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Showing posts from October, 2009

Where Are We Again In This Financial Crisis & Recovery?

I have posted this chart before from Paul Kedrosky's excellent site. As the chart only looks at the recovery from the aligned lows of each crisis, the first year's recovery was most pronounced, and as usual when it recovers the naysayers during each of these periods were vocal. What is more significant is that the recovery carried on into the second year just by looking at the various charts - and that to the naysayers would be unthinkable at the moment. Markets have a nice way of shocking us - are we all drilled to look at the wrong indicators? I am still thinking 10,800 to 11,000 is easy for the Dow by year end. I would term the most appropriate indicators for each of these crisis were:

a) how much cash was thrown into the system - this crisis wins it hands down
b) how widespread / global were the effects - looks about the same for all except the depress…

New York Roadshow By JP Morgan

J.P. Morgan's Malaysia Corporate Access DaysNovember 5-6 (Thu-Fri)Grand Hyatt New York, 109 East 42nd Street at Grand Central Terminal, New YorkRoundtable discussions, presentations and Q&A sessions with Malaysian government officials and regulators1x1 meetings with participating Malaysian corporatesSenator Tan Sri Amirsham Abdul Aziz, Chairman - National Economic Advisory Council
Dato' Ooi Sang Kuang, Deputy Governor, Bank Negara Malaysia
Dato' Yusli Mohamed Yusoff, CEO, Bursa MalaysiaParticipating Corporates
Air Asia
(AIRA MK) - Dato Kamarudin Meranun, Group Deputy CEO
Axiata Group (AXIATA MK) - 1. Dato' Sri Jamaludin Ibrahim, President & Chief Executive Officer / 2. Dato’ Yusof Annuar Yaacob, Group Chief Financial Officer
Bursa Malaysia (BURSA MK) - Puan Nadzirah Abd Rashid, CFO
IJM Corporation (IJM MK) - Datuk Krishnan Tan Boon Seng, Chief Executive Officer & Managing Director
Public Bank (PBK MK) - Mr. Leong Kwok Nyem, Chief Operating Officer
Sime Darby (SIM…

Morgan Stanley Global Research Upgrades Malaysia

The influential Morgan Stanley Research has upgraded Malaysia and Egypt last week in the much followed Asia Strategy Report. Below are excerpts from the report:

Key changes in our country quant model this month are:

Upgrading: Malaysia and Egypt from equal-weight to overweight;
Downgrading: Peru and Chile from equal-weight to underweight.

Overweight countries are: China, Brazil, Taiwan, India, Israel, Poland, Malaysia and Egypt;
Underweight countries are:

Strong points for Malaysia in our model include a #1 currency ranking and #4 business cycle ranking. Relative P/Book has fallen to 1.0x due to recent under performance. Malaysia also gains in our model ranking this month, moving from #8 to #6. Strong points for Malaysia in our model include a #1 currency ranking (a combination of fundamental upside and a stock market consisting mainly of domestic demand, Malaysia ringgit earning stocks).

Malaysia ringgit is making steady progress against the US dollar.We also rank Malaysia’s business cycle …

In Chinatown, Sound of the Future Is Mandarin

Its not just in New York, but in many other Chinatowns as well. Back in Sydney all I could ever hear 20 years ago was Cantonese. Over the past five years, you can hear Mandarin speakers competing for airspace with Cantonese. If you look at the immigration trend, it looks like Mandarin will win out in the end.Cantonese is older.

Mandarin is official. The written language is "borrowed" by the Cantonese and many words when read by Cantonese speakers are pronounced differently than when spoken, a result of the written language begin borrowed from Mandarin.

What is the difference between a dialect and a language? As someone once noted, a language is a dialect with an army and a navy! Language standards are set for political and economic reasons, not linguistic ones. Thus, Mandarin prevails. It is interesting to pointed out that when the Republic of China was founded in 1911 or so, the original founders such as Dr.Sun were of Cantonese descent. They had a 'home turf' advanta…

Obama Tightens The Screws On Firms That Were Bailed-out

PRESIDENT Barack Obama's administration is poised to order cash salary cuts of 90 per cent on average for top executives at firms that received the biggest government bailouts, according to media reports yesterday. The seven companies that received the most government assistance at the height of the US financial crisis will each be required to cut the salaries of their 25 best-paid executives. The firms are AIG, Bank of America, Citigroup, General Motors, GMAC, Chrysler and Chrysler Financial. Smaller companies and those that have repaid the bailout money, including Goldman Sachs and JPMorgan Chase, are not affected. These banks last week reported record quarterly profits and have set aside tens of billions to reward their staff. Goldman, for example, has earmarked US$16.7 billion (S$23 billion) for compensation so far this year, or more than US$500,000 per employee. For the affected seven firms, the biggest cuts will be to the cash portions of the 175 employees' salaries, …

How Sustainable Is China's Growth

China's economy expanded 8.9% y/y in Q3 2009, bringing the year-to-date growth rate up to 7.7% y/y. Industrial production (value added) expanded 12.4% y/y in Q3, up from 9.1% in Q2. Investment continues to drive growth with fixed asset investment grew by 33.4% through Q3, 6.4 percentage points above the rate posted the year previous. Consumption has held up, with retail sales climbing 15.1% through Q3 in nominal terms, or 17% in real terms. CPI fell 1.1% through Q3 but has climbed on a monthly basis. Exports and imports are likewise climbing on a m/m basis. (National Bureau of Statistics, 10/21/09)The Outlook for Q4 and Beyond
The pace of growth slowed in Q3 to about 9.5% on an annualized q/q basis in Q3 from an estimated 16% pace in Q2. Industrial production growth picked up to 13.8% in September from 12.8% in August and 10.8% in July. Retail sales accelerated slightly to 15.5% y/y, roughly similar to August's 15.4% growth and consumer prices have continued to climb on …

Banks Bonuses & The Surrounding Anger

Who isn't appalled by bankers' bonuses!!! The underlying resentment is that they needed tons of taxpayers' money to steady their ships, and now that things are better, they want things back to normal?!

The general public is pissed off as there was no penalty when banks were raking in big profits pushing the very instruments that caused the financial decimation, if the financial crisis was caused by something or someone else, we may understand, but the culprits were themselves ... and when things go belly up, they go pleading to the governments for help, with a wink, wink... hidden threat that "if you don't, things will be a lot worse for everybody". You cannot hold the people to ransom, heads you win, tails you also win but a bit later.

Goldman has provided forty over percent of profits for bonuses to be paid in January 2010. Granted, Goldman is a different kettle of fish as they largely avoided the CDOs fallout, in fact they even profited from it by shorting t…

VIX About To Breach The 20 Level After 287 Trading Days Above That

Why do we look at VIX indicator? As the market tanked, experts kept citing the VIX as a reflection of "risk aversion". Bespoke Group has written an interesting article as VIX is about to breach the 20 level - that is significant as the markets has never traded at 20 for 287 trading days. Is VIX as important when it is LOW? You bet your sweet ass it is. As volatility hit lows in February 2008 and again in October (the S&P 500 was breaching highs), and then in May and August of 2008. These were all market highs. Beware low volatility.
Bespoke Investment Group: The VIX volatility index slipped below 21 earlier today and currently stands at 21.15. This is the closest the VIX has gotten to 20 throughout the entire bull market, and marks a 75% decline from the closing high of 80.86 seen during the financial crisis.The VIX has now been above 20 for 287 consecutive trading days, which is the longest streak since 1990 when our daily VIX data begins. In the bottom chart, we provi…

HK's Economy Turning A Corner, China's Chugging Along

Twin rays of hope flickered through the economic gloom yesterday: Hong Kong's jobless rate has fallen for the first time in 13 months and pay levels are on the rise.
The number of unemployed during the July-September period fell by 7,700 - from 216,800 in June-August to 209,100. That means an unemployment figure of 5.3 percent against the previous 5.4 percent, which is modest at best. But economists are cheered by the data. They see more falls in jobless figures unless there is another reverse in the wake of last year's crash. The good news about pay came after a Baptist University survey between July and September featuring 104 companies and covering 66,000 employees. High on the list of key findings is the indication that people are likely to receive pay rises of 1.2 to 1.3 percent in the coming year. That is only a slight improvement on last year, when rises rounded out at 0.4-0.7 percent, but again it is seen as a turn for the better.In 49 companies, researchers found, 3…

Caijing, Richard Li & China's Bloomberg In The Making

These sort of business drama was not supposed to happen in China, of all places. Caijing, the top business magazine in China saw a power tussle by the senior employees against the invisible "government controlled media forces". Richard li, spotting an opportunity in crisis, jumped in and probably hired the whole sheng group that wanted to leave.

Excerpts from SCMP & The Australian: Days after a much-trumpeted world media conference in Beijing's Great Hall of the People, a mass of resignations at the country's most influential business publication, Caijing, has underscored tensions between groundbreaking journalists and the country's fast-growing government-controlled media groups.Caijing general manager Daphne Wu Chuanhui and eight of her nine business directors have resigned amid rumours that editor-in-chief Hu Shuli may leave to start her own magazine. It is believed that up to 60 other reporters are also poised to leave. Staff at the magazine said something…

Happy Diwali

Happy Diwali to all .....

Emerging Markets Traded Past Its All Time High Vs Developed Markets

How many indices do you want to monitor? Well, this is smashing pumpkins on your forehead significant. If you group all the emerging markets and count it as an index, it has just breached through its all time high against the developed markets basket.

We all know that emerging markets were not that badly affected, especially their currencies. The weaker dollar did help the emerging markets over the past few weeks as well. Do the emerging markets have any business pushing through its all time high against developed markets? Well, the key is a posting I made about two weeks back, on a new way to look at risk in emerging markets.

What that means is that developed markets which used to trade at a premium or rather emerging markets that used to trade at a discount, are now having the roles reversed a bit because trade surpluses, better country balance sheets, savings rate and monetary discipline among emergi…

Bloomberg Acquires BusinessWeek

Word is he's not too happy about this new ad created by the National Organization for the Reform of Marijuana Laws (NORML), but he says he will not try to stop it due to freedom of speech issues. (That plus the fact that he really said it.)

Bloomberg L.P. said Tuesday that it has reached a deal to acquire BusinessWeek magazine from McGraw-Hill Cos. Business Week is easily my favourite business magazine. For a long time it used to be Fortune as their write ups have more depth. However, over the last 2 years, my preference has been tilted towards Business Week as it takes a more global view instead of just a US-centric perspective. Its snapshots and sound bites are crisp and useful - they only need to get rid of the wasteful one pager economics opinion piece on page 7 or 9. I wonder what will happen to Business Week??? Bloomberg being Bloomberg, will keep Business Week running as it is. He should be integrating some of the conten…

Bubble-looking For HK Luxury Condos

No matter how you cut, slice or dice the price HK$63,000 psf is a doozy. Yes, that is about $8,076 psf or RM27,400 psf. Much of the buying over the past few months have been by Chinese from the mainland. Article from The Standard.

Wednesday, October 14, 2009

Prices for luxury properties in Hong Kong are now firmly at a sky-high level, a fact confirmed yesterday as a developer slapped a price of more than HK$63,000 per square foot on a premium apartment in Mid-Levels.That will make it the highest-priced penthouse in Asia - and it is not even on top of the building. The top-of-the-pile tab was revealed as Henderson Land Development (0012) released the first price list for its residential project 39 Conduit Road yesterday. On it was the HK$357.7 million, 5,636-sq-ft duplex. That means a square- foot record of HK$63,473.Another duplex, 5,131 sq ft and also on the 66th floor of the 88-story building, is listed at HK$311.4 million, or HK$60,696 psf.In June last year, Sun Hung Kai Properties …

Jim Rogers Views Summarised - Oct 11th

Just an update on Jim Rogers and his views. This being his latest on his lecture circuit:
1. The 21st century belongs to ChinaAccording to Rogers, the 19th century was the era of the British Empire and the 20th century was the U.S.’ heyday. But the 21st century is China’s (though the rest of Asia is definitely going to get a boost too).The reasons for this are many, but some points brought up by Rogers include the following:The Chinese want to live like we do;They are more eager to work;They are better at saving;There are 1.5 billion Chinese citizens (and 3 billion people in all of Asia), and we owe them money. They are, according to Rogers, “among the best capitalists in the world.”There will be some setbacks, of course, Rogers says, but these are opportunities. “If you see setbacks in China, you should pick up the phone and get more involved,” he advised, before adding his favorite refrain, “The best advice of any kind that I can give you is to teach your children and grandchildren C…

Roubini's New Stance (I Mean Asserting His Old Stance)

This may have been a week old but now I am getting around to it. I didn't post/comment on it because Roubini said the same things. This time, he is sticking to his usual views but using it to reflect on the current stock market rally, saying that stocks have run ahead of fundamentals. My comments in colour.

Bloomberg: New York University Professor Nouriel Roubini, who accurately predicted the financial crisis, said stock and commodity markets may drop in coming months as the gradual pace of the economic recovery disappoints investors. “Markets have gone up too much, too soon, too fast,” Roubini said in an interview in Istanbul yesterday. “I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U- shaped. That might be in the fourth quarter or the first quarter of next year.” Stocks have surged around the world in the past six months as evidence mounts that the economy is emerging from its dee…

Confirmed... My Favourite Chinese Restaurant In Town

Being in Malaysia, there is no shortage of Chinese restaurants. Being Cantonese myself and growing up on Cantonese food, I am partial to that cuisine when it comes to Chinese food. I love the hawker stalls and single dish operators, but when you want to have a very decent Cantonese/Chinese meal, cost comes to mind and as well as quality and taste. The RasaSayang restaurants have been doing great business in that niche market, you can even throw in Overseas restaurants. However, I am convinced Chef Choi in JalanAmpang takes the top prize. For its location, setting, very ample parking, superb quality and amazingly decent prices... I am shocked that many have not discovered Chef Choi yet.

It even has a very snazzy website, unfortunately it does not have the prices of each dish. Let me assure you that they are decently priced, and they come in S, M and L depending on the number of guests you have at your table... very convenient.

Interestingly, I found that I was not alone, in fact highly…