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Showing posts from September, 2007
Burmese Chess

Outrage, but what can be done? Kenji Nagai, 50, a journalist for Tokyo- based video and photo agency APF News, is the first foreign victim of the crackdown. The death prompted Japanese Prime Minister Yasuo Fukuda to say: "Something deplorable is happening there." The Associated Press said soldiers fired automatic weapons into a crowd of protesters.In scenes of naked defiance and anger that the heavy-handed tactics have failed to crush, ordinary people screamed abuse at soldiers and cried openly as they exchanged news of deaths and injuries. "You are eating food given to you by the people. Yet you kill people and you kill the monks!" an elderly man screamed at soldiers downtown".JOINT EUROPEAN UNION-UNITED STATES STATEMENT
We are deeply troubled by reports that security forces have fired on and attacked peaceful demonstrators and arrested many Buddhist monks and others. We condemn all violence against peaceful demonstrators and remind the country…
Astro Boy!

The once-golden boy, dragged through the mud with their adventure in Indonesia, finally made the top ten volume stocks. This is more than aweek after the announcement that they are pulling out of Indonesia. If it was the Indonesia factor, the stock would have reacted much earlier. Hence there is a better than 50% chance we are seeing another privatisation from the AK's stable. Following up on my prediction of another privatisation possibility for Tanjong Plc - if all comes through almost all of AK's companies will be like him, very private.

Factors For Privatisation

a) Easier to do price hikes and whack the Malaysian subscribers as a private entity.
b) Pay TV and ARPU moving in the right direction again.
c) Cut out the cancerous Indonesian operations, limited downside.
d) Starting up in India, less problematic and better potential.
e) Earnings will drop enormously in 2007 and 2008, improvements will occur only in 2009.
f) The Indonesian experience brought on the realisation…
Arise Burma!

A Brief History - Democratic rule ended in 1962 when General Ne Win led a military coup d`etat. He ruled for nearly 26 years. In 1974, the military violently suppressed anti-government protests at the funeral of U Thant. In 1988, unrest over economic mismanagement and political oppression by the government led to widespread pro-democracy demonstrations throughout the country known as the 8888 Uprising. Hundreds of demonstrators were massacred by security forces, and General Saw Maung staged a coup d'état and formed the State Law & Order Restoration Council (SLORC). In 1989, SLORC declared martial law after widespread protests. The military government finalized plans for People’s Assembly elections on 31 May 1989. SLORC renamed Burma "Myanmar" in 1989.
In May 1990, the government held free elections for the first time in almost 30 years. The National League for Democracy (NLD), the party of Aung San Suu Kyi, won 392 out of 489 seats, but the election result…
Hold Till Maturity?

Received an email from Celine Weng-Tse Chung, who asked the following questions:
1) By holding the covered warrants(cw) to maturity, rather than flogging them - what is the mentioned full bang benefit?
2) I appreciate that by buying cw we have the rights but not obligations to exercise our rights. In the case of say, the 1st of your Top Buy pick, CCCC-C1 - upon maturity, should the investor decided to exercise his rights, herein what do the investor "buy" ?

Reply - Reasons why I suggested to hold these covered warrants till maturity are:

a) I think the China A-shares and H-shares have more upside from current levels come December 2007 and April 2008.

b) The biggest worry on any kind of warrants is the depreciating "time value" and the corressponding premium it NEEDS to work off before becoming profitable. However, if you look at the recommended covered warrants, the premium are usually less than 10%. That is cheap to me esp after you factor in the le…
Water Pipes Leaking

Family of Four said... Basis is required when you say that water-play is unsustainable.

KPS may not have too much upside but the penny stocks will catch up. This is especially so for KHSB and JAKS if the Langat II award gets issued by November.Reply: I did say it was a One Liner Advice. One liner means no elaboration, its just a view, my personal view. Whether you choose to believe me or not is unimportant. I don't have to justify everything, people read the blog because they understand how I write and my persuasions. But for you, I will elaborate a little... if you are a regular reader, you will find that I have recommended ZILCH on water plays, be it KHS or Jaks or KPS. Certain projects I can stomach but when it comes to these type, where shares run so much ahead of fundamentals, I like to ignore them. Too much emphasis is based on "inside information" about who gets what. Even when they get it, what was once lucrative will be come marginally pro…
On the left Kublai Khan, on the right Genghiz. Surprisingly many people can tell the difference, and were quick with the correct answer. Stock tip, which was deliberately left out of the list below: BOC-C1, buy up to 0.16.

a) Exposure to US subprime and CDOs caused BOC to provide RMB1.15bn. The coverage was very low considering it was just 1.6% of total exposure but mgmt was confident their subprime investment were at the top bracket in terms of quality.
b) Just released 1H2007 figures saw net profit jumping by 52% year on year to RMB29.54bn. This figure was at the high end of estimates. Its one of the better bets because its exposure to domestic business is excellent. Little reliance on "investment income". Revenue base well spread, earnings from the booming stockmarket, though jumping 72% y-on-y, makes up only 13.3% of operating income.
c) Many houses upgraded their estimates and target prices. Looking at 2.7x PBR 2007 as target price by March 2008 = HK$5.25.
Major Update: China & HK Covered Warrants

They have outperformed outrageously for the past 4 weeks. Below were the recommendations on Sep 7 and their actual performance to date. Bold are the current market prices and the performance to date in percentage. Naturally, if you annualised the returns, the figures would be enormous, but you shouldn't for trading purposes.

Category: Ridiculously Cheap Covered Warrants & Excellent China/HK Exposure
CCCC-C1 / 0.425 / 31 Jan 2008 0.46 +8.2%
CCCC-C3 / 0.115 / 4 Apr 2008 0.165 +43.4%
HKEX-C3 / 0.575 / 4 Apr 2008 2.45 +326%
HSBC-C1 / 0.155 / 4 Jan 2008 0.26 +67.7%
HSI-C1 / 0.40 / 29 Feb 2008 0.645 +61.2%
HWL-C1 / 0.275 /13x 2 Jan 2008 0.44 +60%
Sinopec-C1 / 0.105 / 31 Jan 2008 0.17 +62%

Category: Cheap Covered Warrants & Good China/ HK Exposure
CNOOC-C1 / 0.105 / 25 Feb 2008 0.225 +142%
China Mobile-C4 / 0.40 / 28 Mar 2008 0.49 +22.5%
ICBC-C1 / 0.195 / 29 Feb 2008 0.25 +28.2%
ICBC-C3 / 0.18 / 2 Jan 2008 0.25 +38.8%
Petrochina-C1 / 0.185 / 29 Feb…
One-Liner Advice

G Plus - Another con job.
Idaman - Con job in the making.
China Covered Warrants - Hold till maturity.
L&G - Speculative buy with good reason.
PLUS - Surprisingly on radar screen.
Oil & gas stocks - Very good to buy and hold.
Water plays - Down the drain, unsustainable.
Palm oil - Go long again.
Just A Minute

The recent announcement that Chinese from the mainland will be able to invest directly in all stocks listed on HKSE brought some euphoria. The plan was supposed to start with Tianjin, but somehow Beijing got scared due to the overwhelming positive reaction to the news. Now they have tweaked the program. Short term, HK's market may weaken today but should rebound by end of the day. There will now be a limit on the amount of money that can be put on board the investment "direct train". Some of the more bullish strategists thought that some 800 billion yuan (HK$829 billion / US$106 billion) or more could pour into Hong Kong through the pilot program. They will have to scale that down considerably.
Although there will be no limit on how much any individual can invest, there will be "tight controls" on the total amount invested through the scheme, China Banking Regulatory Commission chairman Liu Mingkang told the Financial Times. Liu did not say what lev…
The Long & Short Of It

Magazines like to capture the trends of the day. To go long is to really like something, its worth accumulating, hoarding or holding. To go short is the opposite - don't like it, waiting to implode, basically the risk of downside are magnified compared to the upside. These long and short calls are basically for the near term outlook, less than 6-12 months.

US Dollar - Very Short

Malaysian Ringgit - Long

US Stocks - Long

China A-Shares - Long

China H-Shares - Very Long

Bernanke - Long

Greenspan - Short

Giant Casinos Operating In Macau - Very Short*

Singapore IR Casinos - Long

Malaysia High End Properties (more than RM1.5m) - Short (pls refer to my blog on why Malaysian real estate will under perform)

Malaysia Mid-High End Properties (between RM700k-RM1.49m) - Very Short (its a long term affordability view)

IDR - Long

The Other "Corridors" - Short (for now)

Heroes - Very Long

Who Wants To Be A Superhero - Very, very Short (Monkeywoman???)
Hedge Funds - Short

Soft …
Asia's Own Warren Buffett

He's ranked in the top 30 in terms of the world's richest man. Lee Shau Kee made his fortune in real estate. Yesterday the Hang Seng Index charged past the 25,000-point barrier to close at an all-time record of 25,554.64. Lee had much earlier predicted the 25,000 level after his 22,000 level was breached. If you missed out on making a killing last month, listen again - Lee has now raised his earlier 25,000 year-end target for the index by 3,000 points to 28,000.

Lee still does not think the market was overbought when the HSI soared nearly 1,000 points and that the rise was due to a boost from the higher-than-expected interest rate cut by the US Federal Reserve. "If you guys had followed my tactics half a year ago ... you would have earned enough to quit your reporter's job," Lee told the media. Lee, 79, chairman of Henderson Land Development (0012), said in March the HSI would reach 22,000 points by year-end. On August 24, he revised …
DecipheringThe Fed's Changing Views
August 7: "Economic growth was moderate during the first half of the year. Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing. Nevertheless, the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy."
(Still thinks economic expansion will continue, and hence keeping inflationary pressures at bay would be a big priority. Strong belief in the resilience of firm US jobs market and a strong global economy helping things along)
August 17: "Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward. In these circumstances, although recent data suggest that the economy has continued to expand at a moderate pace, the…
Fair Commentary
Everyone is entitled to his/her opinion of anything, I guess. But if we are to voice them publicly, say in a blog, we have to make sure they are logical, well argued, substantiated, etc... Blogs that try to promote openess, accountability and transparency in our government must not be overzealous in their commentary.
For example, you cannot simply link sustained low volumes in the Bursa to a poorly received Budget, its not that simple. Stock markets are open channels and it tries to digest information from all corners. It is a forward discounting machine. A Budget is only a small portion of an overall financial blueprint for government allocations. There are tons of factors more important to the markets, such as: the subprime mess; the Fed's pending rate cut and its quantum; the implosion among hedge funds; the collapsing USD; the yen carry trade; the trande sanctions against China; etc... So, we cannot simply pick ONE topic and link it directly to the depressed bou…
Tuesdays With Greenspan

Alan Greenspan launched his new book yesterday, perfectly timed. Its titled The Age of Turbulence and has every biz commentator trying to get a soundbite on it.
An excerpt from the book, “The great problem inherent in capitalism [is] that creative destruction is often, and by a great many, viewed simply as destruction. Capitalism creates a tug-of-war within each of us. We are alternately the aggressive entrepreneur and the couch potato, who subliminally prefers the lessened competitive stress of an economy where all participants have equal incomes,” Greenspan writes.
The Wall Street Journal asked Greenspan “Many people, including some former colleagues of yours from that period, believe the Fed kept interest rates too low for too long, thereby contributing to the housing bubble and problems in subprime mortgages. Do you agree?” Greenspan agrees with the “too low, too long” charge. “We kept them too low for too long because we were effectively creating an insuran…
Possibly The Best Commercial Ever

Just when you think Yasmin Ahmad cannot really create something better than her previous works, well here's possibly the best commercial I have ever seen. Its realistic, funny, endearing ... hope, yearning, innocence and genuine affection all in a minute or so.
Tanjong Plc, Stirred Not Shaken

I have been intrigued by the share price movements in Tanjong Plc for the past two weeks. Volume is not there but the price movements tell me something is stirring in the pot of gold. At a time where fund managers are likely to be NOT accumulating positions or trying to move to neutral on all equities, the movements in Tanjong is all the more interesting. I do not have any inside information or winning whispers, all I am concluding is from the price movements in light of present market conditions. When you are old enough or have lost enough money, that's the kind of "wisdom" you get I guess ; ) ...

Without babbling further, the interest could be due to:

a) a separate listing of its power assets, which would unlock enormous values

b) a privatisation, ala Maxis

c) sale of gaming business, not that hot anyway as their hands and feet are tied in that business by the government

A separate overseas listing is likely, as that will bring better valuatio…
HKEx Shares Surged

Yus-baby probably got all excited yesterday while watching the strong surge in the share price of HKEx, wondering whether there will be some rub-off onto Bursa shares. HKEx shares jumped 20.3% yesterday to close at HK$190.10 with 40m shares in volume traded.

The jump was due to information released that the HK Monetary Authority had collected a 5.88% stake in HKEx worth HK$9.93bn. Indications are the HKMA will continue to add to that stake.That adds to the already significant portfolio of HK shares under HKMA to nearly HK$160bn in value.

There are valid concerns over the HKMA holding such a huge block of HK shares. What started as a collective effort to support and/or invest has now mushroomed to a significant level. It is understandable to see HKMA mopping shares to avert a liquidity crisis or rescue a sharply plunging market. It is also necessary to OFFLOAD those positions carefully when the time is right to place them off. The HKEx Tracker Fund was a good thing whi…
Really Useful Signs

Update On China Covered Warrants
These are volatile buggers and need to be monitored always. In the first few weeks when they were introduced, they were priced expensively and traded even more so. Somehow after the global tussle with subprime, almost all China covered warrants are cheaply traded (each warrant has an intrinsic value, usually priced in terms of its implied volatility and time value). Some are so ridiculously cheap, you'd think they are selling them at Petaling Street!
Company / Warrant Px / Premium / Gearing / Maturity
Category: Ridiculously Cheap Covered Warrants & Excellent China/HK Exposure
CCCC-C1 / 0.425 / 0% / 6x / 31 Jan 2008
CCCC-C3 / 0.115 / 8% / 15x / 4 Apr 2008
p/s CCCC-C3 is a lot better and cheaper as a buy & hold than C1
HKEX-C3 / 0.575 / 0% / 12x / 4 Apr 2008
HSBC-C1 / 0.155 / 7% / 40x / 4 Jan 2008
HSI-C1 / 0.40 / 0% / 24x / 29 Feb 2008
HWL-C1 / 0.275 / 7% / 13x 2 Jan 2008
Sinopec-C1 / 0.105 / 12% / 16x / 31 Jan 2008

Category: Cheap Covered Warrants &…
About Time

Most Singaporeans would have heard of Corrine May and her music. For the rest of the world, here's Corrine! This Singapore-born, Berklee College of Music-educated songwriter & singer sounds like an amalgamation of Sarah McLachlan, Sting and an updated Joni Mitchell. She composes all her songs (almost). She released Safe In A Crazy World in 2005. Her first entitled Corrine May as well was released in 2001. Just recently, her new album was released, Beautiful Seed.

Corrine won the Carole King & Carole Bayer Sager Songwriting contest back in 2000, and the rest, as they say, is history.

When you write your own melodies and lyrics, and sing as well, and you happen to be that good - that's very very good indeed. Should check out her albums when in Singapore (she's already very big in Singapore and California, and should conquer the rest soon). Failing that, check out her Corrine May titled album at , esp Fly Away, Same Side Of The Moon and If You Didn&…
Chicken Without Sexual Life

You have to get there early to enjoy one of China's hidden treasures, broken English. The authorities knowing full well that there are a lot of inadvertently funny translations into English, are acting speedily to rectify the matter. Road signs, shop signages, menus, etc... sigh, you have to go early to enjoy them or else they would have been corrected already.

This is not purely to laugh AT them, but to laugh WITH them. Everybody will make the sincerest of mistakes owing to the country coming to grips with the demands of globalisation. Its easy when you only have ONE language to contend with, but for the rest of the world, its juggling 2-4 languages and dialects - so native English speakers, don't laugh too loud.

To start off, here are a couple of menus from. See if you can guess what the real menu items are. Oh, btw... Chicken Without Sexual Life - Spring Chicken.

Morgan Stanley (again), My Fav Strategists

Asia/Pacific Equity Strategy
Start Buying Asia-Pac: +10% by Year-End
August 21, 2007

By Malcolm Wood, Ryan Tsai, Corey Ng
We see six reasons to buy Asia-Pac: This has been the largest bull market correction in 20 years, valuations are moderately attractive, earnings momentum and fundamentals are positive, the fallout from the US credit squeeze should be limited, Asia liquidity conditions are still strong, and sentiment has turned pessimistic. We have also raised our year-end index target by 3%, to 480.Estimating the US Fallout: Impact on Asia Should Be Limited. The credit squeeze should keep growth sluggish in the US. The squeeze should deepen the housing downturn, slow job growth and lift the saving rate. Asia has four offsets to mitigate the US impact: re-directing exports, and gaining export market share; strong economic momentum and fundamentals; the liquidity boom; and potential political stimulus. We would avoid Asia stocks with l…
Chinese PER & Earnings GrowthAt the end of August, 852 Shanghai-listed companies and 487 Shenzhen-listed firms reported their earnings for the first half of this year. The aggregate net profit of the Shanghai companies was 290.3 billion yuan (US$38 billion), up 69.2 percent year on year, while their aggregate income was 2.69 trillion yuan, up 24.9 percent. Shenzhen-listed firms reported a combined 99.23 percent increase in aggregate net profits at 47.52 billion yuan, while aggregate income was up 28 percent at 754.52 billion yuan.
Blue-chip companies reported the best performance, with their aggregate net profits accounting for 77.4 percent of the total in Shanghai. The aggregate net profit of the top 30 Shenzhen firms jumped 77.23 percent to 27.47 billion yuan, 57.8 percent of the total for all listed firms. Companies in the financial, non-ferrous metals, excavation and real estate sectors performed well. Seventeen Shanghai-listed companies in the financial sector enjoy…