Jeffrey Cheah, Pusing-boy Masterstroke!!!

Malaysian Insider: Sunway is expected to have potential market capitalisation of over RM3.5 billion, revenue of over RM3.3 billion and assets of over RM8 billion said Cheah. This comes as UEM Land and Sunrise have proposed to merge and IJM Land and MRCB have signed an MOU to explore a merge. The Sunway founder said that the merger was due to right market conditions and the need for size rather than as a response to the latest industry developments.

“I am not fearful of being taken over,” he said. “The size of the new company makes a difference rather than 2 separate entities. Size brings us opportunities. We will have access to larger markets and the ability to bid for projects with higher value, particularly in international markets," said Cheah.

He added that the larger merged entity should boost the company’s profile.

“We aspire and now with this merger, we are well-positioned to become a truly Asian brand, through one name and one identity,” he said.

Cheah and his daughter, Sarena Cheah Yean Tih, are the owners of Sunway and will have a stake of about 44 per cent stake in the company after the merger. They currently have direct and indirect stakes of approximately 43.68 per cent of SunCity and 46.53 per cent of Sunway Holdings. The Government of Singapore Investment Corporation will emerge as the second largest shareholder in Sunway with a 12 per cent stake.

The merger is pending shareholder approval and the acquisition will be satisfied by cash and shares and warrants in Sunway. Following the acquisition, Sunway Holdings and SunCity will undertake a capital repayment exercise to distribute proceedings to shareholders.

Sunway Holdings meanwhile reported a RM48.5 million net profit in the third quarter ended September 30 on the back of RM411.5 million in revenue.

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So how will the proposals be greeted? The structure and terms seem a bit convoluted, that can be understood only by the bloody lawyers and bankers who were part of the advisory team. I read and re-read it a few times, I will try to explain what "I think" they meant, but I could be wrong.

Offer Valuation for existing shares
a) Sunway Holdings 2.60
b) Sunway Holdings warrants 1.50
c) Sunway City 5.10
d) Sunway City warrants 1.29

The value will be exchanged at 2.80 new shares in the Newco, plus they will get 20% of it in cash, plus a 1 free newco warrant for 5 newco shares.

If I understand correctly, lets take the example someone owning 10,000 of each securities:

a) 10,000 Sunway Holding shares x 2.60 = RM26,000. 80% of it will be converted into Newco shares = 80% x 26,000 / 2.80 = 7,428 Newco shares. 7,428/5 = 1,485 Newco warrants. Cash 0.52 x 10,000 = RM5,200. Hence the owner will now get the highlighted components.

b) 10,000 Sunway Holding warrants x 1.50 = RM15,000. 80% into Newco = 80% x 15,000 / 2.80 = 4,285 Newco shares. 4,285/5 = 857 Newco warrants. 0.30 x 10,000 = RM3,000. Hence the owner will now get the highlighted components.

If I am correct, this is a highly attractive deal and a swift one as well as the last date for submission is 23 December 2010. It is attractive because:
- it values Sunway City relatively cheap at just below 1.0x Book Value (not even RNAV) when the big boys get at least 2.0x
- it values Sunway Holdings relatively cheaply considering the 20%-30% year on year EPS growth for the next 3 years
- the cash component basically is a generous capital/dividend repayment which would ensure a great acceptance rate
- the capital repayment extends to everyone, including warrant holders
- the free warrants is a good kicker
- its a swift deal, which will see the Newco being traded within 2 months

The merged entity will kick off trading at 2.80, do you think it will go up or down from there? Together, at 2.80, it will trade at around just 7x current year's earnings.Where the prices will go will depend on where investors think the newco will trade at when requoted.I think 3.20-3.50 is fair. So if you think likewise, where will you be buying the shares and warrants up to??? I provide the platform and ideas, you do the math.

In a brilliant masterstroke, Jeffrey and his advisors have basically revalued his two flagship companies closer to a genuine valuation. The often said drawback of his shares as lacking in liquidity can be almost eradicated now.

Both Sunway City and Sunway Holdings suffer from gross undervaluation. Please re-read my posting on both a couple of days ago. Hence the present offers still present very decent upside for the merged entity.

I think from the 3 property deals so far, UEM Land-Sunrise, IJM Land-MRCB and Sunway City-Sunway Holdings... If I can present in simple math: UEMLand-Sunrise is 1+1=3; IJM Land-MRCB is 1+1=2.5; Sunway Holdings-Sunway City is 1+1= 3.5 ... Jeffrey's deal is far superior. It now only unlocked value, it gives back a healthy bonus cash dividend which does not stretch the balance sheet, it prompts the market to give the companies a better valuation and sustains it. No one is left out, no minority should complain at all.

Zyan, Malaysia's First Chinese Bossa Princess n The Production Team

This is a video highlighting all the critical members of ZYan's upcoming Brasileiro ~ Bossanova Chinese album. Leslie Loh being the producer and owner of the amazing pop pop music label. There is Tay Cher Siang, the leader of the brilliant jazz unit WVC and the piano man behind JZ8. Then there is arguably the most talented arranger and saxaphonist in Salvador Guerzo, better known as Ador, and very much part of the Soliano family clan. Then there is Xiong, a great performer of Spanish music, an expert in bossanova and regular performer at No Black Tie. Lastly there is Stefano Chen, who is also a respected classical tenor in his own right, and will be a featured performer in one of YTL's upcoming major musical event. and... of course the lovely Zyan.

When Cartoons Make More Sense

Here is all you need to know about present day economics. The truth and logic are laid bare. We will laugh but beneath the laughter is the stupidity of it all.

Up Or Down?

After weeks of positive sentiment across all equity markets, Friday saw a pullback. Let's be fair, you cannot be all running at the same time and see no pullback. But its interesting to see what the media and experts say were the reasons for the pullback.



a) China was making news all week, and on Friday the Shanghai Composite rattled world markets with a sudden 5% drop on inflation fears and the threat of tightening by the government. Is this a surprise? Of course not. What is more important is sentiment is still good and the pullback is just a breather. When you run for sometime, you have to pullback even if there were no bad news.

b) US municipal bonds took a huge hit and could be flashing danger signals for further problems to come. Muni prices have plunged as concerns about municipal debt and default continue to grow. So far this has been a back burner issue as everyone has assumed that the Federal government would bail out the states and municipalities, but with QE2 and a new House of Representatives in town, confidence in this outcome seems to be on the wane. So when did the rest of the markets really care about US housekeeping issues?



c) U.S. policy makers had a bad time at the G-20 meeting and while they were getting beaten up there for QE2 and devaluing the dollarIn Seoul, President Obama failed to get a much ballyhooed trade agreement with Korea, and the U.S. delegation took heat from countries like China, Brazil and Germany for devaluing the dollar at their expense. Later in the week, the Chinese again expressed their displeasure with current affairs as Commerce Minister Chen Deming said they didn’t support quantitative easing and espoused on the risks of growing more global bubbles. These are policy concerns, not liquidity driven issues.

d) While investor sentiment remains at extreme bullish levels. However in the U.S., insiders didn’t share the same optimism and set records for selling at a 12-1 ratio, perhaps sensing an interim stock market top. This is a concern.

e) In reality, US data has turned slightly more upbeat, reflected in higher US yields.



f) As the USD recovered, commodity markets have fallen back to earth with a thud, causing some to say the commodity bubble has burst, that's bull. A weaker USD caused a rally in commodity price, a slight rebound in USD would do the same in reverse, and since when we have a commodity bubble???

g) Debt worries are widespread in the Euro zone, the market is currently fixated on the Irish situation. Rumors are currently circulating that EU talks are underway that will lead to a financial rescue plan for Ireland as early as next week. Ireland’s Finance Ministry stated it had made no application for emergency funding from the EU and the European Commission said it has not received an aid request from Ireland. They are going through the motions. The Ireland issue is much smaller than the Greek's crisis, and the ECB have to do likewise and bail them, so what.

Being bombarded by various news and opinions can make one confused on market direction. Like I said before, all markets are running for quite some time, they have to pause even if there were no bad news. What's irksome is the business channels and media have to write "something" to explain the markets' pullback. As you can see, there are a plethora of reasons if you want a reason to sell.

I do not see any of the given reasons as anything new, we all know that. What is real is we are in for a low interest rate environment. The USD is moving down on QE2 and rebounding every now and then but the downtrend is there, which will move commodity prices higher and support US equity prices as well.

Elsewhere in emerging markets we are on a tear, or rather just starting. Its not a long drawn correction, its a blip. Thing should move up this week.

Zyan, Malaysia's First Chinese Bossa Princess

Well, Leslie Loh has done it again, the thankless task of discovering great talents and shaping their music in audiophile recording. Constantly pushing the boundaries. She is Zyan and tackling Chinese classics in the soothing bossa style is something I welcome and is sorely lacking in the market. The album should be out by end of the month. Don't forget the 2V1G gig at NBT, and I think Zyan will be the surprise guest performer. See you there!!!

we don't do it very often but once we do it, it is a special occasion.

2v1g is back to NBT for only the 2nd time since its inception in 2008!

besides playjng a vastly new repertoire, the presentation format will be totally different (it is not just singing and light bantering like a normal gig).

add another very special guest to it, you would have a show that promises to take your breath away.

dates: 30th november and 1st december 2010
time: 9:30pm - 12:30am
presentation: 2 sets of 45-minute each, 15-minute interval
cover charge: RM40
NBT reservation line: 03-21423737 (after 5pm)

Leslie Loh: yes, the mastering of brasileiro is completed in hong kong and we are ready to let you listen to some songs!

let's us introduce you to the first song in the brasileiro album : autumnal night, a classic of bai guang. [look to the panel on the right, click the play icon and you are on!]

before we even talk about how zyan tackles this song, let's credit the arranger, maestro salvador guerzo, for his masterful work. there is a story to this arrangement. ador initially did a brilliant big-band arrangement which had us screaming in joy, but due to the need of having 8 musicians and the associated costs, we asked ador to redo another version, which is the one you are listening now.

ador employed "a double bossa" arrangement style which gives the song a very rhythmic foundation that will make the listener sway with the music. the acoustic guitar intro, played by nick from aswara, is quite a magical intro. pay attention to ador's brilliant saxophone solo (sorry, it is not found in this edited version, you have to get the album la!) , this alone is worth the admission! ador's sax has the burnish tone similar to sax legend stan getz (that's why many regard ador as the stan getz of malaysia!) the tone is intoxicating and sensuous to the ears. not many sax players can blow like this, we assure you.

another signature and brilliant style of ador's arrangement (fans of ador would know this!) is the attack. the attack adds drama and contrast to the song. coupled with rizal soliano's dynamic drumming, this attack is very evident in many passages in the song. ador uses even more dramatic attacks in the solianos "pusaka" album. only arrangers of great skills can devise attacks in the arrangement, this we can assure you.

our bossa princess has a way with oldies, despite her age. she sings with a deep tone that oozes maturity and sex appeal. there was once she sang this song at a function and an auntie came to the stage and praised her profusely!

stefano, the producer, wanted zyan to maintain a rhythmic sway while delivering this song. it is a sweet song about longings. zyan sings it with an ease and confidence that is positively convincing. we definitely could feel zyan's sweetness and happiness in her voice.

recording wise, this is also one of the best recorded tracks in the album.

with all these reasons, we made it the first song in the album!

next week, we would premier another song, a local composition titled "romance in the rain" 【灑灑雨】, a great bossa nova ditty that truly carries the brazilian vibes....

A Foretaste Of The Solianos' Album

This is a truncated live version (normal should be 3.5 minutes with great jazzy piano improv) of The Solianos' rendition of the classic Tudung Periuk recently at No Black Tie. It was after hearing them do this number that I thought they should do an album, thus introducing Leslie Loh of pop pop music label to them.

If I can describe them, they are Malaysia's equivalent to The Manhatten Transfer. Wallah, the recording is almost complete. Hope it can be out by December.

Marketocracy Portfolio As At 9 November 2010

recent returns vs. major indexes
		Beating Today MTD QTD YTD SMF 0.13% 6.88% 9.80% 13.51% S&P 500 -0.10% 3.44% 7.37% 11.55% DOW -0.19% 2.59% 5.74% 9.39% Nasdaq 0.01% 2.90% 8.93% 13.70%

recent returns
		RETURNS Last Week 6.68% Last Month 6.47% Last 3 Months 13.65% Last 6 Months 7.31% Last 12 Months 23.98% Last 2 Years 105.75% Last 3 Years N/A Last 5 Years N/A Since Inception 43.38% (Annualized) 17.02% S&P500 RETURNS Last Week 3.34% Last Month 5.10% Last 3 Months 9.67% Last 6 Months 5.42% Last 12 Months 16.72% Last 2 Years 37.54% Last 3 Years N/A Last 5 Years N/A Since Inception 2.57% (Annualized) 1.11% RETURNS VS S&P500 Last Week 3.34% Last Month 1.36% Last 3 Months 3.97% Last 6 Months 1.88% Last 12 Months 7.26% Last 2 Years 68.22% Last 3 Years N/A Last 5 Years N/A Since Inception 40.82% (Annualized) 15.91%

alpha/beta vs. S&P500
		Alpha 16.18% Beta 1.15 R-Squared 0.77

turnover
		Last Month 9.49% Last 3 Months 19.19% Last 6 Months 47.23% Last 12 Months 131.20%

		Symbol Price Shares Value Portion of Fund Gains Inception Return NYB $17.15 6,000 $102,900.00 7.16% $37,167.27 56.54% FMC $77.04 1,500 $115,560.00 8.04% $31,721.85 37.67% Details PLD $14.74 8,118 $119,618.73 8.32% $30,059.79 33.56% Details F $16.48 8,000 $131,840.00 9.17% $138,804.57 51.57% Details BP $44.09 3,000 $132,270.00 9.20% $43,548.12 28.49% Details MIDDLE QSII $63.94 1,500 $95,910.00 6.67% $27,472.77 22.89% C $4.44 25,000 $111,000.00 7.72% $87,454.95 25.04% UCO $11.69 6,000 $70,140.00 4.88% $8,479.31 13.75% WFMI $46.24 2,500 $115,600.00 8.04% $13,305.39 13.01% GE $16.72 4,000 $66,882.00 4.65% $7,644.75 12.91% Details AFL $57.33 1,500 $85,995.00 5.98% $2,517.42 3.02% Details BAC $12.54 14,000 $175,560.00 12.21% $31,893.53 9.39% Details

		Close Date Type Symbol Shares Net Avg. Price Net Oct 29, 2010 Sell SUN 3,000 $37.4391 $112,317.29 Details Oct 28, 2010 Buy AFL 1,500 $55.6517 $83,477.58 Details Oct 21, 2010 Buy BAC 5,000 $11.75 $58,750.02 Details Aug 17, 2010 Sell POT 1,000 $140.3169 $140,316.93 Details Aug 12, 2010 Buy F 8,000 $12.4259 $99,407.51 Details Jul 29, 2010 Sell NVDA 9,000 $9.1826 $82,643.21 Details Jul 22, 2010 Sell C 5,000 $4.0199 $20,099.65 Details Jul 22, 2010 Buy UCO 6,000 $10.2768 $61,660.69 Details Jul 12, 2010 Sell BP 1,750 $36.6356 $64,112.22 Details Jun 25, 2010 Buy BP 800 $27.55 $22,040.00 Details Jun 14, 2010 Buy BP 1,500 $31.4431 $47,164.65 Details Jun 11, 2010 Buy BP 2,000 $34.1535 $68,306.95 Details

Rumer Has It

Musically, this has to be my best discovery for maybe 10 or 20 years. Remember the spine tingling when you first heard Norah Jones, this is even better because this made me Buddhist for a while, its like Karen Carpenter reincarnated, refreshed and rejuvenated. I loved Karen Carpenter, yes the songs were wonderful but its her voice, she can sing anything. Her voice is so masculine yet feminine as the same time. It has a sad undertone ... now I think we have found someone who sings quite a bit like her, but thankfully very much her own self as well.

Rumer, her real name being Sarah Joyce, a UK singer songwriter, and needlessly pretty as well. She is divine.

Deepavali Greetings

So You Think Sold For A$60m

Tan Chin Nam and Tunku Ahmad Yahya came out way in front even though they did not win the Cup. Anyways, they would have had to share a paltry A$3.8m. Now they get to divvy up A$60m. Considering the horse only cost A$83,500 plus they great prizemoney it has won so far.



So You Think has almost certainly run his final race in this country after confirmation yesterday that global racing and breeding giant Coolmore Stud had purchased a majority share in the four-year-old that has valued him at an estimated $60 million. It makes So You Think comfortably Australia's most expensive racehorse.

Last Tuesday's Melbourne Cup favourite and third placegetter is expected to be sent to Ireland in the coming weeks to be prepared for a northern hemisphere campaign by Aidan O'Brien.

Tom Magnier, the racing and business manager of Coolmore Australia, said yesterday that there remained some details to sort through with the horse's owners but that it was likely So You Think would be raced in partnership with owners Dato Tan Chin Nam and Tunku Ahmad Yahaya.

''That is still to be finalised but he's [Chin Nam] a very lucky owner and we'd be happy to race the horse with him,'' Magnier said.

It is understood that Coolmore have identified So You Think as one of the world's best horses up to 2400 metres and are hoping to run him in the Prix de l'Arc de Triomphe at Longchamp in Paris in September.

It is possible that he could have a rematch in the Arc with Melbourne Cup winner Americain.

Magnier confirmed that So You Think was certain to return to Coolmore's Hunter Valley property in Australia each year as a shuttle stallion once his racing days are over.

So You Think is certain to be named the Australian Horse Of The Year despite the fact there are almost nine months of the season remaining following five incredible wins in succession in Melbourne this spring before his gallant third in last Tuesday's Cup.

Dato Tan Chin Nam's racing manager Duncan Ramage confirmed the sale last night: ''Coolmore would like to the race in the Europe and we would have to take that into consideration when working the detail,'' he said. ''Dato has always campaigned his horses in Australia and Bart is probably not in a position to campaign a horse overseas for a lengthy period of time.''

Ramage said that before So You Think flies to Ireland, he will return to Dato Tan Chin Nam's Think Big stud at Bowral in NSW.

Coolmore has a history of purchasing Australian horses as dual hemisphere stallions.

The stud paid $20 million to secure sprinter Choisir to stand in Ireland and the Hunter Valley following his group 1 wins in the King's Stand and Golden Jubilee Stakes at Royal Ascot in 2003.

Encosta De Lago also stood a season in Ireland after Coolmore purchased him but Haradasun, who was valued at $45 million when Coolmore bought into him, has only stood in the Hunter Valley.

More recently, Newmarket Handicap winner Fastnet Rock has stood in both hemispheres while Starspangledbanner, who cost Coolmore about $20 million, is due to stand in Ireland and in the Hunter Valley when his racing days are over.

Melbourne Cup and Malaysians

As I did my tertiary studies in Sydney and lived there for nearly 10 years, the Melbourne Cup still fascinates me. Even non punters will get into the merriment all over the country. Its infectious. Its easily the biggest horse race in the world judging from the history, the colour, the celebration and fame that come with it.



Its always run on the first Tuesday of November, and throughout Australia, everything literally stop for those two hours. Too much drinking, there will be the usual office sweeps (people will put in a dollar or ten and each will get to pick a horse from a hat, winner takes all).

The actual prize money of the Cup is also enticing. Its now worth A$6m, with the winner getting A$3.6m, even the second horse gets A$900,000, the third gets A$450,000 and so on. Even those who finish 6th-10th will get A$125,000 each.



The race is not regarded as a true Group 1 classic because its a handicap race. True Group races runs at set weights or weight for age. In a handicap, the better performed horses get bigger weights. The field is usually the max at 24. Oh, by the way, Tan Chin Nam has another horse in this year's race, Precedence, as well. He could have had four, but the other two probably could not handle the wet track, so Faint Perfume and Dariana did not pay up to enter the final field.

Malaysia has a unique history with the Melbourne Cup, thanks largely to Tan Chin Nam (IGB). In 1974 and 1975, his horse Think Big won it twice, unexpectedly. Tunku Abdul Rahman was there to lead in the horse, apparently he had a small share in the horse as well.



Tan Chin Nam has won it another 2 times and his name is well known among Australian racing circles. Besides that, people also know Tan Chin Nam as the man behind IGB, which renovated two of the prettiest buildings in Sydney, the QVB and Capitol Theatre. He has subsequently won the Cup with Saintly, and 3 years ago with Viewed. All his horses were trained by Bart Cummings.

For the past 30 or 40 years, there has not been a more hot raging favourite for the race than this year's So You Think, a horse Tan Chin Nam co-owns with Tunku Ahmad Yahya (ex-Sime Darby), the nephew of Tunku Abdul Rahman . The horse is still young but has won and incredible 8 out of just 11 races and among that 2 Cox Plates, one of the top Group 1 races in the world.



So You Think is at around A$3.40 for $1.00 bet to win. Usually the favourite in the Cup runs off at 6 to 1 or 7 to 1, owing to the very big field, with a high chance for interference.

Considering that So You Think only cost Tan Chin Nam A$83,500 he is already way ahead, especially when most well bred but unproven yearlings now are sold for between A$100,000-A$500,000.

I can only see one danger, its the French horse Americain, to be ridden by the famed HK French jockey Gerard Mosse. You can tune in for the festivities from 10 am - 1pm today (M'sian time) on the Australia News Network, Astro 521.

Sydney Morning Herald article 3 years ago: Cummings hitched his stable to Malaysian property developer Dato Tan Chin Nam in the early 1970s when he saw him playing two-up, and whichever way the coins have landed, the two have remained friends.

Dato Tan OBE ("Over Bloody Eighty," he joked) urged the other octogenarian to tell the yarn, and Cummings, who loves a short story, did: "He was having a drink in my bar in Adelaide years ago with Glynn Pretty, the jockey, and we were playing two-up. How many times did you win?"

"I won 10 times in a row," Dato Tan said.

"I thought I better stick with this bloke. He's lucky," Cummings said.

Dato Tan Chin Nam stuck, too, after Cummings provided back-to-back Melbourne Cups with Think Big (1974-75) and Dato Tan brought then Malaysian prime minister Tunku Abdul Rahman into the ownership for the second Cup.

In the late-1980s, Cummings spent heavily, buying horses as part of a tax-minimisation scheme, but when the recession hit, he went broke. His friend helped bail him out.

Data Tan wrote in his memoirs, Never Say I Assume: "With a true friend, one does not seek to ask for help when in need. Help is offered even before one asks. In life, there are very few friends of that calibre."

Cummings repaid him with Saintly in the 1996 Cup and with plenty of other wins with horses in Dato Tan's chessboard colours; and with a record fourth Cup for an owner, besting Tony Santic's three with Makybe Diva and Lloyd Williams' trio (Just A Dash, What A Nuisance and Efficient).

Dato Tan said of Cummings: "Bart, he's got long pockets and short arms."

Cummings said: "Where did I learn that?"

"Not from me," shot back a laughing owner.

If Cummings is the king of one-liners, Dato Tan is a riddler extraordinaire. He said of the relationship: "Here's to me, here's to you, may we never disagree. And in the event we do, here's to me and to hell with you."