Feed Service Platform Providers, Buck Up Please

This data collection is about as raw as it can get. Trading platforms keep malfunctioning or not functioning at all at the worst times. The providers cannot keep saying they did not expect such volume throughput. BULLSHIT!!!

Just take the biggest ever daily volume traded and budget it by multiplying by 2.... that should be your system's tolerance. Anything else is irresponsible.

Apologies to D Chia who took the brief survey, although sample size is small, I think its VERY REFLECTIVE of the reality.

 Don't mind Bursa making tons, don't mind paying this fee and that fee to do a TRANSACTION... but please la... not first time, not second time... this is like Tenaga brownouts la. At least TNB offer discounts... c'mon Bursa... you are the gatekeeper that ALLOWED the two buggers to provide feed, nobody else.... Do things better la., record profits but treat the players like chicken shit, for want of a better word.

Don't blame the brokers, you also cannot blame the service providers... you can only blame the GATEKEEPER, who allowed the service providers to provide such service to all clients for such a long time, without a SOUND OF PROTEST, DISSATISFACTION, COMPLAIN ON BEHALF OF USERS...

So who should be answerable to this poor level of service ... but who is always applauding record daily volumes no end... please help us help you, or help you help me. Well, somebody should have done something, and that something should HAVE BEEN SOLVED MONTHS AGO.

Its a situation so prevalent. If it happens ONCE a year, no bother... tell me how often has it occurred. DON'T KILL THE MESSENGER.

a) why only 2 providers. 
b) if its a cost-profit solution, fine ... then why is there NO PUBLIC REPRIMAND, or fine for subsequent and many glitches and failures of the trading platform???
c) are the 2 providers unable to provide the quite simple level of technology transaction?... I mean, its just minimal stocks (in Malaysia), one market and pretty straight forward ... I mean, last count, there are nearly a hundred exchanges. What makes ours so unique that we cannot solve the problem properly ... at least tell us.
d) stop the PR about how to improve fund raising n other capital market issues  blah blah when this very fundamental service also not up to par. Seriously, this has been dragging its feet for so long. If not, I won't be using such harsh language.

More About This Blog's Sponsor

The blog was started in 2007 and I have loathed having advertisers or sponsors for my blog. I now have a proper site sponsor because I believe in the product and have consumed it myself. I find that it mirrors the claims it expounds and is effective to treat andropause.

Blog sponsor: Andropause Succor

https://andropausesuccor.com/

THE MAKING OF ANDROPAUSE SUCCOR

We recognize that andropause was a serious issue among men above the age of 40 but not much attention has been paid to address the issue when compared to say, menopause and its remedies.


Presently, a lot of people take testosterone booster and/or artificial testosterone injections (gels and creams included), which we believe has its limitations. They attempt to address the symptoms rather than the cause. It is like taking Viagra but not addressing why poor erections happen in the first place.

We wanted a holistic remedy to andropause and would stay herbal and organic as much as possible in the formulation. The platform which we build our formulation rest on being anti-inflammatory and better heart health.

Not a week goes by that I am not asked about testosterone levels. Especially one of the following questions:

—”How can I raise my testosterone?”

—”Can supplements actually boost testosterone?”

—”How do I know if I have low testosterone?”

The questions are endless. Testosterone is a hot marketing area for men, that strikes at the core of machismo and male health. Attach testosterone to any product with some hyperbole, and you can market it effectively.

But truth be told, testosterone levels are critical for male health. Low testosterone causes:

Low energy
Low sex drive
Low strength
Anxiety, depression, and general lethargy
There are no advantages to having low testosterone. Zero. Nada. In fact, hypogonadism (which is when your body is not producing enough testosterone) is linked to:

Alzheimer’s disease
Dementia
Cardiovascular disease
Recent research even points to low testosterone being a precipitating factor for prostate cancer.

With all this in mind, it’s concerning that testosterone levels have been dropping in men worldwide for decades.

The reasons for this are legion:

Environmental endocrine disruptors, plastics, contaminants; lack of sunlight and solar radiation; lack of key micronutrients, skewed diets; lack of exercise, lack of sleep, increased stress; the list is long.

And this drop in testosterone is not only seen in humans, but animals as well. Across the world, environmental pollutants are affecting animal life and disrupting sex hormones.

The pragmatic reality is this:

Our environments and lifestyles do affect our bodies. And many men are slowly castrating themselves through their lifestyles.

Increasing your testosterone levels, and thus your general vitality, should be of paramount focus for all men.

High testosterone levels are a representation of overall good health.

You have everything to lose and nothing to gain by ignoring your hormone levels.

What Can You Expect

1-2 weeks:  Better quality erections (hardness and ability to stay up longer)
                  More energetic and positive
                  Higher libido (sex drive)
                  Heightened metabolism
                  Less irritability and mood swings
                  Better quality sleep
                  More motivated and focused

Longer Term:   Stops hair loss
                      Less visceral fats
                      Retention of muscle mass
                      Better joints strength
                      Reduction in bone loss and danger of having osteoporosis
                      Elevated testosterone
                      Higher sperm count
                      Less lethargy and better temperament


Tongkat Ali (extra potency)

We required Longjack (Eurycoma longifolia), a confirmed libido booster. Longjack, also known as Tongkat ali and pasak bumi, is a shrub hailing from Southeast Asia purporting to improve libido. It’s gaining traction in the scientific community for potentially increasing testosterone levels, and researchers at South Africa’s University of the Western Cape found that longjack improved testosterone levels and muscular strength in physically active seniors (a population with typically low testosterone).

The bulk of what is presently available is non-descript. Our manufacturing facility has patented a new way of extraction, using nano tech and sonification to extract up to 5x better - the process is already being patented.

What is TRT?

Testosterone Replacement Therapy (TRT) uses artificial androgens (think synthetic steroids) to try and raise testosterone levels. As the Mayo Clinic notes, they’re still being evaluated for safety and effectiveness, but it’s an option to discuss with your doctor.

Other researchers at the National University of Malaysia have gone so far as suggesting that, after further study, longjack could be used as an alternative approach to testosterone replacement therapy (TRT).

That said, a group of researchers at the National University of Malaysia did a systemic literature review of longjack, looking for clinical research that demonstrated a relationship between the shrub and testosterone levels. 

Cordyceps (tung-chung-chou in Cantonese)

Animal and lab studies suggest Cordyceps have the potential to improve heart health and fight inflammation, cancer, diabetes and aging. Again, we try to come up with a formulation that does not just deal with the symptoms. For example, Viagra is used to help people who have trouble maintaining a strong erection or have trouble lasting sufficiently long enough to complete the act. That does not address why/what caused the poor erections in the first place.

We believe in raising testosterone naturally. We wanted the other complementary body functions to be revitalised as well when generating more testosterone. Hence anti-inflammation and better heart health is a platform which we stand on.


Pomegranate

Pomegranate is a potent antioxidant. This fruit is rich in flavonoids, anthocyanins, punicic acid, ellagitannins, alkaloids, fructose, sucrose, glucose, simple organic acids, and other components and has antiatherogenic, antihypertensive, and anti-inflammatory properties. Pomegranate can be used in the prevention and treatment of several types of cancer, cardiovascular disease, osteoarthritis, rheumatoid arthritis, and other diseases. In addition, it improves wound healing and is beneficial to the reproductive system. 

Zinc

We wanted the best testosterone booster to contain Zinc — an important mineral for fertility. Zinc is little more of a nice-to-have ingredient than a must-have. It’s on our radar as an ingredient that possibly boosts testosterone levels, and while we couldn’t find enough supporting evidence that taking zinc would increase natural testosterone, low zinc levels have been connected to infertility. 

A low zinc level is also possibly a sign of hypogonadism. The closest support we found is in a study which found that people recovered from nutritional deficiency-related problems more quickly if they took a zinc supplement than those who did not. Zinc is available in many foods, such as oysters, fortified breakfast cereals, and red meat.

Zinc also has an upper limit. The NIH recommends that adults should not take more than 40mg of zinc per day, and notes that even moderately high zinc intake levels can be harmful. Hence our dosage has been kept safe within the limits set.

Every vitamin, mineral, and ingredient that affects the human body can be taken in enough quantities that they are harmful, or toxic, even the ones that — at lower levels — are beneficial or necessary. Unfortunately, testosterone boosters contain a lot of ingredients that are not well understood. This means in addition to not being able to confirm whether certain ingredients increase testosterone, the scientific and medical communities also don’t know at what levels many ingredients become toxic. 


Last Words

As with any supplements we are careful with the claims we make. We stopped short of saying it is an anti-aging remedy. However as you can read from the above treatise, it is very much a remedy to help us age better. Informal trials among tested subjects indicate that. We hope you will too benefit from it.

Post Virus Rally

Local players have managed to surprise and scare themselves at the same time when we kept recording massive volumes for a few days. The super charging train was stopped dead in the tracks when the profit taking set it. Even so, judging from the depth and breadth of players, the profit taking was well absorbed.

True, most of the activity entered on smaller caps, but it did switched to larger caps as well. The rotational play will continue way into Raya period when we come back from holidays.

If small caps are too risky for you, have a look into the High Speed Rail play. It was reported in the May 18024 edition of The Edge, that the HSR will be revived soon. The key partner should be Japan.

The timing could be key here as there was a DEADLINE set in September 2018, that by the end of May 2020, a proper announcement will be made. The cost which started at RM100bn, has since been whittled down to RM40bn-RM72bn. The scaled down project will involve stops at Bandar Malaysia, Sepang-Putrajaya, Seremban, Melaka, Muar, Batu Pahat, Iskandar Puter and Jurong East.


MRCB and Gamuda had received and accepted a 50-50 jv from My HSR Corp as project delivery partner from Bandar Malaysia-Melaka stations. SP YTL-TH Properties was supposed to do the southern 200km link. There should be 60 civi works packages, which should result in 5,000 sub contract packages.

However there are indications that Putrajaya wants to do away with the PDP structure, hence the players may change or the terms altered.

Owing to the pandemic, there isn't a better to to start the project immediately. It makes economic and and will jumpstart sufficient activity to provide a much needed lifeline for the small firms.

Senior Minister for International Trade & Industry Azmin Ali, has said that the government will announce a 6-month short term recovery plan by the end of May 2020. After which, a medium-term revitalisation plan under Budget 2021 will be tabled in November 2020.

Maybe its a slow week for news, but TheEdge had another article in the May 25-31 edition, saying that the HSR may cost RM68bn.

At the end of the day, the top beneficiaries will be Ekovest and IW City.

You will notice from both charts of IW City and Ekovest that they were readying to surge a few days back but were caught up in the massive profit taking after 3 straight days of huge volume activity. From the above analysis, it is highly likely that both will resume its uptrend. Initial target levels of 80 sen and 70 sen for IW City and Ekovest look like attainable.

Major Asset Class Returns

This has to be the most revealing look at how each asset class has been performing following the drastic 2-month volatile shakedown owing to the pandemic. The returns were at the end of April 2020.

The one-month figures should show the asset class that regained ground the most. The broader Russell 3000 showed the best rebound, probably because the companies were smaller, hence they got whacked a lot more on the downswing. Could the same be said for emerging markets? Yes, and no. I think as the pandemic wore on, its the emerging markets (in particular Asia and Asia-Pacific) which showed better containment and had more effective measures imposed. Coupled with the fact that most of Latin America have yet to be hit then (currently it is starting to look bad for South America).

The recovery of US REITs was a surprise to me. REITs should be in for a severe two year period. I think we are minimising the repercussions if we think REITs should have things normalised within a year. Many businesses are barely hanging on and most will not be able to see out the year. Occupancy won't be filled till at least two years down the road.

Commodities, in general, have continued its losses. Even prior to the pandemic, things have not looked rosy at all for commodities. Its 6 and 12-month performance were nearly -30%. It is still not time to do any bottom fishing here. Maybe two years down the track.

US Investment Grade Bonds, TIPs, and Foreign Developed Markets Bonds have held up the best over this crisis. This chart further amplifies what "real protection" in investment looks like. Both have managed to eke out minor gains on a 1 month, 4 months, 12 months or 3 year period. As a cautionary stance, I am bearish on USD for the next 5-10 years, and that will impact on your actual returns if you continue to invest in the first two categories. Hence Foreign Developed Market Bonds are the way to go if you are a mid to long term investor.

I would have to stress that the worst kind of asset class you can touch will be US High Yield Bonds. These are rated below BBB- and pays much higher coupon rates. Can expect a deluge of bombshells as the year drags on. Avoid this with all your might.

If you look at US stocks alone, the Russell 3000, the annualised returns over a 3 year period stood at a respectable 8%. This would indicate to me there is still froth in the US equity markets. The S&P 500 figure was even better at 9%.

As for gold, I am not a gold person. I think it is a useless metal and should have no play in the financial macro policies. Though it has done well over the crisis period, it has not done exceptionally well. Looking at their returns, I'd rather go for "real protection" instruments mentioned earlier.

I generally think that most governments have thrown out way too much cash to rescue their economies over the pandemic. I think we will see a huge surge into equities for the remainder of the year. Why? We are nowhere near the factors necessary for The Great Depression nor The Asian Financial Crisis. Last check, some people may lose their jobs, some industries may be devastated, but the majority still have cash in the bank, the majority still have equity in their properties - that is not the recipe for any great depression. Now start counting the monies thrown at the problem.


https://www.investopedia.com/government-stimulus-efforts-to-fight-the-covid-19-crisis-4799723

Between Jan. 1 and May 10, there were 1,465 funding activities announced, committing $15.9 trillion to the fight against COVID-19. Investments of $31.6 billion have been made via 112 program announcements, and 245 grants have supported $685 million worth of investment. Moreover, 213 tenders have seen $2 billion invested through program delivery and service partners, according to an analysis of Devex funding data supporting coronavirus efforts this year.

Since May 2, $85.5 billion in funding announcements for COVID-19 has been added to Devex’s funding database, and $7.2 billion in programs, grants, tenders, and open opportunities have been announced.Below is a snippet of the funds. 

The Pandemic Rally

This infographic was well done. However, it does not reflect a buy or sell call or any of the counters. Each company's actual exposure may be minimal or substantial. Please do your own research.

The Lurking Dangers For Malaysia

It is easy to be over-cautious. It is better to be safe than sorry. I have written before that we need to balance the need to curtail the pandemic and minimize the economic fallout from the situation. It is all well to come out from the pandemic with minimal lives lost ... but there can be massive repercussions on wealth and careers destroyed. We have to be cognizant of the need TO HAVE SOMETHING TO COME BACK TO.

Lives lost to COVID-19 is a bad thing, but many livelihoods and families could be destroyed as well in the process. As we are well aware, Malaysia IS NOT a country full of safety nets. Luckily we have some sort of unemployment insurance kicking in last year, but it is not a prolonged solution at all unlike in many developed nations.

UOB Kay Hian came out with a timely report on "Grave Consequences Of Covid-19 Prescriptions". Some of the more pertinent points, to which I am in full agreement:

The plight affecting the F&B, entertainment outlets and mall tenants have been well discussed. The cashflow ramifications for the majority of SMEs have not been fully appreciated by the government, I feel. The number of jobs lost when we come back from the brink will be worse than any economic recession we have ever seen, and that includes the PanElectric debacle in the late 80s and the Asian financial crisis in the late 90s.

What will be the number of jobs lost? 1 million, 2 million? How many will be able to find employment after 6 months? Maybe, at half their old pay? How will they service their home mortgage, car loans, children's education ... Knowing full well that most Malaysians are already supporting their parents. That will take a hit as well. 

The economic and social displacement costs have not been fully analyzed and accounted for.

Wealth destruction is a major issue. During good times, pump-priming economics will generate a multiplier effect. Every RM100m of new projects or injections can result in an 8-10x effect on the real economy. Called the velocity of money i.e. in simpler terms, every ringgit spent will travel round the economy 8-10x. In the current situation, its the deflation effect that is in play. For every ringgit diminished from the system, it has a deflating effect as well.

Tourism, Airlines ...

Just these two industries alone should give us an insight into how bad things can be. Malaysia Airlines will have to be sold off or merged with AirAsia/X. As if that is not bad enough, oil prices have gone off the charts literally. Our much-revised budget will have to be revised again. USD35, forget it, maybe more like USD25 for the rest of the year.

While our Covid-19 case management figures have been solid and improving. We also may see some trepidation with respect to our testing capacity. If you only test 100 people a day, you are not going to get a high figure of positives to Covid-19. As things stand, we have tested less than 0.5% of the entire population.

What is more worrying is that the Singapore experience tells us that more testing is required for our foreign workers. Singapore has only 300,000 odd foreign workers. Malaysia has 2 million documented foreign workers, and probably another 2 million illegals. That is more than 10x Singapore's figure.

Please note that the higher infection rate for foreign workers is largely due to the cramped dormitories or housing facilities they are usually housed in, and not a slight on their jobs or cleanliness.

As Of April 21, 2020:

For every million of its population, Singapore has tested 16,203 or 1.66%.

For every million of its population, Malaysia has tested 3,344 or 0.33%.

Total tests done: Singapore 94,796; Malaysia 108,216.

Is it a damned if you, damned if you don't situation? Malaysia already has one of the LONGEST countrywide lockdown imposed thus far. However, the level of testing leaves a lot to be desired. I am sure it has to do with obtaining sufficient supplies, and also a matter of cost (i.e. we cannot afford to get everybody tested).

Hence, come May 14, we MUST remove some of the lockdown measures for the greater economy. We must also be vigilant with potential new clusters, which are bound to occur. For those clusters, they should be immediately lockdown, controlled, and tested.

We can no longer afford to lockdown 100% of the population for the sake of possibly an infected 1%. It will be more prudent and pragmatic to loosen MCO but be wary of new clusters. Increase our capacity for testing immediately, otherwise we look like dummies at home as we still don't know who and where are infected.

Some of the social distancing measures should still be imposed for another two months or so: diners only every other table; cinemas should still be shut; MITI to be more proactive to approve SMEs wanting to reopen; shipping and logistics ops should be prioritized for clearing and delivery purposes; important exam years students to start school first; all malls to restrict the number of shoppers to 50%-60% of capacity; face masks mandatory; all offices and factories to implement twice daily temperature testing of all employees and other additional precautions. 

Biggest Threat

Its the Ramadan effect. Though I believe we should lift the MCO come May 14, we have to be very wary of the Indonesia link. Indonesia, where the population is a lot bigger, and where decent testing of cases is grossly limited. Compounded by the vast ness of the country. Hence there should be very restrictive TRAVEL to and from Indonesia for the next 3 months at least. Travelers coming back should be quarantined immediately. 

The trouble is that our borders are so porous. Our navy and police will have to be more stringent and vigilant to stop any form of illegal ferrying of passengers from Malaysia to Indonesia over the next 3 months.

Things To Do During Lockdown

All local councils, utility companies, construction firms (those with permission) and city planners in Malaysia should take the opportunity during the lockdown to:

- repair roads
- lay your lines 
- finish your towers
- change faulty lightbulbs
- speed up construction projects that creates congestion
etc ....

Basically try to finish up things that would disrupt traffic.

Why I Think Markets Are Too Optimistic

Bastardisation Of Currencies

When governments keep throwing money at the problem, some succeed while others are restricted by their fiscal constraints and prudent financial management. There's only so much budget deficit you can stomach. Not the US and Eurozone, they can literally print their way out of the problems at hand, with no need for any asset backing, particularly from the USA. The rest of the world, we can't do that. Our printing capacity has to correlate with our foreign reserves, government debt to domestic and international bodies, our GDP, etc...

What that does is that at every major financial crisis, involving the big guns, its the smaller guys that get whacked. The big guys has printed more monopoly money, get the money circulated, pay down debt, give people money to spend, and spend trip way out of the issues. The smaller nations just have to tighten our belts and compete ever harder to maintain status quo. Its colonialism in the financial age.

Just when you think colonialism is over, in financial markets, the masters still get 10x, 20x, 30x more than the slaves earnings per day. Even when the master make mistakes, its still the saves that kena.






The Horny Black Swans That Keep On Reproducing

That rant aside, have a look at the video. You will begin to appreciate why swiftness, preparedness and commitment to curtail were so important. Just look at China, South Korea, Singapore and HK. Compare that to the top 4 European countries, plus UK, Iran and USA.

Looking at the trajectory alone, the latter countries have not even peak yet, although Italy has shown positive signs of peaking. USA at near 277,000 confirmed cases, and the equity markets there seemed to have rallied. All markets are forward discounting machines. I want to know how many cases has the US markets discounted thus far, taking into account the substantive trillions of dollars worth of stimulus: 300,000 ... 500,000 .... one million or 2 million? Mind you, China and South Korea seem to have peaked at 80,000 and 11,000 respectively.

How can you discount something that has not peaked? You cannot take the statistical distribution for China or South Korea and extrapolate because: the level of preparedness were different; the "more authoritative governments" have better deployment and effectiveness in curtailment strategies; the level of resources and testing are different ... hence it is likely the trajectory will be pushed out higher and further than the former group.

Look at the above statement from US White House (reported in CNBC)... 93,000 deaths, at 1% mortality rate = 9.3 million cases. OK let's take a 5% mortality rate (which is very worrying for the public) = 1.86 million cases. Look at those figures for a while and compare China's 80,000 and South Korea's 11,000. Even if you double both those figures: 160,000 and 22,000 ... compare that to 1.86 million.

OK, let's not even look at those figures, let's halve that further from 1.86 million to 930,000 cases to deal with say over 2-4 month period. There is no way the US system can take it. There are only 924,107 hospital beds. Other illnesses may require at least 50%-70% of those beds.

So, you still think the US equity markets have discounted the fallout from the virus? If its 1 million cases over 4 weeks .. I think US cities will descend into a state of anarchy ... making handguns very handy indeed.

The Latecomers

Has anyone looked at Japan? Its about to boil over.  Last Thursday the prime minister's plan was no lockdown and everyone gets 2 cloth masks. Look at the table above. On 2nd April  Tokyo had 97 new cases, still hunky dory. That's just Tokyo, in Japan the total has surged past 340 cases.  Ueno Park was only closed on 24th March to the public.

Well, everyday in March 2020 till they closed the park, the scene was like this everyday:

Now imagine the scene below being played out 20 hours a day in every major city in Japan with no lockdown:

... at schools, Disneyland, malls, cinemas, etc...

Japan is a time bomb.

There are other latecomers as well, places where "proper testing" had been insufficient, masking the real numbers. Consider Indonesia and Pakistan to start with.


The Bigger Time Bomb For Us

Unfortunately, Ramadan is just around the corner. Will Malaysia allow the 1 million legal and 1 million illegal Indonesians and other foreign workers to go back for Ramadan. Do we have the resources to check, test/quarantine them when they come back. What about illegal channels of entry? Will we have another wave after Ramadan?

Why The Government MUST Implement These To Save SMEs

The government tried to assuage the fears faced by SMEs by directing a lot of help in credit and financing. This shows very clearly there is very little understanding of being an entrepreneur by the government.

Why would SMEs take loans to pay salaries and rental when they don’t have any income to sustain their businesses?

Do you know how much SMEs contribute to the local economy? If we end up with about 200-500 people dying from the virus after two months, that might be deemed as "successful". The rest of the workforce can look forward to a 20%-30% closure and/or bankruptcy by the SMEs as things stand.

At that rate, we can look forward to a loss of some 800,000 to 1.3m jobs. We have to balance between being cautious, and having "something to come back to after the storm".

Look for "calculated ways" to introduce a 50% work rate for as many businesses as possible, taking into account the need to control the spread of the virus.

MITI must be more accomodating and take on a more empathetic advisory role in dealing with companies requesting to restart working at 50%. Rather than reject if conditions weren't met, do advise them on how to get approved - be it cleanliness issues, sanitizing, testing, etc...

UK and Canada have rolled out a 75% subsidy for the salaries of SMEs' employees. While that would be a bit debilitating for Malaysia to consider, I think we should strive harder. Maybe not 75%, but maybe 35% for a 3 months period? Whatever it is the present situation is insufficient.

Clearance of goods from ports, the SST to be paid should be delayed for 6 months and/or Companies be allowed to retain 10 % of SST payable for the next 12 months.

All commercial electricity bills to be reduced by 50% for the next 3 months.


A moratorium of interest payments for the next 6 months.

All EMI’s to banks and NBFC to be put on hold for 6 months with no levy of interest or delayed payment.

Employer share of the EPF not to be paid by the companies but to be borne by the government for a period of 6 months.


Property tax for FY2020-21 to be reduced to half for all commercial properties.

Whodunit

Forced-selling doesn’t kill investors. 

Investors who go max on margin buying kill themselves. 

Why blame the system when the rules and conditions are there for all to see before they signed up?

What Kind Of Bear Market Are We Talking About Here

Well, its official, its a bear market. We somehow still cannot call it a crash but a correction. I don't mind this bear market at all cause it is "within reason" and "within grasp". Let's look at how different the current bear market is from the 2008 crash and 1998 Asian crisis.

1998 - This one you can feel it in your bones. Once it happened, there was an immediate domino effect on all emerging markets' currencies. Our currencies were suddenly seeing 20%-35% drop in value in a matter of days. That sobering crash allowed us to see the extent of the mess that easy credit had on everyone, and how everyone geared to the hilt. 

I immediately knew I would be out of a job within a few weeks. You know very well that the whole Asian emerging markets' economies will shrink, the effect was close to 20%-30%. Companies were trying their hardest to park loans and renegotiate terms, but it was inevitable, we needed these companies and these loans to fail. The longer we stave them off the longer the contraction and slower the recovery.

That was a big lesson from Japanese markets. Since the correction in 92/93 in Japan, all listed companies there refrained from facing the music. Even banks dared not collect. The whole taichi movement last 12-15 years.

2008 - This was scary cause it involved the very existence of the top 5 banks. If they failed, the whole capitalist system could unravel, and that could unravel the whole financial infrastructure for all markets and capital flows. 

It was a lot scarier because financial markets and its derivative instruments (in particular) have dwarfed the real economy. Hence any big missteps will be amplified in a bad way to the real economy.


2020 - This one has to do with the virus morphing into a pandemic. Oil prices has shock value but not much to do with the real bear market. Saudi Arabia wanted Russia and the rest of OPEC to toe the line. Russia wants lower prices in order to kill off Americal shale/fracking producers. At most, the US producers will file for bankruptcy. The top 5 banks in the US only has between 1%-3% of the loans exposed to shale/fracking companies. No big deal.

The good thing about this bear market is that it has very little impact on the integrity of the financial markets and liquidity. The prolonged impact is what everyone is looking at. But just on the fact that it has little systemic effect on the financial system is a huge load of relief. In that way, this bear market IS NOT SO SCARY.

Looking at China, where the outbreak has peaked, we saw economic activity dropping by 30-40% over a 2-3 month period. HK had a longer tough run with the protests over democracy reforms and almost immediately by the corona virus - companies on the frontline are failing by the droves. Nobody will sympathize with the mall or commercial property owners. The lack of business will not be able to counter 50% discounts to rentals.

These frontline industries (retail shops, f&b outlets, airlines, etc..) will feel the brunt very fast, as soon as 1-2 months. Subsequently, the contraction will be felt via employment cutbacks. By 4-6 months, significant job losses will be next. Followed by defaults on mortgages and subsequent forced sales and personal bankruptcies.

Governments can step in to address the situation: no mortgage payments for 3 months or personal tax cuts... but business failures will overwhelm and job losses at smaller firms will be more pronounced than bigger ones.

The markets are now trying to discount a substantive contraction in their economies by 20-30% over a 1-2 month period. If it drags on, the equity markets will dive again later.

For now, we are reaching a good level for a quick buyback during tomorrow's weakness. Trade, don't hold as the situation is still fluid.

https://andropausesuccor.com/

https://andropausesuccor.com/

Irrational Market Blue-Black

There are black swans and there are Black Swans... but this swan somehow can give birth to many little black swans. The world is already trying to come to terms with Covid 19. Central banks have cut rates, governments have put through fiscal packages to alleviate the economic effects. Now suddenly we have the oil plunge. 

Let's be sober here, Saudi Arabia is cutting its nose to spite the face. Even though their cost of oil production is a lot less than Russia, its not that cheap. The strategy is to get Russia to come kowtowing for the March 18th meeting. NO ONE affiliated with OPEC wants the current situation, no one wants USD25 to prevail. Would you keep going to work if you KNOW FOR A CERTAINTY you have to pay the employer RM1,000 a day??!!

Hence it is a short term strategy, but I would still avoid oil & gas stocks for the time being because sentiment is bigger than facts now.

Last time I heard: low oil prices is good for the global economy, generally. Why are we reacting this way??? Are the OPEC countries a substantive consumer of global goods??? Rhetorical indeed.

If G7 and G15 can come together so quickly to address Covid 19, don't you think calls will be buzzing across continents to say WTF ... we don't need this shit now?!!

If you are among the lucky ones who are not exposed that much to the markets, and can take a 1-3 months view at least, you should put your money to work, even in some local stocks.


That's because there are some great second liners that have been hammered 15%-30% over the last few days alone. Just look for the ones with least exposure to disrupted supply chains owing to the virus and not entirely correlated to oil prices, plus they are profitable and cash flow positive.

The list is meant for readers to go and do their own research and not a call to buy blindly.


MYEG - (Recent high 1.38, today 1.03) How da hell is oil prices important here? Slowdown in economy, ok a bit, but you know our we have car registration, etc... that is humdrum transactions but must go one.

NOTION VTECH (Recent high 1.38, today 72.5 sen) - Last quarter made net profit of RM14.2m, bonus issue coming up soon. Chairman reiterated that they are actually benefitting from the breakdown in supply parts.  Project Nixon (EMS codename)  need 600k pieces of aluminium tubing for vacuum cleaners worth RM4.5 mil sales per month from June 2020 onwards. Project Stingray (Extrusion solutions codename) is a major expansion of the extrusion business from 200 tons per month capacity to 1000 tons capacity and billet furnace for upstream recovery of aluminium leftovers. Mainly for external customers. Notion is transforming the group into an aluminium total solutions company more than precision machining or fabrication.

DIALOG - (Recent high 3.45, today 3.03) This company stands to benefit as an oversupply of oil will require companies to find storage space. Probably at Pengerang SPV1.

Quarterly Reporting Must Stay

The Edge:

The Singapore exchange is about to make life easier for listed companies -- the safer ones, at least.

The bourse’s regulatory arm plans to end quarterly earnings reporting requirements that currently apply to all companies with a market capitalization of at least S$75 million ($56 million), according to Tan Boon Gin, the chief executive officer of Singapore Exchange Regulation.

When the rule change takes effect on Feb. 7, only riskier companies will need to report earnings every three months, Tan said at a press briefing. SGX RegCo will also tighten other disclosure rules and introduce a new whistleblowing policy as part of efforts to protect investors, Tan added.

Other global exchanges have moved away from mandating quarterly reporting for all their companies. The European Union ended its requirement in 2013, while Hong Kong only applies the rule to companies on its small-cap exchange. The U.S. Securities and Exchange Commission is currently reviewing the issue.

”Internationally, there’s a shift away from quarterly reporting and this is to allow companies to focus on the long term,” said Tan. About 75% of the local market currently reports on a quarterly basis, according to SGX RegCo.

Under Singapore’s new policy, a listed company will have to report each quarter in circumstances including when it receives a qualified report from its auditors, or when they express concern about the company as a going concern. The requirement can also be imposed if SGX RegCo has regulatory concerns about a company regarding disclosure breaches, for instance.

Additional disclosure requirements will be introduced for rights issues
    Acquisitions that reduce net profit or net asset value by 20% or more, or where the target is loss-making or in a net liability position, will be subject to listing rules.
    Companies will need to appoint an independent valuer for significant asset disposals.
    Firms will be asked to disclose material price- and trade-sensitive information, and any changes to near-term earnings prospects.


(Sept 19): AirAsia Group Bhd chief executive officer Tan Sri Tony Fernandes said he agrees with US President Donald Trump's call for companies to issue financial reports just twice a year, rather than four times, as it drives analysts to make short-term decisions.

"One of the few things I agree with Donald Trump is quarterly reporting is null and void. Should be six months. Analysts driving to much short-term decision," he said via Twitter today.

My View:

a) QR should stay. Any listed company, big or small, should have the discipline of being able to look at their financial status at ANY TIME, be it monthly or quarterly at the bare minimum. Half-yearly leaves too much room for things to happen. A company's management should have the desire to be able to close their books at a week's notice. Financial discipline is paramount to any company that rides on sound management and have a close eye on deviations. If a company needs to have that, investors should be just as eagle-eyed.

b) QR may be lighter in its requirements. Just the basic financials BS/CF/IS, plus commentary on substantive changes to Debtors and Creditors, or any revaluations/disposals of significance. Keep it to the bare minimum.

c) QR does not and should not add much financial burden on listed companies. As mentioned, all companies should be able to close their books within a week. Are you to tell me monthly meetings obtain figures for discussion that are 6 months past? These are things all listed companies should be doing already.

d) QR would also "help to reduce the leeway" for the massaging of earnings. Enough said.

e) There is already insufficient information pertaining to the company's fundamentals. The sector's prospects and outlook are not being highlighted sufficiently by basic financial media. Only the top 40 stocks in Malaysia get any form of decent analyst coverage, what about the other 900? There is a dearth of "credible information" for local investors on local stocks. If The Edge can find a willing audience on a daily basis, shouldn't that tell you investors need better information flow?

f) Half-yearly reporting also gives rise to "insider knowledge". The longer the reporting period, the higher the "value" that is accrued to insiders. Owners, board members, CFOs, accountants, corporate lawyers, industry followers, insider share movements, etc... all will benefit more from Half-Yearlies than QR.

g) If you were a substantive shareholder, would you be happy to only get a half-yearly update on your invested company? No. Why should normal investors be deprived of that information?

h) Does QR limits a company's long range planning? No. Why should short term price gyrations affect your company if your fundamentals are strong. Eventually all QRs will even out positively if your long term fundamentals are good. Yes, stocks will react to QRs, but these are the norm of a market, a daily market place that tries to forward discount a company's prospects. 

If you argue for long term reporting, why not report all earnings in one month and then close the market for one year, then report again... that is as preposterous as eliminating QRs.