Friday, April 15, 2022

Major Asset Classes Performance

 It pays to track the returns from major asset classes following the volatility over the last two months. On a YTD basis commodities have chalked up very strong gains already on a recovering global economy, supply/demand balance, and more so logistical issues. Overall, if you look at commodities alone, you are doing very well over 1 year and 3 year basis... even the 5 year returns were credible at 7.6%p.a.

It is expected for emerging markets to be weak when there is global volatile situations. However, emerging markets stocks have been down trodden even before the war. On a 12 month basis, they have lost 9.7% already. The last 3 months just -3.3%. They did not benefit from the logistical difficulties, in fact they were bearing the brunt of it despite higher commodities' prices. Hence it would be wise to follow the "blockages" and freight rates to ascertain a better time for emerging markets. 

US stocks did well whether there was the Ukraine/Russia debacle or logistical challenges. Of course the reserve currency status played a part. The so called challenge to that status by Russia/China to destabilise that status quo however, is playing out already. Look at TIPS and US Bonds, they have lost 1.3% and 2.8% over the past 3 months respectively, and more significantly US bonds have dipped 4.4% over the past 12 months. Some of it may be due to Federal Reserve evolving stance on inflation, but there's obviously the beginning of a flight from the dollar, albeit minor for the time being. Bears watching.

The US economy looks well into recovery and could have some legs looking at the strong performance of US REITs. They returned 6.3%, 19.2% and 11.1% over a 1 month, 1 year and 3 years basis respectively. They are a good indicator of "occupancy" rates, robustness of domestic economy, and recovery from pandemic issues.

Sunday, April 10, 2022

Why CTOS Is A Likely Multi Bagger

Its been a long time since I have featured a local listed company. CTOS has begun to fill up the gaps that I needed to see that should elevate its earnings platform significantly in the future. I wouldn't bat an eyelid on the tax free status issue as its a temporary thing. 

THE MOAT (the barriers to entry)

- In Malaysia it is already the main supplier of credit information. It has around 71% of market share locally.


- Not many realise that the consumer credit information platforms are still disjointed and haphazard in Thailand and Indonesia. A stock is only good for the population size it serves. Malaysia is a small market no matter how you look at it. CTOS has moved quickly to build on that in Indonesia and in particular Thailand.

49% equity stake in Juris Technology Group for RM205.8m cash. Juris Technology is a leading Malaysian-based fintech player specialising in software solutions for financial institutions. It has a strong entrenched market position in Malaysia and overseas presence in 4 countries, namely Singapore, Brunei, Australia and UAE. Its client portfolio consists of more than 50 reputable corporations and 3,000 agencies consisting of leading financial institutions, banks, development funds and multi-national corporations. Juris’ business is also highly cash-generative in nature – with approximately 65% of its total revenue stream being recurring.

- The acquisition of a smallish 2.18% in Business Online (BOL) in Thailand for RM26.2m should be the first step for future corporate exercises in the future. As things stood, CTOS' stake in BOL has now increased from 22.65% to 24.825%.

THE OPPORTUNITIES (Expansion of natural demand)

- The paradigm shift in normal banking must be taken into account. Now websites are offering various types of consumer loans on their own (extended repayments of purchases, and micro loans).

- The rise and rise of Digital Banking. In Malaysia the new digital banking license will usher in a new wave of demand for credit information, as competition will shoot up for new products and tokenisation.

Bank Negara Malaysia (BNM) is looking to roll out five digital banking licenses in 1QCY22 to hasten the penetration of innovative banking technology and boost financial inclusion by targeting the underserved and unserved banking population. SMEs contribute to about 50% of Malaysia’s GDP, would be one of the largest beneficiaries of digital banking. Digital banks are also expected to be more borrower-centric with more tailored customer solutions, faster approvals and disbursement of funds, simplified lending management and competitive rates. This would also ultimately benefit CTOS from two perspectives: (i) greater penetration into the local credit reporting market with more credit reporting assessments required for lending to the underserved and unserved banking population; and (ii) increased volume with faster approvals and disbursement of funds from digital banks.

- There is a likelihood that the 5 new digital banks could boost CTOS bottom line by as much as RM15m-20m a year.

It has 2.3bn shares. I expect CTOS to improve from a net profit a quarter from RM11.7m a quarter to an average of RM13m for next 4 quarters and RM16m for the following 4 quarters. Before you know it CTOS should be making over RM20m net a quarter. No point looking at PER now. Just buy and keep.

There's never a great low price to buy a really good stock. Just buy and keep averaging up/down over 3-5 years. The two charts below should provide comfort for long term shareholders.

Thursday, March 17, 2022

Entitled ... The Most Despicable People

 Contrary to the headline, this is not about anti-vaxxers. I have already given up trying to convince them to convert. 

I was at Four Season hotel lobby trying to get to the cigar place on 4th floor. Next to me waiting as well was a pretty girl in a flowing black dress. You know how difficult it is to see if anyone looked decent under the mask. But sometimes you know.

There was also a couple, probably in their late 50s, a bit posh, or just attending an "event", you know the type ... probably air kissing too much. There were 3 lifts .. we all went to press the UP button at various times. It was a bit of a wait... maybe 45 seconds.

One of the lifts opened and it was empty. The couple went in, and as I and the girl trudged behind ... the lady, in Diana Ross mode, stuck out her hand and said:

"We don't share ... don't mind aaaah ..."

Stunned and being a bit to early to get my brain juices working ... both of us froze. As the door closed, a litany of rebuttals and swear words came flooding my brain much like the recent thunderstorms.

The audacity ... mother plucker ... Some my intended but late rebuttals include:

"Excuse me, if you are so scared ... don't fucking come out... don't share, what are we sharing already... AIR, don't fucking breathe then"

"Excuse me, UNLESS you are going up to the room to fuck your toyboy... you will meet other people, so don't say DON'T SHARE ... you are not more important than the rest of us... DON'T fucking come out if you are so delicate ... oh btw, cover your fucking FACE too, its affecting my appetite and mood... IF YOU DON'T FUCKING MIND"

Tuesday, January 25, 2022

Why We Need Testosterone (a message from this site's sponsor)

Why do we need testosterone?

Last updated Wed 6 February 2019 By Markus MacGill Reviewed by Daniel Murrell, MD

What is testosterone? Imbalances Testosterone levels and aging Treatment Outlook

Testosterone is the key male sex hormone that regulates fertility, muscle mass, fat distribution, and red blood cell production.
When levels of testosterone drop below levels that are healthy, they can lead to conditions like hypogonadism or infertility. There are, however, sources from which people with low testosterone can boost their levels.

Low testosterone is becoming more and more common. The number of prescriptions for testosterone supplements has increased fivefold since 2012.

This article will explore what testosterone does and whether men should worry about decreasing levels of the hormone as they grow older.

Fast facts on testosterone
- Testosterone regulates a number of processes in the male body.
- Levels of testosterone tend to drop as men age.
- Prohormone supplements do not have any effect on testosterone levels.
- Testosterone replacement therapy (TRT) is also available. However, this can carry side effects and risks.

What is testosterone?
Testosterone is the male sex hormone.
Testosterone is the hormone responsible for the development of male sexual characteristics. Hormones are chemical messengers that trigger necessary changes in the body. Females also produce testosterone, usually in smaller amounts.

It is a type of androgen produced primarily by the testicles in cells called the Leydig cells.

In men, testosterone is thought to regulate a number of functions alongside sperm production. These include:

- sex drive
- bone mass
- fat distribution
- muscle size and strength
- red blood cell production

Without adequate amounts of testosterone, men become infertile. This is because testosterone assists the development of mature sperm.

Despite being a male sex hormone, testosterone also contributes to sex drive, bone density, and muscle strength in women. However, an excess of testosterone can also cause women to experience male pattern baldness and infertility.

The brain and pituitary gland control testosterone levels. Once produced, the hormone moves through the blood to carry out its various important functions.

Testosterone imbalances
Testosterone test
Testosterone decreases naturally with age. It is important to receive tests to determine whether any imbalances are due to an active condition.
High or low levels of testosterone can lead to dysfunction in the parts of the body normally regulated by the hormone.

When a man has low testosterone, or hypogonadism, he may experience:

reduced sex drive
erectile dysfunction
low sperm count
enlarged or swollen breast tissue
Over time, these symptoms may develop in the following ways:

loss of body hair
loss of muscle bulk
loss of strength
increased body fat

Chronic, or ongoing, low testosterone may lead to osteoporosis, mood swings, reduced energy, and testicular shrinkage.

Causes can include:

- testicular injury, such as castrationi
- infection of the testicles
- medications, such as opiate analgesics
- disorders that affect the hormones, such as pituitary tumors or high prolactin levels
- chronic diseases, including type 2 diabetes, kidney and liver disease, obesity, and HIV/AIDS
- genetic diseases, such as Klinefelter syndrome, Prader-Willi syndrome, - hemochromatosis, Kallman syndrome, and myotonic dystrophy

Too much testosterone, on the other hand, can lead to the triggering of puberty before the age of 9 years. This condition would mainly affect younger men and is much rarer.

In women, however, high testosterone levels can lead to male pattern baldness, a deep voice, and menstrual irregularities, as well as:

- growth and swelling of the clitoris
- changes in body shape
- reduction in breast size
- oily skin
- acne
- facial hair growth around the body, lips, and chin

Recent studies have also linked high testosterone levels in women to the risk of uterine fibroids.

Testosterone imbalances can be detected with a blood test and treated accordingly.

Testosterone levels and aging
Testosterone levels naturally decrease as a man ages.

The effects of gradually lowering testosterone levels as men age have received increasing attention in recent years. It is known as late-onset hypogonadism.

After the age of 40, the concentration of circulating testosterone falls by about 1.6 percent every year for most men. By the age of 60, the low levels of testosterone would lead to a diagnosis of hypogonadism in younger men.

About 4 in 10 men have hypogonadism by the time they reach 45 years old. The number of cases in which older men have been diagnosed as having low testosterone increased 170 percent since 2012.

Low testosterone has been associated with increased mortality in male veterans. Late-onset hypogonadism has become a recognized medical condition, although many of the symptoms are associated with normal aging.

The following are symptoms of late-onset hypogonadism:

- diminished erectile quality, particularly at night
- decreased libido
- mood changes
- reduced cognitive function
- fatigue, depression, and anger
- a decrease in muscle mass and strength
- decreased body hair
- skin changes
- decreased bone mass and bone mineral density
- increase in abdominal fat mass

As well as sexual dysfunction, late-onset hypogonadism has also been associated with metabolic disease and cardiovascular disease.

The degree to which testosterone levels decline varies between men, but a growing number of men experience the effects of reduced testosterone levels. Life expectancy has increased, and many men now live beyond the age of 60 years.

As a result, a higher number of men see the effects of age-related testosterone depletion.

Administering treatment for hypogonadism as the result of a disease differs from treating late-onset hypogonadism in older men.

Testosterone supplements
One proposed treatment for low testosterone comes in the form of testosterone supplements.

One type of testosterone supplement, methyltestosterone, has received approval from the United States Food and Drug Administration (FDA). However, guidelines advise doctors not to prescribe this supplement due to the speed with which the liver metabolizes testosterone.

This can lead to liver toxicity. While doctors can legally prescribe the supplement, they generally try to avoid this.

Until stronger evidence is available to support the benefits and safety of testosterone supplementation, only older adults with severe clinical symptoms of low testosterone should be candidates for these supplements.

The FDA have advised that testosterone supplements are not suitable to treat late-onset hypogonadism, and a doctor should only prescribe them for an identifiable cause.

Testosterone replacement therapy
Testosterone replacement therapy (TRT) can help restore some affected functions of low testosterone.

Current research is conflicting. Additional studies into testosterone replacement are necessary for physicians to fully understand its potential risks and benefits, and to identify the individuals that may see the most benefit.

For men, testosterone levels are important to maintain, but they naturally decrease over time. If symptoms of severe or chronic low testosterone are showing, the hormone deficiency may be caused by an active disease or condition.

Treatment can lead to unwanted side effects, so it can be crucial to balance the expected benefits of testosterone supplementation with the risks of the treatment. Often, low testosterone levels come without harmful physical effects and do not require treatment.

Speak to a medical professional, and confirm if treatment is required.

Thursday, December 16, 2021

Investing Ponderables


Stamp Duty Hike from 0.1% to 0.15%  

That was not a smart proposal. It already makes an "expensive" small Asian bourse even more so, and it's not like our bourse offers something highly significant or unique compared to other regional markets. If you want to collect more tax revenues, use the GST, that's more effective. What some people do not appreciate is that a small move has leveraged effects. The approximate value of stamp duty charged last year was around RM500m. So we are looking at an extra RM250m ... but is anyone calculating the dampening effect of that move, which will surely bring the trading volumes down. Net net, we all lose.

Do you know what the big foreign brokers are paying in commission for local stocks? 0.05%-0.1%, that's it... hence the hike in stamp duty is a big thing for them. 

It is a smallish sum but it affects the most vulnerable traders. Needless for me to say, they make up a substantive portion of daily volume. They provide the grease and liquidity for volumes to move. Now its a dead market, no more lubricant, big sellers cannot sell, big buyers cannot buy, small day traders avoiding the market as no liquidity means cannot make money.

Just a small move can pull the markets back substantially. Markets are all about sentiment. This move is backfiring on us. 


Sophisticated Investors

The LEAP market is only available to sophisticated investors. Herein lies the issue why some companies are throwing in the towel by exiting LEAP. Volume and liquidity are critical for any markets to function properly. The current rules set up are too cumbersome and restrictive.

  • Why are LEAP Market investors limited to Sophisticated Investors?

    As one of the guiding principles for this market to have facilitative rules and regulations, this market will only be available to Sophisticated Investors who are deemed to have better knowledge on the potential risk and return of this market.

    I think it is RM5 million before you are termed as sophisticated investors. RM5 million does not qualify anyone as sophisticated investor. Some of the most qualified investors are worth a lot less than that. That is like getting a Masters from Stanford because you have RM5 million.

    Is it because they have RM5 million to lose? Or is it they have to better understand the risks of investing?

    Cause if you are talking of risks in investing ... the normal stocks listed on Bursa are already RISKY. Sure on Bursa there are blue chips but look at the top 20 volume stocks everyday, most of those are some of the riskiest stocks you can come across ... and played by many who cannot afford to lose much.

    There is a big discord here in reasoning. Name me any company on LEAP and I can name you 20 stocks on Bursa more risky.


First Out Best Dressed

This may or may not be a right or wrong issue (read that line again). The recent debacle surrounding ATAIMS - thanks to pressure exerted by a lobbyist on labour issues. When ATAIMS finally caved with two or three rounds of limit downs, the activist say there may be other "targets". What was giving a bitter after taste was that KWAP and EPF sold some of their substantive stakes in other related counters.

Now, lobbyists may or may not be "good" but certainly they shouldn't be allowed to run roughshod over any listed companies without proper due process. Imagine being at the mercy of foreign NGOs, and we shit ourselves before putting up proper "checks and balances ourselves". Why leave ourselves at their mercy?

It is absolutely the right of an institutional investor to sell or buy to rebalance their risk, but doesn't it leave an awful taste in your mouth when our pre-eminent institutional investors sell first and ask questions later?

I am not saying all foreign lobbyists are evil. I am saying why don't our institutional investors ENGAGE with these companies first. Find out and see if the claims or whispers have credence. If the claims are without basis, then our collective institutional investors can come up and say so and not be at the mercy of unsubstantiated claims.

We saw nothing of that. We only saw "first out best dressed".

Sunday, December 05, 2021

Easily The Best New Japanese Restaurant 2021


When we talk of Japanese restaurant, we have to categorise them properly. What I am referring to is the usual sushi/sashimi outlet. KL has been inundated with many high end Japanese restaurants per the last 3 years in particular. Sadly, most of them were respectable but had no soul. The offerings were premium but usual run of the mill. 

(Chef with the flying fish which we had for sashimi and the bones for soup at the end)

A proper sushi/sashimi place has nothing much to work with except the ingredients, and even then you only need to tweak it lightly to bring out the flavours. Sourcing usual fine ingredients is a given, added to that, effort must be made to source out seasonal stuff and even imaginative ways of sourcing produce.

(the absolute beauty of the shark's heart sashimi, crisp and clear ... I has chicken liver and heart sashimi before, they were good but had a tinge of metallic aftertaste, the shark's heart was wonderful on the palate)

This new place more than fulfils those requirements. As in any "labour of love" establishments, you cannot be BIG. This place can only take 8 pax max at the counter (the place to be), plus a couple of tables. Thus we are looking at 10-16 pax max for lunch or dinner. Reservations a MUST.

Helmed by all Malaysians... led by the effervescent Mister Foo (having done his rounds in various places in Japan for over 30 years). 

(very young botanical with uni ... chef uses two types, ottawa and anabi uni for different dishes, this was their attention to detail, aftertaste and how well the uni meshes with different seafood)

The setting is modest but stylishly minimal. Reminiscent of the usual small 2-3 star Michelin places in Tokyo. Solid sake and shochu but feel free to bring your own premium alcohol. Must offer your drinks to Mister Foo as he is a mighty purveyor of alcohol.

Its almost a pure OMAKASE place. Prices starts at RM400pp, RM600pp to RM800pp. Let me assure you that their RM400 menu beats the XXXX out of paces in KL that price their menu at RM900-1,200pp.

(this the dish of the night, it is ONDEN, the cut behind the head of bluefin tuna, small area, lightly seared to release the oils... nowhere are jelly as the toro or chutoro cuts, its mild but very pleasing)

Freshness of ingredients is a given. Its the sauces and the cuts that highlight the natural taste or enhances them. Below was the tamagotchi's, my least favoured thing from a sushi place, but I had to show them here, its the best piece I have ever eaten. Its eggy but oh so light and not sweet, the essence of the egg was the star here.

I won't go into all the things I had, have a look at the pictures. Then you will discover the world of: Sekko Kani, Wakasaki, Onden, Madai, Ohaji, Ogawa uni and Anabi uni ..... you will still get great cuts of kampachi and shima aji, and a delicate crab broth flavoured chawanmushi.

HINOIRI Japanese Omakase

F-5-1 Pusat Perdagangan Bandar, Jalan Persiaran Jalil 1, Bukit Jalil, 57000 Kuala Lumpur 57000 Kuala Lumpur, Malaysia

Reservations: 016-3279516

Major Asset Classes Performance

 It pays to track the returns from major asset classes following the volatility over the last two months. On a YTD basis commodities have ch...