Thursday, January 31, 2008

Multi-Code files suits..

Previously blogged: Special audit on Multico accounts! and also see It's the business.. Part II (Muticode was a stock that paid great dividends but the business was in a slump!)

Today, Business Time published that
Multi-Code files police report on former MD!!!

  • The company's chairman has lodged a formal complaint against Gordon Toh Chun Toh over an alleged RM36 million misappropriation

    A POLICE report has been lodged against the former managing director of Multi-Code Electronics Industries (M) Bhd over an alleged RM36 million misappropriation in the second board-listed company.

    In a filing to Bursa Malaysia yesterday, the company said the formal complaint was lodged by its current chairman Datuk Mohd Nadzir Mahmud against Gordon Toh Chun Toh.

    "The board had resolved that Toh was unable to account to the board and the company's auditors RM35 million to RM36 million of the company's funds had been properly invested in foreign financial institutions," the company said.

    Toh, a Singaporean, was appointed managing director of Multi-Code on March 23 2007.

    Toh, 56, was described as a Colombo Plan scholar, having served in the Singapore civil service and later, several banks. He was managing director of Elliott Gordon Singapore .

One comment - I am known not to like to see the listed company investing the excess money. So many things can go wrong. I would prefer to see the listed company to return excess company back to its shareholders!

Wednesday, January 30, 2008

Mae, I hope I am not WRONG!

I received some interesting comments on the posting A look at MaeMode again.

Before I start, I wrote the following:

  • Back in 2004, its receivables was a mere rm67.475 million. Some 3+ years later, the receivables have blown to an incredible rm271.231 million! This is a massive warning sign, yes?

Sometimes, I do NOT like to write too direct. I see a massive issue with Maemode's receivables. In my opinion, it's an issue and I reckon that it should be a massive warning for investors of MaeMode.

If you had look at the numbers, you would note that the company's net debt position has been rising. And to compound the matter worse, the receivables ballooned in a even more alarming manner.

And in my opinion, no well managed company runs their company in such manner. You do not borrow more money, while you return do not collect your trade receivables. And this was one clear indicator seen previouslyu in Megan. (See The Receivables Issue And Megan ) .

Simple commonsense reasoning is why borrow when you should be collecting what is due to you. Yes?

And yes we all know trade receivables that could not be collected could be re-classified as doubful debts? That's a possibility, a risk.

However, in the market, the unexpected can always happen!

Although the trade receivables is a massive problem, at the end of the day it is only. Just like the possibility of it blowing up badly, there's still a chance it could always be solved. (Though I got I strong feeling that it could blow up!!!)

Why is why I ended the posting saying "I hope I am not WRONG!".

Yes, I could always be wrong.

Anyway here are the comments received.

  • Double negatives can be tricky. I think you mean to say "I hope I am wrong" because "I hope I am not wrong" means "I hope I am right"! Which would be to twist the knife in the side of those who hurt from maemode investments. :)
  • your analysis is backed by numbers. As long as your numbers are correct, you CANNOT be wrong. This company is like a time bomb. People call it TIME bomb because it is not the matter of IF, the question is WHEN will this stock takes its turn to plunge!

I hope this comments clarify my stance on MaeMode. I see a stock with decent, impressive earnings but I do not like what I see underneath. The debts bother me, the receivables scares me! And for me, as an investor, I shall call this a pass for I deemed this as a rather extremely risky investment.

And yes, I could be wrong here but missing an opportunity is never a sin to me or my money.

Dr. Marc Faber's commentary on Barron's 2008 Roundtable

Dr. Marc Faber was featured again in Barron's 2008 Round table discussion on the stock market. ( See What Now? )

Of course the most interesting bit from that article was the part on the shipping industry.

  • My next recommendation is a shipping short. I turned bearish about home-building stocks in 2005, and felt the troubles in the housing market would hurt the subprime-lending industry and spread to other sectors of the economy -- in particular, consumption. Private consumption now accounts for more than 70% of U.S. GDP, which is why I'm negative about the U.S. economy. The problems here will also affect other economies. The Chinese stock market is closely correlated with the Baltic Dry Index, a shipping index. Tanker rates have plunged, but the Baltic Dry Index is still in the sky. If you can't short the index, short DryShips [DRYS]. The BDI has fallen 28% since Jan. 7. Faber suggests remaining short DryShips.

BDI is still in the sky!

Is there any justification in what's been said by Dr. Faber?

If I would refer back to the posting, Update on the Baltic Index, the BDI chart posted on that posting says it all.

Look at the pre 2003 numbers and one would note that over that DECADE, the BDI was below 2000. Now if I would refer to Bloomberg ( see here ), I would note that the BDI fell another 1.35% or 77.0 to 5615. And 5615 is very much higher than the 2000 level. ( I actually would ass-u-me that perhaps 3000 would probably be a fair level for the BDI). So what do you reckon? Is there justification for Dr. Faber to call a short in this shipping industry?

Here are some other commentary worth noting:

  • Faber: We aren't dealing purely with market forces today, but with an economy that is largely manipulated by central banks, which create excess liquidity by cutting interest rates dramatically and letting credit growth accelerate dramatically. I'd like to read a quote from a German newspaper published in 1923, when Germany was dealing with hyperinflation: 'There have been extraordinary rises in the quotations for all shares, the chief cause being the catastrophic change in the economic situation.' In other words, you could have a slump in the economy, yet share markets could go up simply because of excessive liquidity and interest rates being cut, theoretically, to zero.

    Since 2002, all asset prices have risen substantially. Against this backdrop, I'll focus on pair trades -- assets that will perform better in the next three to six months relative to others. The U.S. is in a bear market, and earnings will disappoint here and worldwide. Cost pressures will diminish profit margins. The stock market doesn't have a bubble valuation, though the Standard & Poor's 500 is selling at a higher price-earnings multiple than is evident. Take out the energy sector and the S&P has a P/E of 20, not 15. If earnings decline -- partly because the energy sector won't have higher earnings this year than last, and also because the financial sector has diminishing earnings and the economy is in a recession -- then the S&P isn't cheap.

  • I didn't say Europe is cheap. Stocks in the U.S. probably are cheaper than 10-year Treasuries. Cash has been a disastrous investment for the past 40 years because the purchasing power of money has diminished. I don't find any great values in the stock market now. If people want to buy stocks, stick to the recommendations I made last year. [You'll find them listed free of charge on Barron's Online,, under the 2007 Roundtable Report Card.]
    I still like gold, cotton and sugar. My new recommendation is to short the British pound against the yen. The pound, as Felix explained, is overvalued. It doesn't have a lot of upside potential compared to the dollar. It is probably less risky to short it against the yen than the dollar. [The pound has fallen 3.3% against the yen since Jan. 7. Faber remains short the pound.]
    You can also short the euro against the yen. The euro is a relatively expensive currency and European economies aren't going to perform well. Europe also had a lot of excesses, and the ECB [European Central Bank] will cut rates dramatically. Central-bank monetary policies are leading to the competitive devaluation of currencies.

In regards to the USD.

  • Faber: It has reached extremes. It also has depreciated considerably against the euro. Today, I would buy the dollar.
    At the moment, there is a war: The private sector is cutting credit and the central banks are cutting interest rates because they are desperate to revitalize credit growth. In the long run, the central banks will win, but in the next six to 12 months, relative credit contraction isn't going to be good for any asset class. In a year's time, the S&P 500 will be lower than it is today.

Not liking the Japanese markets at all

  • Faber: Two trades today are totally out of favor. One is betting on the dollar, and the other is buying Japanese shares. I go to seminars, and whereas 10, 15 years ago there were hundreds of people attending the Japanese sessions, today there are hundreds attending sessions on investing in Vietnam. Nobody goes to the Japanese sessions anymore. It's remarkable that people talk about equity valuations being low in the U.S. compared with bond yields, while valuations in Japan are very low compared to the Japanese bond yield. Buy the Japanese stock market on a correction of 10% or so.


  • Faber: Many countries have opened up following the breakdowns of communism and socialism. China began opening in 1978, proceeding at different times and in different sectors. The same has occurred since the late '90s in India, and more recently, Vietnam. One country in Asia hasn't begun to attract a lot of attention, but has great potential. It is Cambodia. You can't play Cambodia now, but some Cambodia funds will be launched this year.
    Eastern Europe has climbed the value scale. There isn't a big difference anymore between, say, Slovenia and Austria. Go further east, into Ukraine, and you'll find big opportunities in real estate, in particular agricultural land.
    Basically, investors should avoid correlated assets such as the S&P 500 and the FTSE index, emerging markets, art prices and real estate in financial centers. I'm ultra-bearish about the financial sector, as it will contract for many years, not just one year. I wouldn't buy
    Citigroup [C] here, or Merrill Lynch [MER]. And as much as I like Abby, I wouldn't buy Goldman Sachs [GS]. I anticipate the day when half of Wall Street will be looking for jobs as drivers of tractors and combine machines.

Tuesday, January 29, 2008

A look at MaeMode again

Last April 2007, I thought I saw some decent earnings for MaeMode and because of that I made a posting on the stock. ( See: MaeMode). However, as impressive as the earnings were then, I was turned off by the classical debt build up.

Well, MaeMode just announced its earnings tonight.

See Quarterly rpt on consolidated results for the financial period ended 30/11/2007

Hence, I thought this blog posting should be of interest. Let's see how the stock fundamental is stacking up. Who know that perhaps I might have been prejudiced in my views?

Here is the table I have compiled. I added in a new column. The trade receivables column. Have a look below.

Cash position wasn't any better. And this is despite a private placement done recently. (according to its cash flows, this raised some rm12.768 million)

What was most worrying was the new column, the trade receivables.

It's simply massive!


Back in 2004, its receivables was a mere rm67.475 million.

Some 3+ years later, the receivables have blown to a an incredible rm271.231 million!

This is a massive warning sign, yes?

I hope I am not WRONG!

Everything's Ok for Berjaya Land, so says ...

Ok, despite aborting that one project in Vietnam, ALL the analysts covering Berjaya Land have gone record and stated that BLand ratings unaffected by move to drop Viet project.

I have added some comments in purple italics.

  • BLand ratings unaffected by move to drop Viet project

    By Chong Pooi Koon Published: 2008/01/29

    The head of research at Kenanga Investment Bank says it is all right for the company to pick and choose projects that are economically feasible (Err.. that's rather common cow sense eh? Which logical company wants to embark on a project that is doomed to lose money?)

    BERJAYA Land Bhd's decision to drop a planned transportation infrastructure job in Vietnam last week did not stir concerns among analysts, who believe that the firm will be better off picking jobs that are more financially viable.

    The group is already occupied with five property development projects in both Hanoi and Ho Chi Minh City and they are not too worried about a single infrastructure job that did not pan out well.

    "We understand that cessation of the proposed project would have minimum impact on the group's venture in Vietnam," a SJ Securities analyst who tracks the stock wrote in a report yesterday. The broker kept its "overweight" call on BLand stock, which ended flat yesterday at RM5.80.

    BLand last Friday said that it will not proceed with a plan with Tin Nghia Co Ltd, a state-owned company from the southern Dong Nai Province, on the overall development of Nhon Trach District that included its transportation network.

    The companies have decided to let the memorandum of understanding signed in late 2006 lapse, after a 12-month extended feasibility study done by BLand.

    "I think it is all right for them to pick and choose projects that are economically feasible," the head of research at Kenanga Investment Bank, Yeonzon Yeow said.

    "This is one of the earlier joint ventures that they did not announce. The firm already has its hands full in Vietnam and we don't mind that this is not working out," he added. ( Well I am certainly puzzled with what's being said here. I, for one, was aware of this joint venture and there was announcements made on Bursa website by Berjaya Land. See MEMORANDUM OF UNDERSTANDING BETWEEN BERJAYA LAND BERHAD AND TIN NGHIA CO LTD, VIETNAM and BERJAYA LAND BERHAD ("BLB" or "Company") EXTENSION OF TIME FOR THE MEMORANDUM OF UNDERSTANDING ("MOU") BETWEEN BLB AND TIN NGHIA CO LTD, VIETNAM IN RESPECT OF THE PROPOSED CO-DEVELOPMENT OF THE NHON TRACH DISTRICT (INCLUSIVE OF ITS TRANSPORTATION AND INFRASTRUCTURE NETWORK), DONG NAI PROVINCE, VIETNAM ("PROPOSED PROJECT") )

    Both BLand and the Viet- nam partner have decided to focus instead on specific developments within the district, which involves a bridge that links the area to Ho Chi Minh City, as well as the recently announced plan to develop a 600ha in Nhon Trach New City.

    The bridge is part of the initial overall plan that was scrapped.

    On top of that, BLand still has other projects in that country, including Thanc Ban New City mixed development, Hanoi Electronics joint venture, Vietnam Financial Centre in Ho Chi Minh City.


Yes, since Berjaya Land has tons of projects announced in Vietnam and judging from the size of these projects, perhaps there are valid arguments that Berjaya Land could still have a bright future ahead...

but.. assuming that I am a share holder and from my investor prospective, then perhaps this episode should serve as a caveat for me and that I should not discount the issue of execution risks involved in all these mega projects. Projects do get delay, projects do get aborted and sometimes the profitability is not as it seems.

What say you?

Monday, January 28, 2008

More interesting Stuff at Berjaya Land

Previously blogged: Berjaya Land Is A Growth Story? and What's to happen to Berjaya Land's Growth Story?

Well, with the announcement that Berjaya Land had aborted one of their Vietnam projects (in Nhon Trach district), this should have put a huge damper in Berjaya Land's so-called growth story.

Which gave it a huge possibility that the stock could be hit pretty bad this morning (Stock open down 30 set at 5.50), however, I then noticed two articles published on the Star Business.

Major projects set to push BLand ahead
Group has projects worth RM60bil in Asia-Pacific

I am amazed. Despite this setback in Vietnam, the company came out strongly defending the company's growth potential.

So how?

Saturday, January 26, 2008

Reading Stuff for the Weekend

One of the most interesting article I have read this Saturday was John Mauldin's What Does the Fed Know?. I strongly suggest a read.

And while we are on this issue, then the piece posted on Wall Street Journal is worth a read too, Criticism of Rate Cut Mounts.

That link was posted by Kirk on his link fest. And since I am on Kirk, I suggest giving the following link a read too: Why are bloggers so bearish?

And last but not least, do read Kirk's stock market lessons series: Part I, Part II, Part III and Part IV. ( See also Kirk's Stock Market Lessons of 2006: Part I, Part II, & Part III ). They are all highly recommended!

What's to happen to Berjaya Land's Growth Story?

Previously I made the following blog entry: Berjaya Land Is A Growth Story?

I had questioned the growth story suggested.

I argued that....

  • Now, let's look at Berjaya Land growth as stated.

    In 2005, it earned 67.5 million
    In 2006, it earned 89.1 million.
    In 2007, it earned 32.3 million! (hey... where's the growth????)

    Seriously. Won't that had been deemed as a DRASTIC decline in earnings???

    Anyway... here is the whopping growth...

    In 2008, Berjaya Land is FORECASTED to earn a whopping 497.2 million!
    In 2009, Berjaya Land is forecasted to earn only 212.5 million!

However in that news article, ECM Libra had their own reasoning.

  • "Our recent visits with the management have left us coming away fairly optimistic of BLand's growth prospects," ECM Libra Avenue wrote in a note on last Thursday.

    Citing examples, the research house indicated a 33-sen annual rise in BLand's fully-diluted earnings per share by applying a 10 per cent net profit margin on its RM37.2 billion worth of property jobs in China, Thailand and Vietnam.

    This, in turn, translates into a RM3.7 billion net profit to be recognised over the next 10 years.

RM37.2 billion worth of potential property jobs.

Now this massive potential suffered a huge hit this morning when news article reported that Berjaya Land has made the following announcement.

  • Berjaya Land aborts Vietnam project

    Published: 2008/01/25

    BERJAYA Land Bhd's plans of developing residential and commercial properties in Vietnam's Nhon Trach district has fallen through.

    In an announcement to Bursa Malaysia yesterday, Berjaya Land said it will not proceed with its co-development plans with Tin Nghia Co Ltd, a leading state-owned enterprise in Dong Nai.

    The property development is inclusive of its transportation and infrastructure network.

    "The board wishes to inform that after much discussion and consideration, the parties involved have decided not to proceed with the project based on the findings of the feasibility study report," Berjaya Land said.

    Berjaya Land had signed a memorandum of understanding in November 9, 2006 but the memorandum will now be mutually terminated by the related parties.


Now with Berjaya Land aborting this Vietnam project, serious re-think is required in regards to it's whopping growth story as suggested by Berjaya Land.

Couple of issues.

One, the feasibility of a project, I keep wondering why such a study was made before Berjaya Land signed that MOU.

And lastly, MOU is MOU is just a MOU.

Btw. I had received an extremely interesting comment from PJ-investor in my initial posting on this issue:

  • Know what? i notice ECM always exaggerate their reports. even after doing my calculations, i could'nt match theirs. THere are only 2 possiblities, either ECM people know something that we dont, or they simply miscalculate and exaggerate.Or, it could be that BERJAYA bosses tell them to write something ridiculous to push the stock higher then simply sell a lot at the top. i dont know...

Monday, January 21, 2008

Share BuyBacks: Symphony House

So many recent buybacks

21/01/2008 Notice of Shares Buy Back - Immediate Announcement

18/01/2008 Notice of Shares Buy Back - Immediate Announcement

17/01/2008 Notice of Shares Buy Back - Immediate Announcement

16/01/2008 Notice of Shares Buy Back - Immediate Announcement

31/12/2007 Notice of Shares Buy Back by a Company pursuant to Form 28A

27/12/2007 Notice of Shares Buy Back - Immediate Announcement
24/12/2007 Notice of Shares Buy Back - Immediate Announcement

21/12/2007 Notice of Shares Buy Back - Immediate Announcement

19/12/2007 Notice of Shares Buy Back - Immediate Announcement

18/12/2007 Notice of Shares Buy Back - Immediate Announcement

17/12/2007 Notice of Shares Buy Back - Immediate Announcement

14/12/2007 Notice of Shares Buy Back - Immediate Announcement

13/12/2007 Notice of Shares Buy Back - Immediate Announcement

12/12/2007 Notice of Shares Buy Back - Immediate Announcement

11/12/2007 Notice of Shares Buy Back - Immediate Announcement

10/12/2007 Notice of Shares Buy Back - Immediate Announcement

07/12/2007 Notice of Shares Buy Back - Immediate Announcement

06/12/2007 Notice of Shares Buy Back - Immediate Announcement

05/12/2007 Notice of Shares Buy Back - Immediate Announcement

04/12/2007 Notice of Shares Buy Back - Immediate Announcement

03/12/2007 Notice of Shares Buy Back - Immediate Announcement

30/11/2007 Notice of Shares Buy Back - Immediate Announcement

29/11/2007 Notice of Shares Buy Back - Immediate Announcement
28/11/2007 Notice of Shares Buy Back - Immediate Announcement

27/11/2007 Notice of Shares Buy Back - Immediate Announcement

26/11/2007 Notice of Shares Buy Back - Immediate Announcement

23/11/2007 Notice of Shares Buy Back - Immediate Announcement

(ps... there are even more. You need to see the postings posted on Bursa)

And then you have the disposal...

21/01/2008 Changes in Sub. S-hldr's Int. (29B) - Angsana Tiara Sdn Bhd


One hand share buy back, the other hand disposes!

How? How? How?

Another update on Maybulk

Here's an update on Maybulk.

Previously, I had posted on the
Regarding the Dry Bulk Shipping Sector, in which I had made an update on it here: Update on the Baltic Index.

I then had highlighted the sharp decline on Maybulk on the posting,
Maybulk And The Baltic Index.

This morning, OSK released a report on Maybulk, acknowledging the sharp decline on the Baltic Dry Index but reckons that it's just a temporary blip!

Here is the snippet of what's being said in the report.

  • Malaysian Bulk Carriers
    Between a Rock and a Hard Place

    BUY Maintain
    Price RM3.94
    Target RM5.90

    The recent sharp drop in the BDI according to sources has been attributed to protracted iron ore price negotiations with buyers and sellers supposedly keeping away from booking ships to create opposing perceptions of a shortage in demand and supply. We expect the BDI to rebound sharply in May when negotiations are resolved. For now, even at current levels, shipping rates are excellent when compared to historical averages. We downgrade our earnings for MBC slightly to account for recent BDI volatility but the company remains a Buy with 49% upside.

    Sharp drop in BDI. As the BDI had exceeded expectations on the way up, so too has the severity of its fall. Share prices of dry bulk shipping companies have retraced together with the BDI and MBC is no exception.

    Probably due to iron ore price negotiations. Indications from industry sources are that iron ore sellers may be holding back cargoes and buyers may be holding back orders as both sides negotiate on the new iron ore prices for the shipping year beginning 1st April 2008. Sellers were reportedly looking for a 50-70% hike while buyers were only keen on accepting a 20-30% hike. The current high price of coal has also led to some parties holding off new orders until February.

    Temporary blip in the BDI. Indications point to demand for iron ore from Chinese steelmakers still being strong and it appears only a matter of time before ore prices are agreed upon and shipping orders come flooding back into the market. Freight forward agreements, which show an uptick in May, seem to support this view.

    Rates at this level still very profitable. Even at below the 6500 pts level, the shipping rates that dry bulk ships will enjoy is still very good. To note that Panamax and Handymax rates have held better than for Capesize vessels.

    Still a Buy. Undeniably, sentiment on MBC has been hit by the sharp slide in the BDI. But with the BDI expected to rebound in May, an excellent set of earnings and a bumper dividend to be announced in February, we maintain a Buy recommendation on MBC. We have tweaked our earnings down by 2% to account for BDI volatility and our fair value is adjusted down to RM5.90.

Now, here's an issue not to be discounted. The BDI has dropped a 37% Since Mid November! And in OSK report, it said they had 'tweaked our earnings down by 2%' to account for the BDI volatility.

Just 2%?

Anyway, here is the earnings tables from OSK.

Now if you look at the 2007F and 2008F forecast numbers, don't you think that OSK is still extremely bullish on the stock?

Friday, January 18, 2008

Maybulk And The Baltic Index

Thought I do a posting highlighting the impact on the Baltic Index on Maybulk ( See Update on the Baltic Index posting this morning )

The following is the chart of Maybulk done on Jan 8th 2008.

Compared that to the current chart of Maybulk. ( Screenshot taken moments ago)


Pretty ugly, right? Maybulk is now at 3.94 compared to 4.42 a few days ago!

Let me say this... if I am interested in this stock or sector, I probably better NOT discount what the Baltic Index is suggesting to me!

Update on the Baltic Index

Here's an update to the early posting: Regarding the Dry Bulk Shipping Sector

Posted on Bespoke Investment
Baltic Index Down 37% Since Mid November

The chart posted on the website is most worth noting.

And the following article was posted on Star on 15th Jan 2008.
  • Tuesday January 15, 2008

    Shipping rates down sharply

    HONG KONG: Hyundai Heavy Industries Co., the world's largest shipbuilder, led declines among shipyard stocks on concern of fewer orders for vessels this year after bulk rates fell the most since June 1989.

    Hyundai Heavy dropped 6.6%, the biggest decline in almost five months, to close at 382,500 won. Unit Hyundai Mipo

    Dockyard Co. declined 6.5%, the largest loss in two months, to 244,000 won.

    Bulk rates plunged last week on concern economic slowdown in China, the world's biggest buyer of iron ore used to make steel, and the US may reduce trade demand for commodities and consumer goods. Demand from China, Asia's second-largest economy, last year helped lift fees to a record, prompting vessel orders.

    “Investors are worried that with rates falling so much last week, shipping lines may pull back from ordering more vessels from shipyards,”said Lee Jae Won, an analyst at Tong Yang Investment Bank in Seoul.

    “That would mean the momentum for new orders could come to an end this year.”

    Lee has an “overweight” rating for South Korean shipyards.

    The Baltic Dry Index, which measures shipping costs for commodities, fell 4.6 % on Jan 11 to 7,949.

    “The index is often used by investors to track rates for the shipping industry,’’ Lee said.

    “It seems investors have overreacted to the news.”

    Strong demand from operators of vessels that carry iron ore, coal and consumer goods helped yards in South Korea to win record orders for a fifth straight year in 2007, stretching deliveries to as long as 2012.

    Shipping lines including STX Pan Ocean Co. and Pacific Basin Shipping Ltd. spent a record US$179.8bil in new vessels in the first 11 months of last year, 40% more than US$124.4bil

    invested for all of 2006, according to London-based Clarkson Plc, the world's biggest shipbroker.

    Hyundai Heavy’s net income more than doubled to a record 434.7 billion won (US$464mil) in the third quarter, with sales climbing 19% to 3.73 trillion won.

Wednesday, January 16, 2008

Getting Edgy Eh?

Here's a fantastic interview between Dr. Marc Faber and Jim Puplava. here

Regarding the decoupling theory, here is Dr. Faber's views:

  • JIM: What about the theory that’s being bandied about, even though the US economy slows down as we are now seeing that –they call the decoupling theory – that the rest of the world (whether it’s Europe, Asia, emerging markets) will continue to be strong? So therefore, if you are let’s say a large cap international company where you get a good majority of your sales overseas – and a good example would be, for example, DuPont this week beat estimates. They get 60% of their business overseas and because of that business doing very well their earnings were higher than expected. Do you subscribe to the decoupling theory, or do you think a slowdown in the US will have some effect on Europe and the rest of the world?

    MARC: Well, basically, we have to first of all distinguish between an economic decoupling and a financial decoupling. In other words, can some countries grow when the US is say in a no-growth mode or in a recession mode? I think that this is possible because if you look at basically the US economy over the last two hundred years, occasionally you had a recession in one state, say, Texas in the early 1980s (when the oil price started to go down), and you had expansion in another state like New England (which benefited from lower oil prices); or in the early 1990s, you had a recession in California but other states they were expanding. So in an economy which is very complex, where you have different regions and you have different sectors – industrial sectors and service sectors – it is conceivable that one sector is in recession and other sectors or other regions are not; that is entirely possible. But I would argue that over the last seven years we had an unprecedented global economic boom where essentially every country has been growing with the exception of Zimbabwe, because you have a money printer in Zimbabwe who essentially should be joined by Mr. Bernanke. He would fit very well with Mr. Mugabe in that country.

    Now, what happens if the US no longer grows is that the trade and current account deficits of the US shrink. In other words, we had during the excessive consumption period 1998-2006, a current account deficit in the US that increased from 2% of GDP to over 7% of GDP, and at the end was supplying the world with $800 billion annually. And this river flows into the world through the American current account deficits, and essentially provided the world with the so-called excess liquidity and created booms in everything from art prices to commodities, stocks, bonds, real estate, what not. And once the US no longer has this growing current account deficit, but a shrinking current account deficit, you have essentially a relative illiquidity coming up in the world. It is not that it’s tight money, but the rate of growth of liquidity shrinks and it does have obviously an impact on the economies and on the asset markets. And it is conceivable that say the US goes into a recession, Europe goes into a recession and that China does not go into a recession but into a growth slowdown, say from 8 to 10% GDP growth down to 3 to 6% of GDP growth. But this decline in the growth rate is still very uncomfortable for China, as well as for India. So I’m not a great believer in this decoupling theory.

    Moreover, I don’t believe that financial markets will be decoupled. In fact, I would argue: If you look at look at the last four years, 2002 to today, then emerging markets have been the big bubble. The US markets have not been a gigantic bubble in the sense that US equities, especially large cap stocks, are not terribly expensive by world standards because the dollar has gone down so much. And so the big bubble is probably in emerging markets; and these markets, obviously if the S&P goes down, will be hit very hard. And I would argue, if someone puts a gun to my head, and says, “Marc, you must buy stocks,” as much as I dislike saying this but I would probably rather buy US stocks today, than say some of the emerging markets that are selling at 30 to 50 times earnings. [20:08]

Had a nice time reading some articles ( from links posted on the usually brilliant Kirk Report). Enjoy!

  1. Bank frontrunning?
  2. Chinese stock manipulation/overvaluation
  3. John Paulson made billions on subprime (here's his portfolio)
  4. Black Swan author Nassim Taleb issues a warning to traders

Tuesday, January 15, 2008

Regarding Top Glove share buybacks.

The Smart Investors wrote:

  • What do you think of Topglove's share buy back scheme. Seems every few days they buy back their shares. But doesnt seem to be affecting share price. As a company i really like Topglove and have taken their share buy back as a positive signal. Juz wondering what your thoughts on it might be.

Dear Smart Investor.

Here are some of my thoughts on this issue. (Do realise I am not a legal investment advisor, so do take my comments with a pinch of 'garam'. )

1. Regarding TopGlove share buyback.

In my opinion, I'm not too impressed with their share buyback program. I could be wrong but I do not see much point in initiating a share buyback based on the current prices for I do not see much value in doing so and I would certainly question why the need for it. Perhaps money could be utilised much better.

For starters, Top Glove's cash flow is weak and if you look at their recent announced quarterly earnings, you would see that their cash balances is much weaker if you compared to the previous year.

And amidst their rather insane everlasting global capital expansion (yes, I am not a fan of their continuous expansion over all these years.) Top Glove is a company which is in a nett debt position. And when you have more debts than cash, I am simply not in favour of such a corporate exercise.

2. Buybacks not affecting the share price.

Not all buybacks works. Some fail. Do read Dali's truly brilliant article on Why buybacks fail.

Hence, I ask you in return. Are you really expecting the share price to increase?

3. Regarding Top Glove.

I have posted before quite a number of postings on Top Glove ( See this posting: Top Of Ze World: VIII. It include links to other Top Glove postings) and I am sorry but I am not a fan of this company and I do see some valid reasons to be sceptical. For example, I seriously believe Top Glove has over-expanded and I am sceptical if the company can truly manage their expansions in a profitable manner. And then you have the rising costs issue. Rising fuel and high rubber prices simply means higher cost. And last but not least, I could be wrong but Top Glove's sales are predominantly in the US Dollar. And a shrinking US Dollar will have a huge impact on Top Glove profitability.

Hope my thoughts help as a second opinion.


Thursday, January 10, 2008

When A Listed Company Sells Its Core Business Away!

Imagine this.

Let me take for granted that you are an investor. You make your research and after due diligent, you come to a conclusion that this company called PomPiah, who sell famous delicious poh-piah, is making extremely good money, and you decide to take a plunge and be a shareholder of the company by buying some shares in the company. A year later, Pompiah announces it is selling its famous poh-piah franchise away. Now after selling, PomPiah is left without a core business.


Wouldn't this not be a massive concern for you the investor?

I mean company now has no core business and you do not know what lies ahead!

What if PomPiah decides to plunge into the rubber wood furniture business? And what if you reckon that this is rather a very depressing business to be in? But do you have a choice? Yes, you can vote against the proposal but what if it's no use?


Isn't it rather terrible that you are a minority shareholder of a listed company and the company then sells away its core business?

Terrible yes?

I mean how can..... right?

This is how I felt when I read the following news article:
Tamco to announce new core business in six months

  • Thursday January 10, 2008

    Tamco to announce new core business in six months

    SUBANG JAYA: Tamco Corporate Holdings Bhd will announce its new core business in six months, group managing director Abdul Latif Mahamud said.

    “We will make that announcement in six to eight months when we feel the time is right,” he said after the company EGM yesterday.

    Abdul Latif did not disclose the nature of the company’s future core business but said: “We are considering several options. We have plans but we cannot reveal them at this moment.”

    However, he confirmed that the company was venturing into “new and different” business streams.

    “We are looking at businesses other than what we have now and have identified certain areas,” he added.

    Meanwhile, deputy chairman Datuk Siew Ka Wei said the company was in good hands and had a promising outlook.

    “This is the management that brought the company from where it was (when it was listed) to where it is today.

    “The management deserves the trust (of its shareholders) to look for a new business that would create value,” Siew added.

    At the EGM, Tamco shareholders approved the proposed disposal of the company’s core switchgear business to India-based engineering company, Larsen & Toubro Ltd, for RM378mil.

    Siew said the bulk of the proceeds would be distributed to shareholders.

    Tamco will be disposing of its entire equity interest in four subsidiaries: Tamco Switch-gear (M) Sdn Bhd, Tamco Shanghai Switchgear Co Ltd, Tamco Electrical Industries Australia Pty Ltd and PT Tamco Indonesia.

    The disposal is expected to be completed in the first half of this year.

And it doesn't make it any better when you read the following statement..

  • Meanwhile, deputy chairman Datuk Siew Ka Wei said the company was in good hands and had a promising outlook.

Promising outlook?


How promising can the outlook be?


Another terrible funky music being played...

Wednesday, January 09, 2008

Hidden Gem In The Plantation Sector

One of the articles that caught my attention this morning was the one published on Star Business, Chin Teck a hidden gem among plantation stocks

With the plantation sector is sizzling hot, any such article would certainly stir anyone interest. Mine was.

  • Chin Teck Plantations Bhd may be a laggard in the plantation sector but its good earnings growth and very attractive yield make it a hidden gem among plantation stocks.

    A brokerage in a report
    said Chin Teck’s operating efficiency was on par with some of its larger peers and it enjoyed one of the highest profit margins in the sector.

I wonder... who is the brokerage? And when was the report dated? ( Sometimes, I seriously wonder why our business articles cannot quote or name their sources directly. Why?)

  • The research house sees Chin Teck’s earnings per share improving to 77.6 sen for the year ending Aug 31, 2008 (FY08) compared with 44.5 sen in FY07. While the sector has advanced almost 80% year-to-date, Chin Teck’s share price has only appreciated about 38%.

    The company’s shares are trading at 10.7 times FY08 price-to-earnings ratio despite its decent growth, good leverage to crude palm oil (CPO) prices and attractive yield.

    The brokerage said it offered a dividend yield of more than 6%, which was the highest in the sector. The company recently declared an interim dividend of 25 sen for FY08, which will go ex- on Jan 21.

PS. It's trading based at 10.7 times FY 08 earnings. Do understand that this research house is EXPECTING (or ass-u-ming) that Chin Teck earnings grow from 44.5 sen to 77.6 sen. Huge growth in earnings is expected for this FY 08!!

The article then continues..

  • Chin Teck has a strong balance sheet, having net cash and cash equivalents amounting to RM123.1mil in FY07. Based on the current CPO price, it could generate another RM50mil to RM60mil from operating activities in FY08.

    Its landbank, last revalued in 1983, would be worth much more at current prices, especially that in Port Dickson, which could be used for property development. The potential revaluation will enhance the company’s net tangible asset per share.

    As at end-FY07, its investment in securities, which cost RM18.3mil, had a market value of RM33.7mil, translating into a gain of RM15.4mil.

    Its reserves as at FY07 stood at RM368.3mil, which are sufficient for the group to declare a four-for-one bonus issue if it wants to.

    Chin Teck’s fourth largest shareholder, Keck Seng (M) Bhd, is involved in property development, hotel management, plantations and palm oil milling.

    Given their similar businesses in plantation, perhaps a consolidation could create more synergy for their shareholders.

Sounds so good eh?

Surely it warrants some investigation, no?

First thing.. I thought I decided to look at Chin Teck's charts. Here is the 'live' chart from my stock quotes provided by RHB.

Oh my..... Wait a minute, this is a fantastic looking stock and it certainly doesn't look like a laggard stock!

Let's refer back to the opening line in the article...

  • Chin Teck Plantations Bhd may be a laggard in the plantation sector but its good earnings growth and very attractive yield make it a hidden gem among plantation stocks


Now... I seriously wonder... who is the brokerage? And when was the report dated?


Just for the record.. Chinteck ended the trading day being the top gainer! It closed at 8.80, up a nice 50 sen.


Tuesday, January 08, 2008

Regarding the Dry Bulk Shipping Sector.

I was reading Blogger Kirk's daily report, Time's A Wastin, when I found this very interesting link posted by Kirk: "Much can be learned from understanding sentiment cycles. Teresa Lo studies the dry bulk shipping industry".

I like that posting by Teresa Lo a lot.

In her article, she focused on 2 phases of the Sentiment Cycle.

  • The two phases we’ll focus on is Enthusiasm and Disbelief:

    Once it is widely accepted that economic and corporate fundamentals are supporting higher prices, a bell goes off. The bull survived The Big Dip. Those who had previously been afraid now have plenty of reasons –- and proof -– that it is safe to go back into the market and buy again.

    At this point, we detect a subtle change in psychology, a shift from the fear of loss to the fear of missing out, and the appetite for risk becomes evident. Investors buy on faith, bolstered by analyst and media reports projecting the trend to continue. As price rises to new highs, they all scream, “It’s a breakout!” They are supremely confident that the best is yet to come.

How true isn't it? The fear of missing out!

Teresa then starts her report on the dry bulk shipping sector by stating the following:

In October 2007, stories by the financial media regarding Dry Bulk Shipping were overwhelming bullish. Let’s check the headlines:

  • Cramer’s ‘Mad Money’ Recap: Bulk Up on Dry Bulk ShippersNobody talks about dry bulk shipping stocks because they’re boring. “I can’t throw pies or wear funny clothes when I talk about dry bulk shipping,” Cramer said. The money to be made on these stocks, however, is very exciting; they provide “huge and reliable dividends,” he said. Dry bulk shipping stocks have risen enormously since July, when Cramer recommended them. “This industry is one of the great bull markets in the world right now,” he said. Even though investing in these stocks is “not sexy,” sometimes you have to go for the easy money, and that’s what dry bulk shippers offer.
  • Jefferies ups targets on bulk carriersOct 16 (Reuters) -Jefferies & Co raised the price targets on several shipping companies, saying the outlook for the dry bulk shipping market remains attractive as significant quantities of new iron ore production capacity come on-line over the next 12 months.
  • Bear upgrades U.S. ocean shipping sectorOct 10 (Reuters) -Bear Stearns upgraded the U.S. ocean shipping sector to “market weight” from “market underweight,” saying it was positive on dry bulk fundamentals over the next 6 to 18 months.”
  • Bear upgrades U.S. ocean shipping sectorOct 10 (Reuters) -Bear Stearns upgraded the U.S. ocean shipping sector to “market weight” from “market underweight,” saying it was positive on dry bulk fundamentals over the next 6 to 18 months.”
  • Smiling Dry-Bulk Shippers See The Boom Times Lasting For Years- Investors Business Daily, September 28, 2007

Now obviously this case study would be interesting as there are a number of dry bulk shipping stock listed locally.

And in this very same period, Oct 2007, Star Biz carried the following article: Shipping stocks head north

  • PETALING JAYA: Shares in shipping firms rose yesterday as freight rates for dry commodities like coal, iron ore and grain climbed to a new high.
    Shares in Malaysian Bulk Carriers Bhd, which derives 70% of its business from dry-bulk shipping, ended 4 sen higher at RM4.80 yesterday while smaller sized Hubline Bhd gained 1.5 sen to 76.5 sen in active trade of 8.18 million shares.

Teresa then states her second phase:

  • Disbelief
    The market fails to go higher, and indeed many of the early leaders have broken down under the 50-day moving average, giving technicians the Subtle Warning. This marks the beginning of the ‘something is not right’ gut feeling, but in the absence of bad news, investors hold on to hope. Not only are they heavily invested in the market, they are psychologically invested in being right and they ignore anything that does not go with their worldview. Indeed, they even wonder aloud why their beloved stocks cannot go up amidst good news, higher earnings guidance and analyst upgrades.

How true isn't it? Tersea then states:

  • Almost all of the high fliers in the Dry Bulk Shipping industry have pulled back from their highs. Investors are looking around for hopeful articles. The “handholding” phase has begun. A excellent example is the industry review piece from Barron’s that also focused on specific companies. They worked the analysts and company executives for quotes and even did a video interview with Bear Stearns shipping analyst Scott Burk:

    Dry-Bulk Shippers Are on Sail
    DRY-BULK-SHIPPING STOCKS HIT SOME ROUGH seas late last year, but barring a U.S. recession and global slowdown, they should be in for smoother sailing in 2008. While companies across the sector are poised to benefit, two standouts are Diana Shipping and Genco Shipping & Trading. Both shippers will acquire new vessels and will have the opportunity to lock in higher contract rates this year. That would provide the company and investors with reduced earnings uncertainty despite an iffy economic outlook. After roughly tripling from their lows in early 2007 to their peaks at the end of October, Diana and Genco..”
    Video Interview- Scott Burk Bear Stearns shipping analyst

She then provides 8 charts for 8 different Bulk shipper.

I will just reproduce one of them here.

Now here is the interesting exercise. Let's compare with some of our Bulk Shipping stocks.

1. Maybulk.

2. Swee Joo.

3. Hubline.

Compare these 3 stocks with the stocks Teresa had posted in her reserach.


Did you see how they all 'seemed' to have formed a peak on Oct 2007?


Ah... I do not give investment advice. Hence, perhaps, you might want to give the rest of Teresa article a read here!

ps. On Dec 31st, the following article was posted on Star: Container, dry bulk seen on downtrend

  • Container, dry bulk seen on downtrend


    THE container and dry bulk shipping industry is forecast to trend downwards next year due to anticipation of weaker Asia-to-the United States trades amid a situation of supply exceeding demand.

    Citi Investment Research (Asia-Pacific), in its latest transportation outlook report, said global TEUs (twenty-foot equivalent units) were expected to see a 9% growth next year from 10% this year.

    “This is based on some deceleration in Asia-Europe outbound trades and continued softening in Asia to US trades,” it said.

    The research house said for Asia to US trades, Transpacific remained the most important market in the world and “it has not been doing well”.

    “Behind a marketing push by container liners on pricing, carrier executives have talked openly of slashed capacity and flat volumes,” it said.

    It said the volumes to the US West Coast fell short of this year's forecasts, which originally called for 10% growth. It was downgraded at 7% to 8% and recently, at 2% to 5%.

    “Based on current data, growth is about 2% to 3%,” it said.

    On the positive side, shipping lines made customers pay for higher inter modal pass-through charges.

    “Also, the generous capacity cuts by prominent shipping group Maersk helped the market, to an extent.

    “Maersk, in late 2006 and early this year, took out about 20% of its capacity from this trade,” it said.

    Citi Investment said the Transpacific rates in the second half this year remained several percentage points below last year's despite higher fuel and other costs.

    “We believe next year will follow a similar deterioration trend due to weaker demand and lower rates from the US property bubble,” it said.

    It added that the third quarter of this year all-in rate on the Transpacific Eastbound was lower by 0.5% at US$1,707 per TEU.

    “This rate includes the higher fuel costs, which the container lines will try their best to redress next year.

    “We believe 2008 will be another difficult year despite news that CSCL shipping line has joined the Transpacific Stabilisation Agreement (TSA) that now represents about 80% of capacity in the Transpacific Eastbound,” it said.

    TSA is a research and discussion group of major container shipping lines, offering ocean and inland transportation, logistics and supply chain services from Asia to the US.

    To counter the downturn, the research house said, the Asia-Europe trade combining the North Europe and the Mediterranean, was expected to be the world's largest trade by box volume next year “if the Asia to Europe trade grows more rapidly to the US”.

    “Given the run rate of growth has been at 20% or above this year, congestion is feared in many North Europe ports.

    “In August and September, overall growth slowed to about 16% to 17%, and base case growth can still be expected to hold at 15% next year,” Citi Investment said.

    Interestingly, it said, the real driver of trade growth was strong demand from Europe for China-made goods.

    “Growth into the Mediterranean has been even stronger than North Europe, partly because of growth into the Black Sea area,” it said.

    For dry bulk, the research house forecasts that supply would exceed demand by end 2008 due to increased capacity.

    “Near-term deliveries continue to creep up due to off-the-radar ship orders being completed.

    “Weaker tanker rates and the phasing out of single hull tankers have resulted in many ship owners converting their tankers into carrying dry bulk. This creates a surplus in capacity,” it said.

    Citi Investment said the latest Clarkson numbers for bulk deliveries next year would be 29.1 million dead weight tonnes (dwt).

    “Oil tanker conversions threaten to add another 7 million dwt next year, which can bring total supply growth in 2008 to almost 9%, before accounting for potential scrapping of old vessels and order book slippage,” it said.

    “Still, we are weary of putting too much hope on slippage, since we expect 2008 deliveries to continue creeping upwards,” it added.

    Although the supply and demand situation may be debatable in terms of where it would take the dry bulk market, the research house expects it would be down.

    “Bulk capacity will hit at 9% to 10% growth levels like we have never seen before.

    “Total demand growth, including special factors such as congestion and demand growth for long haul will have to accelerate from its recent China-driven, all time high levels to keep pace with supply,” Citi Investment said.

    It said demand growth seen from the China-driven growth since 2003 to date had been only 7.24% per year on average and on a longer-term, demand had only grown 3.4% per year from 1980 to 2007.

    “Also, if one believes the growth in China will slow down, then one will be hard-pressed to show how demand can overcome the current order book,” it added.

    Nevertheless, it said, bulk stocks could have one more phase of bullish market next year though downside risks could be on the rise as the year progressed.

    On shipping stocks, the research house, which has an “underweight” call on the shipping sector, has rated a “hold” on shipping companies Wan Hai and Precious.

    It is maintaining a “sell” call on CSCL and Hanjin based on their high valuations.

Saturday, January 05, 2008

Regarding Green Packet's Share Buybacks.

Fellow blogger, Dali, has written a truly wonderful piece on share buybacks, on Star Bizweek, called Why buybacks fail.

I would like to point out two paragraphs.

  • If a company has to resort to improving its share price by reducing free float, it is rarely successful. By reducing free float, it is a futile exercise as the company will have to accumulate a significant amount to prop up the share price – that seems artificial no matter how you look at it as the only group really keen to own the shares is the company themselves.

And ...

  • Bottom line, if it is not going to be cancelled, share buybacks are not really that big a positive in rating the company. Most times, companies who carry out share buybacks do not see significant improvements in their share price. Investors do not rate a company higher because of such an exercise as they are not buying the stock in the first place for various other reasons. In addition, the free float is not really a major factor. A worthwhile share buyback is one that subsequently involves the cancellation of the shares that have been bought back. Companies that do not do that, need to ask themselves why their share price is not at a level where it should be. Are investors not happy with the management's vision? Is the company not communicating its plans effectively? Has the company not been able to chart a credible track record? Have the financial results for the company been haphazard or inconsistent? Is the company unfocused or too diverse that nobody wants to follow/research the company? What is the management's track record in dealing with minority shareholders? Have transactions or deals been fair to all shareholders or been forced down investors' throats?

Here is one GLARING "LIVE" example.

Green Packet.

1. Dec 26th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.38. Highest price paid 2.50.

2. Dec 27th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.43. Highest price paid 2.53

3. Dec 28th. 2007 Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.54. Highest price paid 2.80.

4. Jan 2nd 2008. Notice of Shares Buy Back - Immediate Announcement

Lowest price paid 2.80. Highest price paid 2.93.

So, from Dec 26th 2007 to Jan 2nd 2008, Green Packet's share buybacks saw it paid a lowest price of 2.38 and a highest price of 2.93!

Consider the points Dali made and do put that into perspective of Green Packet's current share buybacks.

Do you like what you see?

Well for the record, Green Packet, share price has been performing terribly.

Have a look below.

Green Packet's highest traded share price was 2.94 on 31st Dec 2006. GPacket closed at 2.77 yesterday, 4th Jan 2008.

Wednesday, January 02, 2008

Special audit on Multico accounts!

What a start to the new year.

Published on the Star Business:
Special audit on Multico accounts

  • Wednesday January 2, 2008

    Special audit on Multico accounts

    By C. S. TAN

    PETALING JAYA: Multi-Code Electronics Industries Bhd (Multico), a second board company with RM37mil in unascertained deposits and investments, will appoint Azman, Wong, Salleh & Co to carry out a special audit on its accounts.

    The company told Bursa Malaysia on Monday the special audit would cover matters highlighted by the external auditors and “the failure to detect the error in FRS (financial reporting standards) recommendations by the external auditors.” The company’s external auditors are Ernst & Young.

    Multico has yet to announce its audited accounts for its financial year ended July 31 (FY07) even after three extensions. It announced in September an unaudited net profit of RM1.3mil for that year, and was required to disclose its audited results by Nov 30 under Bursa’s Listing Requirements.

    After three extensions, the latest of which was till Dec 19, the company had yet to present its audited results, according to Bursa’s website.

    On Monday, in announcing its results for its first quarter ended Oct 31, Multico said that in the course of audit for FY07, auditors were not able to obtain documentary evidence and satisfactory explanation from management so as to verify the existence or recoverability of sums totalling over RM37mil. These involve:

    1) Deposits with a foreign financial institution of RM28.6mil, and accrued interest income of RM960,000;

    2) Investment in a foreign investment fund amounting to RM3.5mil; and

    3) Deposit of RM4.2mil with a foreign company for registration of the company in the American Depository Receipt programme.

    Multico said these sums arose from transactions involving parties connected to a director of the company.

    Meanwhile, Multico, which makes electronics components like remote control auto alarm, central locks, power windows and reverse sensors, reported an unaudited net profit of RM1.1mil for the first quarter of FY08.

    The company saw a change of major shareholder and managing director early last year.

    Goh Tong Huat, who was managing director, resigned on March 23, 2007. He was disclosed in the company’s 2006 annual report as having a direct interest in 12.1 million shares, or 27.3% of the company’s equity, and deemed interest in 502,000 shares, or 1.1% of the company’s equity.

    It was announced on the same date Goh resigned that he sold 10.8 million shares at RM1.60 each and ceased to be a substantial shareholder, while his wife Lee Siew Kiat sold 500,000 shares at the same price. Goh was deemed interested in the shares that Lee sold.

    Most of these shares were apparently sold to Ace Prelude Sdn Bhd as it was later announced that this company bought 11.1 million shares representing a stake of 24.9% in Multico at RM1.60 a share on March 23.

    Gordon Toh Chun Toh, a Singaporean who was appointed managing director of Multico the same date that Goh resigned, was disclosed as having deemed interest in Ace Prelude.

    Toh, who was 55 last year, was described as a Colombo Plan Scholar, having served in the Singapore civil service and later, several banks. He was managing director of Elliott Gordon Singapore.

    Multico shares closed at 84 sen on Monday, down 1.5 sen, and just a shade above its low of 83.5 sen for 2007.

This is utterly terrible!

Another huge cavaet for those who relies on the cash per share yardstick.