to many long term shareholders of iCAP.
They are invited to state their case. How can they hope to reduce the market price - NAV gap? I thought this was a stupid thing really. This gap exists because of various factors. They should propose how they hope to reduce this gap without liquidating this fund.
Share buyback? Will this work? Doubtful ...
Dividends? Why? I would rather have my funds retained in iCAP to compound at a high rate of return.
As I have written earlier, ttb and his board of directors (hopefully they will be retained at this AGM) should stay focus on the performance of the NAV of this fund rather than wasting any time worrying over the market price - NAV gap of iCAP which I feel they have little or no control over.
If Laxey Partner wishes to pay a price closer to the NAV price, this gap would have narrowed. On the other hand, it was also this discount that allowed them to buy into this fund in the first place? Now they are going for their exit strategy. They are invited to be long term investors in this fund, just like the rest. Hope this will be realised on Saturday.
Also read:
Tan confident of support from iCapital.biz shareholders to against Laxey
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