Thursday, May 31, 2018

Should We Buy "Tainted" Counters



There's basically no better way to describe these counters. Tainted might be least offensive word. To all investors, again many will go back to the crudest, simplest form of decision making - anchor and adjust. We anchor on what we know, and adjust for new information.

Hence something that was 3.60 before the election and now stands at 1.60 looks mighty tempting. But we also know the new paradigm will also means that to get back to the 3.60 is almost inconceivable.

Glory to the risk takers. These counters will have a lot of volatility, downs and rebounds. Rumours and newsflow will be flying like fake news in a thunderstorm of hope and lies. Day traders and prop traders will love these counters, hence beware of getting caught by them.


What Might Happen To Them

- These counters while tainted, are not like BN appointees whom you can just fire. If they are found to be in cohorts with previous government in doing "illegal activities" such as: collusion, bid rigging, over pricing, rebates, unjustified commissions, bribery, circumventing laws or approval processes, cosy monopolies, highly preferential awardment of contracts, etc. Hence construction firms, if hit, will be gravely affected owing to the large sized contracts and.or dependence on certain personalities/unit. The trouble with construction firms is that there is little in ways of differentiation. Most can do most type of construction. Unless you have specific expertise (deep tunneling etc..).. the more you will be at the mercy of the new paradigm.

- There are some counters that have a decent business model going. Even if they were tainted, the business might still be good. To that end, there will be no need to reinvent the wheel, but if the owners are not deemed as "suitable owners" going forward, one sense that these counters may be "persuaded" to sell to a GLC. However, let's not kid ourselves, the price won't be fair or high.


Conclusion

I will stay away from tainted counters till there is a firm hint of change in ownership. Otherwise if you must, treat them as quick punts... and be good at trading.

Spongebobs, Parasites & Leeches



Senior Corporate / Investment Pros / Company Owners ..

I Hate

Its funny how many times investment pros get asked to do a deal on a contingent basis - i.e. only get paid if the deal gets done. I wonder what would our parents think when we tell them that we work on a contingency basis, after they have spent their life time savings sending us to college. What is this mentality, this contingent mentality - it happens way too often in Asia, not so much in First world countries. Our brains do not matter, effort does not matter, only success?? 

Why the aversion from commitment fee, engagement fee, out of pocket expenses?? You go and try to get some US investment bankers on a contingency deal - they'd laugh at you. Are some people not worth a salary? When you take advantage of people like the situations cited above, you are a parasite and a leech - you suck people dry, you will not share till you've got your share, you will be rich though but not many will cherish your time on earth.

Another prime example of sponging off people are usually the very senior corporate people, they will "pick your brains" for ideas, insights, opinions, analysis of situations, corporate deals, business developments, industry turning points, etc.. Somehow, these people think it is absolutely OK to engage others to suck their ideas, sponge on their brain power and take credit for them. I know of so many hedge/ fund managers who will listen to your picks, buys them, make tons, and never bother to return the favour via stock orders or a call. Many senior investment pros and senior management people feel it is part of their "ability" to cultivate these various pots of honey to suck them dry occasionally to help them protect their position. Its like high school all over during the exams, and the brats are still looking over to copy your work (and doing so much better than you).

Don't get me wrong, it is OK to exchange ideas among friends (genuine friends). It is also important to let the other person know what your motives are upfront. It is also important to have the graciousness to acknowledge your sources, and where possible, to repay them back in kind or even materially. How many of us do that? It is exactly similar to those people who will ask a doctor at a social setting about how to treat their medical condition - so what has changed that makes it OK not having to pay for professional advice, just because we are at Starbucks??

Too many investment pros and senior corporate management people regard a conversation or a Q&A session with another professional as just a conversation - while a lawyer can charge tons per hour for the same service. Don't be a parasite or a leech, it is a pure reflection on your character, unless you are the manipulative sort of character (who would do very well in the corporate world anyway)... give proper due and recognition to professional comments, analysis, opinions... (unless they are voluntary in the form of blogs like mine). Always be upfront, "I need to hear you views on... if you don't mind ... but stop me if I am overstepping the line..." .... "Thanks, I appreciate your time, is there anyway I could repay you ..." .... "Hey, I made xxx for taking your advice, I hope you will accept this US$200,000 check from me" .....

If you are a corporate parasite or an investment leech, and see nothing wrong with it cause it helps you get to where you are - cheers, and go lick your own balls cause you can (no backbone). Riches, fame and power will never compensate for lack of character, integrity and fair mindedness.

Tuesday, May 29, 2018

Clair de Lune


If ever there was a song or a piece of music that deserves its own special posting, it has to be Clair de Lune. You cannot even call it a song as that seems to be belittling the music. Yes, it has to be called that masterpiece composition by Claude Debussy.

If you ever needed to find solace, calmness and one with the world, just listen to Clair de Lune, possibly my favourite piece of music ever, and I am sure many of you feel the same.


If ever I were to get lost on an island for years, and I can only have one piece of music... this would be it.

Listening to Clair de Lune kind of makes me feel that all people of the earth are so alike. I don't think anyone on earth do not feel the same when they listen to this song ~ any race, any nationality, any political affiliation, any religious group, everyone ~ we all feel the same kind of wonderment and will be moved by it. Coincidence or the humanity of it all.

Translated, its called Moonlight, named after Paul Verlaine's poem of the same name. For such a wonderful piece of music, I tried to locate the movies which have used the piece of music. To my horror and to Debussy as well, many do not do justice by parading the music alongside so-so movies with even blander plots.

Topping the list of horrors has to be using Claire de Lune in Twilight, of course. There are many movies including Ocean's Eleven & Ocean's Thirteen, Seven Years in Tibet, Atonement, Man On Fire, The Darjeeling Limited, Ficció, El próximo oriente, The First Day of My Life, The Right Stuff, Antonieta, Casino Royale, Gran Turismo 4, The Game, Mùi du du xanh - L'odeur de la papaye verte (aka The Scent of Green Papaya), Tôkyô Sonata, Valley of Abraham,Bloodsport 3 (OMG), Castaway, Dog Soldiers, ... I must have missed some somewhere.


Movies that feature the music appropriately: Tokyo Sonata, Castaway and The Right Stuff. But the best movie has to be Frankie & Johnny, starring Al Pacino and the wonderful Michelle Pfieffer. The movie was way under-rated, the story enchanting and the acting was amazing. The song was waaayyyy appropriate. In fact, I thought the entire plot and movie was made so that they could feature the song towards the last 15 minutes of the movie.



Anthony Tobin 2007, piano solo.

The tough task here is selecting which of the four versions you like best. They are all wonderful. I think for this piece, less is more, I love David's version best.



David Oistrakh plays beautifully, recorded in Paris, 1962, with Frida Bauer on piano.


John Williams & Julian Bream


Julian Lloyd Webber with his cello and full orchestral accompaniment.

Monday, May 28, 2018

Malaysia's Debt - Deconstructed


Nobody is spooking anyone by revealing the level of debt the country is facing. Before we can properly address the debt, we have to be honest and come clean. No point pussyfooting here. Some said that that jolted the markets. While the stock market is an important aspect for a open trading country like Malaysia, volatility in the market cannot be minimised at the expense of the greater good. I believe most Malaysians would not mind suffering over the short term as long as the good of the country is being prioritised.


There are rules in placed where federal government’s debt-to-GDP ratio should be lower than the 55% self-imposed debt limit. If the previous government deliberately misled or went over that limit, as it appears to be so, there should be "censures" and a deliberation on possible legal consequences for the mismanagement and misinformation.

(not trying to trivialise the matter, but have a look at our current standing among the rest of the world, while I balked at 80% of GDP figure, it is nowhere near critical or unmanageable)

Finance Minister Lim Guan Eng put the ratio at 80.3% of GDP, or about RM1.09 trillion in debt as at end-2017. There are just too much off balance sheet items. Not all of the debt is bad. The majority based on viable and economically beneficial projects. Nonetheless, you don't want to be servicing RM70b a year in interest year in year out (assuming an estimate of 6%p.a.).

One, must reduce the overall commitments. 
$Hypothetically - Plugging leakages, eliminating wastage, better revenue collection ~ RM30b.
$Renegotiation or cancellation of certain big projects ~ RM100bn




$Reclaiming Stolen Funds/Assets - Again, the figures could be fluid ~ RM20bn.
Listing of Petronas - This is a brilliant idea. Last year's profit was RM45bn. Using 20x = RM900bn market cap. Government sells 25% = RM225bn. Although I am against selling vital resources, but we can get local funds to take up 7%, and let retailers to take up another 3%. The company pays decent dividends. When our country's balance sheet is better, we may even consider buying back and taking Petronas private later on. ~ RM225bn
$ indicates plausible figures, that may vary substantially, one way or another; nonetheless, these are all "positive" newsflow to come in the months ahead. The new government is right to get all the bad news out first. Then only we know what we are dealing with. So far, the figures are not good but in my view, much more manageable, and trust me when I say it could have been a lot worse.



 (the key is to look at the colour representing each country)

There are plenty of ways to raise funds, some of the less popular ones include a temporary tax on palm oil and log exports. Reintroduction of SST. 
Basically, a country has just 3 ways to raise funds: Taxation, Borrowing and Printing of money. Without going into details, none of the 3 can be considered as options as things stand now.
EPF/KWAP - The best "net cash flow" entity in the country are EPF, KWAP and the like. EPF alone has about RM800bn in investible funds and that figure has a net growth in contributions alone of around RM15bn a year. If you factor in the compounded growth rate from returns, it should be a RM1 trillion vehicle in 2-3 years.

As things stand, EPF already has a problem finding sufficient investible local currency assets. There are a lot of companies under Ministry of Finance.

To date, MOF (Inc.) holds direct majority shareholding in 66 companies as below:
MOF (Inc.) Majority Shareholding Companies
#Company
MAJORITY
1.1Malaysia Development Berhad (1MDB)
2.Amanah Raya Berhad (ARB)
3.Astronautic Technology (M) Sdn Bhd (ATSB)
4.Bank Pembangunan Malaysia Berhad
5.Bank Pertanian Malaysia (Agrobank)
6.Cradle Fund Sdn Bhd
7.Cyberview Sdn Bhd
8.Export-Import Bank of Malaysia Berhad (EXIM Bank)
9.FELCRA Berhad
10.Halal Industry Development Corporation Sdn Bhd (HDC)
11.IJN Holdings Sdn Bhd
12.Indah Water Konsortium Sdn Bhd (IWK)
13.Inno Bio Ventures Sdn Bhd (IBV)
14.Institut Terjemahan dan Buku Malaysia Bhd (ITBM)
15.Jambatan Kedua Sdn Bhd (JKSB)
16.JKP Sdn Bhd
17.Keretapi Tanah Melayu Berhad (KTMB)
18.Khazanah Nasional Berhad
19.Kumpulan Modal Perdana Sdn Bhd (KMP)
20.Malaysia Debt Ventures Berhad (MDV)
21.Malaysia Digital Economy Corporation Sdn Bhd (MDeC)
22.Malaysia Kuwaiti Investment Corporation Sdn Bhd (MKIC)
23.Malaysia Rail Link Sdn Bhd
24.Malaysian Bioeconomy Development Corporation Sdn Bhd
25.Malaysian Venture Capital Management Bhd (MAVCAP)
26.Mass Rapid Transit Corporation Sdn Bhd (MRT)
27.MIMOS Berhad
28.MyCreative Ventures Sdn. Bhd.
29.MyHSR Corporation Sdn Bhd
30.Pembinaan BLT Sdn Bhd (PBLT)
31.Pengurusan Aset Air Berhad (PAAB)
32.Perbadanan Nasional Berhad (PNS)
33.Petroliam Nasional Berhad (PETRONAS)
34.Prasarana Malaysia Berhad
35.Prokhas Sdn Bhd
36.Rangkaian Hotel Seri Malaysia Sdn Bhd
37.Sarawak Hidro Sdn Bhd
38.Sepang International Circuit Sdn Bhd (SIC)
39.SIRIM Berhad
40.Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank)
41.SRC International Sdn Bhd
42.Suria Strategic Energy Resources Sdn Bhd
43.Syarikat Perumahan Negara Bhd (SPNB)
44.Technology Park Malaysia Corporation Sdn Bhd (TPM)
45.UDA Holdings Bhd
MAJORITI – SPECIAL PURPOSE VEHICLE (SPV)
46.1Malaysia Sukuk Global Berhad
47.AES Solutions Sdn Bhd
48.Aset Tanah Nasional Bhd
49.Assets Global Network Sdn Bhd
50.DanaInfra Nasional Berhad
51.East Coast Rail Link Sdn Bhd
52.GovCo Holdings Berhad
53.K.L. International Airport Bhd (KLIAB)
54.Malaysia Development Holding Sdn Bhd
55.Malaysian Sovereign Sukuk Sdn Bhd
56.Pembinaan PFI Sdn Bhd
57.Pengurusan Danaharta Nasional Berhad
58.Perwaja Terengganu Sdn Bhd
59.Piramid Pertama Sdn Bhd
60.Pyrotechnical Managers Holding Sdn Bhd
61.SDE Solutions Sdn Bhd
62.Syarikat Jaminan Kredit Perumahan Berhad
63.Syarikat Jaminan Pembiayaan Perniagaan Berhad
64.Syarikat Tanah & Harta Sdn Bhd
65.Turus Pesawat Sdn Bhd
66.Wakala Global Sukuk Berhad
  Subsidiaries owned by MOF (Inc.) companies such as Khazanah and PETRONAS are also considered MOF (Inc.) companies through indirect ownership.

A study should be made of the companies to see which are generating decent returns, that are steady and predictable. Looking at the list, MOF will probably have to restructure some of the companies to come up with a vehicle or two that are investible by EPF and the like. 
Sell those assets to EPF/KWAP/PNB. It kills two birds with one stone. We will raise funds to pay down debts, while our local pension/savings funds get an asset that gives a decent return back to Malaysians.

Legalising Sports Betting - This will be seen as an unpopular vote but it is the right time to bring this up in the new era of transparency and social pragmatism. You can choose to ignore it but a substantive portion of the grey/hidden economy involves illegal betting. We have legalised gaming with Genting, 4D, lotto and horse racing. The country has taken up archaice and greedy taxation laws to those legal units - thereby bringing about the rise of illegal gaming outfits. 

If you tax the revenue at 30%, the remaining pool will have a lot less to offer the winners. Its this gap that gives the illegals a huge edge. They can offer 10%-20% discount on your bets and still come out ahead.

A revamp of betting rules, taxation on revenues, and bringing to legality sports betting is needed. Currently the service tax from legalised gaming runs between RM3-6bn a year. While it is hard to estimate the illegal markets, suffice to say it is at least double or triple the legal size. Hence we could be talking an additional revenue of RM6-15bn a year. It is definitely worth studying further. Like it or not, the gambling is already happening, the country might as well benefit from it.

Conclusion: It is not a debilitating task to whittle down our debt figure. The 80% figure while monstrous, is nowhere what many other countries are already facing, and for most of them the outlook is much bleaker. Bad news first, flow of good news will come later.

Recharging The Economy: Paying down debt is one thing. Cutting spending does not help. Does it means that the government will be curtailing investment into the economy? Short answer is NO. Here are just a few suggestions and there could be hundreds of ways to do this.
a. Luring long term foreign investment in specific industries, in specific locales.(Hint: eco-tourism).
b. Improve the velocity of money by energising the small caps market with a RM4bn fund (please read previous post).
c. Increase re-participation of insolvent members of country by adopting a better insolvency laws platform, such as the ones in Singapore/HK where bankruptcy is canceled after 4-5 years (please read previous post).
d. Encourage start ups from the region to locate their HQ in Malaysia via incentives, ease in visa requirements, support from local start up funds, etc.


Wednesday, May 23, 2018

Open Letter - Some Recommendations To New Government


Investing Funds

I have spoken on this in the past. We have about 1,100 listed companies and the majority are the market capitalisation of RM500m. We already have a situation whereby local pension funds are finding it tough to investable vehicles locally. Hence the need to invest an increasing amount overseas. Thats all fine. However most funds cannot invest in small caps, hence you find many decent small caps not having the support of long term funds on their register. Yes, there are plenty of under performing and even dubious small cap counters. But we are not helping matters by ignoring the small caps.

Part of the reason why so many small caps have to resort to "manipulative" share price activities to "make money" is due to a lack of genuine long term funds participating in small caps. If the situation is remedied, we can see an explosion of interest in good small caps. In the longer term, small caps will alter their behaviour to pursue good financial management goals to attract these long term funds.

We don't even need a huge fund. EPF can allocate RM4 billion for a small caps local fund unit, targeting listed companies below RM500m market cap. Say there are 600-700 listed vehicles that qualify to be investable. Assuming 200 are "performers" .. we are talking roughly RM20m position in each. the flow on effects will be enormous. Retail investors will be better persuaded to follow "good" small caps. Small caps with a decent growth story will find it easier to seek for more capital for growth and expansion. Velocity of money will translate to a more robust small caps market. In turn, the appetite among other small caps yet unlisted, will find Bursa to be a better location to get listed. This will go a long way to losing good potential listings to other jurisdictions such as HK's GEM.


Judiciary

AG: A most important post. A shoo-in by most would see Ambiga as a popular choice. However, the real world is not so simple. As much as we would like to see all things transparent, and all things above board. we have to be mindful that the real world involves personalities and politics. There are plenty of gray areas. While we need somebody who is respected and capable, we also need someone is able to move us gradually from gray to not to gray, and to white or shades of white. Being too idealistic may show us up as a growing nation not so prepared for the full truth. I can see somebody who is more politically astute while holding the rightful credentials assuming the post. Do we take baby steps or do we have the political will to take the plunge. Hence I would understand if Ambiga is not chosen, but I wish she will be the final choice. 


EPU

Rafizi Ramli to head EPU. Enough said.


Old Habits Die Hard

Can we eradicate corruption and cronyism outright in a flash. Again, idealistically impossible. Even in the case for Hongkong, which was a grand beacon for eradicating corruption via the establishment of ICAC and the spring cleaning of the police force - eventually it took more than 5-10 years for things to take root before anti-corruption became part of the larger business culture.

To that end, to facilitate culture change: MACC must be one armed with teeth; needless to say the judiciary/AG must be free from influence; the Whistleblower Act must be revamped to protect whistleblowers. Once the machinery and laws are in place, it will permeate itself into the workings of all dealings. Full eradication will still be years away but we need to set it on the right path.


Safety Nets 1

As a caring nation, we must have some sort of unemployment benefits or unemployment insurance. As things stand, once we lose our employment, we are left to fend for ourselves. Unemployment can arise when there are structural changes to the industries a country can support. We cannot and should never be locked in a low cost exporting country.


Employer and employees can contribute a small sum to fund the Unemployment Benefits fund. Simple workable rules can be adopted from proven schemes in other countries. One should at least have worked more than 1 year to qualify and benefits if suddenly unemployed, 3 months full salary, 3 months half salary. It is important that safety nets not be a crutch but a helping hand to ease the burdens somewhat.

To that end, we must limit the number of foreign workers and start them at a higher basic pay, say RM1,500-1,800 a month. Enough about protecting our low cost production industries, or else we will never move up the economic transformation curve for higher wages and higher value add industries. No point producing graduates if the better jobs are not forthcoming. 

Of course, there will be those who argue that graduates we are producing do not measure up - its a chicken and egg thing. Now that we can evolve, with a renewed perspective on education, parallel changes must be enacted across other spectrums such as industries, workforce composition and attracting the "right type of foreign investments".


Safety Nets 2

Our bankruptcy laws are archaic, and unnecessarily favours the banks/finance companies.The trouble with our system is that bankruptcy runs in perpetuity (i.e. almost never ending till you die). Unlike in HK, Singapore and many forward thinking economies where you only have 4 or 5 years to pay down your debt and after that you are free from the debts.

Why is it so important to implement a limited period for bankruptcy?

1) Being bankrupt means you are also literally removing around 5-8% of the working public and 5-8% of households from participating in the real economy. Cannot do business, cannot get loans, even job hunting may be a problem every now and then.

2) The Malaysian archaic system overly favours the banks and financial lending institutions. When its in perpetuity, the banks can clamp down on you for the rest of your life. We have to make banks and other lenders also responsible for their part in giving out the loans. Look, even creditors to EU give haircut once Greece is in trouble. That is why banks in Malaysia can be so bloody aggressive with credit cards, they know they have a very long recourse to make your life a living hell.

3) The 250,000 figure (back in 2013, the present figure could be around 400,000) will jump soon. Why? Just look at the way they are dishing out the study loans under PTPTN. Look at the surge in personal loans by non bank institutions, look at the aggressive credit card schemes. When you give out RM30,000 or RM40,000 or RM50,000 to someone and their job is only likely to pay them RM2,000-2,500 when they graduate, if they graduate, and if they can find a job then, ... you are going to have huge problems. Plus, we haven't got to the credit card users yet.

4) Even people who end up in jail for a few years and come out, they are free ... not if you are a bankrupt, man, they will drag you till you go to your grave.

5) The onus needs to shift back to the banks and other institutional lenders for a more balanced and equitable solution. For far too long have the banks been operating giddily under such a protective umbrella in their favour. There has to be a fairer distribution of risk for lending and borrowing. I am not suggesting that debtors need not pay, I am saying you need to give them a limited timeline.

6) When you take out 5-8% of the household from the real economy in perpetuity, it has a lot of indirect repercussions: cannot get study loans for children, making it very difficult to reverse their position as their job prospects may be affected as some companies frown on their status, etc. Needless to say, these 5-8% will also NOT play a part in the real economy in an effective manner - talk about dropping an anchor on the economy, it weighs heavily especially if its in perpetuity.


To that end, I would suggest to make the threshold for making a person bankrupt to be raised to RM50,000, and that automatic cancellation be enforced after 4 years.


Safety Nets 3

Is our civil service bloated? Probably. However I would suggest that we slow the hiring of new people for civil service and adopt a redeployment and retraining of existing civil servants to rectify the problem. as a caring nation, we cannot just effect changes with a swift cut without giving due recognition to the consequences. It is also the past governments' fault that they are in such a situation, not the people working there. 

It is a known fact that it is "easy" for civil servants to obtain loans from certain banks/finance companies. Unfortunately, instead of helping them, this has more often than not, burdened them further. The on-going automatic deduction from salary to pay down loans has to be revamped.


Electoral Issues

Easy peasy. Make everyone who is 21 and over automatically registered as voters. Redraw boundary lines using population sizing - each Parliamentary seat to make up between 50,000 to 100,000 voters. Less than 50,000 will be merged to nearest constituency, more than that spillover to nearest constituency. Same for state seats. Plus all the other Bersih proposals for improvements in the electoral system.


Sabah & Sarawak

Needs better autonomy. Better sharing of oil royalties. A special investing committee to look into bringing the right industries and value-add industries to East Malaysia. A more cohesive approach to build up eco-tourism there as there are plenty of opportunities to harness economic activity from that.





Twilight Zone

Malaysia is not in a twilight zone. Things cannot happen without good reason, and people cannot just disappear without the truth being uncovered. The high profile deaths/murders over the past 10 years cannot just be swept under the carpet.






Tuesday, May 22, 2018

Inflows and Outflows - Talking Points

Suffice to say, most market commentators got their predictions wrong, following Pakatan Harapan's victory. Below was the market poll of their views:


*Market Poll*

JP MORGAN - Medium Term Sell


RHB - Negative/Sell


UBS - FBMKLCI  1504-1655


MORGAN STANLEY - Underweight


FIDELITY - Downward bias


NOMURA - Underweight
FX - 12 months Ringgit 4.20-4.30 


ALLIANCEDBS - Buy on dips


DBS - Downside Risk


CAPITAL ECONOMICS - Sell


IHS Markit - Sell


Even my favourite business magazine, covered their asses with a premature salvo. The issue arrived in my mailbox on Tuesday 8 May, the issue was dated 30 April ...

Again, we do not fathom why people get paid big bucks to write nonsense. You get the election results wrong, ok I can understand cause you may not get the pulse of the nation. Or you believed in the machinery of the previous government. Or you believed that the shennanigans, gerrymandering, scare tactics were sufficient to brush aside the power of democracy.

Not getting the election results right is one thing, not getting the reaction of the markets is less forgivable. Again, the old adage that most people get by in life by using "anchor and adjust" decision making theory. You only anchor at the previous point and adjust based on your perceptions or persuasions. There is no room for "insights" and intelligence because thats how the average get by. 




So, how should we interpret the foreign net outflows:
May 14    -RM682.6m
May 15    -RM837.3m
May 16    -RM320.7m
May 17    -RM384.4m
May 18    -RM251.2m

There were naturally a lot of counters which went limit down on massive volume. There were also some counters which went limit up, but these were much fewer, and less robust compared to the selling that enveloped "limit down counters".

The KLCI went negative only briefly before restoring near parity, and even went up later. 

This is my view: its not so much the net outflows, but to look at the net outflows as a percentage of actual volume traded daily. You will find that net outflows was around 10%-20% of actual volume traded. That basically told us that local institutions, and more so, retail investors, were back in taking up the slack. The net outflow figures should not be too alarming when you look at the overall picture.

False Optimism?: Would this heightened activity and positivity from local funds and retail investors be termed as "being overly optimistic"? Short answer: NO. Long answer: Definitely not! All things being equal, all the debts, excesses, mismanagement, etc... were there before and after the elections. How would a Pakatan Harapan government BE WORSE in rectifying those missteps??!!

This is my p/s view: Look at the foreign net outflow, I suspect it was not a true reflection of the mentality of foreign funds participation. I suspect a substantive amount of selling that came from "foreign funds" were some bigwigs of the past government trying to extract funds out of the country as the very platform holding up their ability to plunder in the past was shakier than a 93 year old man's walking stick (no offence to Tun). 

Hence, reading between the lines, I think there is a gradual build up of genuine foreign funds coming in based on the smart/immediate steps taken by Tun M and his team.
a) Council of Elders - an immediate steadying of the ship; a brilliant move to bring back proven performers; getting Robert Kuok was a masterful move as there are a lot of substantive deals with China that needs to be renegotiated, and to pacify relations owing to some questioning of China's motives and investing strategy; an immediate strategic review and recalibration of the roles of major investing bodies...
b) Fast Action - to restore the 3 pillars of good governance, the legislative, executive and judiciary
c) Market Friendly - Tun M and Tun D, both knew how important the stock market is to the country; they have been making the right sounds and whistles

I expect certain companies will be "forced to sell" at low prices to rid of cronies of the past. It is very critical not to have a BN 2.0 infiltrating the system. Either by way of "new members joining PH for the wrong reasons" or "tainted business folks kissing new asses for survival".

Grey To Bright Gold: It will be a bit grey on the newfront initially as tallies of mismanagement, debts and hidden mistakes are brought to light. Expect a generous uptrend as assets are retrieved, savings shored up by more professional management, a more robust and transparent market for business deals, and just better management of our vast resources. Our resources just need to be managed better for the country to swiftly move back on the track of glory.


Friday, May 11, 2018

Diary Of An Election - Malaysia Boleh?

Malaysia Boleh?

I will be honest here. I used to cringe .. a lot... whenever I hear shouts of "Malaysia Boleh"... anywhere, even at sporting events. I mean, its actually a meek war cry .. imagine soldiers shouting that while charging the enemy. Doesn't quite cut it.

That is until 9 May 2018. Don't even need to shout it because in our hearts of hearts, those two words were emblazoned and burned into our memory and conscience forever. 

Malaysia Boleh - we not only did something for our country, we are actually the shining light of democracy to the world now. No other nation can say they have a change in government, without bloodshed or riots. 

Even in the eye of blatant bias all along the voting process, negative bias treatment of candidacy and opposition parties, excessive gerrymandering, hastily enacted rules and laws to frustrate all on the opposing side ... 

Despite.., in spite of ..., Malaysia changed the government by muscling democracy to more than just bare popular vote threshold. With odds so stacked against us, we not just prevailed... we faced it hard, looked them in the eyes, doubled down, and ...we did not just win, WE TRIUMPHED. Malaysia Boleh... oh yes, we can, and we did. 

Like another writer said, now we are a beacon for democracy for the rest of the world to follow. Malaysia, a population of less than 30m..., showed the world you can achieve proper democracy with non-violence, if you want it hard enough, and you need to unite in ONE VOICE.



THE DIARY

It’s been an exhausting yet exhilarating 12 hours. My thumb has never had such a workout. I felt like I was holding Beyoncé’s and Taylor Swift’s handphone. The number of messages might indicate that I was in running for the most popular person on earth. 

What was most exhausting was trying to ensure the messages were roughly true. Even more exhausting was trying to pacify friends who were losing heart. It was all so busy, I forgot to eat. 

Then half an hour ago, a close cousin asked via WeChat about the progress. As I changed tack to type a personal response, tears flowed freely as I typed “my country has changed government”. I don’t know why, maybe I do.  I am sure many of you do too. This is not like winning Thomas Cup joy .. this was a struggle by so many for our country for so long. 

I cannot thank the legions of opposition leaders and members enough who had to endure so much for so long. The general public just stood under the umbrella they provided. The umbrella of justice and fairness, they had a voice for us as we went along our lives. Hidup Malaysia!



Things To Do During Lockdown

All local councils, utility companies, construction firms (those with permission) and city planners in Malaysia should take the opportunity...