Skip to main content


Showing posts from November, 2018

Low PER & Low P/B Ratio - Privatisation/Investing Candidates

The Edge did a marvellous compilation on stocks with low PER and low P/B, citing considerations that there may be plenty of opportunities for privatisation. Let's look at the low PER first.

Granted the equity markets have been in the doldrums for sometime now, hence as a collective group PER valuations would move down. It has to do with what we call "earnings visibility".

Privatisation is seemingly easy to suggests but the reality for most listed companies, even when their PER or PB are low, they needed the access to capital markets via their listing vehicle. Hence to take them private be it the owners themselves or PE funds, they probably have to tag another extra 30% as capital needs as each privatisation will need to wait it out maybe 3-5 years before relisting.


a) PER refers to the earnings ratio. Hence there are a few assumptions, PER is only a valid reading if its a "going concern". PER has to do with earnings predictability. How low is deemed as …

Khazanah's Portfolio Assessed

Khazanah's portfolio makes for a very interesting read, but probably not for the reasons you are thinking. Yes, the markets have been bad. It would have been a very cheap shot to snap a portfolio's performance at ONE specific date and try to "shame" the managers. That is not my intent and I don't think Star Biz wanted to do that at all.

a) Performance - It is in line with the rout in global equity markets, more so for emerging or developing markets. The trade war exacerbated the situation.

b) Key Holdings - Mind you, these are key holdings, or substantive holdings of the said company, hence it is not like you can trade in and out easily.

c) Blame - Well, even in a rout you have losers and real outsized losers. Could Khazanah have known or impacted on those companies. We are talking about Axiata, Telekom and Astro in particular? They could only make their input at board level. Failing which, they could have initiated a replacement of the CEO with someone with a bette…

China - That's Bullying

This happens about 2 to 3 times a year, in China. It is always either the Koreans or Japanese. Sometimes its the Americans, now its Dolce & Gabbana. Every time something is not right or not nice happens to China, usually corporate wise, the said country's products will be boycotted. Sometimes it can happen via tourism where they vote with their feet. You get angry at MAS, you will stop coming to Malaysia. You did not do rescue operations well in Thailand, I will not go there.

Its like a belligerent child getting his/her way with the parents' approval.

China needs to understand and its citizens need to understand - people make mistakes, companies make mistakes would you like it if a Chinese citizen in Hubei ranted off on FB racist comments about "pick any country". Does it make sense then to boycott all Chinese products? Come on, grow up.

Deal with each instance properly. Just because you are the world's biggest consumer group does not mean you use that as…

RPGT Should Not Be Calculated From Year 2000 But 2013

Our Finance Minister clarified that RPGT would only be calculated from year 2000 onwards. We also have to remember that, in 2007-2009 the property market needed stabilisation and PM Badawi suspended RPGT from April 2007 till December 2009.

The move, was it to allow people to sell at a profit without RPGT??!! NO!!! It was to encourage people to buy then. Hence to say that all RPGT will be calculated from year 2000 is grossly unfair. 

Here we are only arguing over the just implemented 5% RPGT for properties held for more than 5 years. Hence the more than 5 years should be worked back from 2018, which is for properties bought on or after 2013.

By Hidir Reduan Abdul Rashid - November 21, 2018 @ 11:06pm KUALA LUMPUR: The Real Property Gains Tax (RPGT) valuation on property would only be calculated from the year 2000 onwards, says Finance Minister Lim Guan Eng. He said that this is done to give clarity on the issue following feedback from concerned property owners who have bought and …

Why The Accounting Firms Must Face The Music

All the accounting firms signing off on dubious financials MUST be fined heavily or even jailed. Accounting was not just my bachelor degree's major, I also did bloody Honours classes in them. Its boring like hell but important as well. It is a man made system of keeping track of data... seemingly simple but oh so important. In a capitalistic society where there are investors, owners, minority shareholders, regulators, ... so many facets of society who have to rely on the validity, integrity and authenticity of these numbers. 

Failing which, the entire economic ecosystem of trust, reliability and enforcement of rules and regulations (of those financials) breaks down. 

Just look at the pictorial below, all the asset movements, valuations, justifications, collaterals for loans, asset valuations, asset disposals, veracity of figures, actual audit trail of assets and cash flows, etc... ALL required the reliance on verified figures. If NO ONE CAN DEPEND on them, the whole thing breaks dow…

Why Namewee Is A Humanitarian Genius

Many of my friends were surprised when I told them that I considered Namewee a really smart, musically gifted, funny and noble guy. If you do not share this opinion, well, read on and maybe you will change your mind.

Namewee may ruffle some feathers with his antics, protest songs or even profanity. To me, I am very much like him, except for the musically gifted part.

Namewee is a lot more popular elsewhere in particular, China, taiwan, HK and Singapore than Malaysia. Malaysians again are generally uncertain or take for granted the talents we have until we are told by others outside the country. we tend to under-rate ourselves a lot.

Why "humanitarian"... he fought for most things which resulted in us having a new government, he played his part long before it was safe to do so ...

His latest creation was brought on by his experience being locked up in a cell with loads of illegal Burmese migrants. The new government must find ways and implement effective rules to treat the migran…

Why No Premium - Daibochi & Scientex

TheEdge Weekly asked the question: WHY NO PREMIUM

Scientex is one of the world’s largest producers of stretch films. Scientex also produces BOPP films with an annual production capacity of 60,000 tonnes. 

The company also produces cast polypropylene (CPP) and metallised films with an annual capacity of 12,000 tonnes, the biggest producer in the country. 

“This merger will enable Scientex to offer an integrated range of products to a larger client base and enhance its capabilities in the flexible packaging business through synergistic and complementary products to better serve global clientele.  Scientex also intends to maintain Daibochi’s listing status on the Main Market of Bursa Malaysia, and retain all the management and staff,”  Scientex spokeperson said.

“We believe it is good value for Scientex to acquire Daibochi on [a] PER basis, with about 20 times PER for Daibochi’s FY17 (financial year ended Dec 31, 2017) earnings, 16.5 times for FY19, and 12.3 times for FY20. Industry average …

Assessing "FundMyHome" Concept

Let me say that I think the concept has a lot more merits than the current 'reception' is willing to give it. I am not aligned with anyone or any company dealing with this business segment.

It is very important to note the group of people that the concept is targeting: FIRST HOME BUYERS. More specifically, first home buyers who are having problems buying the said property. It is not for anyone else.

Issues that I have against the concept:

a) Tough for the funders - The 5 year lockup period will actually stave off speculation or that the funders side will get a hefty return on their investment at the expense of first home buyers. In fact, in there is no interest paid to funders, its actually quite a sad deal for the funders.

The funders pay 80% of the property, for what? For a maybe/potentially/ yes-no 20% gain after 5 years. If you put your own funds in a savings account, 12-month automatic rollover, you could get 3% compounded over 5 years = 15.9%. Hence 20% versus 15.9% is nothi…

Rethinking About Recycling

This is a damn powerful image. The work he is doing, recycling, is so noble and forward thinking...and yet we know that he is also probably not paid well for it. Something is not right, for something that is so right.

Photo: Shen Yu / Imaginechina