Saturday, June 22, 2013

Flash Crash Slams Several Stocks

Got this in my comments:

  • newbie has left a new comment on your post "MaeMode Defaults Its Loan Payments And Enters PN17...":

    Dear Moolah, Did you notice the sharp fall in a number of stocks today?Stocks like BJTOTO,BKAWAN,TDM,CBIP and COASTAL plunged near the end of the session .Remembered you wrote about a similar subject some time ago.Any conspiracy theories behind such fall? Spooked quite a number of people.Thanks for your time reading this. 
 Yes, I did write about this before and it's rather spooky again.

This is the 3rd time something like this happen and yet here we are again.

Has something been done?

Are they gonna say it's an error trade again?

21 Oct 2011:
And almost one year ago,About Stock Market Yesterday: The Day KLSE Decided to Have Gap Up And Gap Down All Over

Same thing all over again.....!!!!!

Several stocks went limit down at the very last minute of trade.

Several stocks shot up too!!!

Come on SC.

Come on Bursa.

Don't tell me you guys saw nothing.............

Apparently they did and they just said " Trades ‘valid and genuine’

!!!!!!

  • Six counters from mid-caps to big ones, namely, Hap Seng Plantations Holdings Bhd, Batu Kawan Bhd, TDM Bhd, CB Industrial Product Holding Bhd (CBIP), Coastal Contracts Bhd and Berjaya Sports Toto Bhd, hit limit-down, or a 30% plunge, with a combined trade of RM43.1mil in that short time window during pre-close.

    While the trading pattern may seem like an “error in trading” could have taken place, a Bursa Malaysia representative when contacted by StarBizWeek clarified: “With regards to the eight stocks which hit their limits-up (two) and down (six), Bursa Malaysia has investigated the matter and has confirmed with the broker that the basket order, which was from their institutional client, was valid and genuine.
Valid and genuine????


Has the institutional client lost their marbles???


Why DUMP all those shares and sell with limit down orders????


You believe???


Yeah, I think extremely likely of the pre-close trading. It's nonsense and we get to see nonsensical trades like this!!!

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

Here is how the flash crash looked like....

HSPLANT


BATU KAWAN


TDM


See how these stocks literally fell off the cliff near the end of closing trade???

Which institutional client would give a mindless trade order like this??????

I just highlighted 3. There are more.

And here is the opposite.

Some stocks went straight up!!!!!!!!!!!!!

JCY


STAR


Oh yes, there are several more stocks trading in such an outrageous manner at end of trade. Some plunging while others surge limit up.

What gives?

Come on Bursa, you cannot just say that these trades are from an institutional client and that the trades were valid and genuine.

Of course they are valid.

But.... think lah.

Do you call this a fair and orderly stock market???

Well again... if these institutional clients are so important then what about the retail investors???

Which retail investors wants to be a long term shareholder when market shenanigans like this happen and the culprits get away freely????

Sigh.


Thursday, June 20, 2013

MaeMode Defaults Its Loan Payments And Enters PN17

Just got this:

Yeah, I saw that and I see it's highlighted on the Edge also. http://www.theedgemalaysia.com/business-news/242712-malaysian-ae-models-defaults-on-loan-payment-.html

With that default, MaeMode is now a PN17 stock. PRACTICE NOTE 17 / GUIDANCE NOTE 3:FIRST ANNOUNCEMENT 

Anyway, I am not a bit surprised at all.

My last posting on MaeMode was on 2nd May. Time's Almost Up For MaeMode


Thursday, May 23, 2013

Unhappy Goldis Minority Shareholder

lim hwa has left a new comment on your post "Investment Adviser: Just Who Are You Advising For?...":

I refer to the recent announcement by Goldis Berhad on 8 May 2013 for the capital distribution of IGB shares. From the first reading of the announcement, it seems the proposal is really to reward the shareholders of Goldis. However, with further understanding of the proposal, the proposal seems to me just another way of taking the value from the minority shareholders.

In my humble opinion, to put the unlisted share as an alternate option to cash to MI is as good as forcing the MI to have no option but just have to take up the cash option. My rationale is that one of the key objectives of us investing in stock markets / listed shares as compared other investments is due to liquidity. As the proposal is to distribute the unlisted shares, then such proposal is defeating the our objective.

To simplify it, assuming a listed co only owns a very profitable subsidiary (say with NTA of RM100 mil). The major shareholders then propose the similar structure to all the shareholders whereby the profitable subsidiary to be transferred to a non-listed company at say RM50 mil. Thereafter, all the shareholders will be given the options to choose (i) the unlisted shares or (ii) cash value per listed share which will be substantially undervalue as the valuation for the transfer is only half of the NTA.

Eventually, the major shareholders will own 100%/ majority of the unlisted company cuz i presume majority of the MI will not opt for unlisted shares due to liquidity.

With this, the major shareholders are essentially privatise the jewel of the listed company at a cheap valuation in the expense of the MIs' value.

I see the above illustration happens to GOLDIS now.

May I have your view on this case i.e. GOLDIS just to make sure MIs' are well protected before the same structure to be replicated for the next many more coming proposals if this first kind of proposal is successfully completed.

Wednesday, May 08, 2013

Red Flag Raised At HB Global Cash Balances!

Since I had been posting a lot about China based companies listed in our stock exchange, I was watching HB Global.

HB Global's stock was plunging when it said publicly it was delaying its audited accounts ( http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=237501&Itemid=79 )!!!!

Last night HB Global made the following announcement: http://www.bursamalaysia.com/market/listed-companies/company-announcements/1280081

  • The Board of Directors of HB Global Limited (formerly known as Sozo Global Limited) (“HB” or “the Company”) wishes to announce that the Company’s External Auditors, Messrs. Paul Wan & Co had expressed an audit disclaimer opinion in the Company's latest audited financial statements for the financial year ended 31 December 2012, as follows:-
    “Basis for Disclaimer of Opinion
    Included in the Group’s balance sheet as at 31 December 2012 is bank balance amounting to RMB 249,633,611. In the course of our audit, we were not able to satisfactorily and independently substantiate the bank balance of the subsidiary company.  In addition we were not able to receive reliable independent confirmations on majority of the trade receivables and trade payables that were circularised; these balances represented 56% of trade receivables and 48% of trade payables as at 31st December 2012.  These brought into question the proper accounting for bank balances, trade receivables and trade payables and the corresponding transactions in the Group for the year ended 31 December 2012 and the completeness of transactions recorded in the Group’s accounting records.
    Disclaimer of Opinion
    Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for our audit opinion.  Accordingly, we do not express an opinion on the financial statements.”
    This announcement is dated 7 May 2013. 
WOW!

NOT able to satisfactorily and independently substantiate the BANK BALANCE of the subsidiary company?

Aha!

Red flag raised!

Remember the past postings on the China based stocks? So What's The Problem With China Based Companies?

The media kept on highlighting that these China based stocks were so cash rich.

I challenged that statement and I showed with a real example on how a director of a China based stock sold shares BELOW the cash per share value and for that stock, we saw the company's cash balances was said to be at 894.674 million. So much cash but the company earns only 3.416 million in interests. Does it make sense?

Let's look at the last reported quarterly earnings from HB Global. http://www.bursamalaysia.com/market/listed-companies/company-announcements/1214805

The balance sheet shows the following...


Oh yeah... cash balances were said to be at 124.725 million. HB Global 'as per'  its balance sheet is cash rich!

Now if you look at the cash flow statement below, the interest received is only 1.018 million!!!!!


 Huh?

Exactly!!!

HB Global said it holds cash balances of over 124 million but it only receives 1 million in interests!!!!

Does it make sense to have so much money and not generate any bank interest for all these cash?

Now HB Global auditors is questioning the cash balances!!!!

How?

Next time you hear someone talks about cash rich China based stocks, tell them to have a look at HB Global!!!!!

And yeah... currently there are 9 China based stocks listed here and our dear old Bursa Malaysia wants to have more such listings!!!!!

Sigh!





Saturday, May 04, 2013

So What's The Probelm With China Based Companies?

I was reading the following article: http://biz.thestar.com.my/news/story.asp?file=/2013/5/4/business/13030734&sec=business

In light of the recent posting, Do You Want More China Based Companies To Be Listed Here?, the first few passages caught my attention...

  • THERE are currently nine China-based companies listed in Malaysia and you'll be hard pressed to find one that is trading above their initial public offering (IPO) price.

    Of course, some did trade above their IPO price soon after they were listed but none proved sustainable.

    It's somewhat perplexing that they are not. These companies are cash-rich, have profits that grow year-on-year and almost, if not, all are trading at huge discounts to their net cash per share.

    Sure, not all of their businesses are terribly sexy. Most are shoe manufacturers but given the growing population and income levels the world over, there remains growth potential.

    So, what is the problem?
Yeah what's their problem?

First thing first.

"you'll be hard pressed to find one that is trading above their initial public offering (IPO) price.".. When I posted Do You Want More China Based Companies To Be Listed Here?, on the average, these China based companies were starring at 63% losses since their IPO listing. And the losses increased since ALL of these China based stocks declined further since then.

Two of the big losers were HB Global and CSL, with HB Global plummeting some 24% yesterday when it announced it's delaying its audited accounts! ( http://www.theedgemalaysia.com/index.php?option=com_content&task=view&id=237501&Itemid=79 )!!!!

CSL closed at 26 sen yesterday. (IPO Price 95 sen!!!!! )

The Star Business article talked about these stocks trading at huge discounts to their net cash per share.

Let's look at CSL quarterly earnings report: Quarterly rpt on consolidated results for the financial period ended 31/12/2012 

Have a look at the pdf file attached to that Bursa webpage.

From the balance sheet, we can see that CSL is cash rich!

 CSL says it has some 894.674 million in its piggy bank!

That's a lot of cash!

Super cash rich since CSL does not have any borrowings.

But the market is selling CSL at 26 sen only!!!!

26 sen... which means CSL market capital is worth 323.117 million!

Holy cow!

I'm sure you will ask is the market out of whack selling CSL at 26 sen!!!!!

With a market capital of 323.117 million, it means the market is valuing CSL way below its 894.674 million.

With 1,242.760 million shares, CSL's cash per stated in its Feb quarterly earnings is 72 sen!

Yes, you heard me, cash per share is worth some 72 sen.
Market valuing the shares at only 26 sen.

How can the share be worth so little compared to the company's cash????

Won't the owners be better off taking the company private?

Correct?

If the cash per share is REALLY worth 72 sen and the share is trading at 26 sen, surely the owners would buy these shares like crazy, yes?

But this did not happen!!!

Instead on 23 March, less than one month after this earnings report was released, one of the directors, Chan Fung @ Kwan Wing Yin, decided to dispose shares at 60 sen!!!!!

Huh!!!!

Yes sir!

Company's cash per share were worth 72 sen.
Company's director disposes shares at 60 sen!!!

How????

Makes sense?

Time to look at the cash flow.

Looking at the cash flow statement is useful because the interest income is stated there.

Think about it. For a company like CSL, it says it has 894 million in its piggy bank. A lot of money, yes? Surely the company would deposit a bulk of the money to earn some interest right?


CSL's interest received showed only 3.416 million.

Huh?

So low?

CSL has 894.674 million cash and CSL only receives 3.416 million in interests!!!!

WHAT'S HAPPENING?

What is CSL doing with its 894.674 million????

(ps: How about CSL allow me to manage their 894.674 million cash and I pay them 6 million in interest!! )

Why is CSL getting so little in interest???

 Well, what's the possible answers?

Is CSL putting any of the money into fixed deposits account?
If no, why?
If no, what is CSL doing with all these money?
If yes, why so little in interest?

How? What's the problem with these China based companies?

Would you trust the NET CASH PER SHARE of this China based company? ( Feel free to do a similar research on other China based companies.)
 

How now?

They say share cheap because share is trading below net cash per share. But company director is selling their share below the net cash per share. Company earns extremely low interest.

DARE you invest in such company???

 ps: When CSL was newly listed it was a darling stock. With an IPO of 95 sen, CSL managed to fly to a high of 1.93 sen within one month from its listing! See chart below.

 Here's the chart almost a year later.

 

Thursday, May 02, 2013

Time's Almost Up For MaeMode

One of the stocks I blogged many times before is




















Friday, April 26, 2013

Do You Want More China Based Companies To Be Listed Here?

Saw the link to the article on Star Business: Kanger set to be 10th China-based company to list on the local bourse

I did not even want to read about it.

First thing on my mind was 10th!

Do we really need all these Chinese companies to be listed in our stock exchange?

Come on Bursa!

Stop thinking like a commission based  salesman! These companies are stinking our stock exchange! Come on. You can't smell it? You guys complain about the lack of retail investors all the time and here you are, inviting all these China based companies to be listed here.

You just don't get it, yes?

More quantity is not going to increase retail investing participation.

QUALITY is the only word that is important.

What is stock investing?

Stock investing is investing in good quality businesses at a good price.

Investors don't want to invest in all these poor quality companies only to find the value of their investment shrink like hell after a few months!

Here's proof.

http://www.bursamalaysia.com/market/listed-companies/initial-public-offerings/ipo-summary/

The three most recent listed Chinese stocks.

China Automobile Parts Holdings Limited
IPO Price: 68 sen
Listed 30/1/2013
Current Price: 36 sen

China Stationery Limited
IPO Price: 95 sen
Listed: 24/2/2012
Current Price: 34 sen

Maxwell International Holdings Bhd
IPO Price: 54 sen
Listed: 6/1/2011
Current Price: 31 sen

Compare the current share price as of this morning versus the IPO price of these 3 China based stocks. All IPO investors of these Chinese stocks would be cursing at the stock performance as of today.

The following table shows the current price versus the IPO price and the % change of all Chinese listed companies.


On average, investors of these Chinese stocks are starring at an average loss of 63% since listing!!!!

How?

Bursa Malaysia, are you aware of this stat?

If so, why?

Why are you pushing for another Chinese stock to be listed on our stock exchange?

Do you care for the quality of the stock exchange?

Or do you just list such companies hoping just for more revenue for the exchange????

Here are the charts showing the performance of all these Chinese stocks since listing.

Chinese Automobile Parts (CAP)


China Ouhua Winery Holdings Ltd (CNOUHUA)


 China Stationery Limited (CSL)


HB Global Limited (HBGLOB) (Old name: Sozo Global)


K-Star Sports Limited (KSTAR)


Maxwell International Holdings Bhd (Maxwell)



Multi Sports Holdings Limited (MSPORTS)


XiDeLang Holdings Limited (XDL)


Xinquan International Sports Holdings Limited (XINQUAN)



Tuesday, April 23, 2013

One Of The Best Manchester United Goal!

Kagawa squares the ball to Rooney.

Rooney in his own half sees Van Persie making the run.

A Hail Mary pass was lobbed towards the path of Van Persie's run.

The pass was right on the money. Van Persie didn't even need to break his run. All was needed was concentration. Eyes on the ball, mate.

Bang!

Bang Bang Van Persie lets fly.

Van Persie didn't even need the ball to bounce. He lashes the ball and kaboom!

Ball was in the net!

What a volley! What a goal!


One of the best Manchester United ever!

Absolutely brilliant!

This is the goal of the season for me!

Well done United!

Champions again!

Monday, April 22, 2013

Maintain Neutral But Stock Is Trading Higher Than Target Price

Since I have commented on the UNFAIR but REASONABLE advise dished out by Independent Advisors, I feel I should also point out another type of wonderful advice from our stock market research houses.

This was published on theEdgeMalaysia.com: http://www.theedgemalaysia.com/business-news/236588-venturing-into-biodiesel.html

  • Venturing into biodiesel  
    Business & Markets 2013
    Written by theedgemalaysia.com   
    Monday, 22 April 2013 10:49

    Felda Global Ventures
    Holdings Bhd
    (April 19, RM4.60)
    Maintain neutral at RM4.60 with a target price of RM4.32:
    We are overall “neutral” on FGV’s acquisition of a 100,000-tonne biodiesel plant in Malaysia. This will allow the group to expand its product offerings to include biodiesel. However, this is offset by our concern over the historical losses reported by the business.

    We expect FGV to turn around this business given the potential synergy to be derived from this asset with its existing businesses. In view of this, we expect this acquisition to have a minimal impact on the group’s future earnings. We maintain our “neutral” call with an unchanged sum of parts-based target price of RM4.32.

    FGV has signed an agreement with Mission Biotechnologies Sdn Bhd to acquire a 100,000-tonne per annum biodiesel refinery at Kuantan Port, Pahang for US$11.5 million (RM34.9 million).

    The biodiesel plant is located on six acres (2.4ha) of prime land and has a 16,000-tonne storage tank connected to a deep water jetty via import and export pipelines. The plant is expected to be fully operational by July 1.

    This new development is in line with the group’s strategy to venture further into downstream operations. The plant is located close to FGV’s estates in Pahang as well as the group’s refinery and oleochemical plant. This will allow the group to integrate this plant into its existing operations more efficiently and save on transport costs.

    The acquisition will also allow FGV to channel its high free fatty acids (or lower quality) CPO for biodiesel production and achieve better pricing for its palm products. The acquisition price for the asset looks fair to us as it is below RM100 million, which was the price quoted for building a biodiesel plant in 2006.

    However, FGV’s acquisition is most costly compared with Genting PLANTATION []s Bhd’s acquisition of a 200,000-tonne biodiesel plant in Lahad Datu for US$13.3 million in 2011.

    The potential synergy to be derived is offset by the historical pre-tax losses chalked up by the biodiesel business of A$4.5 million (RM14.04 million) to A$5 million in 2011 financial year (FY11) and FY12.

    We expect FGV to turn around the business through improved utilisation rates and better procurement of raw materials. Overall, the earnings impact from this is projected to be minimal. Maintain “neutral”. — CIMB Research, April 19



    This article first appeared in The Edge Financial Daily, on April 22, 2013.
Well what's wrong with this 'neutral' recommendation?

The stock is trading at 4.60 but the research house's target price is 4.32.Which means the stock is worth more than the target price set!

Yet the research house recommendation is a NEUTRAL.

Duh!

If the stock is trading more than the target price, shouldn't the recommendation be a simple SELL?




Wednesday, April 17, 2013

The Independent Advisor For MBF Speaks Again....

Posted recently: If The OFFER is NOT FAIR, how can it be REASONABLE...

On theSunDaily Business: http://www.thesundaily.my/news/645150

  • MBf take-over offer not fair but reasonable
    Posted on 25 March 2013 - 10:12pm
    Last updated on 25 March 2013 - 10:51pm

    PETALING JAYA (March 25 ,2013): The offer for the shares and warrants of MBf Holdings Bhd by a consortium of three companies led by major shareholder Tan Sri Ninian Mogan Lourdenadin, are deemed not fair but reasonable, according to independent adviser Affin Investment Bank Bhd.

    "However, we are of the view that the offer for the shares and the warrants are reasonable based on our evaluation and also taking into consideration that there have been no alternative offers received to date," it said, advising that shareholders and warrant holders accept the offer.

    In an independent advice circular yesterday, Affin Investment said the offer for the shares is not fair, given that the share offer price is below the derived valuation range of MBFH shares of between RM2.45 and RM3.20.

    The offer represents a 30.6% and 46.8% discount to the adjusted net asset range of the group. The offer for the warrant is also not fair, given that the warrant offer price is derived by reference to the share offer price.

    Tor Pte Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investment Ltd through Hong Leong Investment Bank Bhd has proposed to acquire all the remaining shares in MBf Holdings and all the remaining warrants which are not already held by the joint offerors for RM1.70 per share and RM0.70 per warrant

    Affin Investment Bank said the sale of MBF Cards was a loss of significant contribution to the group's profitability.

    The fact that the group's business is largely concentrated in the South Pacific Island, which are perceived as remote markets, following the disposal of the MBF Cards, was also seen as a negative point.

    The heavy losses incurred by the group's shipping segment since FY ended Dec 31, 2010 which had drained the group's cash reserves, was another.

    MBf's revised offer will be open for acceptance until 5pm on April 3.
They told the minority shareholders to ACCEPT the deal which is unfair.....

MBF revised the offer UPWARDS to RM1.775 per MBfH share and 77.5 sen per warrant.

Guess what the INDEPENDENT ADVISOR has to say this morning...

Also from theSunDaily: http://www.thesundaily.my/news/663921
  • MBfH advisor recommends acceptance of 2nd revised offer
    Posted on 17 April 2013 - 05:40am

    PETALING JAYA (April 17, 2013): Affin Investment Bank Bhd, which is the independent advisor to the minority shareholders of MBf Holdings Bhd (MBfH), has given the thumbs-up to MBfH's controlling shareholder and group CEO Tan Sri Dr Ninian Mogan Lourdenadin's latest attempt to take the group private.

    In a filing with Bursa Malaysia yesterday, MBfH said while Affin Investment had deemed the second revised offer of RM1.775 per MBfH share and 77.5 sen per warrant "not fair but reasonable", it is advising its shareholders to accept it.

    "The board (save for the interested directors) concurs with the recommendation of Affin Investment. Accordingly, the board's comments, opinions and recommendation as contained in the Independent Advice Circular remain unchanged," said MBfH.

    The joint offerors for the rest of the MBfH shares are Tor Pte Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investments Ltd. Ninian has accumulated 98.51% or 568.8 million shares in MBfH.

    In a separate filing, MBfH said the joint offerors will still require further acceptances of 2.4 million shares or 0.42% to invoke the compulsory acquisition of the remaining MBfH shares.

    "If it fails, shares not held by the joint offerors as at the close of the offer on April 26, 2013 may not be compulsorily acquired."
   !!!!!


Saturday, April 13, 2013

SAY NO to The Relisting Of IOI Properties!

On Star Business, a ghastly news was announced!

  • Saturday April 13, 2013
    Mixed views on IOI’s plan to re-list property division


    PETALING JAYA: Analysts have mixed views on whether the possible re-listing of IOI Corp Bhd's property division would create value for it.

    Early this week, a wire report had stated that IOI Corp was planning an initial public offering (IPO) of its property arm in the fourth quarter of 2013, speculating the total value of the listing to be in the region of RM10bil.

    This would be a huge improvement in size, considering that it was only in 2009 that IOI Corp had bought back its then-listed property arm IOI Properties Bhd for a mere RM310mil in cash and shares, valuing the unit at about RM1.3bil.

    “The plan to re-list its property arm is not new. In our sum-of-parts, we value the property business at close to RM9bil.

    “We would be positive if the group lists its property arm, as it would allow it to unlock value and for investors to better appreciate its property division,” said a CIMB Research analyst.

    She explained that at the moment, the property division was “hidden” and that there wasn't much visibility in terms of its value, future plans and launches in the pipeline.

    “For now, no one knows what IOI Property is worth because it is hidden inside IOI Corp. With the listing, we would obtain more information. We would know a lot more about its launches and future developments.

    “If it were to be listed on its own, then IOI Property would eventually be able to find its own value,” said the CIMB analyst.

    An Alliance Research analyst pointed out that back in 2009, IOI Corp had taken IOI Properties private as the company was undervalued, trading at 8.4 times versus IOI Corp, which was trading at 15 times back then.

    She said that as at IOI Corp's financial year ended June 30, 2012, the total asset value of the property development and investment segments stood at RM7.7bil, contributing a pre-tax profit of RM538mil or 20% of IOI Corp's total pre-tax profit.

    “While details on the listing are not known, we have doubts whether the move would add value to IOI Corp, given the latter's rich valuations as compared to most property companies.

    “This raises the issue of whether IOI Corp's property division's IPO could be priced at more attractive valuations than IOI Corp,” said the analyst.

    She said that IOI Corp was currently trading at a forward price earnings of 20.7 times on 2013 earnings.

    Another property analyst added that as IOI Property was currently 100% owned by IOI Corp, there was room for value creation.

    “If it were to go for a separate listing, this would mean that the parent company sells down its stake and gets back some value from its assets.

    “Perhaps, it could use that money to expand its business or give it back to shareholders,” said the analyst.

    The analyst pointed out that a separate property listing would also reduce the risk for the plantations side.

    This was because at present, funds from IOI Corp were being used to buy and develop land for its property segment. 

Like I had said before, due to the fact that Bursa Malaysia is a listed BUSINESS entity, a relisting simply means a new IPO and new IPO means more business and I have no doubt that Bursa Malaysia would welcome this relisting with open arms.

I doubt that Bursa Malaysia would care about the minority shareholders who were mightly screwed when IOI Properties were delised back in 2009.

That ghastly and unreasonable privatisation is explained in detail in the posting:Why Is Retail Investing Lacking? (Part II)

In 'short'...
  • Now consider this story (the story of IOI Privatisation)

    You read about the company venturing into another country, just when that country is announcing some interesting projects. You get optimistic about the company, right? Analysts are optimistic too.

    So you invest in it.

    Then came another opportunity.

    Company announce a share split plus rights issue.

    Rights issue can't be that bad, right? Especially when the company is now having hot new project in another country. Times are exciting and the company 'invites' you to invest more money into the company by subscribing to the rights issue.

    So you decided to invest more, more so since you noted that the company was also buying back their own shares.

    The company shares meanwhile started to announce weak set of earnings. Stocks started to decline.

    7 months after you had subscribed to the rights issue, the stock, due to continued weak earnings, fell to its historical lows. The owners of the company too agree that the stock was cheap. So cheap that  they decided to privatise it!

    Now get this.

    Your cost of shares after the rights issues was 6.25.

    The company privatisation offer was a very generous 2.60!!!!!!!

    OUCH!!!! 




Now do consider what was written on the Star Business today.

So previously, IOI saw IOI Properties was undervalued. Like a vulture, IOI capitalised on the cheap valuations by taking it private.

Did IOI care about its minority shareholders who had subsribed to the rights issue at 6.25 7 months earlier? My opinion is a simple NO since IOI privatisation offer was a generously ridiculous offer of 2.60!

And IOI even denied publicly the early privatisation rumours!!!!

Yeah, denied publicly but yet the company did the privatisation!!! 

So when the subsidiary was considered cheap, it took it private.

Now to UNLOCK value, IOI Corp wants to relist it again!

Fair game for the minority investors???

You tell me!

!!!!!!

Think about it.

Given such rampant delisting and relisting of companies, how is the stock exchange going to attract retail investors????

Yeah, don't cry if the market lacks retail investors!!!

Remember think about the GAME that it is being played.

When a stock is undervalued, careful... the stock could be delisted via a cheap privaisation offer.

And yeah, they will even dare to tell you it is unfair but hey, the offer is reasonable!!! (Duh!!!)

And now when they want to seak (unlock) value, they want to sell you the shares by relisting it once more!

You like such games?




    Monday, April 08, 2013

    MSWG Turn To Raise Issue Against NOT FAIR BUT REASONABLE

    Yay!

    On SunDaily: http://www.thesundaily.my/news/655667

    • Investors cry foul over "not fair but reasonable" advice
      Posted on 8 April 2013 - 05:37am

      Presenna Nambiar

      PETALING JAYA (April 8, 2013): The Minority Shareholders Watchdog Group (MSWG) has come out to say that there may be a need to re-look the methodology in which independent advisers base their advice to minority shareholders, as more and more investors cry foul over the increasing number of "not fair but reasonable" recommendations.

      CEO Rita Benoy Bushon (pix) told SunBiz in an interview that the watchdog has been receiving an increasing number of complaints on independent advisers' call to accept takeover offers that are "not fair but reasonable".

      Listing requirements stipulate that listed companies that are targets of a disposal of all or substantially all of its assets that may affect its listing status, appoint an independent adviser to objectively assess the merits of the deal for the benefit of minority shareholders.

      The "not fair" statement is normally attached to the pricing of the offer when compared to quantitative considerations such as the company's net asset value, whereas the reasonableness of it is based on non-quantitative considerations such as market conditions and liquidity of the market.

      Bushon sees merit in investors' frustrations, saying that as an investor who is ultimately faced with the compulsion to exit a listed entity, a major consideration would be getting a fair exit value of their investment.

      "The fair pricing is very important and it depends on various factors including the sector the company is in and potential of the business in terms of numbers," Bushon said.

      "From MSWG's observation, on the aspect of reasonableness... too much of emphasis is placed on this subjective element with final recommendations to accept the offer in all cases where there is a clear intention to delist the company even though the offer price is grossly unfair with a huge discount to the intrinsic value. This is what the minority shareholders are complaining about," she added.

      Bushon also noted that past experiences have seen examples of companies that have not revalued their land for 14 years.

      "So (in instances like this) how can you (an independent adviser) ever come up with an advice based on a valuation done 14 years ago. That is difficult to comprehend,
      " she added.

      Bushon suggested that perhaps there is a need to re-look the yardsticks and criteria that independent advice letters (IAL) work on, considering investors are reluctant to heed the advice given, as observed by MSWG.

      The recent failed attempt by Hong Leong Financial Group Bhd (HLFG) to take Hong Leong Capital Bhd private is an example of one advice which did not convince minority investors, even as independent adviser Affin Investment Bank Bhd had opined that the offer was "fair and reasonable".

      HLFG only managed to acquire a 2.24% stake during its offer period.

      Petroliam Nasional Bhd's (Petronas) offer for MISC Bhd also saw resistance from minority shareholders despite the independent adviser on the deal, AmInvestment Bank, asking minority shareholders to accept it, after calling it "unfair but reasonable".

      This resistance eventually made Petronas, which had been adamant that RM5.30 a share was the "right price", to revise its offer to RM5.50 per share at the eleventh hour on Friday.

      The rules governing IALs have undergone a few changes over the years, kicked off by a consultation paper published in March 2010, seeking feedback on proposed updates to guidelines on offer documentation of the Malaysian Code on Take-overs and Mergers.

      What started out as a call for comment and advice by independent advisers on the reasonableness of an offer, evolved to one which set standards that needed to be adhered to when analysing the fairness and reasonableness of a takeover offer.

      Then in September last year, it was decided that the two considerations: fairness and reasonableness, be independent of each other. This allowed for independent advisers to recommend that investors accept an offer even if one of the considerations was not up to mark.

      Three months later in December last year, the Securities Commission (SC) released another document called the "Best Practice Guide on Independent Advice Letters" for another round of public comment.

      The SC said the guide is to clarify the SC's and Bursa Malaysia's views on the role of an independent adviser, and to provide guidance on the standards of disclosures in IALs; and augment both regulators' continuous efforts in raising standards of corporate governance through the promotion of high quality disclosures.

      "Perhaps another suggestion is to have an over-the-counter platform for those minorities who wish to still remain in the delisted entity until and unless a compulsory acquisition is triggered," said Bushon.

      "This would motivate majority shareholders to offer a better price at the outset and the minority would be more fairly
      dealt with. (But) this suggestion needs to be studied more in detail with the implications." 
     Remember this....

    If we continue to allow NOT FAIR BUT REASONABLE advise to continue to be dished out to the minority shareholders, we are sending one clear message, which is, you minority shareholders, it is reasonable to accept offers that are not fair!!.

    Is that acceptable??????




    Sunday, April 07, 2013

    Investment Adviser: Just Who Are You Advising For?

    From the posting: Business Times Writes About Unfair And Reasonable!

    limko said...

    • What comes to mind is the two occasions when Pharmaniaga planned for privatisation.
      On the first privatisation, "independant adviser" advised not to accept the offer, and the exercise did not go through. Subsequently, the price of Pharmaniaga slummed.
      On the second privatisation, another "independant adviser" advised to accept, and the exercise completed. Subsequently, the price of Pharmaniaga soars.
      On both occasions, the mionrity shareholders got screwed.
      Advise or lie?
     Good point.

    For me, right now, there's indeed some changes when compared to previous years but I would say it's nor enough.

    The next step is, we need our minority shareholders to be better advised.

    An unfair order is unfair. End of.

    It should be rejected.

    Calling it 'unfair but reasonable' is just not acceptable.

    Saturday, April 06, 2013

    Business Times Writes About Unfair And Reasonable!

    After making several postings on this issue, If The OFFER is NOT FAIR, how can it be REASONABLE?. and How could it be reasonable to accept an offer which is deemed not FAIR?, Business Times decided to post an opinion on it too. :)

    • Investors want 'KISS', not word games

      Published: 2013/04/06

      STICK TO THE BASICS: Shareholders need crystal clear explanation from those independent advisers

      WHAT is "not fair but reasonable"? For the life of me, I cannot understand the meaning of it.

      These days, such term is used so frequently by independent advisers when advising minority shareholders on the worthiness of a corporate exercise.

      Who pays the independent advisers? If a public-listed company does, then, in theory, all of its shareholders pay for their service. Hence, the shareholders should get a crystal clear explanation from the highly-paid independent advisers.

      The catch is not on who pays them, but rather, who is in charge of hiring them.

      Are corporate fees too tempting that layman investors are forced to put up with reports that highlight proposals as being "not fair but reasonable"?

      Looking back, the only thing that pops into my mind as being unfair but reasonable is being caned in school.

      Mind you, my "not fair but reasonable" assesment on being caned at schools comes more than two decades after the incident had happened.

      I had aged and, presumably, gained some wisdom in coming to that conclusion.

      In the action-packed world that we live in, an average investor does not have the liberty to wait for 10 or 20 years to see if a deal, proposed in the current time, is indeed "not fair but reasonable".

      As my first boss in Business Times once told me, KISS! (short for "keep it short and simple") So, why can't independent advisers (aka merchant bankers in disguise ) just stick to facts and keep their Shakespearean instinct in their closets?

      Independent advisers who fancy themselves as talented writers and poets should quit the merchant bank industry altogether.

      Let's go back to the basics. Independent advisers must only be allowed to recommend to shareholders either to accept or reject a deal.

      If they ask shareholders to accept a certain proposal, then it should be on the assumption that it is a fair and reasonable one.

      Rejecting the proposal should be on the basis that it is unfair and unreasonable.

      Independent advisers should not be allowed to be politically correct by disguising a bad proposal as "unfair but reasonable".

      Before the next independent adviser contemplates keying in a proposal as "unfair but reasonable", take a minute to unwind by listening to Bob Dylan's "Gotta Serve Somebody".

      The lyrics go something like this: "You may be the heavyweight champion of the world. You may be a socialite with a long string of pearls. But you're gonna have to serve somebody, yes indeed. It may be the devil or it may be the Lord."

    Tuesday, April 02, 2013

    Stock Market Is To Make A Big Buck From The Fool Of All Minority Shareholders...

    kine said...

    • Stock market is for any company to make big buck out from the fool of all the majority of shareholders. They need to sell/distribute at very high price to the very greedy & excited investing public & collect/buy at the very damn dirt cheap price through buy back from their short selling activities or forceful privatization at the expense of the very ignorant public.
      This is the very uncomfortable harsh reality of true life.
     Yeah it's sad.

    There are so many ways Bursa Malaysia, the country's STOCK EXCHANGE could be better.

    But sadly, because it's a listed company, a business, I find it difficult to see changes.

    ALL the CEOs, the present and the past, had repeatedly announce the COMPANY is seeking more revenue.

    When you hear a stock exchanging seeking revenue, it clearly states the STOCK EXCHANGE is business motivated. The stock exchange just wants to make more money! Which means, company will continue stand a chance of relisting again despite how horrible it treated its minority shareholders in the past.

    And yeah, less than quality stocks will be listed in our stock market.

    Just look at those companies from China listed in our stock exchange.

    Can you smell........

    Monday, April 01, 2013

    Why Is Retail Investing Lacking? (Part II)

    Posted the other day: More On Bursa CEO Pay And Lack Of Retail Investor...

    Consider the following.

    You hear these advice always. Invest and don't punt. Invest long term. The longer you hold the stock, the better your investment return. When the stock falls, just buy more. Same investment is now cheaper, invest more!

    Now consider this story.

    You read about the company venturing into another country, just when that country is announcing some interesting projects. You get optimistic about the company, right? Analysts are optimistic too.

    So you invest in it.


    Then came another opportunity.

    Company announce a share split plus rights issue.

    Rights issue can't be that bad, right? Especially when the company is now having hot new project in another country. Times are exciting and the company 'invites' you to invest more money into the company by subscribing to the rights issue.

    So you decided to invest more, more so since you noted that the company was also buying back their own shares.


    The company shares meanwhile started to announce weak set of earnings. Stocks started to decline.

    7 months after you had subscribed to the rights issue, the stock, due to continued weak earnings, fell to its historical lows. The owners of the company too agree that the stock was cheap. So cheap that  they decided to privatise it!

    Now get this.

    Your cost of shares after the rights issues was 6.25.

    The company privatisation offer was a very generous 2.60!!!!!!!

    OUCH!!!!

    Now seriously you tell me, who in the right mind want to be a retail investor when incidents like this occur? And to add serious salt to your injury, last year, the local business papers suggested the company was planning to relist its shares again!!!!

    How?

    Isn't this delisting and relisting giving the stock exchange such a horrible stench?

    And you know very well, since the stock exchange is a listed entity, it is a business and as a business, the business will most likely allow the relisting because such exercise will generate revenue for the stock exchange.

    But at what cost?

    You tell me....

    So if retail investors shun our stock exchange, can you really blame them?

    And oh, this story is real. This incident did happen.

    See http://whereiszemoola.blogspot.com/2009/02/big-ouch-for-ioi-properties.html and http://whereiszemoola.blogspot.com/2009/03/ioi-properties.html

    This chart says it all...


     And this is the link about the possible relisting... http://whereiszemoola.blogspot.com/2012/02/ioi-wants-your-money-again-by-relisting.html

    Seriously.

    Think about it.

    When you see incidents like this happen in our stock exchange, won't it scare away retail investors?

    My point again?

    Let me paste what I wrote in my last posting.
    • Bursa, remind yourself you are a stock exchange. Look after the exchange. Make sure you protect your other customers, the minority shareholders, fairly. That's the most important thing. Who wants to invest when they run the risk of being treated unfairly and not being compensated for taking the risk to invest their hard earned money in shares? Once the protection is there, slowly but surely, the retail investors will flow back into the market.


    Friday, March 29, 2013

    More On Bursa CEO Pay And Lack Of Retail Investors

    Posted yesterday: Why Is Bursa CEO Getting Such A Pay Increase?

    I have always insisted that because Bursa Malaysia is a listed entity, it is a business and as a business it is profit oriented. The primary focus of a business is to make money. That's the one and only one focus. Make more money.

    Which is why I have no doubt that in my mind that despite the stock exchange being made a mockery for letting business delist and relist anyhow and anyway they like, these relisting will continue to happen. That's my flawed opinion and yes, one can despise it all they want but I doubt that Bursa Malaysia will not say NO to a company seeking relisting.

    Relisting means more business and more business means more money.

    If, in the future, say a company like KFC who was recently taken private, decides to seek listing again, do you think Bursa will say NO?

    It's business yo!

    Back to the CEO pay issue. On today's Business Times.

    •  Tajuddin defends remuneration

      Roziana Hamsawi Published: 2013/03/29

      KUALA LUMPUR: Bursa Malaysia Bhd chief executive officer Datuk Tajuddin Atan yesterday defended his RM5.5 million remuneration last year, saying it commensurated with the job challenges.

      He said his salary package was evaluated and approved by the board and a consultant firm and it was an agreed package designed on what was needed for him to accomplish.

      He said the last two years had seen Bursa Malaysia's revenue growing, adding that it was not an easy task for him.

      "Operating revenue had gone up by 28 per cent over the last five years compared to an increase in expenses of only 13 per cent. The jump in operating revenue was significant in the last two years. Since you asked me, I can say, 'I think, I did quite well'," he said.

      The issue of Tajuddin's salary package was raised by a minority shareholder at the exchange's annual general meeting yesterday, who queried the difference of RM2 million with his salary in 2011, which was stated as RM3.5 million.

      Speaking after the AGM, Tajuddin, who was former group managing director of RHB Capital, said when he was appointed to lead the local bourse, he was tasked with a number of responsibilities.

      They included preparing the exchange to compete with other regional bourses when the Asean Economic Community is in place by 2015.

      He said last year, Bursa Malaysia made a mark internationally with the listing of two of the world's top 10 IPOs, namely Felda Global Ventures Holdings and IHH Healthcare.

      Last year, it ranked among the top five listings destinations in the world, raising funds from IPOs worth US$7 billion (RM21.7 billion).

      Bursa Malaysia chief financial officer Nadzirah Abd Rashid, meanwhile, said: "The CEO's package is a share grant plan. It is based on a three-year key performance indicators and if not achieved, he will not get the entire package. It is very much linked to his performance."

      She added that the RM2 million difference in salary as stated in the annual report was due to the timing of Tajuddin's appointment as executive director, which began on April 1 2011.

      On a different development, Tajuddin said Bursa Malaysia is confident that the country's strong economic growth will continue to fuel listing interests among local companies.

      As the economy grows, businesses will need capital for growth and will continue to seek different sources of funding which include the equity market.

      Tajuddin said the equity market is still a little overhang, pending the upcoming general election but, "I am certain once this is over, the second half of this year will see the market picking up again".

      "The Malaysian economy has weathered the global slowdown relatively well in 2012 and early indicators for 2013 show positive development, in line with the country's economic prospects and business fundamentals," he said.

      Tajuddin noted that Malaysia's home-grown companies are doing well internationally with nearly 40 per cent of the FBM KLCI companies' revenue coming from abroad.

      He added that 28 per cent of FTSE Asean 40 are Malaysian public-listed companies while three of Asean's top five investment banks are from Malaysia.

      "Last year, we saw foreign investors consistently increasing their stakes in Malaysian public-listed firms and this is good news for our capital market," he said.

      Bursa Malaysia posted a net profit of RM151.5 million in 2012, an increase of four per cent from 2011's performance while operating revenue was up two per cent to RM388.5 million.

      The derivatives market, which did well last year, is expected to continue its performance this year due to increased global visibility of derivatives products, he said.
    On theSunDaily:
    • Bursa seeks to boost retail participation
      Posted on 29 March 2013 - 05:38am

      Premalatha Jayaraman

      Tajuddin speaking at a press conference after Bursa's AGM in Kuala Lumpur yesterday. NORMAN HIU/theSun

      KUALA LUMPUR (March 29, 2013): Bursa Malaysia Bhd, which is eyeing moderate growth in all business segments for the financial year ending Dec 31, 2013 (FY13), will introduce more initiatives to boost retail investors' participation in the equity market, said its CEO Datuk Tajuddin Atan (pix).

      The exchange is working to come up with services and products that will bring ease of trading to investors.

      "Among the exchanges, yes, we are the lowest (in terms of) retail participation. This is something that we need to work on very extensively." he told reporters after the group's AGM here yesterday.

      In 2012, retail participation on Bursa Malaysia was about 23% of average daily value traded.

      "Last year, we saw foreign investors increasing their stake consistently (throughout) the whole year. I guess this lag effect is something that our retail participants have always been doing and hopefully with more information they will join or front run these foreign investors," Tajuddin said.

      He said the eRights service launched yesterday, was part of its efforts to create a more facilitative trading environment for retail investors.

      The service will enable shareholders to suscribe to rights issues via the ATM and internet banking facilities of participating banks, similar to the current practice for electronic initial public offering (IPO) applications via electronic share application.

      "We are continuously taking steps to introduce new initiatives for the market with the objective to provide a more facilitative trading environment to attract more investors and issuers, not only within our domestic market but also the region," he said.

      "I may not be able to help you trade but one thing's for sure, the exchange will be there to facilitate with products and services," Tajuddin added.

      Meanwhile, Bursa's growth this year will continue to be driven by stable income from its equity and derivatives segments.

      "If the market continues to be volatile, there will be more interest. The cash cow is still the equity (market)," said Tajuddin.

      He said the exchange, which had several sizeable IPOs last year, has seen a lot of interest in raising funds in the country.

      "It will not be as big as last year, (but) there is enough interest, and applications have been submitted to the Securities Commission and Bursa. Whether they come in or not, it is an issue of timing," he said.

      "The overhang of election holds things (back) a little bit. Hopefully, we will see some traction in the third and fourth quarter of this year," he said.

      Earlier during the AGM, shareholders and the Minority Shareholders Watchdog Group (MSWG) raised questions with regards to Tajuddin's remuneration package that was increased to RM5.5 million in 2012 from RM3.5 million in 2011.

      "MSWG said there was an increase of over 50% but it is not a increase (in real terms). Datuk (Tajuddin) was with us for just over nine months in 2011," said Bursa Malaysia's CFO Nadzirah Abd Rashid.

      Tajuddin was appointed as the CEO of Bursa Malaysia on April 1, 2011.

      Nadzirah clarified that the CEO package includes a share grant plan that is charged up front but only payable should key performance indicators are met.

      "In terms of accounting, we would charge upfront but delivery (is) in three years. In the event that the three-year key performance indicator is not achieved, he (Tajuddin) is not going to get it," she said.

      Bursa also announced the appointment of Datuk Karownakaran @ Karunakaran Ramasamy, Chai Way Leong and Ghazali Darman to the board from March 28, 2013.
    Can you see the message in the red bold.

    As a listed company, the CEO pay as mentioned in the news article is performance based.

    Which means revenue is so important. Look at the headline mentioned in the SunDaily.

    That's the focus.

    More revenue means more money.

    That's all to it.

    And I find it so ironic that Bursa cannot understand why retail investors are lacking.

    Look at how companies delist at unreasonable pricings. How to be a retail investor? When stock price go down, the retail investor will be holding on to the stock price. The owners, seeing the cheapness in stock prices, only see opportunity for themselves to take the company private and profit from the cheap prices.

    Look at MBF's privatisation. Does Bursa really want to know why their minority shareholders are so unhappy?

    Look at the quality of the new IPOs. If the companies listed of are of good quality, why do we have companies like Smartag which had reported losses every quarter since listing? 

    Look at Astro relisting. Why was it allowed to relist based on a higher earnings valuation? Look at its recent earnings. Earnings were way below than what was suggested in its IPO figures.

    Look at another new listing. China Stationary Limited. Company was IPOed at 95 sen. On 21st March 2013, its substantial shareholder dumped shares at 60 sen! Any logic? CSL now? 40.5 sen this morning! Is this what you call a quality new listing?

    Look at the nonsensical not fair but reasonable advise given issued. Why is this being allowed? Is Bursa, by not saying anything on these advices, saying that it's ok for minority shareholders to accept offers that is basically not fair?  Who wants to be a retail investor when not fair deals are being shafted left, right and center at them?

    Look at how many fraud cases. Is the punishment just? Look at Megan Media! What happened to this multi million dollar fraud case? Will we see justice?

    Can I go on?

    Yes I can but I won't.

    They are so many valid reasons why retail investors do not want to invest.

    Bursa, for its part, needs to remind itself that its a stock exchange. Business should never been an issue. And as a stock exchange, Bursa Malaysia needs to protect its very core foundation of its house. A house has to be built on strong foundations and for a stock exchange, the minority shareholders is the very core of the foundation.If the minority shareholders aren't taken good care of by the stock exchange, retail investors will always shun the stock market. It's simple as that.

    Why would the retail investors want to invest in shares when the listed companies sees them (retailers) nothing but OTHER PEOPLE's MONEY (OPM)?

    Do the listed companies treat their shareholders fairly?

    Yes, Bursa, remind yourself you are a stock exchange. Look after the exchange. Make sure you protect your other customers, the minority shareholders, fairly. That's the most important thing. Who wants to invest when they run the risk of being treated unfairly and not being compensated for taking the risk to invest their hard earned money in shares? Once the protection is there, slowly but surely, the retail investors will flow back into the market.

    Thursday, March 28, 2013

    Why Is Bursa CEO Getting Such A Pay Increase?

    On theEdgeMalaysia.com

    • Bursa CEO's 57% pay rise spurs questions  
      Business & Markets 2013
      Written by Lee Wen Ai of theedgemalaysia.com   
      Thursday, 28 March 2013 14:13

      KUALA LUMPUR (Mar 28):  A 57% year-on-year increase in the remuneration package of BURSA MALAYSIA BHD []'s CEO Datuk Tajuddin Atan grabbed the attention of Minority Shareholders Watchdog Group and piqued interest from shareholders at the company’s AGM today.

      Tajuddin’s pay package was raised from RM3.5 million in 2011 to RM5.5 million in 2012.

      A few shareholders raised the question on the CEO’s salary at Bursa's 36th AGM at PWTC today. They wanted the board to explain why the CEO's pay in 2012 was “more than doubled” from the previous year when the stock exchange's performance was "not impressive".

      "The increase was partly due to a full year's pay in 2012 as compared to just 9 months' pay in 2011 (because Tajuddin was appointed in April 2011),”  said Bursa's chairman Tun Mohamed Dzaiddin Haji Abdullah.

      "The CEO package is competitive with other listed companies and is a competitive package for a CEO of an exchange. The board is mindful that fair remuneration is critical to attract and retain the best talents," he added.

      At the AGM, a shareholder also asked what Bursa's role was following an  increasing trend of listed companies being taken private, wiping billions off the exchange. And after several years, these companies got relisted.

      "When [privatisation and relisting of the same companies] happens, I think someone is making money but not us shareholders," remarked the shareholder.

      To that question, Tajuddin responded:

      "Bursa has engaged with its stakeholders on this. The conclusion was that these corporate exercises were business decisions.

      "Bursa will continuously look for new quality companies with good valuations to list on the exchange, in line with the freer flow of funds and investors in ASEAN and the ASEAN Trading Link."

      Reporters covering the AGM wer e banned from taking any notes or using recording devices and mobile phones.
     Yes, why is the Bursa CEO getting such a pay increase?

    Why?

    Then I want to touch in this statement.

    Bursa will continuously look for NEW QUALITY companies with good valuations to list on the exchange
    .

    Ahem.

    Seriously?

    Take a recent posting: Smartag Sinks Deeper

    When was Smartag listed? March 2011.
    When did Smartag started announcing losses? 18 Aug 2011!! ( See Since Listing, Smartag Had Reported Losses Every Quarter! )

    Is Smartag the only such good quality company that was listed recently?
    Can you find more?

    How about the stock performance of China Automobile Parts (CAP) since listing?
    IPO Price: 68 sen
    Closing Price on Listing day: 78 sen  (Wanna guess the listing day high?)
    Opening price this morning: 37 sen.

    I wonder if this is considered a QUALITY STOCK with GOOD VALUATIONS for the stock exchange investors? 



    Wednesday, March 27, 2013

    How could it be reasonable to accept an offer which is deemed not fair?

    How difficult can it be?

    You simply cannot have them independent advisers issuing moronic statements proclaiming that an offer is not fair but reasonable.

    It makes utterly no sense.


    If such an advice from these so-called professional investment advisers are allowed to continue than the simple message you are sending out is that any listed company owners can continue to simply make unfair offers to their business partners, the minority shareholders, screwing them them of their legal rights to receive a fair share of what the company is worth.

    Is the word FAIR non-existent in the world of the stock market?

    Telling minority shareholders to accept the offer despite the offer being unfair is the ultimate betrayal to the minority shareholders.

    How could it be reasonable to accept an offer which is deemed not fair?

    If the answer is no, then why is them independent advisers given the freedom to issue moronic advice of 'NOT FAIR BUT REASONABLE'?

    Think about it......

    Tuesday, March 26, 2013

    If The OFFER is NOT FAIR, how can it be REASONABLE?

    On theSunDaily Business: http://www.thesundaily.my/news/645150

    • MBf take-over offer not fair but reasonable
      Posted on 25 March 2013 - 10:12pm
      Last updated on 25 March 2013 - 10:51pm

      PETALING JAYA (March 25 ,2013): The offer for the shares and warrants of MBf Holdings Bhd by a consortium of three companies led by major shareholder Tan Sri Ninian Mogan Lourdenadin, are deemed not fair but reasonable, according to independent adviser Affin Investment Bank Bhd.

      "However, we are of the view that the offer for the shares and the warrants are reasonable based on our evaluation and also taking into consideration that there have been no alternative offers received to date," it said, advising that shareholders and warrant holders accept the offer.

      In an independent advice circular yesterday, Affin Investment said the offer for the shares is not fair, given that the share offer price is below the derived valuation range of MBFH shares of between RM2.45 and RM3.20.

      The offer represents a 30.6% and 46.8% discount to the adjusted net asset range of the group. The offer for the warrant is also not fair, given that the warrant offer price is derived by reference to the share offer price.

      Tor Pte Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investment Ltd through Hong Leong Investment Bank Bhd has proposed to acquire all the remaining shares in MBf Holdings and all the remaining warrants which are not already held by the joint offerors for RM1.70 per share and RM0.70 per warrant

      Affin Investment Bank said the sale of MBF Cards was a loss of significant contribution to the group's profitability.

      The fact that the group's business is largely concentrated in the South Pacific Island, which are perceived as remote markets, following the disposal of the MBF Cards, was also seen as a negative point.

      The heavy losses incurred by the group's shipping segment since FY ended Dec 31, 2010 which had drained the group's cash reserves, was another.

      MBf's revised offer will be open for acceptance until 5pm on April 3.
    Incomprehendable advice!

    If an offer is not fair, then it only means it is not fair.

    Think about it.

    Does it make sense to accept an offer that it is not offer?

    Does it?

    If it doesn't make sense, how then can it be reasonable?

    Oh my England!!!!!!!!!!!!!!

    No wait... I forgot. This is the stock market. The minority shareholders is there to be screwed. And what better way to screw the minorities than to have investment advisers making advice such as not fair but reasonable!!!!






    Saturday, March 23, 2013

    Is Tony Fernandes An Angel? Does He Know The Future?

    Published on Business Times:

    • AirAsia, Lion Air chiefs play down rivalry

      Published: 2013/03/23

      KUALA LUMPUR: AirAsia boss Tan Sri Tony Fernandes questioned his rival's growth plans after Lion Air struck a US$24 billion (RM75 billion) Airbus order while pledging to preserve his own ties with the European jetmaker.

      As competition intensifies between Southeast Asia's largest budget carriers, Lion Air co-founder Rusdi Kirana shot back by targeting sharp growth in AirAsia's domestic Malaysian market.

      In a realignment of industry loyalties, Indonesia's Lion Air loosened exclusive ties with Boeing this week to place a 234-plane order with Airbus, which is also sole supplier to AirAsia.

      Asked if he was upset about the blockbuster deal between his top supplier and his closest rival, Fernandes said, "Why should I be? I think Lion has probably bitten off more than it can chew. We are focused on ourselves".

      Lion Air co-founder Rusdi mocked any suggestion that the airline had over-extended itself.

      "Is he an angel? Does he know the future?" Rusdi said when asked about Fernandes's comments.

      The two airline chiefs discussed the deal in separate interviews.

      Lion Air launched its services in Malaysia yesterday through a partially owned venture, Malindo Air, while AirAsia says it is filling planes successfully in Indonesia.

      Rusdi said Malindo hopes to operate 100 Boeing aircraft within 10 years.

      The rapid rise of both airline groups has been channelled through exclusive partnerships with jetmakers Airbus and Boeing - making the two airline bosses star players in a broader power struggle in the US$100 billion jet industry.

      Those battle lines were abruptly redrawn when Lion Air announced the Airbus order in Paris on Monday, doubling up on a similar order placed with Boeing just over a year ago.

      AirAsia has taken delivery of more than 100 Airbus A320 aircraft out of a total of 475 it has ordered.

      Airlines can save money by running one type of fleet but can also obtain good pricing by forcing suppliers to compete.

      Fernandes, who bought AirAsia together with its fleet of two Boeing 737s in 2001 and then built it into the largest operator of Airbus A320s, pledged to stick with the European planemaker.

      Asked whether he might consider Boeing for future orders, he reiterated he wanted to stick with one type of aircraft. The Malaysian entrepreneur studied new jets from Canada's Bombardier before striking his most recent Airbus deal, however.

      "I run a proper business not an emotional business," Fernandes said in an electronic interview.

      "They have to sell planes. How can I stop them?" he said of Airbus's three-year courtship of Lion Air.

      Low-cost airlines prefer operating one type of aircraft to reduce the cost of parts and separate crews. But the sheer size of some of the world's largest fleets has raised questions over whether one supplier can meet the needs of the largest airlines.

      Air Berlin and Norwegian Air have a mixed portfolio of jets.
      Bankers and lessors have expressed concerns that a series of record-breaking orders risks flooding Southeast Asia with too many narrowbody planes, despite projections of sharp growth.

      "The world is big. There is a lot of space for everybody. We should accept that competition is normal," Rusdi said.

      Asia is expected to double its fleet in the next 20 years. Reuters
    Tony said Lion Air had bitten off more than it can chew???

    Haha!

    It was just on Thursday that Tony Fernandes said ‘Asia can take a LOT of planes.’

    • “There are 3 billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia,” Fernandes said in a Bloomberg Television interview at the Credit Suisse Asian Investment conference in Hong Kong yesterday. “So it can take a lot of planes.”
    Yeah, if Asia can take a lot of planes, why make comments like Lion Air 'had bitten off more than it can chew?'

    Why?

    I have always questioned about Business Times's choice of article titles.

    Here's the screen shot of today's Business Times article.

     As mentioned on Business Times, this article originated from Reuters.

    For some strange reason, I decided to read Reuters article too. Dunno why. :P

    http://www.reuters.com/article/2013/03/21/us-airasia-lion-idUSBRE92K0QU20130321



    As you can see the article is the same!!!!

    Only difference is the title!!!

    The original title from Reuters is "AirAsia, Lion Air bosses spar over plane orders".
    Business Times however decided the title should be "AirAsia, Lion Air chiefs play down rivalry".

    Don't you wonder why Business Times always have to be so creative with its article titles?



    Friday, March 22, 2013

    And Finally Axis Inc's ex-Directors Are Charged With Fraud

    On 31 July 2008, I wrote about Axis Inc. The stock was trading at 2.00 on 11 July 2008. By 30 Jul 2008, the stock price collapsed to 35 sen!



    After the plunge, when queried, Axis announced that its autditors had unresolved issues A quick examination of Axis Inc's quarterly earnings would have shown that its receivables ballooned.



    More details were explained in the posting A Deeper Look At Axis Inc

    On 31 Jul 2008, the following statement stood out in Axis announcement.

    • The external auditor, Messrs Horwath are unable to obtain sufficient appropriate audit evidence and explanations to ascertain the following:- (b) the recoverability of the outstanding balances due from the Contract Manufacturers (net of the settlement subsequent to 31 March 2008) in relation to the trade receivables and advances)

    Receivables had ballooned and the external auditors states that they are unable to obtain sufficient audit data!

    More drama unfolded a few days later. On 3 Aug 2008. claimed it might have to write off a whopping 161 million from its accounts!

    The following was taken from a Business Times article .http://whereiszemoola.blogspot.com/2008/08/update-on-axis-inc.html
    • The company said its external auditor, Messrs Horwath, was not able to obtain sufficient evidence and explanation to verify three issues.

      One is an amount of RM105 million due from contract manufacturers, which is part of other receivables as at March 31 2008.

      This is a big jump from RM11 million in the previous financial year. Subsequent to the balance sheet date, RM20 million has been settled by the contract manufacturers.

      Secondly, the contract manufacturers also owed the group RM28 million for sales of fabrics by the group to the contract manufacturers.

      Finally, prepayments of RM32 million were made to certain suppliers for the supply of embroidery services, purchase of fabrics and accessories, from which only RM11 million of these services and goods were received by the group
      .

      The balance (of goods and services) is expected to be settled by the end of September 2008.

      The contract manufacturers are LA (Cambodia) Garment Pte Ltd, Vivatino Design (Cambodia) Pte Ltd and United Garment (Vietnam) Co Ltd.

      These manufacturers are in a strategic alliance agreement with a subsidiary of Axis, where the manufacturers receive a 25 per cent advance payment of the value of a confirmed order for the cutting and sewing of the garments.

      Since Messrs Horwath was unable to form an audit opinion, Axis intends to carry out a special audit. It told Bursa Malaysia on Thursday that the company can only say how long it needs to settle the audit issues once the board appoints an independent auditor for the special audit.
    I had almost forgotten all about Axis Inc until 2010. On July 2010, Axis Inc Lodges Police Report!!

    Yes more drama!

    A police report was made because documents and records belonging to Axis Inc went missing!!!
    • KUALA LUMPUR: AXIS INCORPORATION BHD 's board of directors has lodged a police report over several official documents and records belonging to Axis and its units which have gone missing.

      It said on Friday, June 11 that it had on Wednesday lodged the report over the missing records of the company and its units Asiapin Sdn Bhd, Chongee Enterprises Sdn Bhd and GBC Marketing Pte Ltd from 2004 to 2008 at the offices in Johor Baru, Tangkak and in Singapore.

      The missing records included documents in relation to the purchase of machinery sent to contract manufacturers in Cambodia and/or Vietnam; bank statements and cheque butts; payment vouchers and supporting documents for payments made to the contract manufacturers in Cambodia.

      Also missing were documents, letters, e-mails and correspondences between Axis group and
      the contract manufacturers; documents in relation to the orders placed with the contract manufacturers by buyers; documents of raw materials bought for the contract manufacturers (ncluding purchase orders and delivery orders).

      The report also claimed that documents on the account of monies received from the Bumiputera issue in 2004 and the sale of Ganad assets in 2007-2008 were missing.

      "As a result of the above missing records, Axis Group of companies in 2009 had to write off substantial amount of its assets and receivables due to the lack of documentary support of these assets and receivables," it said. The company said the present Axis Board was unable to answer certain queries posed by Bursa Malaysia Securities Bhd.

     

    A month later, I wrote the following: Stock Manipulation On Axis Inc: Dealer Charged

    Totally unreal!

    We had accounting issues, police report, missing documents and now stock manipulation! 

    Let me reproduce that posting here once again. On the Edge Financial Daily Dealer’s rep sanctioned for false trading, market manipulation
    • Dealer’s rep sanctioned for false trading, market manipulation
      Written by Loong Tse Min
      Friday, 09 July 2010 11:06

      KUALA LUMPUR: Bursa Malaysia Securities Bhd has publicly reprimanded and fined a commissioned dealer’s representative (CDR) of Kenanga Investment Bank Bhd RM100,000 for false trading and market manipulation in the trading of Axis Incorporated Bhd shares.

      In a statement yesterday, Bursa Securities said it ordered that Lee Beng Huat be struck off the register, if he was still a registered person of the exchange.

      The exchange said Lee had carried out false trading and market manipulation involving about 41 million Axis shares, out of the market turnover of 104 million Axis shares, for 87 trading days in 2006 and 2007.

      It said during that period, Lee had dealt in Axis shares mainly through the accounts of 10 clients. “He had entered buy and sell orders which were manipulative in nature and which had led to false or misleading appearance of active trading in, or market for, Axis shares and tantamount to stock market manipulations,” Bursa Securities said, adding that Lee had breached trading rules.

      It said the dealing in Axis shares by Lee via the 10 accounts, which were the top buyers and sellers during the period, had several characteristics:

      1. Entry of orders which were several bids lower than the last done price with no real intention to have the buy orders matched.

      2. Lee also engaged in order splitting, entering a series of buy orders in succession through any one of the 10 accounts with the same price. These buy orders gave rise to and created an impression of continuous demand for Axis shares which led to false or misleading appearance of active demand/market for Axis shares.

      3. The buy and sell orders executed in the 10 accounts:


      • had cross-trades which were matched among each other for about 12 million units of Axis shares involving Lee as their common CDR;
      • resulted in the buy and sell transactions of Axis shares in the 10 accounts without any change to the beneficial ownership of Axis shares (NCBO trades) and during the relevant period, there were 65 NCBO trades involving 385,800 units of Axis shares;
      • were frequently matched with the corresponding orders keyed in by another CDR from another broker which indicated that there were some form of pre-arrangements for these trades to be matched;
      • resulted in trades which were rolled over periodically with the same or almost the same block of Axis shares which gave rise to the manipulative trading activities; and
      • had trades which were subsequently amended to other clients’ accounts resulting in a change of the original party to the contract which is not permitted.


      Bursa Securities said Lee, by engaging in the manipulations, managed to sell about 72% of the sell orders (40.98 million out of 56.67 million units of sell orders entered for the 10 accounts) and bought about 55% of the buy orders (41.6 million out of 76.14 million units of the 10 accounts’ buy orders).

      It said the higher volume and percentage of the buy orders, which were subsequently cancelled and/or lapsed due to the orders being lower than the last done price resulting in lower percentage of buy orders matched, gave an impression of and created an inflated demand for Axis shares.

      This, it said, led to a misleading appearance of an active market for Axis shares.

      Bursa Securities said Lee had failed to take heed of the concerns raised by the exchange on his irregular trading activities in Axis shares in the 10 accounts but had continued to trade in the irregular and manipulative manner.

      This article appeared in The Edge Financial Daily, July 9, 2010.
    Hmm... as stated in the article

    "Lee had carried out false trading and market manipulation involving about 41 million Axis shares, out of the market turnover of 104 million Axis shares, for 87 trading days in 2006 and 2007. ". 

    Here is the chart of Axis between 2006 and 2007... yeah... I can see the massive volume...



    And what's interesting is what happened after 2008... here's the chart from 1 Jan 2008 to May 2009.




    I wonder who were the big sellers were when the shares plunged in 2008. :P

    Ok it's not very clear (LOL! yeah.. what's new! :P ) ... anyway, remember the posting Axis Inc Lodges Police Report!? I had an Axis chart posted?

    Let me post an ammended chart now. :P ( I have now crossed out 2007 stock bumper year and changed it to 2007 Stock Manipulation time! :P )



    Now see the bottom arrow on the volume...

    Can you see what it suggests? Can you?

    Anyway.... I am glad that the dealer was caught but... I am wondering... is the dealer the chief 'tukang masak'? (do check out some of the comments posted http://www.blogger.com/comment.g?blogID=17708300&postID=6931647163956148008 )

    Let me repeat the this one sentence: the dealer that was charged, was said to "carried out false trading and market manipulation involving about 41 million Axis shares, out of the market turnover of 104 million Axis shares, for 87 trading days in 2006 and 2007."

    Think about it...
    Think about the SIZE of the manipulation.
    Think about the SIZE of missing accounts.

    On  today's Sun Daily:3 Axis ex-directors charged with fraud
    • 3 Axis ex-directors charged with fraud
      Posted on 22 March 2013 - 05:40am
      PETALING JAYA (March 22, 2013):

      The Securities Commission (SC) has charged three former directors of garment manufacturer, Axis Incorporation Bhd for providing false information to Bursa Malaysia between 2006 and 2008.

      Koh Tee Jin, Saipuddin Lim and Lee Han Boon were each charged with five counts of furnishing false statements relating to the revenue of Axis to Bursa.

      If convicted, the three ex-directors will be liable to a fine not exceeding RM3 million or imprisonment for a term not exceeding 10 years for each charge or both.

      In a statement yesterday, the SC said the charges were in relation to false statements contained in Axis' four quarterly reports for the financial year 2007 and the quarter ended March 31, 2008.

      Koh, 47, Saipuddin, 54, and Lee, 32, were each granted bail of RM100,000 with two sureties by the Sessions Court and were required to surrender their passports to the court. The matter has been fixed for case management on May 21, 2013.

      Axis was delisted from Bursa in November 2010
      .

      "We will continue to bring enforcement actions to ensure accurate and timely disclosure of financial information by listed companies as this is an important aspect in upholding integrity and investor confidence in the capital market," said the SC.

    Fine of 3 million and a jail term not exceeding 10 years for each charge or both?

    Is it enough?