Maxis May Raise Up to 12.4 Billion Ringgit in IPO

Today’s price range for the shares values Maxis at 36 billion ringgit to 41.25 billion ringgit. That compares with Maxis’s 2007 market value of 40 billion ringgit before it was taken private. The 2007 valuation includes the company’s overseas operations, which are now excluded.

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Maxis May Raise Up to 12.4 Billion Ringgit in IPO (Update2)

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By Soraya Permatasari

Oct. 23 (Bloomberg) -- Maxis Communications Bhd., Malaysia’s biggest mobile-phone operator, may raise as much as 12.4 billion ringgit ($3.7 billion) in the country’s largest initial share sale, according to an e-mail sent to investors.

The Kuala Lumpur-based phone operator’s shareholders will sell as many as 2.25 billion shares at 4.8 ringgit to 5.5 ringgit apiece next month, lead arranger CIMB Investment Bank Bhd. said in the e-mail. That would value the company as much as 41.25 billion ringgit.

The sale, more than double Petronas Gas Bhd.’s record 1995 offering, would give billionaire Ananda Krishnan funds to invest in faster-growing markets as wireless demand slows at home, where mobile subscriptions exceed the nation’s population of 28 million. The shares are being offered as equity markets from Malaysia to China to India climb back to levels preceding the bankruptcy of Lehman Brothers Holdings Inc.

“As it will likely be added into the benchmark index, fund managers would have no choice but to look at Maxis and to add it into their portfolio,” said Pankaj Kumar, who manages about $540 million of assets as chief investment officer at Kurnia Insurans Bhd. “It will help boost the market in terms of the depth, being such a big cap stock.”

Institutional Investors

The indicative price range values the stock at 16 to 18 times estimated earnings, making Maxis expensive relative to rivals such as Digi.com Bhd, according to Scott Lim, chief executive officer of MIDF Amanah Asset Management Bhd. in Kuala Lumpur. Stocks on the MSCI Asia Pacific Telecommunication Services Index trade an average of 13 times estimated earnings.

“The offer is also a bit pricey compared with regional valuations,” Lim said. “Foreign fund managers may not be interested and they would rather buy a similar stock somewhere else.”

The stock will be priced on Nov. 10 and start trading on the Malaysian exchange Nov. 19, according to the e-mail.

About 2 billion shares, or 91 percent of the total, are being offered to institutional investors, while about 150 million, or 6.7 percent of the total, will be sold to the public, according to the e-mail. Maxis will start marketing today in Hong Kong, followed by Singapore on Oct. 26 and Oct. 27, and Kuala Lumpur from Oct. 28 to Oct. 30, it said.

Europe, U.S. Presentation

Presentations of the sale in Europe and the U.S. will be from Nov. 2 to Nov. 9. Malaysia’s biggest funds, including the Employees Provident Fund, may take up almost half of the stock offering, a person with knowledge of the matter, told Bloomberg this week.

Lembaga Tabung Haji, which manages about 23 billion ringgit of Islamic pilgrim funds in Malaysia, is considering the offer as long as the price doesn’t exceed 5.20 ringgit a share, Chief Investment Officer Mohd Noor Abdul Rahman said yesterday.

The phone carrier will only include local operations in the sale, potentially discouraging foreign investors because Maxis already controls 40 percent of the Malaysian market, in which handsets outnumber people.

Maxis was among the country’s four biggest companies by market value before billionaire Krishnan, 71, took it private in 2007 in a 16 billion ringgit transaction.

Mobile-phone penetration in Malaysia exceeded 100 percent in March, according to the Malaysian Communications and Multimedia Commission.

Mobile Subscribers

Maxis had 11.4 million mobile-phone subscribers as of June 30, according to the initial prospectus. The company reported 4.24 billion ringgit of revenue in the six months to June 30.

Today’s price range for the shares values Maxis at 36 billion ringgit to 41.25 billion ringgit. That compares with Maxis’s 2007 market value of 40 billion ringgit before it was taken private. The 2007 valuation includes the company’s overseas operations, which are now excluded.

Krishnan is Malaysia’s second-richest person, with an estimated $7 billion of wealth, according to Forbes magazine.

Krishnan, whose family originated from Sri Lanka, was born April 1, 1938 in Brickfields, Kuala Lumpur. He also owns Astro All Asia Networks Plc, Malaysia’s biggest pay television operator, which this month secured a three-year agreement with the FA Premier League for exclusive rights to broadcast Barclays Premier League football matches in the country.

Krishnan took Maxis private in 2007 in a 16 billion ringgit buyout deal in a bid to accelerate expansion in India, where it owns Aircel Ltd., and in Indonesia, hoping to seek growth outside the maturing Malaysian market. He promised to re-list Maxis in there years.

The decision to re-list Maxis this year came after Prime Minister Najib Razak in July said Maxis should re-list to attract investors to the Malaysian stock exchange.

To contact the reporter on this story: Soraya Permatasari in Kuala Lumpur at soraya@bloomberg.net

Last Updated: October 23, 2009 02:42 EDT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aifzm6xbxmlA

SOUTHEAST ASIAN STOCK MARKETS

SOUTHEAST ASIAN STOCK MARKETS
Change on the day
Market Current Prev Close Pct Move
Singapore 2715.34 2681.97 1.24
Kuala Lumpur 1267.10 1260.02 0.56
Bangkok 708.76 716.35 (closed)
Jakarta 2467.95 2433.18 1.43
Manila 2932.99 2888.72 1.53
Ho Chi Minh 615.68 624.10 -1.35

Change on year
Market Current End prev yr Pct Move
Singapore 2715.34 1761.56 +54.14
Kuala Lumpur 1267.10 876.75 +44.52
Bangkok 708.76 449.96 +57.52
(closed)
Jakarta 2467.95 1355.40 +82.08
Manila 2932.99 1872.85 +56.61
Ho Chi Minh 615.68 315.62 +95.07

Stock Market Volume (shares)
Market Current Volume ... Average Volume 90 days
Singapore 273,457,500 ... 370,578,304
Kuala Lumpur 110,653,800 ... 156,325,598
Bangkok 2,982,748 ... 4,575,457
Jakarta 4,462,989,500 ... 5,809,227,300
Ho Chi Minh 137,061 ... 56,606

"Warren Buffett" of Malaysia

http://spreadsheets.google.com/pub?key=tkb0enVog-PjOHzgbMUXi_w&output=html


The returns from iCap's winning transactions were truly fantastic. 

Are we looking at a budding "Warren Buffett" equivalent?

Wonder the 'cow' will jump over the moon?

iCap completed transactions - The Winners

http://spreadsheets.google.com/pub?key=tvUBvGFsmHcpydgvtogKM9Q&output=html

Analysing the Winners:

Total = 140 transactions

Holding Periods

less than 1 year
64 transactions
Holding Period Return less than 15% = 14
Holding Period Return more than 15% = 50

exceeding 1 year
29 transactions
CAGR less than 15% = 5
CAGR more than 15% = 24

exceeding 2 year
17 transactions
CAGR less than 15% = 8
CAGR more than 15% = 9

exceeding 3 year
5 transactions
CAGR less than 15% = 3
CAGR more than 15% = 2

exceeding 4 year
8 transactions
CAGR less than 15% = 8
CAGR more than 15% = 0

exceeding 5 year
3 transactions
CAGR less than 15% = 1
CAGR more than 15% = 2

exceeding 6 year
3 transactions
CAGR less than 15% = 3
CAGR more than 15% = 0

exceeding 7 year
4 transactions
CAGR less than 15% = 4
CAGR more than 15% = 0

exceeding 8 year
3 transactions
CAGR less than 15% = 3
CAGR more than 15% = 0

exceeding 9 year
2 transactions
CAGR less than 15% = 2
CAGR more than 15% = 0

exceeding 10 year
0 transactions
CAGR less than 15% = 0
CAGR more than 15% = 0

exceeding 11 year
2 transactions
CAGR less than 15% = 0
CAGR more than 15% = 2

Findings:

Of the 140 transactions:

• 51 (36%) have a return (HPR or CAGR) of less than 15% and
• an amazing 89 (64%) have a return (HPR or CAGR) of more than 15%

Of those transactions giving more than 15% HPR or CAGR, 93% ( 83/89) were stocks held for less than 3 years:

• 50 of the stocks were held for less than 1 year
• 24 of the stocks were held for more than 1 year but less than 2 years
• 9 stock were held for more than 2 years but less than 3 years.

Take Home Message:

1.  Of 4 stocks selected, 3 were winners and 1 was a loser.

 2.  Of the 3 winners:

• 1 gives a CAGR of less than 15% and
• an amazing 2 give a CAGR of greater than 15%.

 3.  Of 4 stocks selected:

• 1 faltered,
• 1 did fairly alright and
• 2 did exceptionally well.

Completed Transactions of iCap (1989 to 9.7.2009)

http://spreadsheets.google.com/pub?key=tQvTWgP7osgpwBxXVtVyy_g&output=html

There were 192 completed transactions over the period 1989 to 9th July, 2009.

There were 140 winners (73%) and 52 losers (27%). 
The ratio of winners to losers is 2.7 to 1.

Therefore, we can infer that for every 4 stocks picked by iCap (also known as ttb), 3 will be winners and 1 will be a loser.  :- ))  or  :- ((


Of these 192 transactions:
80 (42%) were sold within the 12 months holding period.
112 (58%) were sold after a holding period of more than 12 months.

Of the 140 winners:
64 (46%) were sold within the 12 months holding period.
76 (54%) were sold after a holding period of more than 12 months. 

Of the 52 losers:
16 (31%) were sold within the 12 months holding period.
36 (69%) were sold after a holding period of more than 12 months.


Ref:  http://icapital.biz/icapital2/other/completedtranx_en.pdf

Past Stock Selections in i Capital

Past Stock Selections in i Capital

Completed Transactions from 1989 to 9 Jul 2009
 
http://icapital.biz/icapital2/other/completedtranx_en.pdf
 
How to convert this pdf file into Microsoft Office Excel format to facilitate the calculation of the CAGR for each of the completed transactions?  TQ

The stock market requires an endless supply of losers

Perhaps the most forceful statement on the need to act in the contrary mode appears Confessions of a Wall Street Insider by the self-named C.C. Hazard:

"The stock market is built on a necessary foundation of error.  You make money on the market mainly by living off the errors of other players.  You become a predator, in fact, a carnivore, a beast of prey.  Others must die that you must live... The stock market requires an endless supply of losers."

By refusing to act like and with the crowd in either its manic or panic phases, an investor immensely raises his or her chance of not being part of that pool of losers. 

"Never follow the crowd!"

Leaning against that powerful tide

The crowd can be correct during much of a long trend, but always overstays and proves itself wrong at turning points.  When the feeling of bullish rightness becomes universal and powerful, a top is immediately at hand. 

Being successful in investing or trading means leaning against that powerful tide, which then creates psychological, financial and social stresses and strains not everyone can handle. 

If by nature an investor is passive, a follower, he may lack sufficient courage to do what is required for investing or trading success.  But if one can stick to contrarian principles despite probable early suboptimization of profits, he acquires a bucketful of cash near the top (plus some interest) for use later when the panic phase arrives. 

The key to success is to do what is not easy.

The key to success is to do what is not easy. What seems very easy will probably prove a mistake. Almost invariably when a buy looks compelling and overwhelmingly obvious, the investor actually is getting in too late.

The best bargains are purchased when the investor has to struggle and debate, afraid even to tell his broker about an idea under consideration.

When he loves the stock because it has treated him so well and wants to stay on board longer to maintain that highly comfortable association, he has overstayed the market.

"We buy (on) wars, earthquakes, coups, assassinations and devaluations. We sell on peace, free-trade agreements and all that other good stuff."

Buying and selling that way is how to succeed, but it always feels like facing into a 100-mph head wind at the time.

KNM upgraded to 'buy'

KNM upgraded to 'buy'


Published: 2009/10/23


KNM Group Bhd. was upgraded to “buy” from “sell” at Maybank Investment Bank Bhd on expectations of higher orders for the oil and gas services provider.

The company’s target price was raised to RM1.02 from 69 sen, Maybank said in a report today. -- Bloomberg

Undertand both fundamentals and psychology of the market

Market moves are driven by an ever-shifting combination of fundamentals and psychology; to be successful, investors need to seek to understand both rather than ignore them.

Mere identification of an extreme trend will not guarantee selling at an exact top or buying at precise bottoms. 

But selling above the long-term trend when markets are buoyant will produce returns above those from selling on average at the long-term trendline. 

Buying well, namely when fear pervades, gives another advantage. 

What is the annual turnover of stocks in iCap?

In their continuing efforts to stay atop the best, many mutual funds engage in 50% to 100% or faster annual turnover (rather than buying and holding.)

Just wondering, what is the annual turnover of stocks in iCap? 

The price of investment success is constant vigilance.

Buying and holding for the long term assumes that one is willing to settle for whatever long-term average return is generated.

Buying and holding for the long term also assumes that one can successfully select a stock, or group of stocks, whose fundamentals will continue intact.

Technology is moving ever more rapidly and for most corporations the relevant competitive context has become worldwide, whether or not they wish it were so. These facts imply that selections of companies likely will not remain valid as long as they could in the past.

In a dynamic world, a static portfolio is by definition a fatally flawed strategy.

Bottom line:  One year's favourable and seemingly stable fundamentals are not a given that can be assumed in perpetuity, much as we might wish they could.  The price of investment success is constant vigilance.

The advice to buy and hold long term begs a critical question:  buy and hold what? 

Just 4.5pc of finance professional opted for a V-shape recovery from current slump

Recession: 95pc of finance professionals expect downturn to continue
Just one in 20 money professionals believes that the economy will stage a sharp “V-shaped” recovery from the current slump, according to a survey by Barclays Capital.

By Richard Evans
Published: 9:09PM BST 02 Jun 2009


Photo: PA When the investment bank asked experts what they expected the trajectory of the global economy to be this year and next, 37.5pc predicted a W-shape – temporary recovery, before renewed weakness – and 31.5pc a U-shape, representing weak growth for some time before gradual recovery. Another 26.5pc favoured the L-shape: growth remaining weak for a protracted period.

Just 4.5pc opted for a V-shape – weakness and then sharp recovery – according to the survey of 605 professionals, who worked for a broad range of foreign exchange investors including hedge funds, real money managers, proprietary trading desks and corporates.

The pessimism about the economy was reflected in experts' opinions about the recent rally in "risky assets" such as shares.

Thirty-seven per cent said they thought we were in a bear market rally close to ending, while 23.5pc said it was a bear market rally with further to go, a bearish total of over 60pc; 22pc thought it sustainable but that further gains were unlikely, and 17.5pc said risky assets had further to rally.

“The recent strong performance of risky assets is seen by investors as a ‘bear market rally’ that is close to ending,” the bank said. “This is consistent with the general view that any global economic recovery over the next year will be shallow or temporary – U or W-shaped.”

Barclays also asked the finance professionals to select the currencies most likely to rise and fall. As favourite to rise, the pound was narrowly beaten by the Australian dollar, while the American dollar was seen as most likely to weaken.

"The choice of the most attractive long currency trading position was a close-run contest between sterling and the American dollar, with the latter eventually winning," Barclays said. "The US dollar was seen as the most attractive short currency position."

http://www.telegraph.co.uk/finance/personalfinance/investing/5431622/Recession-95pc-of-finance-professionals-expect-downturn-to-continue.html

A rally from extreme cheapness to excellent value

So what happens next? If that was a rally from extreme cheapness, what does the market do when it is merely excellent value?

Overpriced = price at more than 120% of Intrinsic Value

Fair price = price at more than 80% but less than 120% of Intrinsic Value

Bargains = price at less than 80% of Intrinsic Value

Overpriced:

Extremely overpriced = more than 50% above intrinsic value

Overpriced = more than 20% above intrinsic value

Fair price:

Fair value = +/- 20% of intrinsic value

Bargains:

Good value = 20% lower than intrinsic value
Excellent value = 30% lower than intrinsic value
Extreme cheapness = 50% lower than intrinsic value