Thursday, January 26, 2006

SYDS - Same Wolves, New Wool or New Wolves, Same Wool

Only in Malaysia and Singapore where the word "syndicate" has become a very much tainted word in our financial vocabulary. Even taxi drivers and hawkers can use the term to tout potential movers on the KLSE. The actual definitions of the word in a proper dictionary include:

1 a : a council or body of syndics b : the office or jurisdiction of a syndic
2 : an association of persons officially authorized to undertake a duty or negotiate business
3 a : a group of persons or concerns who combine to carry out a particular transaction b :
2 c : a loose association of racketeers in control of organized crime
4 : a business concern that sells materials for publication in a number of newspapers or periodicals simultaneously
5 : a group of newspapers under one management

The funny thing is, to Malaysians and Singaporeans in general, when you mention syndicates, it probably means "a loose association of racketeers in control of organised crime". To those who are in the syndicates themselves, they would take it to mean "a group of persons who combine to carry out a particular transaction". To prevent further negative association with the word, for the rest of the article the word "syndicates" will be substituted with "syds".

2005 saw syds being very quiet in the KLSE. There were occassional runs by syds in a few stocks, particularly Mesdaq ones, but fizzled out relatively quickly. Thats because many syds were not convinced that the market's underlying strength last year was that strong. The collapse of Fountain View really pushed many syds to play more golf, or take that junket to LA.

The first couple of weeks of 2006 saw some new syds in the market place. Rumours and hearsays are all we need to deduce important financial decision making (ahem). After staying away for sometime, the evergreen financial wizard (I'm being overly nice here) ... to be safe, I shall scramble his moniker, Coper Aul (sounds like a Jewish Chinese guy... and in many ways he is), is back doing what he does best. Only this time he has roped in hedge funds to be his bit players.

Many of you must be aware of the enormous surge in the number of hedge funds (HF) being set up in Singapore for the last 2 years, even dwarfing the figures for HK. While the bulk of the funds are in quant related arbitrage and specially tailored instruments, there is sufficient gung-ho funds out there masquerading under the hedge funds banner. HFs are special in that most do not have strict reporting rules and everything can be their plaything. It is very difficult for a proper equity fund manager to take up shares in dubious companies (especially with the dire repercussions when they tank).

The grapevine has it that at least 3 shares have had large blocks placed out by our Jewish Chinese friend to a number of HFs. The timing is pretty good too as the market has been looking for leads for a long time. Keep a man hungry enough for a long time, even crumbs will taste good. His track record also is pretty good, ... not spotless or bloodless ... , but ringgit for ringgit ... pretty good. I do not condone what syds do for a living, but a market is a market, you jump in with both eyes open (or is that closed... I always get that confused). Nobody can make money on the market without somebody losing out.

I personally would never buy these stocks, but it makes for an interesting watch to see how this plays out. I am curious to see if the professional HFs are better at this game than the highly rated amatuer syds of the past.

Oh.... the rumoured 3 stocks, ... again, love my scrabble... so you have to unscramble them: Marf Steb, Siri, Socfin ... (please just observe, don't get involve).


ichithekiller said...

Ha ha ... Coper Aul! And Socfin?! Love the creative word-scrambling. Took me a while to figure out the 3rd one, although I still have some of it.

Why "don't get involved?" ... I made good money on the 1st one, some pocket money on the 2nd and jury's still out on the 3rd. Adds some spice to life this...

Salvatore_Dali said...

Well, glad you enjoyed it.... since I am blogging to the general public, I have to make sure the general public do not get trashed. If I give out positive vibes to buy these specky counters, and they crash suddenly, even just one of them, it will ruin the main thing, which is my blog. I am more keen to critic on issues rather than punt ... but I know by providing readers with a good understanding of developments, they will make their own decisions, but better informed ones

ichithekiller said...

Yup, understand and agree with your rationale. Like you said, when I jump in, I jump with both eyes open ... caveat emptor!

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