Friday 27 August 2010

IS MERITOCRACY RACIST? This is a globalised world, Mr Mahathir. Malaysia needs to focus on competing on an international scale.

By libzim on August 26, 2010 12:19 AM
Literally meritocracy is not rascism. But it can be used subtly as tool for suppression. Meritocracy is merit based on some criteria.
The government should only practice meritocracy if there is one school system, all race based organizations(be it for trade, commerce or culture) banned, one culture, one language. English is allowed as it is International language.
Change back Malaysia to Persekutuan Tanah Melayu to preserve heritage and remind the people of the history and where each one originated.
Pork and liquor banned. Nobody is going to die without these things.
I dont think Chinese are ready for this meritocracy. They want meritocracy as defined by them.

By 6 Jahanam on August 26, 2010 12:14 AM
He is a amart man,having a good chemistry among his cabinet.
He thinks ,he make sure what he did is right,and immediately ammend what is wrong.
He is a quiet winner.
He won Singapore.
He learn from Jews that miliatary invasion is hardly to succeeds.
Econmic Invasion proven to him,more effective, as He knows
the malay can never succeed in economy.
He is filling Singapore with more China, to invade Johor,subsequently more part of Johor.
As seen the IDR project has moves much of the malay away from Johor.Capital Land belongs to Singapore has been active in IDR projects.
Today they buy 1 miilion ringgit of land from the malay,will fruit them to be 10 million ringgit later.The malay 1 million ringgit that they have will shrink to 0 riinggit.So on they will sell again their left over land till the malay will have no land.
It happens in Singapore malay land. None is LEFT.
Your choice as to stay undeveloped,inherit your datuk moyang land,
or let them develops seeing your land,your rights being removed.
It is not modernizations,nor materialistcs a measure of success.
It is WHAT YOU WANT IT TO BE.

By ah_huat on August 26, 2010 12:08 AM
Mr Mahatir,
Did you read the a comment written by a foreign writer Bryant? i think it's so good and worth reading....
Dear Mahathir
China is coming up, India is coming up, Vietnam is coming up and now even Russia is on the rise. In this flat but wired world regardless of whether we are Malaysian Malay, Chinese or Indian, if Malaysia fails to progress, all of us will become history of this country.
Without the Malays, Chinese could not do well in the country and without the Chinese, Malays will not do well either. Both have to work together to uplift Malaysia and mitigate the acute impact that is being brought about by globalisation.
For me, a true leader is someone who has the vision that focuses not just on one particular ethnic group in the country but instead nurture the future for everyone. A good leader is someone who knows what the biggest threat the country is facing and directs the people to stave off that threat. A good leader is also someone who is impartial in his ability to promote harmony in the country for as long as possible.
UMNO is a political loser leading the country to nowhere. They do not have the capacity or unction to understand what is going on in the outside world. They have no serious idea where Malaysia will be in the next 30 years. With the emergence of the three new superpowers, India, China and Russia, standing tall and alongside the USA and the European Union, UMNO knows nothing of the kind of world it will shape up to be and how Malaysia may or may not be able to share let alone compete for the ever diminishing slice of cake of the world economy.
UMNO only knows how to get the Malays to fight with other non-Malays on insignificant issues within Malaysia, while in the meantime everyone knows all too well that these issues are oftentimes trivial, self-destructive and merely self-serving.
UMNO has no genuine interests in learning how their impoverished Malays will go on living in the future and they have no welfare concern as to what benefits them. UMNO’s chief aim is to garner votes from them. The practical outcome of the NEP is good enough evidence on how the party benefits the cronies but not the huge segment of destitute Malays. Despite all their despicable acts they are still in the power.
Dear Mahathir
As you are aware, the Malays control the rights to all the lands and natural resources in this country. They control all government institutions, GLC and state-owned companies. The Malays also dominate the lawmaking process in Malaysia including the decision-making processes in the formulation of the country’s economy policies.
From statistics we also know now that the Malays not only own the largest national assets but are also freely – and without conditions – allocated shares in public-listed companies. The Malays have also been accorded all kind of priorities when it comes to buying properties, awarding of public contracts, tertiary education opportunities including the granting of scholarships and even securing jobs in any of the government departments and agencies.
Yet with all these privileges and rights enjoyed by the Malays, you still complain that not enough is done to help the Malays to catch up with the other ethnic groups, principally the Chinese? Then what else should Malaysia do to satisfy the Malays? Did the Chinese seize or rob anything away from the Malays or were their accomplishments the result of their hard work?
If it is all due to their diligence, why do you say it is unfair? Many of us don’t quite get your point here. May I therefore ask you what you expect the Chinese to do in the event that your so-called NEP fail to achieve the desired result?
Would the Malays be happier if the ethnic Chinese in your country do any of the followings:
- surrender their assets and hard earned money to the Malays unconditionally;
- not to engage in any business activities;
- not to do well in all sort of school, college and tertiary examinations;
- not to earn more income or achieve greater than the Malays;
- not to advance to higher education; or
- renounce their citizenships and return to China or migrate to somewhere else?
I am a foreigner but I am surprised that your underlying intention is to ultimately divide your own country. It is so obvious that you are mainly targeting the Chinese. Frankly, tell us, what do you expect the Chinese to do in order to achieve what is so called “equality” as you so define it yourself?
Mr Mahathir, after all these criticisms you have railed against the present government, many of us feel that you are beginning to sound irrational because your arguments lack logic.
You have basically exhausted all forms of good reasoning because you hardly sound convincing to any of us. Some of us think that your poor conduct might be owed to your ever increasing jealousy of the highly successful Mr Lee Kuan Yew, your former nemesis in Singapore .
I suppose that reality is always hard to accept let alone swallow. No matter how you slice it, you must accept the fact that Mr Lee is rightly regarded the Father of Singapore but given your racist attitudes, you can hardly be called the Father of Malaysia. Mr Mahathir, accept the fact that unlike you, Mr Lee continues to be a force of influence to the government of Singapore and he will likely be until the day he dies.
On the other hand you lost all abilities to influence the government the moment you stepped off the dais as the country’s prime minister.
You also need to tacitly accept that Mr Lee remains intellectually sharp (sharper than you, we think) and immensely popular on the world stage. Mr Lee continues to be an international leader respected by many but unfortunately, try as you may, you are not quite so. Maybe that is why you sought out your popularity in certain African and North African states where some think you are god. That must be good for your ego but Mr Mahathir, it does nothing for your country’s economy though.
Because of your jealousies toward Mr Lee, your views become blinkered and unbalanced as you continue to train your personal hatred at him across the border. All these eventually manifest themselves into a series of diabolical attacks against your successors in your own country.
We may be foreigners but we can see so obviously that you are unhappy whenever your successors become more popular than you. Is there any good in doing that? What is your intention? Can’t you take a back seat and chill out? Your time is over. Retire gracefully and enjoy your sunsets. Most political leaders around the world do that. Why don’t you do the same as others? Why do you continue to meddle? I don’t get you at all.
During your “rule,” you were critical of most of the developed countries aiming more specifically at the western sphere usually out of jealousy. And then after you had stepped down from office, you criticised (and continue to do so) every single minister who served you and still remained in the cabinet simply because you believed they didn’t listen to you. Mr Mahathir, when will you ever stop criticising anyone? Can’t you respect the decisions of others?
Back to your recent blog, is there anything wrong with the Chinese in this country?
Do they seize or rob the money away from the Malays?
Do they have the ability to come out with any policies to marginalise the Malays?
Do they dominate the lawmaking process of this country?
Do they formulate the economy policies in this country?
Do they control the government departments and agencies in this country?
Do they control the state-owned companies and GLC in this country?
Do they control the country’s largest resource (oil) companies and banks?
Of course you know the answers, right?
Malays are the one who dominate the lawmaking process of this country; Malays are the one who formulate the economy policies in this country and in so doing, shape them to exclusively favour the Malays;
Malays are the ones who control the government departments and agencies not to mention also the state-owned companies, GLCs as well as the country’s largest resource (oil) companies and almost every single major financial institution;
Malays are the ones who control the funds in this country.
With all these exclusive non-negotiable rights enjoyed by the Malays, what else do you want the Chinese to do?
Do you want them to surrender their homes and savings including their wealth that they earned with their hard work to the Malays?
Or do you want to ask all the Chinese to return their citizenship and leave the country? If you condone your fellow Malays in accusing the Chinese of being squatters (pendatang) in your country, I guess that is what it amounts to, right?
Mr Mahathir, have you ever stop to think why 30 years of implementing the NEP had not brought about the desired results or should I say, not achieved the principal objectives and that is to economically equip ALL the Malays in the country? Maybe the NEP could have but you and your cronies denied it the ability to; instead allowed the system to carry on for more years than it ought to so that others can call you god because of the illicit money you funnelled to them.
Under the NEP there is a complex series of policies that favours the Malays. And despite these policies, the Malays still can’t get what they want – again the question is what else do you want the Chinese to do? Do you blame the Chinese simply because they are industrious and focused? Or should you level your blame at those Malays who do not treasure the opportunities that you claim you have given them? Having asked that did you or did you not give them these opportunities?
You definitely are aware that the NEP has been misused for at least 23 years (while you were in office), benefiting only your cronies and those who aim to stroke your ego as they seek favours from you. Since it is apparent that the NEP was reshaped by you to serve and benefit you and your cronies, then refrain from blaming the Chinese when the average Malay continues to languish in your country. It has nothing to do with the Chinese but NEP and the Malay themselves.
This is a globalised world, Mr Mahathir. The Chinese and Malays should not be fighting against each other because Malaysia needs to focus on competing on an international scale.
China used to lie in the backwaters, lagging seriously behind Malaysia but that seems a long time ago now. Today they have not only caught up but have sped past Malaysia to compete with far larger economic rivals like the USA , Japan and Europe . Mr Mahathir, do you think you can ask them to slow down their development so that your country can play catch up? If the Chinese government refuses to listen, will you then make a complaint to the United Nations that China is developing too fast and this is unfair to Malaysia , which adapts a more passive approach?
Who gives you the right to prevent others from progressing?
Who do you think you are? This is a flat world – obviously, Mr Mahathir, you did not read the book named “The World is Flat” but I encourage you to. The problem with you is that you are so narrow-minded that you level your sights on only the Chinese and/or Malays in your country.
You would be doing Malaysia a larger favour if or when you learn that in the end we’re all living in a flat world. In other words, look farther and more horizontally askance at the bigger world out there. That’s the world that Malaysia continues to flounder so long as you and the blinkered UMNO have exclusive say over how your country is run. And if Malaysia remains in its doldrums state within the next few years, believe me, it will be irrelevant whether you are Malay or Chinese; because the country will then have to fight for scraps with Somalia . Imagine that.
Have a God-blessed day.
P.S. Mr Mahathir, you are not even Malay but an Indian at and by birth. In other words, you criminally exploited the NEP to your own advantage. You helped UMNO to facilitate Barisan Nasional to rob the country and claim the wealth for your own. You made yourself out to be god but you were instrumental in destroying the integrity of the poor Malays who needed government assistance. Shame on you.

http://chedet.co.cc/chedetblog/2010/08/is-meritocracy-racist.html#more

Tuesday 24 August 2010

****Know your company to stay Streets ahead




The management thinking can be best understood by reading the management discussion and analysis mentioned in the annual report. One can start with reading three year’s annual reports. This will allow you to compare the management analysis from past reports with what really transpired in the following year. The next important thing that will help you is the corporate governance details in the annual report.

“Management’s intentions towards the minority shareholders must be carefully understood,” advises Kunj Bansal, chief investment officer of Sanlam SMC India. If the business has just been sold, the promoters collecting a non-compete fee does not bode well for smaller shareholders.

Some investors find buy back programmes done at suppressed stock prices and unrelated diversifications detrimental to the minority shareholders. Management actions in the past while handling surplus cash can be good signalling device. One quantitative element that comes handy is the quantum of management compensation. One can look at payout to the management as a percentage of the net profit and decide if the management is fair.


Related Party Transactions




Good companies do business with related parties at fair market prices. The same is disclosed in the annual report for the benefit of the shareholders. Few related party transactions, along with high transparency, is an indicator of a good business. Promoters’ presence in the same business through a privately-held entity is a clear dampener as the investor in the publicly-listed entity runs the risk of promoter placing the ‘cream business’ in the privately-held entity.
Business model

Simply put, it means where and how the company earns its bread and butter. You have to figure out what products the company produces or markets. Five Ws — who, when, where, what, why, will help you understand the raw materials that go in, the time and skill set required, the risks faced by the company and probably all those variables that can influence your returns as a shareholder.

During tech boom of 2000, investors poured in their hard earned money into hundreds of dotcom companies. A few avoided these companies as they found that there were no meaningful revenues or they were bleeding at operational level. Undoubtedly those who stayed clear of that boom were the eventual winners. A thorough understanding of the business can help determine the potential of business and the risks the business is subject to.

Pricing Power

If you grasp the business model well, you stand to understand the pricing power. Customers and suppliers can influence the profit if they possess the pricing power. Generally, businesses with a few customers or sole suppliers typically do not have pricing power. Hence it makes sense to stay with companies that have a large customer base and have many suppliers and still a monopoly player in the business.
Power of intangibles

Intangibles such as brands play a significant role in the performance of a company. In the long-run, consumer preferences tilted in favour of a brand can bring in high visibility of income for a business. Intellectual property rights are also important as they offer an edge over others. They become the deciding factors in the knowledge-driven businesses.

“Investors must check the ownership of such intangibles. If the promoters own the brands in the personal capacity, then it is a case of promoters making money at the expense of the shareholders,” says Avinash Gorakshkar. This is especially true if the business is doing well, as the promoter can take home a sizeable amount of profits by way of higher fees.

Point of Reference:  Information Sources

Company annual reports:

--> An annual communication to shareholders

--> Available to all shareholders

--> High authenticity

--> Good companies also keep them on their websites














Broker reports:

--> Prepared by brokers to solicit business and advise clients

--> Can be helpful in understanding micro or company-specific issues

--> May contain scenario analysis that exhibits impacts of changes in fundamentals
Company presentations:

--> These are prepared by companies from time to time

--> Meant for analysts and give update on business

--> You have to discount the contents as company may paint an overoptimistic picture

--> Available on company websites

Industry reports:

--> Prepared by consulting firms and industry bodies such as FICCI

--> Offers good business insights

--> Useful in tracking changes in regulatory, technological changes

--> Available on websites of industry bodies or websites of manufacturers

--> You have to discount the interested parties' views
Stock exchange filings:

--> Periodic communications by the company

--> High authenticity

What differentiates winners from losers in a stock market: Qualitative Variables

What differentiates winners from losers in a stock market? Some may religiously follow the recommendations of a ‘hit’ stock broker. And some may even dig a bit deeper to know about the stock and the company they plan to invest in by going through the earnings and valuations multiples. But the real winners could still be a league ahead of such investors. That’s because they keep an eye on the qualitative variables. Let’s look at them: 

People 

This is the most important variable. You should know both the promoters and the professional managers who run the company. If the business is managed by a first-generation entrepreneur, check if the promoter is professionally and technically qualified to run the business. Of course, this is not a necessary condition and one has to exercise judgment. If the management consists of professionals, look at their employment history to understand their track record. For instance, before setting up HDFC Bank’s operations in 1994, Aditya Puri was a successful country head of Citibank in Malaysia. 

The management thinking can be best understood by reading the management discussion and analysis mentioned in the annual report. One can start with reading three year’s annual reports. This will allow you to compare the management analysis from past reports with what really transpired in the following year. The next important thing that will help you is the corporate governance details in the annual report. 

“Management’s intentions towards the minority shareholders must be carefully understood,” advises Kunj Bansal, chief investment officer of Sanlam SMC India. If the business has just been sold, the promoters collecting a non-compete fee does not bode well for smaller shareholders. Some investors find buy back programmes done at suppressed stock prices and unrelated diversifications detrimental to the minority shareholders. 

Management actions in the past while handling surplus cash can be good signalling device. One quantitative element that comes handy is the quantum of management compensation. One can look at payout to the management as a percentage of the net profit and decide if the management is fair. 

Related party transactions 

Good companies do business with related parties at fair market prices. The same is disclosed in the annual report for the benefit of the shareholders. Few related party transactions, along with high transparency, is an indicator of a good business. Promoters’ presence in the same business through a privately-held entity is a clear dampener as the investor in the publicly-listed entity runs the risk of promoter placing the ‘cream business’ in the privately-held entity. 

Business model 

Simply put, it means where and how the company earns its bread and butter. You have to figure out what products the company produces or markets. Five Ws — who, when, where, what, why — will help you understand the raw materials that go in, the time and skill set required, the risks faced by the company and probably all those variables that can influence your returns as a shareholder. During tech boom of 2000, investors poured in their hard earned money into hundreds of dotcom companies. 


http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/What-differentiates-winners-from-losers-in-a-stock-market/articleshow/6404286.cms




Related:  
Read how a company used its large cash reserve:
Review of Fima Corp's Earnings
http://whereiszemoola.blogspot.com/2010/08/review-of-fima-corps-earnings.html

****What differentiates winners from losers in a stock market: Qualitative Variables

What differentiates winners from losers in a stock market? Some may religiously follow the recommendations of a ‘hit’ stock broker. And some may even dig a bit deeper to know about the stock and the company they plan to invest in by going through the earnings and valuations multiples. But the real winners could still be a league ahead of such investors. That’s because they keep an eye on the qualitative variables. Let’s look at them: 

People 

This is the most important variable. You should know both the promoters and the professional managers who run the company. If the business is managed by a first-generation entrepreneur, check if the promoter is professionally and technically qualified to run the business. Of course, this is not a necessary condition and one has to exercise judgment. If the management consists of professionals, look at their employment history to understand their track record. For instance, before setting up HDFC Bank’s operations in 1994, Aditya Puri was a successful country head of Citibank in Malaysia. 

The management thinking can be best understood by reading the management discussion and analysis mentioned in the annual report. One can start with reading three year’s annual reports. This will allow you to compare the management analysis from past reports with what really transpired in the following year. The next important thing that will help you is the corporate governance details in the annual report. 

“Management’s intentions towards the minority shareholders must be carefully understood,” advises Kunj Bansal, chief investment officer of Sanlam SMC India. If the business has just been sold, the promoters collecting a non-compete fee does not bode well for smaller shareholders. Some investors find buy back programmes done at suppressed stock prices and unrelated diversifications detrimental to the minority shareholders. 

Management actions in the past while handling surplus cash can be good signalling device. One quantitative element that comes handy is the quantum of management compensation. One can look at payout to the management as a percentage of the net profit and decide if the management is fair. 

Related party transactions 

Good companies do business with related parties at fair market prices. The same is disclosed in the annual report for the benefit of the shareholders. Few related party transactions, along with high transparency, is an indicator of a good business. Promoters’ presence in the same business through a privately-held entity is a clear dampener as the investor in the publicly-listed entity runs the risk of promoter placing the ‘cream business’ in the privately-held entity. 

Business model 

Simply put, it means where and how the company earns its bread and butter. You have to figure out what products the company produces or markets. Five Ws — who, when, where, what, why — will help you understand the raw materials that go in, the time and skill set required, the risks faced by the company and probably all those variables that can influence your returns as a shareholder. During tech boom of 2000, investors poured in their hard earned money into hundreds of dotcom companies. 


http://economictimes.indiatimes.com/personal-finance/savings-centre/analysis/What-differentiates-winners-from-losers-in-a-stock-market/articleshow/6404286.cms




Related:  
Read how a company used its large cash reserve:
Review of Fima Corp's Earnings
http://whereiszemoola.blogspot.com/2010/08/review-of-fima-corps-earnings.html

Ajinomoto (21.8.2010)

Visit here for a write up on Ajinomoto
http://turtleinvestor888.blogspot.com/2010/08/ajinomoto-eat-well-live-well.html







UMW (23.8.2010)

Visit this link for an analysis of latest earnings report from UMW
http://turtleinvestor888.blogspot.com/2010/08/my-one-laggard-pick-umwrm-641.html




If you look at the segmental results, the automotive segment is the real money spinner. It accounts for 96% of the pre-tax results.



UMW (23.8.2010)









Visit this link for an analysis of latest earnings report from UMW
http://turtleinvestor888.blogspot.com/2010/08/my-one-laggard-pick-umwrm-641.html

Fima Corp

Stock Performance Chart for Fima Corporation Berhad

Here is a good review of the historical data of this company over the years by Ze Moola:
REVIEW OF FIMA CORP'S EARNINGS
http://whereiszemoola.blogspot.com/2010/08/review-of-fima-corps-earnings.html

Also read:
http://whereiszemoola.blogspot.com/2010/08/hey-this-blog.html

Shanghai new home sales halved in Jan-July: report

Copyright AFP, 2010 | Aug 23, 2010

Shanghai new home sales halved in Jan-July: report

Sales of new homes in Shanghai dropped 48 percent in the first seven months of 2010 from a year earlier, as China's efforts to cool the property market began to bite, state media said Monday.

By the end of July sales in terms of floor space totalled 9.11 million square metres (98.1 million square feet), the Shanghai Daily reported, citing the city's statistics bureau.

It did not provide comparative figures for 2009.Chinese authorities have issued a slew of measures in recent months as they seek to prevent the property market overheating and causing a bubble that could derail the country's economy.

The government has tightened restrictions nationwide on advance sales of new developments, introduced curbs on loans for third home purchases and raised minimum down-payments for second homes.

The property price index for July was 10.3 percent higher than a year earlier, down from a record rise of 12.8 percent in April, the National Bureau of Statistics said earlier this month.

Prices in Beijing remained flat month-on-month in July, while they dipped 0.6 percent in Shanghai and 0.4 percent in the southern city of Shenzhen, on the border with Hong Kong.

At the weekend, vice premier Li Keqiang urged local governments to implement the central government's policies to curb speculation in the real estate sector and increase the supply of affordable housing, the Xinhua news agency reported.

http://www.starproperty.my/PropertyScene/TheStarOnlineHighlightBox/6623/0/0

Property advice from Hong Kong tycoon, Li Ka-Shing


LIVE IN Magazine | Jul 19, 2010
Property advice from Hong Kong tycoon, Li Ka-Shing

Hong Kong tycoon, Li Ka-Shing

Home prices have risen rapidly in the last 15 months, sparking concerns about a possible bubble in the Hong Kong market. While urging caution, Li Ka-Shing avoided the “B” word while answering questions at the recent results press conference for his two flagship companies, Hutchison Whampoa Ltd. and Cheung Kong (Holdings) Ltd. Instead, he praised government officials for their effective use of mortgage-tightening measures and tough talk to keep the market in line.

“I think the Hong Kong government has already tried its very best to keep prices stable," Li told a throng of reporters. “I think the government has done a nice job.”

The annual results conference usually affords the biggest opportunity for local journalists to dig for sound-bites from Li, who is known to many in Hong Kong simply as “chiu yan,” or ”superman,” for his investing prowess.

Referring to past statements in which he’s recommended citizens buy property if they have extra cash on hand, Li grinned and said, “If people bought when I suggested, they would have done very well.”

In Mainland China, where Beijing officials are focusing on land hoarding by real estate developers, Li said his companies hadn’t ever been challenged by authorities.

Not everyone in the Li clan has been as fortunate. Earlier this month, Beijing municipal authorities banned Pacific Century, a company controlled by Li’s younger son Richard, from making future land acquisitions in the city after the company allegedly failed to proceed with work on a real estate project in the city in a timely manner. A spokesman at the time said company officials were seeking more information about the incident and declined further comment.

The elder Li cautioned observers against reading too deeply into that matter. “You can’t just look at what’s on the surface, or you’ll misunderstand. It may not be a matter related to Pacific Century at all,” Li said, without elaborating.

Mostly, the tycoon left the property market commentary to elder son Victor, seated to his right, who summed it up this way: “In the end, property is a question of supply and demand – and in Hong Kong, supply is limited and demand is growing,” Victor Li said.

http://www.starproperty.my/PropertyGuide/Finance/5944/0/0

Low dividend payout by AirAsia if any

Tuesday August 24, 2010

Low dividend payout by AirAsia if any
By LEONG HUNG YEE
hungyee@thestar.com.my


PETALING JAYA: While analysts approve of AirAsia Bhd’s move to pay dividends, they expect the dividend payout will not be significant yet.

The budget carrier, which has been listed since 2004, do not have a dividend policy. However, the group is now considering to pay dividend to its shareholders.

HwangDBS Vickers Research said that although the dividend payment was positive for AirAsia’s shareholders, it did not expect yield to be attractive, considering AirAsia’s huge capital commitment as it was still at its expansion phase.

A local analyst said although AirAsia could afford to start paying dividend, it need not do so as no one expected the airline to pay dividend.

“Its cashflows are okay but the questions is not about the decision to pay, but by what quantum. It (quantum) makes a difference, for example paying one sen – which still constitutes a dividend although it’s not material – and a payout which gives a decent yield such as 10 sen,” he added.

A bank-backed analyst concurred that AirAsia could afford to pay dividend based on its current cashflow but it would not be as significant yet. He added that investors could invest in dividend stocks such as British American Tobacco if dividend was what they were after.

“AirAsia is a growing company. Investors invest in AirAsia for its growth story. They could pay half a sen to one sen in dividend and it may be more symbolic in the next three years,” he added.

The analyst also said AirAsia needed to restructure its Thai and Indonesian units as both were currently leveraging on its balance sheet.

Another analyst said AirAsia was currently on an expansion phase and would required large capital commitment. Hence, its dividend yield would not be as attractive.

“I don’t think it will be that much. In terms of yield, it may not be that attractive,” she said.

Yesterday, a local daily reported group CEO Datuk Seri Tony Fernandes as saying the group was planning to propose a dividend policy by the third quarter of this year.

AirAsia has been mulling over a dividend for some time. In June, Fernandes said AirAsia was in a much better position to consider paying dividends to its shareholders after solving some issues within the group.

Although it has announced its intention to pay its maiden dividend, the carrier has not given any indication on when the first payout will be.

As at June 30, AirAsia has a short and long-term borrowing of RM7.58bil and a deposit, bank and cash balances of RM858.1mil.

“The borrowings are mainly in the form of term loans which are for the purchase of new Airbus A320-200 aircraft,” it said in notes accompanying its latest quarterly results.

For the quarter ended June 30, AirAsia posted a net profit of RM198.9mil for the three months to June 30, a 43% jumped from RM139.2mil in the previous corresponding period, on a turnover of RM940.6mil.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6906547&sec=business

Genting M’sia pays RM15.7m in share buy-back

Tuesday August 24, 2010

Genting M’sia pays RM15.7m in share buy-back

KUALA LUMPUR: Genting Malaysia Bhd spent RM15.71mil to buy five million of its own shares yesterday and announced that it intends to acquire more within the next 10 months.

The shares represented just below a quarter of the 20.527 million Genting Malaysia shares traded yesterday.

Genting Malaysia closed five sen higher at RM3.14.

In a filing with Bursa Malaysia, the company said it intended to purchase up to a further 362.207 million of its shares (representing 6.13% of the issued and paid-up share capital) within the next 10 months.

Its cumulative net outstanding treasury shares now comprised 228.501 million or 3.87% of its issued and paid-up capital of 5.907 billion shares as at Aug 23.

The share buy-back was part of continuing efforts under its capital management programme, which the company constantly monitored together with its strategies of business expansion (through organic growth or acquisitions) and capital distribution, Genting Malaysia said.

The company said it would continue to pursue share buy-back efforts when opportunities presented themselves, pursuant to the mandate approved by its shareholders on June 9. — Bernama

Bursa surpasses psychological 1,400-point level


Tuesday August 24, 2010

Bursa surpasses psychological 1,400-point level

PETALING JAYA: The local bourse surpassed the key 1,400-point level to close 0.58% higher at 1,403.15 on selective buying of blue-chip stocks in the latter part of the trading day by funds as better-than-expected corporate results at home outweigh the lack of fresh leads from abroad.

Analysts were convinced that the benchmark index would face resistance at that level after a spate of macro news which heralded a gloomier second half.

CIMB Group Holdings Bhd became the largest bank after its market capitalisation exceeded that of Malayan Banking Bhd’s (Maybank) yesterday.

CIMB’s market capitalisation stood at RM58.06bil compared to Maybank’s RM57.61bil. CIMB’s share price rose 22 sen to RM7.92 while Maybank’s added 1 sen to RM8.14.

Among other actively traded counters, Genting was up 11 sen to RM8.72, PPB added 40 sen to RM17.36 and TM was three sen higher at RM3.58.

However, investors remained cautious as reflected in the broader market, with 465 counters down compared to 291 gainers while 270 counters were traded unchanged.

Volume was relatively low at 805.11 million shares traded with a total value of RM1.33bil.

The local bourse bucked the trend in the region, where Tokyo’s Nikkei 225 lost two-thirds of a per cent to 9,116.69, Hong Kong’s Hang Seng Index fell 0.44% to 20,889.01 and Singapore’s Straits Times Index was 0.36% lower at 2,925.99.

Meanwhile, the Aussie dollar faced selling pressure after a federal election over the weekend failed to deliver a majority to either incumbent prime minister Julia Gillard nor opposition leader Tony Abbott.

Sydney’s S&P/ASX 200 Index was little change, shedding 0.4%.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6907184&sec=business

Big investors moving away from stocks into gold and bonds

Published: Tuesday August 24, 2010 MYT 9:05:00 AM
Updated: Tuesday August 24, 2010 MYT 9:13:21 AM

Big investors moving away from stocks into gold and bonds

NEW YORK: The smart money has moved away from stocks. So is the era of stock investing over?

It's too early to tell, but one thing is certain: "Money goes where it is treated best, and that hasn't been in stocks," says Wade Slome, who advises high net-worth investors and runs a hedge fund at his firm, Sidoxia Capital Management in Newport Beach, California.

The overall stock market is down over the past decade, while the price of gold has more than quadrupled and corporate bond returns have doubled. Couple that with the slow economy, and hedge fund managers and institutional investors continue to shift money away from stocks to investments they think will be safer.

An estimated $170 billion has been put in bond funds this year, while $35 billion has been pulled from stock funds, according to the Investment Company Institute, a trade group for the mutual fund industry.

So much for buy and hold.

Analysts at Bespoke Investment Group say we're in a "drive-by market." Their take: Stock investors aren't anticipating or analyzing anything. They just react to the news of the day and then move on to the next thing.

Three months ago, the survival of European banks and economies was front and center. Now, it's barely mentioned. Same goes for the "flash crash" in May. News of strong corporate earnings one day can drive the market sharply higher, but a weak earnings report the next can send prices plunging.

"Investors look at what is in front of them at that minute, and that's it," says Paul Hickey, one of the founders of the investment research firm.

The volatility begets more volatility, which further unnerves investors who have been punished by losses over the last decade. The total return, including dividend, for the benchmark Standard & Poor's 500 index is down about 11 percent since August 2000, according to Bespoke.

That means an investor who put in $10,000 in an S&P index fund 10 years ago and held it now has less than $9,000 to show for it.

Billionaire investor George Soros is one of those who bolted out of stocks in the second quarter. His Soros Fund Management reduced its stock holdings by about 40 percent to $5.1 billion from April through June, according to a quarterly report filed Aug. 17 with U.S. securities regulators. The fund sold 93 percent of its stake in Pfizer and 98 percent of its stake in Wal-Mart during the quarter.

The fund's biggest holding is an exchange-traded fund in gold-related stocks. It represents 13 percent of its stock portfolio. The quarterly report does not detail the fund's holdings outside of stocks, and the fund declined to comment on its investments.

Other big-name investors with large positions in gold ETFs include John Paulson, who was made famous for his successful bet that the subprime mortgage market would blow up.

They are sticking with gold even though prices for the precious metal are up 9 percent this year to more than $1,200 an ounce. That's four times the $300 price of an ounce of gold in 2000.

There has been an equally bullish move into government and corporate bonds. The Federal Reserve has pushed down interest rates to almost zero to stimulate the economy. That has spurred a rally in Treasury bonds and notes. The benchmark 10-year Treasury yield is down to 2.6 percent, its lowest level since the height of the financial crisis in 2009. Prices and yields move in the opposite direction.

Lower rates should help companies because they make it cheaper to borrow money and allow them to refinance their existing debt. Corporate profits then go up, leaving more money to spend on expansion or workers.

That's why lower rates should help boost stocks, says Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "But we are not seeing that at all right now."

Instead, investors are putting money into corporate bonds, even those that offer little guaranteed return. IBM was able to raise $1.5 billion by selling 3-year notes that pay a mere 1 percent in interest. That was only 0.30 percentage points more than the yield on comparable U.S. Treasurys.

Johnson & Johnson sold 10-year bonds this month with a 2.95 percent yield, even though it pays a dividend equal to about 3.7 percent of its stock price.

That means an investor who buys $10,000 in J&J bonds gets back $295 annually for 10 years, plus the principal. If that investor bought 166 shares of J&J stock at about $60 a share now and held it for a decade, the annual payout would be $360 a year, plus any price appreciation in the stock and increases in dividends. J&J has increased its dividend for 48 consecutive years.

Junk bonds are also attracting investors. They are being issued by companies at a record clip. Junk bonds are rated lower than other corporate debt because they have a higher probability of default. Investors are compensated for that risk with higher yields, which currently average around 9 percent.

Institutional investors like pension funds that are willing to take above-average risks to get above-average returns, says Ed Yardeni, who runs his own investment and economics consulting firm.

"Investors are fed up with stocks," Yardeni says. "But they are still diversified: Half their portfolio is in gold and half in bonds."

Of course, investing in bonds and gold aren't risk-free. Far from it. The dramatic rallies in both have some on Wall Street saying that bonds and gold could be nearing a bubble that's about to pop.

By taking those positions, investors are hedging their bets about what's to come with the economy. Gold is considered a protector against inflation, and bonds are good to hold in times of deflation.

As for stocks, they're getting the short shrift they deserve. - AP

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/20100824091246&sec=business

CIMB invests RM1.1b in IT platform


CIMB invests RM1.1b in IT platform
By Adeline Paul Raj
Published: 2010/08/24

The 1Platform project will be completed on a country-by-country basis, starting with Thailand, followed by Malaysia, Indonesia and Singapore.

CIMB Group (1023), the country's second largest banking group, will spend RM1.1 billion over the next five years to implement a unified banking platform across Malaysia, Indonesia, Singapore and Thailand.

The so-called 1Platform project, which involves building a single operations and information technology (IT) framework, will help it operate as one entity across the region, its group chief executive officer Datuk Seri Nazir Razak said.

"(It) unifies CIMB group and enables us to compete as a truly regional bank. It will also facilitate product development and proliferation across the region, enabling our people to more effectively bundle and cross-sell products," he told reporters after CIMB inked agreements with its four main technology partners for the project yesterday.

The partners were awarded jobs worth about 40 per cent of the total investment.

The RM1.1 billion investment, which will come from internal funds, is the biggest component of the group's regional transformation blueprint, for which CIMB has budgeted RM2.1 billion over up to five years.

CIMB chose Silverlake Axis, a homegrown global IT solutions provider, to provide the core banking system. Its other partners for the project are IDS Scheer, IBM and Accenture.

Given the scale and magnitude of the 1Platform project, its implementation will be completed on a country-by-country basis, starting with Thailand, followed by Malaysia, Indonesia and Singapore.

The whole group is expected to be on the unified platform by 2015, Nazir said.

CIMB's investment in the project is on top of its usual RM350 million a year spending on IT.

"The full impact of our investment in 1Platform and other transformation initiatives will only be felt progressively over the next three to five years," he said.

On another matter, Nazir said CIMB "stands ready" to apply for a dual-listing on the Jakarta Stock Exchange once rules there permit this.

Bloomberg reported later yesterday that the group wanted to list there towards the end of this year or early next year, citing PT Bank CIMB Niaga president director Arwin Rashid.



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Maybank jumps on analysts' stock upgrade


Maybank jumps on analysts' stock upgrade
Published: 2010/08/24

Kenanga Research and TA Securities upgraded the stock after Maybank turned in an over fivefold increase in net profit to RM3.8 billion for the year to June 30.

Malayan Banking Bhd's (Maybank) (1155)stock got a boost yesterday as analysts raised their target prices after the lender reported record earnings.

The stock rose to an intra-day high of RM8.40 before closing lower at RM8.14, its highest close in 28 months. It closed 1 sen higher from the previous trading day.

At least two research firms, Kenanga Research and TA Securities, upgraded the stock after Maybank turned in an over fivefold increase in net profit to RM3.8 billion for the year to June 30.

RHB Research raised its fair value for the stock by 2 per cent to RM9.86 while ECM Libra Research lifted its target by about 9 per cent to RM9.81.

"In our view, valuations remain decent with strong organic growth expected from the domestic operations as well as Bank Internasional Indonesia (BII). Hence, the negative impact from the expensive acquisitions of BII and Pakistan's MCB Bank would be more than nullified with (2011 earnings) expected to exceed pre-acquisition levels," RHB said in a note to clients yesterday. It maintained an "outperform" call on the stock.



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