A Message By George Carlin

I even have a book by Carlin, he is a top comedian by profession but also a brilliant writer. His funny diatribe are usually laced with profanity but still very funny. Some of his funnier books include: When Will Jesus Bring The Porkchops? and Brain Droppings.

Some of his famous sacarsm comedic stylings:

Honesty may be the best policy, but it's important to remember that apparently, by elimination, dishonesty is the second-best policy.

I'm not concerned about all hell breaking loose, but that a PART of hell will break loose... it'll be much harder to detect.

If it's true that our species is alone in the universe, then I'd have to say that the universe aimed rather low and settled for very little.

It's never just a game when you're winning.

and my favourite:

Think of how stupid the average person is, and realize half of them are stupider than that.

George Carlin

To get a sense of his genius, watch his 1 hr stand up routine Life Is Worth Losing:
http://video.google.com/videoplay?docid=-7068677712290004125

A good friend of mine sent me Carlin's message below, possibly following the death of his wife, nothing to do with finance or business... but read my banner, it makes my world go around... After watching his comedic talents, now marvel at what he wrote below - brashness and sacarsm do not equate to a harsh person but a most tender soul bent on pointing out our flaws, so that we all can call a spade a spade and live life as we should to the full.

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The paradox of our time in history is that we have taller buildings but shorter tempers, wider Freeways , but narrower viewpoints. We spend more, but have less, we buy more, but enjoy less. We have bigger houses and smaller families, more conveniences, but less time. We have more degrees but less sense, more knowledge, but less judgment, more experts, yet more problems, more medicine, but less wellness. We drink too much, smoke too much, spend too recklessly, laugh too little, drive too fast, get too angry, stay up too late, get up too tired, read too little, watch TV too much, and pray too seldom. We have multiplied our possessions, but reduced our values. We talk too much, love too seldom, and hate too often. We've learned how to make a living, but not a life. We've added years to life not life to years. We've been all the way to the moon and back, but have trouble crossing the street to meet a new neighbor. We conquered outer space but not inner space. We've done larger things, but not better things. We've cleaned up the air, but polluted the soul. We've conquered the atom, but not our prejudice. We write more, but learn less. We plan more, but accomplish less. We've learned to rush, but not to wait. We build more computers to hold more information, to produce more copies than ever, but we communicate less and less. These are the times of fast foods and slow digestion, big men and small character, steep profits and shallow relationships. These are the days of two incomes but more divorce, fancier houses, but broken homes. These are days of quick trips, disposable diapers, throwaway morality, one night stands, overweight bodies, and pills that do everything from cheer, to quiet, to kill. It is a time when there is much in the showroom window and nothing in the stockroom. A time when technology can bring this letter to you, and a time when you can choose either to share this insight, or to just hit delete... Remember; spend some time with your loved ones, because they are not going to be around forever. Remember, say a kind word to someone who looks up to you in awe, because that little person soon will grow up and leave your side. Remember, to give a warm hug to the one next to you, because that is the only treasure you can give with your heart and it doesn't cost a cent. Remember, to say, "I love you" to your partner and your loved ones, but most of all mean it. A kiss and an embrace will mend hurt when it comes from deep inside of you. Remember to hold hands and cherish the moment for someday that person will not be there again. Give time to love, give time to speak! And give time to share the precious thoughts in your mind. AND ALWAYS REMEMBER: Life is not measured by the number of breaths we take, but by the moments that take our breath away.

George Carlin

King Pie Fan Club

I am glad to hear of so many like-minded fans ...

sqkanji said...

Hi Dali,

I agree with u. They sell the best pies in KL and served them hot. My fav is mutton curry!.

2:04 PM

Jomaropol said...

Haha Dali, back to your food reviews again. King's Pie is a family biz, and yeap the daughter's married.

Like you I share a passion for pie, when I was in Australia, I would walk to the nearest Petrol kiosk every other night and get one of those meat pies, to microwave it back home and wolf it down.

I was missing pies for years until the King showed up. Thank goodness for King's pie. Only wish that they have a way of tah pauing the mustard to go with those juicy pies.

2:29 PM

Vronique said...

Hey S. Dali - my whole office LOVES the FRIES! I would call it "chips", as its really good ol' satisfying comfort food! Nobody can resist it.....

3:21 PM

Emerging Markets Headed Higher

An examination of most emerging markets showed that many are bottoming out and are forming strong consolidation levels to rally from. Many have been oversold over the subprime mess. Even the clouds are clearing for US markets, and that should be a green light for a next upwave for most markets.

China has finally had a meaningful correction and uptrend for the longer term is still intact. Good base building has been happening over the past week, which was why I promoted the China dolls again. On any indicators, China markets have been way oversold. Even though higher rates, inflationary pressure and lending restrictions have restrained players, but buying has been building up. Brazil is the next market showing very bullish signs as well, followed by Korea.

The more battered Taiwan may rebound but its still showing some mid term weakness. Malaysia and Singapore would fall into this category, there will be some upside but inherent strength would be lacking as foreign funds are finding better markets for true exposure.

While among the bigger markets, HK is still getting plenty of attention and would be the best long market for the next 3 months at least.

Carry On Carry Trades

After the slight scare with the subprime mess, which caused the USD to tumble, or more importantly causing the yen and swiss franc to rise - carry trades seem to be increasing again. The main target currencies were the Australian dollar, Indonesian rupiah, Indian rupee, New Zealand dollar and Philippine peso - i.e. carry trade was borrowing in yen or swiss franc to invest in the above mentioned currencies.

Yen-funded carry trades provided higher returns than those using Swiss franc loans because of the Asian country's lower main interest rate. The recent rise vs the USD from 120 yen to 109 yen would have scared many carry traders, but most would have been able to unwind to lock in gains. Now that the yen has stabilised, we are seeing more carry trades reopening positions because carry trades despite the inherent risks allow them to lock in 10%-12% gains per annum. For example by borrowing in yen and buying AUD, these trades can produce an annualised gain of 12%. One can borrow in yen at 0.5% and buying AUD will yield 6.5%.

In fact, if measured in volatility, these carry trades have a lower volatlity than stocks even. Of course, the danger is the sudden divergence in currency movements. The losses would be magnified if yen strengthens and AUD weakens. However, the recent risks and losses have been less than generally anticipated because when yen strengthens, the AUD and other targeted currencies also strengthen. There was only one losing currency and that is USD.

Not all carry trades are the same. The danger is the "underlying fundamentals" of the target currency. All things being equal, the following target currencies are ranked according to inherent strength in economic findamentals:

1) Australian dollar

2) Indian rupee

3) Thai baht

4) Indian rupee

5) Phillippine peso

6) Indonesian rupiah

7) NZ dollar

The lower the ranking the bigger the danger of the target currency collapsing. What carry traders don't want is a strngthening yen/swiss franc and a collapsing Kiwi dollar/ rupiah. Private investors dabbling in carry trades, do realign your strategies.

The yuan would have been the ultimate carry trade on a 6-12 months view. Borrow in yen at 0.5% and just park in yuan bonds or deposits giving you 3%-4% p.a. The beauty is the expected rise in yuan value on a 6-12 month basis. Alas, its difficult to get hold of yuan papers.

As a matter of fact, borrowing in yen and buying HKD in blue chip stocks (with 3-4% dividend yield) or good REITs would be an excellent trade on a 6-12 view. Even though USD may weaken further, thus weakening HKD owing to its USD-peg, the structural shift actually would push HKD stocks higher. Its atrade with a high level of risk though. Worth mentioning anyway.

Chinese Tidbits

Sinopec - Sinopec Group, and the Iranian oil ministry on Sunday signed a contract on the development of the Yadavaran oilfield in southwestern Iran. The initial estimation of the project's cost is about US$2 billion. The first phase to produce 85,000 barrels per day will be carried out in four years and the second phase to produce another 100,000 bpd will be carried out in another three years. According to Iranian estimates, the Yadavaran field has in-place oil reserves of 18.3 billion barrels and gas reserves amounting to 12.5 trillion cubic feet, of which 3.2 billion barrels and 2.7 trillion cubic feet are recoverable respectively.

Blackstone & CIC - Private equity firm Blackstone Group is assembling a consortium for the purpose of submitting a counterbid for Australian miner Rio Tinto, currently the target of a hostile offer by BHP Billiton. The consortium is said to include China Investment Corp., China's US$200 billion sovereign wealth fund. Rio is planning to defend itself from Billiton's three-for-one offer by selling up to US$30 billion in assets, possibly including the talc business, two uranium projects, the Northparkes copper and gold mine in Australia and the US Greens Creek zinc, lead and silver mine. Blackstone wants to buy the company and break it up completely. Blackstone's primary target is Rio's iron ore operations, which Blackstone values at a minimum US$110 billion based on existing reserves -- though further mineralization in the Pilbara in Australia and at the Simandou project in Guinea could push that figure considerably higher. The Chinese steel industry is a massive consumer of iron ore and has expressed concern that a Rio-Billiton combination could control the market. Blackstone has close ties to China, feeding speculation that China is involved in the pending bid: China Investment Corp. bought a 10% stake in Blackstone for US$3 billion just prior to its IPO.

QDII To Triple In Size - China plans to triple the quota for foreign investors to invest in the country's stock and bond markets under its qualified foreign institutional investors (QFII) scheme. The ceiling will be increased to US$30 billion from the current US$10 billion. To date, a total of 49 institutions have acquired QFII quotas, and the value of their portfolio has increased to 200 billion yuan (US$26.5 billion). The QDII program is supposed to help investors reduce risks by widening the investment channels of domestic capitals, and to help expand Chinese residents' investment in overseas stocks.

King Pie - Its Really Good!

I have to get more people to try out King Pie cause I am scared that mediocre business may force them to close shop. Although I think they are doing OK, but the rents must be killing them, hence I need to rally more people to at least try out my favourite pie shop.

Pies are not big with Malaysians. Its great with foreigners. I had plenty of meat pies in Australia, including the 4/20 and the famous kiosk in Woolloomooloo - all still pretty average. There was only one decent pie place, and that was at Pitt Street Hilton, but even that changed hands.

I must say that King Pie bakes the best pies I have ever tasted. Its the flaky outside pastry, yet there is a thin doughy part after that, and succulent, generous meat/sauces. I am there at least once if not twice a week. Now they are at Suria KLCC (just outside KFC), Tesco Mutiara Damansara and 1Utama (opposite Laksa Shack). Its always warm/hot, and they discard pies not sold after a couple of hours (really!!!).

The franchise is from South Africa and I hope it continues to well in Malaysia. Here I have to qualify that I am not an investor in King Pie (M), or dating the owner, or his/her daughter, or even know who the owners are.

Their best seller is Chicken Mushroom, but my favourite is Pepper Steak. Other pies that must be sampled include: Mutton Curry (seriously), Steak & Cheese, Spinach & Cheese ... The other item you must order is their fries. The only trouble is you have to wait 4 minutes each time cause they are microwaved the moment you order. Surprisingly, it comes out as the closest thing to the best french fries ever (I am not kidding)... What makes good french fries, cannot be too thin, it has to have some size, and because its not fried in oil, its not oily... its piping hot and a bit crunchy on the exterior (good bite feel) and soft in the middle. You can taste the "potato-ness". Its certainly the best fries in the country.

The attention to detail and ingredients selection (e.g. they only use topside beef) helps them to come up with a superior product. Give them a go!

Decoding China's Pulse

Important Chinese bigwigs at a just concluded economic conference identified five major problems in the national economy in a bid to better steer the country's economic growth in the coming year. The three-day Central Economic Work Conference that ended on Wednesday cited overheating risks, inflation pressure, a weak agriculture sector, arduous energy conservation and emission reduction tasks and prominent issues on welfare of the general public as key concerns of Chinese authorities.

It emphasized that it would be of great significance to properly guide the national economy in 2008, which is the first year for China to implement policies mapped out at the 17th National Congress of the Communist Party of China (CPC), during which the country's new leadership was selected.
China will host the Olympic Games in August next year, for which the government is going all out in preparation to guarantee the success of the major event.The meeting has also outlined policies to be adopted to ensure problems could be properly solved, such as the prevention of overheating economy and guarding against a shift from structural price rises to evident inflation.

Overheating Risks - A liquidity issue which channels itself into property and stock markets. To rein in these risks is very difficult. Beijing have been raising bank's reserve requirements and stopped banks from lending till end 2008.

Inflationary Pressures - Another liquidity issue. Can be combated by subsidy from the government or price controls.

Weak Agriculture Sector - A planning problem.

Energy Conservation & Emission Risks - Putting in measures which would eventually lead to more rules and regulations, thus increasing the cost of doing business - but a desired development.

General Public Welfare - General workers salaries not catching up fast enough with prices, and the still troublesome unemployment in more remote areas of China. Another planning issue.

We have to remind ourselves that although most of us know China intimately through their stock markets, the authorities have larger fishes to fry. Just because we view their stock marets with "importance", listed equity is still a small proportion of the real economy. If there is no overheating risks, they would certainly do nothing to stop Chinese equity markets from rising further.

Their property markets have been subdued somewhat, as these larger committments are easier to control via fiscal measures. Stock markets are more difficult to rein in as funds can move in and out.

Looking at the above factors, chances are this is only a temporary pause for the bull run because liquidity is still intact. As companies keep churning out decent results, it is likely to reignite the market's run. Raising the reserve requirement stems the banking side, but liquidity is already there. Raising bank lending rates also will hurt property side more but not stocks because the gap between deposit rates and BLR is still too wide, about 4 percentage points. Unless that gap is about 2 percentage points, only then will hikes in BLR attract real funds into deposits and away from stocks. Hence the hike in interest rate over the weekend is rather a non-event, in fact it could prompt some to re-enter the equity markets because another hike may be a few months away.

Beijing still have many fiscal measures it could implement if things really get out of hand - such as raising transaction fees or even taxing capital gains. These measures are not likely to be implemented till maybe the all time highs have been breached again. Hence on balance, the bull run should continue soon and things should be "safe" at least till it nears their all time highs. China dolls, come to papa ...

GOOD TRADING BUYS

( but watch those expiring in 2-3 months time, and get out when time to expiry is near)

CCCC-C3 0.23

CCCC-C4 0.16

China Life-C3 0.17

China Life-C4 0.48

China Merchant-C1 0.12

CNOOC-C1 0.36

Chalco-C1 0.14

China Construction Bank-C1 0.12

Shenhua-C1 0.37

STRONG BUYS

China Mobile-C5 0.51

China Coal-C1 0.13

ICBC-C4 0.23

Petrochina-C4 0.43

Sinopec-C2 0.17

Sinopec-C3 0.15

Extended Hols Eliminated in China

As mainland visitors tend to visit Hong Kong in large numbers during the so-called Golden Weeks, the move by China's State Coulcil to reduce the long May Day vacation to just one day, will not be a welcomed move. The State Council on Friday decided to cut the three-day long May Day Golden Week holiday to one day, despite most respondents in a nationwide survey objecting to the proposal during last month's nine-day consultation period.

Not only will the May Day holiday be shortened, but the council is also considering reducing the three-day National Day holiday as well to one day. About 80 percent of the respondents rejected the plan according to China News Agency.

In order to encourage more consumer spending, the May Day holiday has been a three-day vacation since 2000. However, on November 9 the government announced a proposal to shorten the May Day holiday. Under the plan, the May Day holiday will be reduced to one day, and the Tomb-Sweeping Festival, Dragon Boat Festival and the Mid-Autumn Festival will be added to the national holiday calendar. The total number of annual public holidays will increase by one day to 11.

The Spring Festival and the National Day Golden Weeks will both remain three days long. Late Friday, the Xinhua News Agency reported the State Council had "principally" approved the proposal during a standing committee meeting, and it is pending revision before an official announcement. Though the intention is noble, but one must remember that the majority of people working in Beijing, Shanghai and Shenzhen are from other parts of China. They really look forward to the extended holidays to go home for holidays. The move will not be popular. This will also affect HK retail and tourism adversely as many will take the opportunity during the May Week and National Day week to travel to HK. Though officially, the top brass in HK will not be saying that that is a bad move - there will be great dissatisfaction among the business crowd in HK. This will also piss off most mainland Chinese - wait for more displeasure. Pretty bad and illogical move by China, those in the State council could face a hard time in the days ahead.

Best Racing Day

Followers of horse racing should now regard the HK International Invitational races as probably the best one day program in the world, with mega prizemoney stakes to boot. This is still the best competitive field yet. Not to mention the cream of the best jockeys in the world also riding.

HK SPRINT 1200m Group One HK$12,000,000

1 ABSOLUTE CHAMPION (3) B PREBBLE 7-1
2 BENBAUN (2) P SMULLEN 15-1
3 SACRED KINGDOM (6) G MOSSE 2.25-1
4 MARCHAND D'OR (5) D BONILLA 31-1
5 SCINTILLATION (7) E SAINT-MARTIN 41-1
6 TIZA (11) C SOUMILLON 76-1
7 DESERT LORD (9) N CALLAN 61-1
8 WHY BE (13) N CALLOW 51-1
9 ROYAL DELIGHT (4) S DYE 21-1
10 SUNNY SING (1) D BEADMAN 31-1
11 SUNNY POWER (10) Y T CHENG 28-1
12 GREEN BIRDIE (8) L DETTORI 29-1
3 MISS ANDRETTI (12) C NEWITT 4-1

Comment: Probably the most competitive race among the 4 with the untouchable Miss Andretti from OZ. However, the fact that the horse has drawn a ridiculous barrier even things out enormously for the probably favourite Sacred Kingdom. The dark horse would be Royal Delight which broke the course record in his last start, a vastly improved horse. A repeat of that performance will bring in the longshot. Absolute Champion does not look like the horse it was last year, and may be now suited to 1400m or 1600m. Finally a horse bring invited from Malaysia/S'pore in the kampung champ Why Be - its probably 4 lengths better than the top horses running in both countries at set weights over 1200m - a bad barrier is nothing and should see Why Be at least leading till round the bend, and thats all she wrote.

HK VASE 2400m Group One HK$14,000,000

1 DYLAN THOMAS (7) J MURTAGH 2.5-1
2 QUIJANO (1) A STARKE 14-1
3 RED ROCKS (8) L DETTORI 11-1
4 DOCTOR DINO (4) O PESLIER 10-1
5 BUSSONI (6) C SOUMILLON 26-1
6 EGERTON (3) T MUNDRY 41-1
7 VITAL KING (9) B PREBBLE 9-1
8 ARCH REBEL (10) F BERRY 71-1
9 KOCAB (2) S PASQUIER 41-1
10 VIVA MACAU (13) D BEADMAN 12-1
11 HAWKES BAY (11) G MOSSE 31-1
12 EVER BRIGHT (5) O DOLEUZE 18-1
13 MACLEYA (12) R MOORE 21-1

Comment: A one horse race? The appearance of Dylan Thomas, Europe's Horse of the Year, almost took all the interest from other fancied runners. There is always a niggling doubt about foreign invaders being acclimitised soon enough to get back their condition. The horse was worked hard every day, which may indicate that the horse is still not within top condition yet. Hence I am willing to back the under-rated Vital King by another very under-rated NZ trainer Paul O'Sullivan as the horse will finish very well as Paul seems to have been targeting this race for the horse in its last 2 starts.

HK MILE 1600m Group One HK$16,000,000

1 KONGO RIKISHIO (1) S FUJITA 3-1
2 SPIRITO DEL VENTO (13) O PESLIER 21-1
3 THE DUKE (3) G BOSS 25-1
4 ABLE ONE (2)M KINANE 15-1
5 AL QASI (10) R MOORE 56-1
6 FLORAL PEGASUS (11) G MOSSE 11-1
7 GOOD BA BA (6) O DOLEUZE 7-1
8 JOYFUL WINNER (7) D BEADMAN 17-1
9 DOWN TOWN (4) D WHYTE 11-1
10 EXCELLENT ART (5) J MURTAGH 6-1
11 CREACHADOIR (12) L DETTORI 22-1
12 VISIONARIO (8) N CALLAN 36-1
13 DARJINA (9) C SOUMILLON 5-1

Comment: Probably the best race in terms of a large number of fancied runners. The Japanese Kongo R will try to lead all the way. Excellent Art is a lucky but over rated horse. I would stake a bet on the improving Spirito Del Vento to finish all over Kongo R. If Downtown can settle well at the paddock and not take the lead till the last 400m, its a decent chance.

HK CUP 2000m Group One HK$20,000,000

1 RAMONTI (4) L DETTORI 11-1
2 VENGEANCE OF RAIN (7) A DELPECH 10-1
3 VIVA PATACA (3) M KINANE 1.4-1
4 SHADOW GATE (2) K TANAKA 17-1
5 ART TRADER (1) D BEADMAN 20-1
6 ROYAL PRINCE (6) B PREBBLE 13-1
7MUSICAL WAY (5) R THOMAS 45-1

Comment: The presence of Viva Pataca scared most of the internationals and locals away, hence the very small field. Haphazard pace is likely in this small field as there are no clear leaders. Royal Prince is a good longshot as I expect Tony Cruz to have the horse ripe for an all the way lead performance. Viva Pataca may/may not cut him down in the end. Vengeance of Rain looks to be past his peak.

The Detective - Another Gem

HK/Asia filmakers have grown up considerably, and there are certainly a lot more great filmakers now. The Pang brothers, or rather Oxide Pang, gave us another great one in The Detective - a murder mystery. The setting in Bangkok was excellent and background music enchanting and relevant. You get drawn in more and more into the mystery with Aaron Kwok delivering another sublime performance (he should really stop singing). Liu Kai Chi the under rated veteran was excellent as well.

You should really try to catch this movie. Some of Oxide's previous work include The Eye, Bangkok Dangerous, Forest of Death and Ab-normal Beauty. Even though Aaron lost to Leung Chiu Wai, I still think Aaron's acting was better and has more depth. Can't really give the story away as it peels away like an onion, its intoxicatingly addictive.

Ooops!!! Big Wok!!!



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UPDATED
Seng: "In most corporate exercises, where there is a choice between a share-swap or cash option, the automatic default option — if a shareholder fails to choose or reply — is usually the share-swap one. ". I note with interest that the recent LIONDIV/Parkson restructuring gave shareholders 1.3 ACB shares as default, instead of automatically cashing out shareholders. It's true it's not directly comparable since LIONDIV still exist, whereas previous coy dissappear, but that should be no reason to not give shares isn't it? Perhaps someone can explain to me why it must be automatic cashing out, as I still don't understand. It's true SD is much more complex restructuring, involving 9 companies, but that means having 9 different multiples - one for each company potentially, maybe not (cf 1.3 x for ACB), but why automatic cashing out? I am puzzled....

Dali - My additional point is that Synergy Drive was a unique proposition, and that the GAP btw the px fixing for cashing out till the actual conclusion of the exercise was very substantial. SD directors and the lawyers should be AWARE that the mkt px has moved substantially prior to the suspension of Sime Darby - to me that is a material change of underlying factors. The mgmt and lawyers should be aware that there has been a MATERIAL CHANGE, and should warrant some form of redress. If the pre suspension px of SD was 7.00 or even 7.50, one can argue that the default/elect options would be deem as FAIR. Owing to the material change, one can easily predict the dire consequences ahead, and should have acted to minimise the impact to the detriment of shareholders.

In developed mkts, the board will appoint an independent advisor for minority shareholders, and I am sure the independent advisor would have suggested AGAINST the default for cash option esp when the presuspension px is almost double the cash option. I hope the SC and Bursa will implement new guidelines for future transactions.

Final point, if the affected shareholders really wanted the cash option, they could have sold anytime during the week leading up to the suspension and got nearly double the 6.46! What does that tell... that they are still holding the old Sime Darby shares for the 6.46??? Who in the world would do that? Yes, the blame largely lies with the affected shareholders, but some blame must accrue to the way the deal was structured, and failing to "act" when there has been such a material change in the crucial terms and conditions.

----------------------------------------------

Yes, Sime Darby is the world's largest plantation company now. However there has been a GRAVE INJUSTICE inadvertently committed by the company & its related advisors / registrar. Let's listen in to a conversation between an auntie and her remisier a few days back:

Aunty: Ah May ah..., my Sime Darby now trading again aah??
Remisier: Yes, it touched RM12.00 just now.
Aunty: Waaah ... so good one... lucky I hold for 3 years never sell ... thats why la... people should stick to blue chips, cannot lose one... Can you sell my 3,000 Sime Darby now ... I think I will use the money to visit my old friends in Australia..
Remisier: OK, .... let me check your account.... eh, Aunty you have no Sime Darby in your CDS account, only left 2 lots of Mems Technology...
Aunty: WHAAATTTT.... (and faints..)

Now repeat that conversation a few hundred times over across all brokerages in the country. You think the Hinduraf and Yellow Power protest marches were aggressive... wait till these affected investors bang on Sime Darby's doors.

The Problem - The circular and announcement by SD clearly stated that if you do not elect, you automatically by default will receive 6.46 in cash. We all know the pre-suspension price of SD, nearly double that cash amount. Those who ignored or did nothing automatically got cash instead of new Synergy Drive shares.

The Legality Side - Lawyers will advise that you should not allow default clause to receive shares, but to allow default clauses to receive cash is OK. I can understand where they are coming from - and legal thinking along those lines, can we enforce that those who did not turn up to vote in the upcoming elections will automatically be an extra Vote for BN? IT IS SO OBVIOUS that the deal favours to take up the new shares by a very wide margin. It is also probable that there will be some who will fail to follow up on these type of "exercises" maybe through their ignorance or genuine mistakes. That being the case, I don't think it is legally or morally wrong to put in the clause that in default they will receive shares. What is the law and legal system there to do - to ensure justice and fairness, both not evident here.

The Sufferers - Its not just the aunties and uncles, many foreign investors are affected as well. Custodians also got whacked by their clients. Clients who manage 1,000 companies in their portfolio may have missed the circular as well.

Remisiers/Dealers - Good ones would have inform their clients and reminded them what to do. If they didn't, well, you should change your remisier.

Actual Gainers & Losers - Well if you got a cheque for your old Sime Darby shares, that's your losses. The gainers are the new shareholders in Sime Darby, as the company need not fork out as many new shares vis-a-vis the cash portion. The dilution effect is less. But to SD's bottomline, its all negligible, but the losses to the real shareholders are very real indeed.

Sime Darby - While the PR dept can trumpet all they like that they made the proper announcements and laid out the rules. There are no rules governing equitable performance by the management or doing the right thing. These are not strangers, they ARE your long suffering shareholders who stood by the company through thick and thin - and this is what they get? Is this managing with shareholders' interests as the top priority? Can do better right??? Can do so much better!!!

Level Of Care - SD, their lawyers, the merchant bankers and the registrar cannot and should not hide behind prepared text and legality to excuse themselves from the debacle. Only an IDIOT would have selected to receive cash. Yes, some of the fault can be ascribed to the shareholders who did not follow up on their part. But, as I have mentioned above, SD's management, the lawyers and registrar all had a role in this as well.

Solution - Give them all shares in the new SD, take back their cheques. If you need to hold an AGM to do this, do it. Then, being the biggest plantation company in the world may actually mean something the next time you say that you have the shareholders' interests at heart.

Charity & Good Charity!
An Important Diversion

There is charity and there is good charity - hmmm ... Good Charity, sounds like a wonderful name for a horse. There are those that say that any charity is good. Are you one of those who draw a line between certain causes, that they have to be deserving enough first? If an able man in his 30s were to beg for coins, is that deserving? Or a one-legged man in his 60s more deserving?

Why does it have to be that we "mark people and causes" for charity? Because we have limited funds? When people find out that they have been cheated by certain causes or people pretending to be beggars - are you pissed off? But why ... why should any of us be pissed off?? Why bother being charitable in the first place? Is it the reputation, or does the act itself makes you feel good?

Some say that it does not matter what your motivations are, as long as there are donated funds. Charity is charity, whether you are donating to enhance your reputation, or because there are others who will see you in a different light, or you are just a kind soul - all funds into charity are good funds.

Our own persuasions and motivations will be dealt with by some higher forces, its not for us to make the calls or prejudge. While any charity is good, we can and should aspire to higher grounds. Just give, out of the goodness of your soul - do not be bothered if that beggar deserves it, do not qualify your charity - do your parents love you only if you behave in a certain way? Even if the unfortunate soul were to be only pretending, its OK ... we have to think "what if he's not", and not be overly pessimistic.

Just remember the goodness that comes to each of us when we ourselves are down, and when we don't really deserve kindness. Be a channel of goodness, not a guarded hoarder. There are billions of misdeeds in the world that needs correcting - we are not supposed to do all ... Bloom Where You Are Planted ... charity and goodness does not mean to strangers only, but first to the friends and family ... its absurd if we were to treat strangers better than the ones we love.

But anyway, back to Good Charity ... the affluent Hong Kong Jockey Club has decided to create 2,500 new jobs in the troubled area of Tin Shui Wai in HK. The Hong Kong Jockey Club announced that it would complement its new telebet centre with training and volunteer services and set up the "HKJC Telebet Centre cum Volunteers and Training Centre" in Tin Shui Wai. It is hoped that the new centre will help revitalise Tin Shui Wai and gradually give local residents a chance to establish new community networks. HKJC's 800-strong C.A.R.E.@hkjc volunteer team would set up a base at the new Centre, and the new workforce at Tin Shui Wai centre would in due course join the volunteer team themselves. HKJC said "We believe that volunteer work is a part of holistic people development, and our ultimate aim is to form a strong volunteer force in the district to promote the spirit of helping others to become self-sustaining ... We hope this task force can help other needy people through their own experience, so as to promote community care and ensure a self-sustaining, harmonious and proactive life for everyone."

For those in the dark, Tin Shui Wai is a depressed area populated by the working class mainly. There is also a substantial proportion of people living there who are the newer migrants. Livelihood has been affected because of more than frequent family tragedies and people finding it hard to make ends meet. The prevailing mood and reputation caused many to "blacklist" the area and the people living there as "unfortunate, unlucky, depressing, down-trodden..."

Hence I applaud HKJC's move as it was very swift and prompt. Its good when "charity" can do a more "effective good", but that is not Good Charity, that's effective Charity. Good Charity are any acts that comes from the goodness of your hearts, with no expectation of reward. Of course charity is not just in monetary terms. Don't know why, but its probably just the time of the year to talk about these things. Writing a business blog can sometimes cloud our ways and motivations to certain objectives & life's drection - good to be reminded. Happy birthday J-man!

Something's Rotting With CIC

China Investment Corporation, the US$200 billion sovereign wealth fund set up by the Chinese government in September, was a much touted sovereign wealth fund. Initially CIC has been allocated US$200 billion, a still small portion of its US$1.4 trillion reserves.

While many thought that CIC would begin to solicit stakes in big foreign companies, including myself, their subsequent moves indicate something stinky. CIC initial US$3 billion investment into Blackstone caused me to praise their astuteness in strategy as that would allow CIC to be privy to the major deals flowing across the desk of Blackstone, and thus allowing CIC the choice to invest alongside with Blackstone. It would also limit the bad press portraying CIC as the aggressor in major M&A activities.

However, how CIC deployed the rest of the funds revealed more than they intended. A third of China Investment's portfolio is to be invested in Central Huijin Investment Company, a purchaser of bad loans from the Chinese banks, and another third will recapitalize China Agricultural Bank and China Development Bank, to shape them up for privatization.

This lends further evidence that there is still a mountain of bad debts residing in many unlisted state-controlled units. Those banks already listed, and those with major foreign banks as substantial shareholders, are those with healthier balance sheet - however, a major correction in the China stock markets and/or property side will also put a lot of stress on these so called "healthy listed banks" loans portfolio.

But thats not the major point, the main thing is that CIC would be entrusted to "recapitalise" institutions related to the hidden bad debts still residing in unlisted companies. I have mentioned before that the main reason why Beijing is slow to allow the yuan to appreciate is that its financial system is still at a nascent stage. The trade surpluses and booming stock market are only a portion of the real economy - and they need to "clean up" the underside while things are still good. Beijing is buying time - let's hope that they can do that while the stocks, property and trade surpluses are still bullish. Cause if not, the weight of bad debts will turn insurmountable almost overnight.