More Whispers On Shenhua

Shenhua Energy, the world's second-largest coal company, could raise almost US$80 billion to spend buying mines, power plants and ports to feed China's growing demand for energy. The mining company is in preliminary talks to invest in Indonesia (Adaro, read below) and is studying targets in Australia and Mongolia, president Ling Wen said on Friday. Shenhua has been forced to move a lot faster in its M&A strategy thanks to BHP Billiton's audacious bid for Rio Tinto. The $US134 billion unsolicited takeover bid for Rio Tinto Group by BHP Billiton, the world's biggest mining company, may accelerate those plans. There are only so many decent sized mines left to acquire that would help make a difference to Shenhua over the longer term. After all, it IS the world's second largest coal company, and wants to at least stay there if not improve further.

"It's very important to use not only organic growth but also mergers and acquisitions to make our enterprise larger, better and more profitable," Mr Ling said in an interview in Beijing. "We have huge room to make some acquisitions."

China Shenhua would be able to finance takeovers because its parent, state-owned Shenhua Group, owns a 74%. China Shenhua would be able to liberate $US78.5 billion by selling new shares and diluting its parent's stake to just over 50 per cent. China, the largest energy consumer after the US, burns coal to generate almost 80 per cent of its power. The Government estimates energy demand will rise about 4 per cent annually to the equivalent of 2.7 billion tonnes of coal by 2010. China's gross domestic product grew 11.5 per cent in the third quarter.

The price of shares in China Shenhua, which ranks behind St Louis-based Peabody Energy in coal sales, have more than doubled this year, outpacing the 43 per cent advance in the benchmark Hang Seng Index. The parent's stake dropped from 81% after the company raised 66.6 billion yuan in a Shanghai share sale in October. The stock has fallen 7% since then.

Next Hottie - Kian Joo

Well, the bidding has reached frenetic pace for Kian Joo's 35% controlling stake. The grapevine has it that Mega First was an early bidder but soon dropped out. Tin can manufacturer Can-One then came into the picture to buy the 153.87m block.

Apparently the price was being bidded higher than the purported RM250m. Bearing in mind that the new owner will probably have to collect more or even make a general offer as well, its going to be a lot more than RM250m (share price of around RM1.55).

Anthony See was known to have submitted a bid himself, however it looks like the race now has left only two bidders. One an American company and the other a Japanese company, and both are willing to work with one of the brothers. The key thing is pricing, apparently bidding is already past the RM2.20 mark. This may give Kian Joo shares a bit more upswing as the battle heads to a conclusion.

China Dolls' Whspers

Following up on how China Mobile surged on corporate developments, players of Chinese H-shares covereds would be disadvantaged for failing to keep in tune with the latest whispers. Here are some of the latest whispers with respect to those H-shares covereds on KLSE.

ICBC & Bank of China - The company is rumoured to be making a bid for a stake in Swiss investment banking giant UBS. This is similar to the troubles Citigroup and Bear Stearns found themselves to be in. Looks like UBS would also be needing some form of capital injection. While the two banks are the rumoured aggressors, a deal with ICBC is more likely than with Bank of China.

Shenhua - The company had been invited to take a small stake in Adaro prior to its listing in Jakarta next year to raise US$750m but Shenhua declined to take that up. Apparently Shenhua is very interested but would like a bigger stake. Shenhua is rumoured to be persuading Adaro to shelve their listing plan and instead allow Shenhua to take up a bigger stake. Adaro is controlled by several investors including Edwin Soeryadjaya, son of the founder of the Indonesian car firm Astra International, and entrepreneur Sandiaga Uno. Indonesian laws encouraging corporate transparency provide a tax break on capital gains earned when a stake is sold through a stock offering. Regulations limiting foreign ownership in the country's coal firms to 49 per cent are also waived if the acquisition takes place through a share sale. Shenhua is cashed up and looking for acquisitions after raising US$9 billion from an initial offering in Shanghai in September and has long had Indonesia in its sights. Shenhua, which listed in Hong Kong two years ago, has also indicated it was looking at acquisition targets in Australia and Mongolia. To control Adaro, Shenhua may have to fork up US$4 billion.

OK! Now Is Safe To Get Back Into Certain Markets!!!

Recent postings have avoided highlighting stocks of any kind as the markets were averse to equities in general. The only bright spot, HK/China, even had a difficult few weeks. However, there are sufficient signs that its OK to re-enter certain equity markets.

Global liquidity is still there. A good indicator is to examine the flow of funds in/out of certain fund types. The data on fund flows from the Investment Company Institute for October showed that global equity funds showed inflows of US$14.97 billion, compared to an outflow of US$3.71 billion from US equity funds. For all of 2007, global funds have recorded inflows of US$123.7 billion, compared with US$20.9 billion in outflows for U.S. funds. This further strengthen the funds away from US assets.

Much of the outflow from US equity funds was probably due to a hedge against a persistently weakening USD. As for China, the fears over inflation and out of control CPI seem to be properly discounted. We know for a fact that liquidity is still ample globally - they have to go somewhere. However, not all markets present the 10%-20% upside necessary for foreign funds to park their assets. If we were to reassess the global equity picture, we need places where: currency outlook is still positive; stock markets can see a 10%-20% upside over the next 6 months; and a reflating economy. With that in mind the best markets would be:

1) HK

2) Brazil & Colombia

3) Japan

4) China

5) South Korea

6) Vietnam

7) Thailand

At present levels, it is very difficult to see markets such as Australia, Canada, the US and Malaysia to register a 10%-20% gain from current levels.

Cost Of Living Survey 2007

Excerpt: ECA’s Cost of Living Survey is carried out twice a year comparing a basket of 128 consumer goods and services commonly purchased by expatriates in over 300 locations worldwide. Multinational companies use the results to help compensate their internationally mobile staff. Living costs for expatriates are affected by inflation, availability of goods and exchange rates, all of which can have a significant impact on expatriate remuneration packages. Some people may be surprised to see African locations in the top ten. However, ECA’s cost of living survey compares like-for-like goods and services, certain items and brands typically purchased by expatriates, which are not readily available locally, can be very expensive. In addition, the commodity boom in recent years has led to considerable currency appreciations in commodity-exporting markets, such as Angola, making it an increasingly expensive location for expatriates.

Seoul maintains its position as the most expensive city in Asia for expatriates, moving from 8th to 7th in the global ranking over the past twelve months. During the same period, Tokyo, Asia’s second most costly city, dropped out of the top ten for the first time moving from 10th to 13th. Depreciation of the yen against most other currencies, coupled with low inflation, has significantly reduced living costs for foreigners in Tokyo, Yokohama and Kobe in recent years. Several other Asian cities have fallen in the ranking, including Taipei which has fallen six places. This is largely explained by the weakness of the US dollar to which their currencies are linked. The region’s biggest fall was in Indonesia with Jakarta dropping 11 places to 153rd position. However, with a large number of Asian cities experiencing higher rates of prices increases than elsewhere in the world, locations in the region have, in general, moved up the rankings.

A 6% overall rise in the cost of goods and services typically purchased by expatriates has meant that despite the weakening Hong Kong dollar Hong Kong’s position in the ranking has remained steady and is still the fifth most expensive location in the region and ranked 79th worldwide. The recent rise in GST in Singapore from 5% to 7% has contributed to pushing up living costs in Singapore, which has risen 10 places in the ranking since 2006. This, together with no change in Hong Kong’s position, means that the gap is closing between the two locations. As living costs in other locations in the region catch up, the need for companies to provide higher cost of living allowances when moving people to Hong Kong rather than elsewhere in Asia, has been eroded over the past 12 months.

Most Expensive Cities Globally (Last Year's Position)

1 (2) Luanda, Angola

2 (3) Oslo, Norway

3 (4) Moscow, Russia

6 (5) Kinshasa, Congo

7 (8) Seoul, Korea

9 (11) Geneva, Switzerland

10 (17) London, UK

13 (10) Tokyo, Japan

23 (54) Istanbul, Turkey

48 (28) Manhattan New York, USA

Asia's Most Expensive Cities (Global Ranking)

1 (7) Seoul

2 (13) Tokyo

5 (79) HK

6 (94) Taipei

7 (95) Beijing

8 (100) Shanghai

9 (122) Singapore

11 (153) Jakarta

18 (168) Bangkok

24 (177) Mumbai

25 (178) New Delhi

29 (191) Manila

32 (195) Hanoi

33 (197) Kuala Lumpur

35 (203) Karachi

36 (204) Ho Chi Minh City

My Comments: Should we be happy or sad that Malaysia is so "cheap"? I see three main reasons why Malaysia is cheap:

a) Subsidised products - The country puts in a lot of subsidy in many essential necessities, but more importantly the government subsidises a lot in oil & gas products as well. This helps to translate into a lower COL for all, albeit unecessarily subsidising the profits of many manufacturers and MNCs. Naturally, when these products' prices surge (like they have been doing for the past 2 years), the subsidy budget will become unmanageable. The government has to look deeper into the opportunity cost of such deep subsidy plans. We also need to put in place a timeline to trim the subsidy for all companies operating in Malaysia - they must be forced to compete with fuel and electricity at normalised prices.

b) Foreign Workforce - Malaysia enjoys near full employment, however the country has some 2 million official foreign workers and probably another 2 million in the country working illegally. The foreign work force is a significant factor in depressing wages and keeping prices in check. They also free up a sizable percentage of the local workforce to other areas of employment.

c) Its In The Real Estate (the biggest reason for low COL figure) - Malaysia has one of the cheapest real estate market in Asia, and real estate is a huge component of overall cost structure for any businesses. Translate that down the line for all products and services, you get an effectively lower COL for Malaysia.

MEMs Tech vs Moolah

Well, my mate Moolah has done it again, I shall give him a new nickname, Dragon Slayer... but wait, those companies were no dragons at all, maybe Cicak Slayer ... nah, just Slayer will do. Just as effective and scary as Sylar if you ask me. Moolah tore Megan Media to shreds before it decided to implode on its own. As for Mems Tech, well, same old, same old... one person can be better than 3 research analysts at CIMB, OSK and S&P (of all places). Check out his posts (with apologies to Moolah), but first, Moolah noted the wonderful short history of S&P's recommendations for Mems Tech (loved the BUY at 73 sen, then a SELL at 38 sen followed by the STRONG BUY at 85 sen, all within a year - talk about being contrarian). Their earlier instinct was right, should have stuck to the SELL at 38 sen, then be a hero like Moola now already... or just reversing every single recommendation would have yielded the same results.

http://whereiszemoola.blogspot.com/2007/03/mems-part-vi.html

http://whereiszemoola.blogspot.com/

Comintel's Information Flow - Somebody Call 999

Share price of Cominetel Corporation Bhd plunged in early trade on Nov 29, falling 29.66% or 43 sen to RM1.02 on extended heavy selling pressure. It opened at RM1.45 unchanged. At 9.03am, it plunged to RM1.02. Within the first hour, there were 5.77 million shares done at prices ranging from RM1.02 to RM1.49. At 10am, it was trading at RM1.02, the lowest since May 10. There were 1.08 million sellers at RM1.02 but no buyers. Yesterday, the share price hit limit down. Falling 65 sen to RM1.45, wiping out six weeks worth of gains. The company was queried by Bursa Malaysia over the sharp fall in the share price.

The Edge reported this back in June 2007:
Telecommunication solutions provider Comintel Corp Bhd is focusing on securing value-added projects for its manufacturing services and communication and system integration divisions to help address its thin margins and loss-making position. "In a way, we are moving away from our traditional contracts to value-added projects, where margins are better but risks are higher," its managing director Lim Keng Hock tells The Edge.
One such project that the company hopes to secure is the nationwide implementation of the C4i system for the police force, which is worth some RM1.5 billion over five years. The C4i system, developed and patented by Comintel, involves the integration of all base operations for command and control purposes. It provides the police with improved command, control, communication computing and information capability to enhance the force's ability to respond quickly to emergencies.
The rollout of the system's pilot phase was commissioned in 2005 and it has become fully operational in the Klang Valley. According to Lim, the system has improved the force's response to emergencies. The missing link in the overall effectiveness of the system is the "999" number connectivity because Telekom Malaysia Bhd is reluctant to give it up to the police force, he adds. This is despite a government directive in 2005 to route all calls made to the police and ambulance and fire services to police headquarters at Bukit Aman or any other centre set up for the purpose, he says. At present, Telekom operators handle "999" emergency calls, of which about 90% are crank calls. With the C4i system, Lim says, crank calls will drop substantially and the police force will be able to respond and take action swiftly.
Last December, Comintel's subsidiary Comlenia Sdn Bhd was awarded a RM115 million turnkey contract by MiTV Corp Sdn Bhd for the rollout of a new broadcast network and infrastructure over three years. MiTV is migrating its broadcast technology network from the existing video codec standard to the MPEG4/H.264 advanced digital video codec standard.
Also, Comlenia, which provides system integration services, has recurring revenue of about RM20 million annually from the Royal Malaysian Navy for the maintenance and system upgrades of four Corvettes. In terms of manufacturing contracts, Comintel recently secured a three-year deal from Motorola Inc to design, develop and supply various categories of products to the latter. "The new contract with Motorola enables us to participate in the design on portable radio. Also, Comintel is able to command better pricing, with no more discounts given," Lim says. He adds that the company is also looking at value-added contracts in its manufacturing division. "We are developing our own products, such as dual-band phones. From now till 2010, people will be moving into IT phones. In the interim, there is a gap for migration. We plan for mass production of dual-band phones sometime in September. Already, British Telecom, Google and MSN are interested in our products." "We will either manufacture the phone under our own brand or we might brand it for our clients. The intellectual property for this phone belongs to the group," Lim says. He adds that Comintel plans to sell the dual-band phones, which support WiFi (wireless fidelity) and GSM bandwidths, at about US$399 (about RM1,363) each. "We are only commercialising in September, so we are looking to sell between 50,000 and 100,000 phones this year." Lim says based on research, demand for such phones is estimated at 50 million units worldwide next year. "We are going to be the first one to launch the phone. If we can capture 10% of the market, it will be good," he adds. Moving forward, Comintel executive director Loh Hock Chiang says the company is eyeing contracts worth RM500 million to RM1 billion related to IT and telecommunication solutions this year. These contracts, which will provide better margins to the company, will help turn around Comintel for the financial year ending Jan 31, 2008.
"This year, based on what we are looking at now, we should be profitable. We are looking at a 10 sen earnings per share target. We anticipate that the manufacturing division will grow but at the same time, our system integration will more than double. Margins from system integration projects can give the company better margins," Loh says.
In FY2007, Comintel went into the red with a net loss of RM3.03 million from a net profit of RM1.43 million last year. This is despite a higher revenue of RM324.3 million against RM297.9 million in the previous year. "Revenue for FY2007, mainly from the manufacturing division, has gone up while margins are thin. Furthermore, with the appreciation of the ringgit, we convert less from our billings, which is denominated in US dollars," Loh explains.
He adds that losses were incurred due to lower government spending as a result of the Eighth Malaysia Plan being in its tail end and huge investment in research and development.

K&N Kenanga has a research report dated October 1st 2007, which recommended a HOLD on the counter. The stock was 92 sen then. The report's recommendation:

We are maintaining our hold recommendation on Comintel with a revised 12 month target price of 88 sen (up by 58.6% from 55 sen previously) based on a FY08 PER of 10.5x. While we expect Comintel to stage an impressive earnings turnaround in FY08 mainly on the back of strong performance by the CSI division, we remain cautious and would want to see consistent q-q improvement before upgrading our recommendation. The Management has also indicated that a dividend policy could be introduced from FY08 onwards, which lends a view of confidence on future profitability.

My Comments:

What is galling, and the SC should really take note were the comments made by the CEO and director of the company on the company's prospects. If the reasons for their share price dive was fundamentals to their operations, and known by them during that time - that is tantamount to misleading investors and readers. Hence it is imperative that the SC gets to the root of the rot which caused the sell down.

Naturally, the most probable answer to all this is that the stock was under syndicate play, and the distribution was complete, I guess. This goes on all the time, everyone close one eye on this, but when it goes yo-yo up and down based on pure manipulation and not fundamentals driven or even rumoured better prospects, it makes a total mockery of the exchange and the administrators. SC, if failing to find fundmanetal fault with the company, should check closely on substantial shareholder movements over the last 6 months to get a clearer picture. If the insiders were "in", then those statements given in the interview to The Edge has a very different slant.

Best Dim Sum Place

Markets are so boring, no stock to look at, let's talk food. Being Cantonese and all, finding really good dim sum places is really difficult. In fact the better ones can be found, of all places, in Sydney! That's due to the wave of migration from HK in the 90s to Australia. Many good chefs came as part of that wave ahead of 97 then.

When I visit HK, the standard for dim sum is very high indeed. However, my all time favourite dish when eating there was this very simple "see yau wong cheong fun". Its like chue cheong fun here but thicker and its tossed with superior soya, its all in the soya I guess. The simple dish cost HK$30 at the dim sum place in New World Hotel, Kowloon and I always go back there every time I'm in HK.

Back to dim sum in Malaysia. Unfortunately, my favourite place cannot be found in KL, its Ming Court (or Ming Kok in Cantonese when asking for directions driving around in Ipoh). The spread is as in the photo, everything is just very good or unbelievably good. Some of the older diehards will opt for Fohsan as their best place, but I think that's more due to loyalty and longevity reasons. Fair is fair, Ming Kok wins easily. Get the woo-kok, char siew pau, century egg/lean meat porridge, black sesame soup dessert, egg tart and baked siew pau!!!

Synergy Drive: Some Caveats

The Malaysian markets will be in for a major fillip on Friday owing to the requotation of sorts via Synergy Drive. Conservative estimates see the KLCI jumping 30-35 points based on the requotation, thus we are looking at 1,400-1,420 as the new base judging by today's market performance.

While many foreign houses and international funds played Sime Darby prior to its suspension. Many opted to cash out rather than hold for the extended suspension period to get Synergy Drive's shares. SD is expected to account for 9% of the recalculated KLCI capitalisation. Regional and index funds will have to have SD in their portfolio, no two ways about it.

There is a prediction that some investors will sell other plantation counters to switch to SD. That is unlikely to hold true as SD is not a pure plantation exposure. While SD will be the biggest in terms of plantation earnings, it is not a pure play - and that could be the thing which could trip up SD.

For FY07, plantations will contribute 45% of SD's operating profit. The figure rises to 52% for FY08. Its a significant figure but it still looks more like a conglomerate to me, and probably to most professional investors. Those bullish on SD have cited its involvement in the Bakun dam and undersea hydroelectric cable and power transmission to the peninsular as the near term catalyst.

The fact that its not pure plantation may actually result in a lower valuation over the longer term. I would expect the initial couple of weeks to see robust uptrend in SD's share price on just foreign institutions and more importantly, local government investment institutions. However, following the euphoria, SD's price could be repriced at a discount to pure plantations valuations. The discount could come to 20%. The discount is largely due to the fact that SD has its fingers in many pies as well - motor, oil & gas, utilities, heavy equipment and property. That's a conglomerate in my books.

No doubt that SD has a few factors going for it:
a) world's largest plantation group with over 500,000ha - that has to mean something
b) more than 75% of its palm oil are young (below 15 years)
c) seemingly stronger & more professional management
d) finally a Malaysian counter that can provide ample liquidity to "big investors" - over 6bn shares in share capital and a decent free float
e) a premium rating should be accorded for the above factors cited

The often cited synergies and cost savings in plantations still needed to be delivered. Valuation wise, the simplest would be a sum-of-the-parts valuation based on the business PER for the respective businesses. After scouring some of the latest research reports, on the low side we have Kim Eng/Yuanta with a RM9.60 valuation and an exuberant OSK target price of RM13.65.

At the end of it all, we have to ask ourselves if Synergy Drive is indeed a better animal than Sime Darby. Well, plantations make up 21% of Sime Darby's operating profit in FY07 compared to 45% for Synergy Drive. Heavy equipment made up 44% of Sime Darby's operating profit in FY07 but only contributes 18% to Synergy Drive. Going forward, palm oil and other soft commodities have a much better outlook on a 3-5 year view.

For foreign funds, palm oil is increasingly being seen as the only unique and worthwhile exposure worth looking at when investing in Malaysia - that's something a lot of people don't want to hear. If you are touting banks, airlines or utilities: to a regional investor he/she have the option of investing in similar industries in HK, Japan or Singapore - where the stocks may be bigger and more liquid.

All big Malaysian companies must compare themselves to regional or even global peers in their industry in order to be noticed. Getting bigger like SD is one thing, performing like IOI Corp is another.

If you are a fund manager, god help you if you do not have some Synergy Drive in your books at a decent price. For retail investors, don't chase, just wait a week or two, there should be at least one or two new covered warrants on Synergy Drive, that's a better trade.

Rio Tinto & Implications

I had expected China to join in the battle for Rio Tinto following BHP Billiton's bid a couple of weeks back. Now that Rio Tinto has rejected a merger proposal from its largest rival, BHP Billiton, which valued Rio at about US$142 billion (HK$1.10 trillion), this creates an opening for China. BHP Billiton, Rio Tinto and Brazil's Cia Vale do Rio Doce are the three biggest mining companies in the world. Together they account for 70% of the globe's total iron ore output.

The potential merger of BHP and Rio Tinto aroused concerns among China's steelmakers and the central government as China is the world's top steel consumer. China Development Bank has secretly bought about 1% in Rio Tinto during the week that BHP Billiton offered the hostile bid. Despite no confirmation, the move was seen as a move by China to ensure there will be no combined entity dictating iron ore pricing.

China's newly set up sovereign wealth fund, China Investment Co, will join the bidding for the world's second-largest mining group, Rio Tinto, together with Boasteel, Shougang and Angang. China's collective bid could be around US$200bn. Well, thanks to BHP Billiton, they have now stirred a hornet's nest. US$200bn will see China bidding 40% higher than BHP's offer. Plus, BHP's offer was an all share offer, that should be easily topped by China.

Why the fervour to snap up Rio Tinto? Well, China already takes half of all iron ore from BHP. As mentioned before, the top 3 producers control 70% of the global iron ore production. A tie up between BHP & Rio would strengthen the producers pricing power and put China at their mercy.

BHP would probably back off as investors have been hammering BHP's share price following the audacious bid. Following the bid for Rio Tinto, BHP Billiton's share has seen some US$32bn being erased from its market cap.

BHP's bid is not so much to control prices but for the company to post strong earnings growth. The relatively new CEO of BHP, Marius Kloppers probably sees the bid as the easiest way to grow considering the size of BHP. Return on assets at BHP has averaged 35% during the past five years, compared with 32% for Rio Tinto. BHP's five-year growth in earnings before interest, tax, depreciation and amortization also outstrips Rio's, 29% to 26%. What is likely to happen is BHP backing down, and the Chinese steel companies gradually accumulating strategic stakes in Rio Tinto and Brazil's Cia Vale in order to preempt something like this happening in the future. The Chinese don't really want to take over Rio Tinto at this point in time, its too sensitive and aggressive. Nothing to stop them from accumulating small strategic stakes though.

Posco, JFE and Chinese steelmakers attacked the BHP's bid proposal, saying it would be harmful to the iron-ore market. The Brussels-based International Iron & Steel Institute, which represents ArcelorMittal and 18 others among the world's 20 largest steelmakers, urged regulators to block the bid.

Steelmakers in China are already facing an increase of as much as 50% in prices for iron ore over the last 6 months. Prices have tripled to US$72.11 a metric ton for Brazilian iron ore the past five years. About 1.6 tons of iron ore are needed to make a ton of steel. Hence it is pretty important to China that they "control" iron ore prices to some extent.

Unbelievable Effort!!!

Badminton has a very special place among Malaysians. Considering our smallish population, its amazing that we do relatively well against the other nations. Due to our build, we can only succeed in games that are usually non-contact and those which favours a lower center of gravity and agility. Hence we are pretty awesome in squash, bowling, lawn bowling and badminton. Fergedabout football already!

We used to have great female players in badminton when Sylvia and Rosalind were at the top of their game. Its been some 30 years where we have always drawn a blank at tournaments for our female badminton players. Its a thing we never criticise or say much about cause since the Chinese women players came on the scene, its near impossible to dislodge them from the top 5, plus they are all near 6-footers. Hence this puts it into greater perspective what Wong Mew Choo has acheived. Its unbelievable. Hard to fluke it cause she had to beat a few of the highest ranked players to win.

On her way to the top, the 24-year-old Mew Choo came full circle as far as beating players from China is concerned when she put on an incredible show to beat defending champion and Athens Olympic winner Zhang Ning 21-16, 21-19 in a fiery 41-minute encounter. With her first ever victory over the lanky Zhang Ning in their eight meetings yesterday, Mew Choo, the world No. 8, now holds the record of having beaten every current top national Chinese women players.

Just a day ago, she sent world champion Zhu Lin packing in the quarter-finals. National coach Wong Tat Meng had only praises for his charge’s breakthrough performances. “I have been coaching her for three years. But now, I am proud to say that she has developed her own style of game. She has her own brand now. People use to call her a runner but today, she was attacking Zhang Ning and scoring points ... that was amazing,” said Tat Meng.

Indeed, Mew Choo’s determination showed throughout the match. She fought tooth and nail in a very tight first game that surprisingly saw the Malaysian making fewer mistakes than the nervous Zhang Ning. She has also learnt to make quick changes when things go wrong.

Wong Mew Choo won the China Open Super Series' women's singles in Guangzhou, China. She defeated world No. 1 Xie Xingfang of China, 21-16, 8-21, 21-17. It was Wong's first Open title in her badminton career. She pocketed US$17,250 (RM58,650) for her historic feat Sunday. Did she ever deserve this .... politicians, make your way to the airport for her return tomorrow, ok?

CNOOC's Star Rising Amidst The Rubble

Following Petrochina, CNOOC would be my best pick, owing to it being the next big A-share listing by the H-shares. However, the edgy markets for the past 2 weeks may be delaying the A-share plans somewhat. Another thing to bear in mind is that the covered warrant is expiring in February 2008, which would have been ideal a few weeks back, but owing to the postponed A-share listing, may be a bit too short in life span to cover the Shanghai listing. Still, cannot beat CNOOC, especially when the Shanghai index gets closer to the crucial 5,000 level, which I am expecting to be a good base building area for China shares.

Call it coincidence, foresight or good planning, CNOOC's in the news today that it is considering buying interests in Nigerian blocks held by Royal Dutch Shell PLC- the latest indication of China's rising assertiveness in Africa's oil sector. As reported in the WSJ:

Shell is considering selling interests in two Nigerian offshore blocks as it restructures its business in the troubled region, people familiar with the matter said Tuesday. A block is a geographic area of territory over which the owner holds exploration and drilling rights. The Anglo-Dutch oil company has said it expected to sell about US$9 billion in assets in 2007. The block stakes, each amounting to 49.8%, could fetch as much as $900 million, adding that Nigerian oil companies had also expressed interest. Agip, a unit of Eni SpA, holds the remaining 50.2% in each block.

In January 2006, CNOOC, China's largest offshore operator by output, bought a 45% interest in Nigeria's Akpo field for US$2.27 billion. The same month, it bought a 35% interest in the license to explore for oil in a Nigerian offshore block. China is on course to overtake the U.S. as the world's largest energy consumer soon after 2010, according to the International Energy Agency, but its domestic oil production is set to peak around the same time, leaving a supply gap that will have to be filled by foreign oil. As a result, Chinese oil companies are investing massively in Africa, searching for oil to fuel the country's booming economy.

Sinopec, paid US$692.2 million for stakes in three deepwater oil blocks in Angola last year. China National Petroleum Corp., the parent company of PetroChina Co., has interests in Sudan. In addition to direct investments by oil companies, China's government has used a strategy of offering loans and aid to African countries to secure access to resources.

Its Like The Sopranos Making You An Offer

Beware the friend who keeps patting you in the back, saying "well done, boy" ... cause its more likely he is patting you in order for you to cough up something. BFFs, Temasek and Chinese banks, have elevated their friendship to the next level, a disturbing marriage. Yesterday, the three largest banks in China have separately approached Temasek about buying its 17% stake in Standard Chartered. Officials of Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), and China Construction Bank (CCB) have "sounded out" senior officials at Singapore government's investment agency about buying the stake.

Temasek is the largest single shareholder in London-based StanChart, which makes two- thirds of its profit in Asia. Temasek sources confirmed the approaches but insisted that the agency had rebuffed the advances. StanChart executives are unlikely to welcome a change in its largest shareholder to another lender, as this could trigger fears about its future independence.

StanChart is a brilliant vehicle for big Chinese banks seeking to expand abroad, especially where Chinese banks do not necessarily need to have control. StanChart is very strong in India with 81 branches, plus it has secured Amex Bank (India) for US$860m back in september which will ehance their reach and clout. All up, StanChart will have 90 branches - this is significant because for foreign banks in India there are only a total of 258 bank branches.

I think the 3 Chinese banks approached Temasek, the purpose was not to buy the 17% stake, but to strategise moving ahead should they become minority shareholders of StanChart. Like I said earlier, the Chinese banks do not need control. They'd love to work with Temasek, to learn the ropes about integrating global operations. There is nothing to stop the 3 Chinese banks from collecting minority stakes from the open market.

StanChart top executives headed by Mervyn Davies, chairman, and Peter Sands, chief executive, are however thought to be opposed to Temasek selling its stake to another lender over fears that would compromise Standard Chartered’s independence. We have to remind ourselves that Temasek was the beneficiary of a few sweetheart bank deals a couple of years before the banks were listed. Temasek made tons when these bank stakes were listed. Now time to cough up some blood.

Temasek's Chinese Holdings:

a) Bank of China (5%)

b) China Construction Bank (6%)

c) China Eastern Airlines (8%)

Now, you don't get the OK to buy stakes in the above companies without "proper connections". Time to cough up!