The ones being hammered: Sime Darby (understandably), but others are getting whacked as well, Petronas Chemical, Axiata, MRCB, UEM Land, CIMB, AirAsia (new link up now can be considered as related GLC counter), ... even Kencana, IJM, SP Setia ...
Coffee shop talk would have you believe that it could be an aggregation of various factors:
1) Unpalatable corporate governance issues
2) Cashing up owing to upcoming elections
3) Downgrades in property and oil and gas sectors
Foreign funds vote with their shares. Recent corporate governance issues have been very unpalatable. Some even say that certain parties are trying to push through certain deals prior to the elections, at all costs. Besides the Sime Darby-E&O deal, the AirAsia-MAS deal was a sour note ... not many mainstream media or analysts dared to mention that CIMB was advising both parties??!! What kind of crap is that? Its like a court case where the prosecutor and defending lawyer are from the same firm. Please show me ONE other case in global corporate M&A transactions whereby one investment bank advises both sides.
You'd think there would be more support from local funds, in fact PNB and EPF have been having to up their stakes in indexed stocks over the last 3 years owing to lessening participation of other investing groups (private and foreign investors alike). Take any of the top 20 indexed stocks and mark out how much Khazanah, EPF and PNB collectively hold.
That IS NOT A GOOD THING!!! A vibrant, liquid and transparent exchange is needed for it to fulfil a proper capital markets' objectives. It has now come to a stage whereby local funds control the index ... the flip side is local funds are buying because NOBODY else wants to buy.
Indonesia used to be way behind us in terms of stock market attractiveness, market capitalisation, liquidity, transparency issues .... Now Indonesia has overtaken us on ALL counts, yes, their total market capitalisation is bigger than ours now.
The stranger thing is that the Indonesian market have a very very low participation rate by their local funds. They do not have their PNBs or EPFs ... this is all the more glaring when you line up our markets.
15 years ago it would have been HK, Malaysia, Singapore, Thailand, Indonesia, Vietnam, Sri Lanka... in that order of attractiveness to investors
5 years ago it would have been HK, Singapore, Thailand, Malaysia, Indonesia, Vietnam, Sri Lanka
Now, its HK, Singapore, Indonesia, Thailand, Malaysia, Vietnam, Sri Lanka ...
I believe 3-5 years from now, if left unchecked ... it would be HK, Indonesia, Singapore, Thailand, Vietnam, Sri Lanka, Malaysia
We all know the reasons why, I can highlight all those reasons, even those on both sides of the fence know why .... well... do we know where we are headed if we continue this way? If you do, are you doing anything about it?
10 comments:
This country is still being run by pack of thieves. Nothing have changed except the thieves are more discreet and not so blatant as before. When some scandals are reported the authorty concerned does not seem to be aware of it. Look at the clearing of the jungle for agriculture. It is so easy too find the culprit but the Perak state govt is not able to. Why? Any fool can answer that.
Another obvious case. The Kancil carpark at the bottom station. Who is the architect that designed the carpark?. Nobody wants to know they just want to attack the CM. The CM designs the carpark?
we are heading no where... well, "no where" is not the correct terminology.
We are heading south, worst than no where.
The Malaysian market is totally insignificant today. Whatever foreign funds that is in the market is at most a very small fraction of the portfolio.
The selling is local cronies cashing out and the buying by GCF (govt controlled Funds.
Sometimes you can witness these funds buying and selling the same stocks in the same day.
We are a real gonna.
Good write up and i am going to link it up later.
Your message is clear and loud.
Good observations. My kopitiam buddies came with some reasons of their own for the sell down in the counters referred to.
Air Asia: Drowning in debt. Not good in an economic downturn.
CIMB and other crony comapnies: BN might become B End in a matter of months. Consequences can be not conducive.
P Chem & Axiata: Foreigners taking profits before these evaporate into thin air in the global sell down.
Poperty counters: Slowdown and indigestion.
Of course you have general issues of poor corporate governance, arm-twisting of minority shareholders by major shareholders, regulators sleeping on the job or looking the other way etc. Bursa sucks. Yeah, it sucks big time.
You are one of the very few courageous writers/commentators. Many are reluctant to provide the reality of the market for obvious reasons. Especially,even if the market is bearish, it is taboo to utter it. Other soothing words like, consolidation, with upside basis in the long term and so forth. Malaysia was once No. 1 in the export of primary commodities: TIN, RUBBER, PALM OIL. NO MORE!!!
By Clongviews
All that being said, is my savings safe in the medium term with KWSP?
Yes I am doing my bit by voting in every election & also urge those around me to do the same. At least that's what all of us can do I suppose.
I attended a talk by RHB in Penang recently. This speaker kept repeating the country's indebtness ..indebtness of this and that..and never got the courage is say the country is broke. I don't know what he is afraid of. Maybe he is afraid UMNO will accuse him of being not loyal to the country or worse treason.
Sir,
A very dire question, I need views... do you think FGVH listing, there would be good premium, i am trying to bet it is, and risk my son's edu saving for this bet...
your view will be much appreciated.
Thank you and best regards.
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