Budget 2011 boost for Economic Transformation Programme

Budget 2011 boost for Economic Transformation Programme
Posted on October 17, 2010, Sunday

PUTRAJAYA: Pemandu has received the necessary allocations to carry out the implementation of its Government Transformation Programme (GTP) and Economic Transformation Programme (ETP) initiative in 2011.

“The budget allocations clearly demonstrated the Government’s commitment to ETP. This will enable us to put up the eight per cent public funding required to catalyse the 92 per cent private sector investment.

“As the ETP is co-created by the private sector from the ground up through a 1,000-person workshop and 500-person nine-week lab, we now need the private sector to deliver on its promise,” said Senator Datuk Sri Idris Jala, Minister in the Prime Minister’s Department and chief executive officer of Pemandu.

“The estimated growths of 10.2 per cent and 6.3 per cent for private sector investments and private consumption respectively are aligned with the ETP’s strategy for a private sector-led and a more private consumption-driven economic expansion,” he added.

The ETP initiatives covered in the 2011 Budget include:

• the Mass Rapid Transit (MRT) in Greater Kuala Lumpur/Klang Valley
• measures to revitalise the domestic capital market
• the launch of a Private Pension Fund
• RM857 million allocation for local Electrical and Electronics sector
• RM146 million allocation for the Oil, Gas and Energy industry
• RM3.8 billion allocation to increase productivity and generate higher returns in the agriculture sector
• RM85 million allocation for infrastructure facilities to facilitate construction of hotels and resorts in remote areas, and RM100 million allocation to further support the tourism industry
• the RM3 billion eco-nature resort in Sabah
• the abolishment of existing import duty of between five to 30 per cent on approximately 300 goods
• RM297 million allocation to support palm oil replanting activities
• RM127m allocation to support domestic oleo derivatives companies and RM23.3m to expand downstream palm oil industries
• The set-up of the Wage Consultation Council to determine the rate and mechanism of the minimum wage policy
• Allocation for Wholesale and Retail sector activities such as Tukar, Pakar and automotive workshop transformation.

http://www.theborneopost.com/?p=69175

Bursa M’sia delists 192 companies from 2005

Bursa M’sia delists 192 companies from 2005
Posted on October 13, 2010, Wednesday

KUALA LUMPUR: A total of 192 public companies have been delisted from Bursa Malaysia from 2005 till end of August this year, the Dewan Rakyat was informed.

Deputy Finance Minister, Datuk Dr Awang Adek Hussein, said a total of 203 public companies were also listed on the stock exchange during the same period.

He said 74 companies or 38 per cent of the 192 companies were delisted following privatisation process.

“Out of the 74 companies, 50 were off the list after take over offer and scheme arrangement, 12 following scheme payment and reduction in selected capital in line with the Companies Act. Another three companies were delisted following the sale of assets resulting from a merger where the assets had been transferred while another nine companies opted for voluntary delisting,” he said.

The minister said this when replying to a question from William Leong Jee Keen (PKR-Selayang) at the Dewan Rakyat sitting here.

Leong wanted to know the number of public companies listed on Bursa Malaysia through an initial public offer (IPO) and the number of companies that took private from 2005 till 2010 and the reasons behind the move.

Awang Adek said there were many other reasons for a company to seek delisting including the wish of the main shareholder to expand the company’s business direction without any obstruction from other shareholders.

A low share price that is not reflective of the actual asset value of the said share is another reason.

“It happens also when the company sells its assets and has no core business activity and both the main shareholder and the company’s management have no plans to start on a new core business,” he said.

Awang Adek also said that there had been a 15 per cent increase in the stock exchange’s Composite Index, rising from 1,272 points last year to 1,484 points todate.

“A rise of 15 per cent within a year is a good achievement. With the impending listing of several new companies including two subsidiary companies of Petronas on the local bourse, it should provide for some new activity and inspiration in the market,” he added. — Bernama

Poh Kong Holdings Berhad

Date announced 12-Jun-10
Quarter 31/10/2010 Qtr 1 FYE 31/07/2011

STOCK POHKONG C0DE  5080 

Price $ 0.47 Curr. PE (ttm) 5.90 Curr. DY 2.98%
LFY Div 1.40 DPO ratio 18%
ROE 10.2% PBT Margin 9.0% PAT Margin 6.4%

Rec. qRev 169451 q-q % chg 28% y-y% chq 11%
Rec qPbt 15191 q-q % chg 58% y-y% chq 11%
Rec. qEps 2.65 q-q % chg 39% y-y% chq 10%
ttm-Eps 7.96 q-q % chg 3% y-y% chq 17%

Using VERY CONSERVATIVE ESTIMATES:
EPS GR 5% Avg.H PE 6.00 Avg. L PE 5.20
Forecast High Pr 0.61 Forecast Low Pr 0.38 Recent Severe Low Pr 0.38

Current price is at Middle 1/3 of valuation zone.
RISK: Upside 61% Downside 39%
One Year Appreciation Potential 6% Avg. yield 4%
Avg. Total Annual Potential Return (over next 5 years) 10%

CPE/SPE 1.05 P/NTA 0.60 NTA 0.78 SPE 5.60 Rational Pr 0.45


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


Stock Data: Recent Stock Performance:
Current Price (11/19/2010): .49
(Figures in Malaysian Ringgits)
1 Week 10.2% 13 Weeks 11.5%
4 Weeks 19.8% 52 Weeks 16.9%

Poh Kong Holdings Berhad Key Data:
Ticker: POH KONG Country: MALAYSIA
Exchanges: KUL Major Industry: Apparel & Textiles
Sub Industry: Apparel Manufacturers

2010 Sales 561,242,000
(Year Ending Jan 2011).
Employees: 1,047

Currency: Malaysian Ringgits Market Cap: 199,020,720
Fiscal Yr Ends: July Shares Outstanding: 410,352,000
Share Type: Ordinary Closely Held Shares: N/A

Day's Range: 0.46 - 0.47
52wk Range: 0.35 - 0.51
Volume: 273,000

Top 5 Things to Do to Make Money Investing Stocks

You can read all the investing books from Amazon.com Inc (Nasdaq: AMZN, stock), attend all the seminars you can afford and ask a million investing questions because Warren Buffett is your neighbor next-door but you can never duplicate and apply all the teaching in your way of investing. So let’s start with the top 5 things you should do to make money investing stocks or trading option (in no particular order):

First Thing to Do
You Should Study the Companies’ Fundamentals

Second Thing to Do
You Should Do Technical Analysis

Third Thing to Do
You Should Read the Pulse of the Market

Fourth Thing to Do
You Should Know When to Lock Your Profit

Fifth Thing to Do
You Should Minimize Your Emotion


Read more here.

Petronas Gas surges on LNG project

Petronas Gas surges on LNG project
Written by Joseph Chin
Thursday, 02 December 2010 09:21


KUALA LUMPUR: Shares of PETRONAS GAS BHD [] advanced in early trade on Thursday, Dec 2 after it secured a proposed liquefied natural gas (LNG) regasification project from its parent, Petroliam Nasional Bhd.

At 9.18am, PetGas was up 22 sen to RM11.36. There were 5,700 shares done.

The FBM KLCI jumped 11.91 points to 1,497.33. Turnover was 95.33 million shares valued at RM102.61 million. There were 304 gainers, 41 losers and 96 stocks unchanged.

PetGas announced on Wednesday the projects would be in Sungai Udang port, Melaka and would include two floating storage units (FSUs) to receive and store LNG; an island jetty and regasification units to regasify LNG; and subsea and onshore pipelines to transport the regasified LNG to the Peninsular Gas Utilisation pipeline network.

http://www.theedgemalaysia.com/business-news/177973-petronas-gas-surges-on-lng-project.html

Blue Ocean Strategy

Blue Ocean Strategy
Slide Presentation

The Ketuanan issue

Dr Wan Azizah struck at Umno’s soft spot — Kim Quek
December 02, 2010

DEC 2 — PKR President Datuk Seri Dr Wan Azizah Wan Ismail seemed to have struck at the Achilles’ heel of Umno when she officially condemned “Ketuanan Melayu” (Malay the master race) as the fraudulent ideology that has propped up Umno all these years.

Delivering her policy speech during the party’s annual congress on November 27, she said that the Malay supremacy concept was used by Umno’s elites to deceive the Malay masses for self enrichment and for maintaining their political power. As a result, the majority of Malays and Bumiputera have remained poor and neglected despite 53 years of Umno rule.

Calling the Malays to discard this ideology, she said: “The concept of Malay supremacy must be left behind so that our children will grow up with the vision of a dignified race.”

By any democratic standard, Dr Wan Azizah’s clarion call to abandon racism must be applauded as the voice of reason that is in consonance with fundamental values embraced by every member of the world community.

After all, isn’t it true that the last country practising institutionalised racism — South Africa — had given up its racist policy twenty years ago? Though Malaysia has largely escaped the kind of world condemnation accorded former apartheid South Africa, thanks to the Barisan Nasional government’s skilful image polishing, nevertheless, endemic racism remains a plague that has sabotaged national integration and thwarted economic growth.

Ketuanan Melayu indefensible

Perhaps aware that “Ketuanan Melayu” is indefensible in the eyes of the world, Umno was at a loss as to how to respond to Dr Wan Azizah’s unexpected frontal assault.

To keep silent would be to acquiesce to Dr Wan Azizah’s assertion and that would spell trouble — big trouble. For it is through inciting the primordial instinct of race that Umno hopes to scrape through the coming national election. So, how could Umno give up “Ketuanan Melayu”?

On the other hand, to defend the ideology would be to invite worldwide ridicule and condemnation. And that would not be pretty, keeping in mind that with the myriad of modern communication gadgets instantly transmitting news and messages, international backlash could be swift and unpalatable.

So, after a short interval to recover from Dr Wan Azizah’s surprise initiative, responses began to drip in from Umno’s top leaders, but these are either evasive or irrelevant, and none has dared to take Wan Azizal head on.

Deputy Umno President and Deputy Prime Minister Tan Sri Muhyiddin Yassin described Dr Wan Azizah’s assertion as an attempt “to salvage a sinking ship”, and to regain public support after a divisive party election. What about the Ketuanan issue? Not a word of rebuttal.

Umno Vice President and Defence Minister Datuk Seri Zahid Hamidi said Dr Wan Azizah was “only trying to divert public attention from the party’s serious problems.” He said PKR wanted to please the Chinese and Indians to gain their support for the next general election. Again, he avoided touching the Ketuanan issue.

Not unexpectedly, the dirty job of savage counter-offensive was left to Umno’s ultra racist wing Perkasa. Its youth leader Arman Azha Abu Hanifah attacked Azizah as “political prostitute”. He said that she and other PKR Malay leaders owed their professional achievement to “Ketuanan Melayu” policy and that they had now betrayed the race for the sake of gaining Chinese and Indian support.

Interestingly, Arman’s bad manner and insensitive blast at other Malay leaders seem to justify Dr Wan Azizah’s advocacy to abandon the “Ketuanan” mentality so as to regain dignity for the race. It is not only abhorrent conduct to call a respected national leader “prostitute”, but his inference that Malays are not capable of achieving success unless they are propped up by racial favouritism is outright humiliating to the race. In fact, Arman’s crass outburst has unwittingly made him the best poster boy of the ill fruits that “Ketuanan Melayu” has borne.

However, the icing of the cake in this episode is undoubtedly the novel theory put up by the vociferous Umno Cabinet member Datuk Seri Nazri Aziz to deflect Dr Wan Azizah’s criticism. He said “Ketuanan Melayu” is not about the Malay race, but about the Malay Sultans. He said the word was coined to protect the sovereignty of the Malay Rulers, not to emphasise racial supremacy.

Glaring evidence of racism

While Nazri may consider himself ingenious in coming out with this new interpretation to escape the “Ketuanan” trap, it sure holds no water. The bedrock of Umno’s hegemony is its racial ideology which has captivated its core supporters, and “Ketuanan Melayu” has been coined to symbolise Malay supremacy. It is through the indoctrination and implementation of this ideology that Umno has been able to win election after election; and Umno is not about to give it up for whatever reason.

Read more...

http://www.themalaysianinsider.com/breakingviews/article/dr-wan-azizah-struck-at-umnos-soft-spot-kim-quek/

I'll die in debt, say one in three in UK

Nine out of 10 people have run up unsecured debt and many fear they will never be able to pay back what they owe, a survey has claimed.

5:40PM GMT 30 Nov 2010

Around 89pc of people aged between 18 and 35 said they owed money on a credit card, loan or overdraft, the research showed.

A third of people admitted they did not think they would ever be debt-free, 54pc of whom said they would always need to borrow money in order to fund the lifestyle they wanted.

One in five of these people also claimed they were not worried about the possibility of their debts being passed on to their next of kin if they died before they were repaid.

Just over half who owed money said they did not feel in control of their debt, with 8pc admitting they had needed to ask for help with repayments from a friend or family member. Eight out of 10 people also told the research for discount website MyVoucherCodes.co.uk that they thought it was too easy to borrow money through their bank or on credit cards.

Farhad Farhadi, MyVoucherCodes.co.uk's personal finance expert, said: "The majority of British adults owe money in some way, shape or form, but to see that almost a third think they'll never be free from debt is quite alarming.

"When borrowing money from any source, how you are going to repay it should always be in the back of your mind.

"A lot of people don't really think about the consequences of borrowing money and it can be easy to get complacent, but keeping it all under control should be a priority from the off. Only borrow what you really think you can afford to pay back."

MyVoucherCodes.co.uk questioned 1,722 people aged between 18 and 35 during November.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/8171236/Ill-die-in-debt-say-one-in-three.html

KLSE Market PE

http://biz.thestar.com.my/news/story.asp?file=/2010/11/30/business/7523425&sec=business

Well-managed companies set to gain

Tuesday November 30, 2010

Well-managed companies set to gain

By Teoh Kok Lin


ASIA'S stock valuations are not expensive especially if you pick the right companies to invest for the long term. I sensed lately that there is a growing concern when I speak to investors about Asia's or Malaysia's stock markets.

The fact that Malaysia's stock market index is now hovering near its all-time high of 1,516 points (set in January 2008) is one big cause of uneasiness for some; while EU financial problems and lukewarm US economic data have put a damper on sentiments for others. Some anxiety is not surprising; fresh in many investors' minds are the 2008 global stock market crash, the rebound of 2009 and very volatile markets throughout.

Unnerving investors

Volatile stock markets can be unnerving for investors; since 2008, major stock market indices such as in China, Hong Kong and the United States have experienced gains or losses of up to 3% to 5% a day such huge daily swings are no longer unusual or unexpected.

It is therefore understandable that some investors feel that stock markets (in Malaysia or elsewhere) are due for a big fall, either because stock prices are already too high and/or Western economies have too many unresolved problems. Even a double-dip global stock market crash continues to be bandied about with gusto.

I like to share some of my views on these doubts, especially with regards to Asia's stock market prospects. First of all, are stock prices too high? Asia's stock market indices today (including Malaysia) are still attractively priced and not close to the excessive levels seen in the late 2007/early 2008 market highs (See table). Hence I believe Asia stock prices in general are not expensive yet.

The current Asia bull market rally also means some stock markets will keep hitting new highs, and bull markets can last for many years (for example, the US S&P 500 Index rallied from 295 points in 1990 to 1,232 points in 2000, a continuous bull run for more than nine years, as compared to the current bull run in Asia of about two years).

Second, Asia today is experiencing a major shift in the world's economic centre of power from the West to the East. In this decade, Asia is likely to continue with its rapid economic growth while the West repairs it debt-laden economies.

Growth in Asia will be fuelled by the three big populous and increasingly rich nations of China, India and Indonesia where latent demand for consumer goods is built on a base of almost three billion increasingly wealthier consumers.

According to a World Bank report, China has 32 cars per 1,000 population while India (10 cars) and Indonesia (76 cars) has equally low car ownerships when compared to the United States (819 cars) or Australia (653 cars). For the next 10 years, I would hazard a guess that major car companies will likely sell more cars in Asia than in the United States every year.

On a similar vein, while there may be short-term negative sentiment in China's property sector, I believe that the underlying Chinese demand for housing will be very strong for many more years to come due mostly to increasing wealth (nominal per capita GDP rose from about US$1,000 in 2000 to US$3,735 in 2009 and likely to grow richer) and rapid urbanisation (2.7% annual rate of change) in a country with 1.3 billion population.

This decade, therefore, will offer tremendous opportunities for many established as well as entrepreneurial Asian companies to prosper.

Accurate information

Third, when one invests in stocks, it is the company's business that you invest in. Accurate and timely information regarding a company its business and management is important in order to separate the well-managed from the not-so-well managed companies.

After any stock market downturns, good companies will almost always rebound strongly; something that was quite evident during the 2009 stock market rally. It may be stating the obvious but picking the right stock (or well-managed company) will most likely determine whether one is investing successfully or not.

Finally, as long as the macroeconomic trend is favourable for Asian economies, it also represents fantastic business opportunities for well-managed Asian companies. As Warren Buffett says: If a business does well, the stock eventually follows.

Investing for the long term in companies that will reap the benefits of Asia's high economic growth for many years will likely reap handsome rewards no matter whether there is short-term market volatility, downturns or corrections. In that sense, I am very optimistic for Asian equities this decade.

The writer is the founder and chief investment officer of Singular Asset Management Sdn Bhd.

http://biz.thestar.com.my/news/story.asp?file=/2010/11/30/business/7523425&sec=business

Reflections on Volume

Big volume without further upside equals distribution
Big volume without further downside equals accumulation
Volume tends to peak at turning points
Volume often precedes price movement
Volume is a relative study

Politicians should embrace 'Ketuanan Rakyat' and focus on their services to the public, helping ALL the people.

‘Ketuanan Melayu’ not in Constitution, says Prof Khoo
November 30, 2010

KUALA LUMPUR, Nov 30 — The terminology “Ketuanan Melayu” or Malay Supremacy need not be debated because it does not exist in the country’s constitution, said history expert, Prof Emeritus Tan Sri Dr Khoo Kay Kim.

He said that from the historical aspect, only the Rulers’ Supremacy was stated in the constitution where the people must show their loyalty to the Rulers.

“In the past, ‘Malay Supremacy’ was never mentioned within the Malay community. In history, such things are incorrect. What is stated in the Constitution is only the Rulers’ Supremacy, where you show loyalty to the state where you reside in.

“The Malays obtained the special privileges because they are the subjects of the Ruler. The position of the Malays is given special consideration and need not be disputed,” he said when contacted by Bernama, here tonight.

He was asked to comment on the statement by Parti Keadilan Rakyat (PKR) president Datin Seri Dr Wan Azizah Wan Ismail on the Malay Supremacy in her policy speech at the 7th National Congress of the party on Sunday.

Dr Wan Azizah called for the abolition of the concept of Malay Supremacy to enable Malaysian children to grown up with the vision of a ‘race of integrity’ or ‘Malay of Integrity’.

Khoo said the terminology ‘Malay Supremacy’ was only raised by politicians purely for political purposes, and he observed that politicians were now frequently raising issues that could lead to racial confrontations.

“Politicians should focus on their services to the public, helping the people. They should not encourage the people to quarrel,” he said.

Meanwhile, the Director of the Institute of Ethnic Studies, Universiti Kebangsaan Malaysia (UKM), Prof Datuk Dr Shamsul Amri Baharuddin shared Khoo’s opinion that the term Malay Supremacy was coined by politicians in portraying the political and economic position of the Malays.

Questioning Dr Wan Azizah’s motive in raising the issue, he said the statement by the wife of PKR de facto leader, Datuk Seri Anwar Ibrahim, was merely a political gimmick and purely to cover up the crisis faced by the party currently.

“I don’t know why the issue was raised. What I notice is “Anwar’s Supremacy” in the PKR. It is Anwar’s Supremacy that must be abolished. The Malay Supremacy is merely to demolish Anwar’s Supremacy. In my opinion, the concept (Malay Supremacy) does not exist,” he said.

He said Dr Wan Azizah should re-examine what was meant by the term supremacy and should not question the special privileges of the Malays which had been enshrined ever since the era of the Malay Sultanate.

Shamsul Amri said that looking from the economic aspect, the Chinese community dominated 70 per cent of the economy while the Malays had only 30 per cent and there was no such thing as the Malays dominating in all aspects.

“If we look at it, the 70 per cent should be the supreme group. So, what does the Malay Supremacy show? What does supremacy mean? She (Dr Wan Azizah) herself is not clear on the meaning of supremacy,” he said.

Dr Shamsul Amri said politicians should be thinking about issues that were relevant for discussion instead of raising issues that could bring about negative developments between the races. — Bernama


http://www.themalaysianinsider.com/malaysia/article/ketuanan-melayu-not-in-constitution-says-kay-kim/

Upscale Americans Investing Abroad

WEALTH MATTERS
Buy American? Upscale Investors Look Abroad
By PAUL SULLIVAN
Published: November 19, 2010

Well-heeled American investors have been doing something lately that they resisted for decades — becoming more like their European, Asian and Latin American counterparts and substantially diversifying their portfolios outside their home country.

There are two reasons for this. The financial crisis and the slow recovery showed them that the United States was not immune to devastating crashes of the kind that wealthy people in emerging markets have tried to hedge against by investing abroad. And second, American investors are worried that their portfolios are going to suffer for the foreseeable future, given the size of the United States’ budget deficit, the weakness of the dollar and the uncertainty over the stock market.

“I’ve never seen a period in which clients have expressed such an interest in nondollar investments,” said Kent Lucken, managing director at Citi Private Bank. “People are spreading their chips around more prudently and I think more wisely.”

What is different is how directly these investors are going into non-American markets. They are not content with buying international equities or going into an international bond fund. They are looking to invest directly in Chinese private equity, Indian real estate, Brazilian equities denominated in reals and Australian government bonds. They are also opening cash accounts in multiple currencies.

“International clients understand the need to diversify currencies, but this is something new to U.S. clients,” said David Frame, global head of alternative investment at J. P. Morgan Private Bank.

The people putting as much as 40 percent of their portfolios into nondollar investments are quite wealthy. But consider it this way: What can investors of more modest means learn from what the wealthiest people in the country — with the best research and advice at their disposal — are doing with large portions of their fortunes?

UPSIDE Investors who lived through the 1990s will remember the crises in Asia, Mexico and Russia that shook global capital markets. Investing internationally has always carried risks and it is by no means without perils today.

But many investors see a different trade-off, one based as much on a stagnant or declining United States as on certain international markets that are growing, if not booming.

“When you make an investment in nondollar currencies, you’re making two investments at once,” said Tony Roth, head of investment strategies at UBS Wealth Management. “You’re betting the dollar will go down, but you’re also buying another investment. You need to be compensated for that source of risk.”

He cited the example of buying a one-year Australian government bond, yielding 5.25 percent. He said he believed that the American dollar was going to lose value and the Australian dollar was going to gain it. That’s Part 1. Part 2 is that the Australian government is stable, so an investor can count on receiving that 5 percent annual return. The alternative is less than half of a percent if invested in United States Treasuries.

“I’m going to receive a return,” he said, “that more than compensates me for the marginal risk I’m taking.”

But there are far more risky investments. And the ones that are less liquid — infrastructure in China, say, or a private equity fund in Brazil — carry more uncertainty. But like their equivalents in the United States, they provide a higher return, in theory.

Mr. Frame said clients were investing in Asian infrastructure and Asian private equity by pooling their money with other investors. “There is a lot going on when a country is growing and developing that is hard to address through the public markets,” he said.


While there’s an obvious "pull" to international investments, there is also a bit of a "push" out of the United States: investors who are making their portfolios more international are doing so because they believe that the role of the United States in the global economy is shrinking.

Mr. Roth said the United States contributed 40 percent of global gross domestic product 15 years ago and now contributed 21 percent. He predicted that that figure would fall to 12 percent in another 15 years. Going along with this is the shrinking market capitalization of American stocks compared with global stocks.

“We have the U.S. experiencing flat to 2 percent G.D.P. growth, but you have Brazil, India and China with substantially higher rates,” Mr. Lucken said. “Equity investors are investing abroad to capture higher returns and invest ahead of higher growth rates.”

DOWNSIDE The biggest risk is uncertainty, followed by a lack of knowledge. No one knows exactly what is going to happen, and there are always investors who rush in too quickly without fully understanding the risks.

Those risks run the gamut from income inequality that could create unrest, to legal systems that have not been tested by foreign investors, to managers abroad without established track records.

There is also the unforeseen. “I witnessed firsthand the collapse of the Soviet Union,” said Mr. Lucken, a former foreign service officer. “That speaks to the unique political risks in smaller developing countries.”

Also, South Korea and Brazil, which are now darlings of investors, were shaken by crises in the 1990s. “The history of success has been relatively short — the past 10, 12 years,” said Christopher J. Wolfe, chief investment officer for the private banking and investment group at Merrill Lynch.

But Mr. Wolfe said clients were investing across all asset classes when they invested internationally and that gave them greater diversification. It is also a big change from the time when “it used to be U.S. stocks and non-U.S. stocks,” he said.

Like all big changes, there are going to be fits and starts. But after what investors lived through over the last three years at home, some are willing to chance it.

http://www.nytimes.com/2010/11/20/your-money/20wealth.html?ref=wealth_matters

Hunting for Returns Abroad

Are overseas investments worth the risk? Which ones can be part of the mix for a prudent investor?

Wealth Matters

Paul Sullivan writes about strategies that the wealthy use to manage their money and their overall well-being.

Integrax sees LMT tagged at ‘no less than RM250m’

Integrax sees LMT tagged at ‘no less than RM250m’
Tags: Integrax Bhd | LMT

Written by Joy Lee
Tuesday, 30 November 2010 15:10


KUALA LUMPUR: Port operator Integrax Bhd may consider selling its stake in Lumut Maritime Terminal Sdn Bhd (LMT) for a price tag of no less than RM125 million.

LMT has a port facility and cash of about RM50 million as at June 2010. Additionally, LMT has an exclusive concession zone of a 30km radius around the terminal, which expires in 2015 with land available for sale.

“I think [the value of LMT] would be in excess of a quarter billion (RM250 million),” Harun Halim Rasip, joint chief executive of Integrax, said at a press briefing yesterday.

Currently, Integrax has a 50% minus one share in LMT while Perak Corp, via its unit Taipan Merit Sdn Bhd, has a 50% plus one share in LMT.

LMT has an exclusive contract to manage the deepwater port Lekir Bulk Terminal (LBT), in which Integrax has an 80% equity, till 2017. Malakoff Corp Bhd holds the remaining 20% of LBT.

There is a feud between Harun and his brother Amin Halim Rasip, who is also co-chief executive and executive director of Integrax. The duo hold a collective stake of 37.8% in Integrax via private vehicles.

Yesterday Amin took the stage before a press briefing called for by Harun.

The brothers do not see eye to eye on the plans ahead for Integrax, including the deal to provide transshipment services for Brazilian mining giant Vale, the world’s largest iron ore producer, for a 10-year tenure while Vale built its own facility.

While Amin is for the Vale deal, Harun and other board members, are opposed the deal as the cost of setting up the facility for Vale would be in the region of RM280 million.

Harun’s objection was due to the capital investment that Integrax would have to incur with no certainty of the port being utilised after the 10-year tenure. The board said it would be difficult to rope in new clients of Vale’s size. “The financial risks that were worked out against the permutation on capital cost yielded a return that was too low. The deal did not make sense,” Harun said.

At this, Amin, who has the backing of the state, interjected: “Data will be provided to you to show that this is totally incorrect. It does not accord to reality.”

Integrax and the Perak government have been at loggerheads since the former turned down the Vale offer. The Perak government and Amin said the Vale deal would benefit the state including a commitment by Vale to build a RM3 billion iron ore pellet distribution centre.

LMT is currently the object of a tussle between Taipan Merit and Integrax after Perak Corp terminated a shareholders’ agreement with Integrax for the operations of LMT. Integrax said earlier it had opted to exercise its option to acquire all of Taipan Merit’s shares in LMT.

Perak Corp is unlikely to give up LMT as it is the state’s main revenue generator. For the nine months ended September, Perak Corp posted a net profit of RM13.33 million on revenue of RM74.81 million. Its infrastructure arm accounted for almost RM64 million of Perak Corp’s revenue.

Nonetheless, should Taipan Merit be able to gain full control of LMT, LBT may opt to terminate the operations and maintenance agreement with LMT given the ongoing scuffle at Integrax’s level.

Perak Corp has an 8.29% interest in Integrax via Kuda Sejati.

Yesterday Perak Corp announced that it bought 20 million shares or a 6.67% stake in Intergrax for RM30 million, confirming an earlier report by The Edge Financial Daily. The acquisition is seen as a move by Perak Corp to strengthen its position in Integrax.

Last week, another block of 5.6 million shares, or 1.87% stake, was traded off-market. The block is believed to have been mopped up by KYM Holdings Bhd, which had sold 756 acres of land to Vale for RM93.76 million.

With KYM entering the fray, it will be interesting to see how the struggle for control at Integrax ends. Given that the only logical way for the tussle to end is for one party to exit, but it may be a long while before the dust settles.

The boardroom tussle has sent Integrax shares surging 107.7% year-to-date to RM1.60 yesterday. The stock’s net assets per share were RM1.79 as at Sept 30.

At that price, the company has a market capitalisation of RM481.3 million.


This article appeared in The Edge Financial Daily, November 30, 2010.

Integrax co-CEO says buyout can clear row

Tuesday November 30, 2010

Integrax co-CEO says buyout can clear row

By SHARIDAN M. ALI
sharidan@thestar.com.my


KUALA LUMPUR: Integrax Bhd co-chief executive officer Harun Halim Rasip says the company's fallout with Taipan Merit Sdn Bhd may be solved if one of them buys the other out of Lumut Maritime Terminal Sdn Bhd (LMT).

Taipan Merit, a Perak state-owned enterprise under Perak Corp Bhd, had recently terminated the shareholders agreement with Integrax for LMT, a port-operating unit of Integrax.

It was set out under the agreement that Integrax had the right to nominate the CEO of LMT to be approved by the LMT board.

The agreement also provides for reserved matters which effectively makes LMT a 50:50 joint venture where both shareholders have to be in agreement although Taipan Merit holds 50% plus one share in LMT.

Integrax found the termination unacceptable and a breach of the agreement. Thus it filed a notification of arbitration and made an offer to buy out Taipan Merit on Nov 10.

Integrax also filed an originating summons to Perak Corp, Taipan Merit and the other Integrax co-CEO, Amin Halim Rasip, amongst others.

We are unable to offer the buy-out now until the arbitration stage and I am willing to pay a lot of money for it. We are also going for the injunction because we want to put somebody independent to run the company, protect our shares in LMT and make sure the money is not being dissipated inappropriately.

If it (Taipan Merit) is professional enough, it should offer to be bought out, he told a press briefing yesterday.

Harun said the problem with Taipan Merit started before the Vale International SA contract came into the picture. Harun and Amin, both major shareholders of Integrax, have been feuding over the matter with the latter and Taipan Merit in favour of the tie-up with Vale.

But the problem with Taipan Merit has some impact on the Vale matter. Now, as the transhipment services agreement with Vale had lapsed on Oct 19, we're just going to step back, Harun said.

All the noise for the Vale contract has no merit as it has problems to reflect stable financial return. Also, we do not want to be investing RM250mil to RM300mil while the relationship with our partner is on the rocks.

Harun added that the Vale contract required high capital expenditure where the minimum annual throughput from the project would not generate enough income to meet Integrax's minimum project hurdle rate of return.

It will result in asset yield destruction, he said.

The port signed an agreement with Vale on Dec 29, 2009 which allowed Integrax to expand existing facilities at the Lekir Bulk Terminal (LBT), one of two terminals in which Integrax has stakes in, to comply with the LBT's requirements over a 10-year period.

Meanwhile, Vale bought 166ha for almost RM102mil in cash from KYM Holdings Bhd and its 54%-owned subsidiary, Harta Makmur Sdn Bhd, in early January with an option to acquire an additional 306ha for RM93.8mil in cash.

Going forward, Harun said Integrax would be tapping into Indonesia's booming economy to expand its port operations. Integrax holds a 70% stake in PT Indoexchange Tbk, a public-listed Indonesian company.

Indonesia's vast economic potential is hampered by poor infrastructure, including ports. And supported by hastening of de-regulation process in the port industry, Integrax is ready to fill this gap and has committed to the state-owned enterprise to undertake the operations and management of an established port in Sumatra, amongst other potential projects there.

It is estimated that the expansion plan in Indonesia will cost about US$150mil, he said.

As for LMT and LBT, Harun said negotiations were under way to deal with additional coal-handling needs which would serve the expansion of Tenaga Nasional Bhd's Janamanjung power plant at LBT.

Meanwhile, Perak Corp, in a filing with Bursa Malaysia yesterday, said Taipan Merit had, on Nov 26, acquired 20 million ordinary shares of RM1 each in Integrax, representing 6.65% of the issued and paid-up capital of Integrax, for about RM30.05mil cash.

In a separate filing, Integrax said PT Indoexchange had announced to Bursa Efek Indonesia and had made the obligatory disclosure that it had received a notice of termination of share-sale agreement dated June 13, 2008 from one of three vendors of shares in PT Alkatara.

PT Indoexchange is taking the necessary legal actions against the vendors.

http://biz.thestar.com.my/news/story.asp?file=/2010/11/30/business/7522289&sec=business