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?


  • Bursa CEO's 57% pay rise spurs questions  
    Business & Markets 2013
    Written by Lee Wen Ai of   
    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?


Then I want to touch in this statement.

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



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:

  • 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???


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?'


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

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 .
  • 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 )

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?

Thursday, March 21, 2013

Two Cows

You have 2 cows.
You give one to your neighbour

You have 2 cows.
The State takes both and gives you some milk

You have 2 cows.
The State takes both and sells you some milk

You have 2 cows.
The State takes both and shoots you

You have 2 cows.
The State takes both, shoots one, milks the other, and then
throws the milk away

You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income

You have two cows.
You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemptionfor five cows.
The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on one more. You sell one cow to buy a new president of the United States , leaving you with nine cows. No balance sheet provided with the release.
The public then buys your bull.

You have two giraffes.
The government requires you to take harmonica lessons.

You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

You have two cows. You borrow lots of euros to build barns, milking sheds, hay stores, feed sheds, dairies, cold stores, abattoir, cheese unit and packing sheds.
You still only have two cows.

You have two cows.
You go on strike, organise a riot, and block the roads, because you want three cows.

You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
You then create a clever cow cartoon image called a Cowkimona and market it worldwide.

You have two cows, but you don't know where they are.
You decide to have lunch.

You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

You have two cows.
You worship them.

You have two cows.
Both are mad.

Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the ** out of you and invade your country.
You still have no cows, but at least you are now a Democracy.

You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

You have two cows.
The one on the left looks very attractive...

Tony Fernandes: ‘Asia can take a LOT of planes.’

Published on Star Business:

  • Thursday March 21, 2013
    Asia can absorb more aircraft, says AirAsia chief Tony Fernandes

    HONG KONG: Asia will be able to take in more aircraft as economic growth and a population of more than 3 billion people will sustain travel demand, said AirAsia Bhd group chief executive officer of AirAsia Tan Sri Tony Fernandes.

    “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.”

    The comments come after Indonesian budget carrier PT Lion Mentari Airlines ordered 234 aircraft from Airbus SAS this week its second commitment to purchase more than 200 planes in two years stoking concerns of overcapacity in Asia. More than a dozen budget airlines began operations in Asia-Pacific in the past 15 years as economic growth in China, India and South-East Asia enables more people to fly for the first time.

    The growing population in Asia was expected to help fill the planes, said Fernandes, whose AirAsia group expected to carry 43 million passengers this year. Eleven years ago, the airline carried 200,000 passengers, he said.

    “I wouldn't say there are too many planes in Asia,” Fernandes said. “We have 500 planes and we fly in six countries. Lion Air is in Indonesia and a hybrid in Malaysia. Asia can take the planes they have and we have.”

    Discount carriers have secured about a quarter of the region's air travel market in the past decade. The region will account for 33% of global passengers in 2016, according to the International Air Transport Association, and HSBC Holdings Plc has said four out of five airports in Asia are operating at or above their designated capacity.

    AirAsia has grown into Asia's biggest discount airline since its takeover by Tony Fernandes and partners in 2001. The carrier has set up ventures in the Philippines, Japan, Thailand, India and Indonesia.

    In 2011, AirAsia ordered 200 Airbus A320neo aircraft valued at US$18bil (RM56.2bil)
    in the biggest order for the planemaker.

    Lion Air, which serves more than 36 destinations, is establishing a low-cost carrier in Malaysia to challenge AirAsia, Airbus's biggest A320 customer. Low-cost carriers are increasing their fleet as air travel is expected to grow more than 6.4% annually through 2031.

    Lion Air already has 700 planes on order and expects to have ordered 1,000 planes within “two to three years,” president Rusdi Kirana said on March 18. The Indonesian carrier ordered 230 Boeing Co 737 planes last year.

    AirAsia planned to pick an engine for the 100 A320 planes it ordered from Airbus by April 18, Fernandes said. - Bloomberg
 Comments: Just for the record of what's being said.

Monday, March 18, 2013

Transparency? Who Wants To Invest In A Company They Cannot Trust?

Posted on Star Business:

  • Monday March 18, 2013
    Listed firms told to be transparent to investors

    KUALA LUMPUR: Companies listed on Bursa Malaysia need to be transparent in providing information to the investor community, said Bravemarket Inc managing director Dr B.M. Marcello Maestro.

    He said he had been talking to some of the local companies and found them undervalued because of their lack of transparency.

    “You need to communicate with the investors by giving them clear information about your company’s growth, earnings and revenues.

    “Most of the companies have knowledge and future plans about their company but they are not putting that in their website which makes them look unattractive to investors’ eyes,” he told Bernama.

    Maestro urged the companies to inform the investor community about their growth plans – where they are going, and how and when they are going to get there – because investors are interested in the future and not in the past.

    “Clarity creates confidence. If you are clear about your company, then you will have investors coming in for you, and once they are confident about your company then they will keep on investing for a long time.

    “It doesn’t matter if your past performance is poor, you need to explain why and how you are going to overcome that,” he said.

    Maestro said a company’s share prices were an indication of how investors were valuing its assets.

    “Once the share prices go up, its market cap will follow and the company can have lower funding.

    “With lower funding, you can expand more because your share prices are higher, and you could also improve the balance sheet,” he added.

    Bravemarket, a US-based firm servicing financial institutions, businesses and governments, has engaged government agencies to select the best local small and medium enterprises for inclusion in the Bravemarket Asia Investment Ready 500. — Bernama
My comments: I fully agree that companies are going to be undervalued when the transparency is lacking.

When a company is not transparent, it is not telling the investors what is happening within the company. And I cannot understand for the life of me, why can't the owners and management understand the importance of transparency. Is transparency not important? Are the owners and management so arrogant that they feel that the minority shareholders are not important? Don't they understand that a minority shareholder, is a shareholder and shareholders are but their business partners? So why wants to be their business partner when they have are not giving access to information that will help them understand the business they are investing?

Yes, who wants to buy your company share?

Like this also cannot understand???

Think about it.

A prospective investor or even fund manager for the matter of fact, sees this company. Earnings is great. Dividends paid is not bad too. But sadly, before they could invest, they see this company embarking on multi million dollar project. The information given by the company is hazy, leaving the prospective investors utterly dumbfounded on what is happening, which gives them no choice but to avoid the company.

Why risk investing their money, when they have no idea what is happening exactly with the lack of transparency?

When there is lack of information and clarity, who can the investors trust the company?

Or as they say, who wants to invest, to be a business partner, of a business they cannot trust?

Is this all too difficult for the owners/management to understand???

For example, blogger

Protasco's Puzzling Purchase

Some of the issues highlighted.
  • PT ASI is only a few months old: "PT ASI was incorporated in Indonesia on 6 September 2012 as a private limited company".
  • PT ASI only has one director who hardly owns any shares. No background of this director is given.
  • The vendor is 99% owned by Anglo Slavic Petrogas Ltd, a company registered in the British Virgin Islands, no background is given, a search on the internet returns nothing; who is behind this company, what is their track record?
  • The company structure of PT ASI owning part of PT FAS owning PT Haseba is rather artificial, why is such a difficult construction chosen?
  • Who are the minority shareholders of PT FAS and PT Haseba?
  • On the signing of the S&P, Protasco will pay RM 50 million cash, why so much? This is about 30% of the total amount, much higher than normal in comparable deals.
  • On November 1, 2012 PT ASI signed a S&P agreement to buy an additional 46% of PT FAS. What was the price paid for that stake? Why does Protasco not wait until this deal is panned out?
  • a thorough reasoning should be given: where is the profit guarantee based on? It is definitely not based on the profit from PT Haseba, its results are poor, its revenue in 2011 is even zero:

 Do read Wind's other postings:

Friday, March 15, 2013

Astro Good Results And Double Digit Revenue Rise?????

Astro announced its earnings yesterday.

These are the figures posted by Dow Jones.

The net profit dropped a lot compared to last fiscal year.

The EdgeMalaysia carried the following news.
  • Astro Q4 profit down 47% to RM83m
    Business & Markets 2013
    Written by Shalini Kumar of  
    Thursday, 14 March 2013 18:43

    KUALA LUMPUR (Mar 14): Astro Malaysia Holdings Bhd recorded a net profit of RM83.2 million for its fourth quarter ended Jan 31, 2013, a 47% fall from the RM157 million it posted in the last corresponding quarter.

    Its quarterly revenue came in at RM1.1 billion, a slight increase over the RM1 billion it brought in last year.

    “The decrease in net profit is mainly due to a reduction in interest income of RM41.4 million as well as higher depreciation of RM57.5 million compared with the corresponding quarter, which resulted in lower tax expenses by RM22.3 million,” Astro said in its explanatory notes accompanying its results.

    For its full year to January 2013, Astro recorded a net profit of RM418 million, down 33.5% from the RM629 million it saw last year.

    But its 2013 revenue came in at RM4.3 billion, up by 13.2% compared to 2012’s RM3.8 billion.

    In a statement released to Bursa Malaysia today, Astro’s CEO Datuk Rohana Rozhan said: “Astro continues to execute strongly on its growth strategy, delivering double-digit revenue growth of 10% to RM4.3 billion in FY13.

    “This is as a result of new customers and good take-up of value added products and services which has contributed to the ARPU growth of 5% from RM89 to RM93.”

    The group has also proposed a final dividend of 1 sen per share, which is subject to shareholder’s approval.

    Tun Zaki Azmi, Chairman of Astro said, “Our good financial results are a reflection of the achievement of challenging targets, generating strong cash flows from operating activities.

    “We therefore declare a second interim single-tier dividend of 1.5 sen per share and propose a final dividend of 1.0 sen per share subject to shareholders’ approval, giving a total dividend of 4.0 sen per share since listing in October last year.”

    Looking forward, Rozhan added the group was now aiming to convert the rest of its residential customers to the Astro B.yond platform by the end of January 2014.

    “We have momentum in adding both new Pay TV and Njoi customers, and will continue to build on our 52% household penetration rate, which in turn will make Astro more attractive to media buyers,” she added.

    “With Astro On-The-Go, we are now bringing Astro services to customers and non-customers in Malaysia, as well as the introduction of the service beyond Malaysia, expanding our footprint beyond our traditional customers of households to individuals in Malaysia and abroad.”

    “We will continue to strengthen our IP assets in content, including on-demand and prepaid offerings to remain our customers’ content provider of choice,” she said.
 I was puzzled by the following statement.
  • “Our good financial results are a reflection of the achievement of challenging targets, generating strong cash flows from operating activities.
Net profit dropped 47%!

This is considered good?

And I was more amused by today's headlines on Business Times.

Since the net profit dropped by 47%, Business Times decided to focus on REVENUE!

  • Astro: Double-digit revenue rise

    By Cheryl Yvonne Achu Published: 2013/03/15

    STRONG STRATEGY: Astro credits new customers, good take-up of value-added products

    ASTRO Malaysia Holdings Bhd's revenue rose 10 per cent to RM4.3 billion in the financial year ended January 31 2013, driven by new customers and good take-up of value-added products and services.

    However, net profit was down 33.5 per cent to RM418 million from RM629 million a year ago.

    The group has declared a second interim dividend of 1.5 sen per 10 sen share, payable on April 18, and proposed a final dividend of one sen per 10 sen share.

    Chief executive officer Datuk Rohana Rozhan said Astro continues to execute strongly on its expansion strategy, delivering the double-digit revenue growth.

    "This is a result of new customers and good take-up of value added products and services such as high definition, Personal Video Recording, Multi-room, On Demand (Astro First and Astro Best) and Superpack, which have contributed to the ARPU (average revenue per use) growth of five per cent from RM89 to RM93," she told a press conference here yesterday.

    Rohana said total subscribers grew by 418,000 (comprising of 209,000 for Pay TV and 209,000 for Njoi), increasing Astro's total customer base to 3.5 million and an overall TV household penetration rate to 52 per cent.

    For its fourth quarter ended January 31 2013, Astro recorded a net profit of RM83.2 million, down 47 per cent from RM157 million in the previous year.

    Revenue stood at RM1.1 billion from RM1 billion recorded in the corresponding quarter.

    In a filing to Bursa Malaysia yesterday, Astro said the decrease in net profit was mainly due to a reduction in interest income of RM41.4 million and higher depreciation of RM57.5 million, which resulted in lower tax expenses by RM22.3 million.

    Rohana said Astro is aiming to convert the rest of its residential subscribers to the Astro B.yond platform by the end of January 2014.

    "We have momentum in adding both new Pay TV and Njoi customers and will continue to build on our 52 per cent household penetration rate, which in turn will make Astro more attractive," she added.

MBF's Increase Offer Still Isn't Fair.

As mentioned yesterday, MBF had increased its privatisation offer.

  • PETALING JAYA (March 15, 2013): The controlling shareholder of MBf Holdings Bhd (MBfH) has revised upward his takeover offer for the remaining shares of the group to RM1.70 from RM1.50 and the offer for its remaining warrants to 70 sen from 50 sen previously.
 Is 1.70 enough?

Not even close.

Come on, the offer could and should be more generous!

Let me use the data from yesterday news.
  • Currently, he already owns 535,685,704 shares, or 92.77% stake, in the company.
 MBF total shares is 577,423, 224.

Effectively, he's trying to buy up the rest of the shares or 577,423, 224. - 535,685,704 = 41,737,520 shares.

At 1.70 a share, he's paying 41737.520 * 1700 = 70.953 million.

Yes, that's his cost of privatisting MBF. (ps: this calculation is not 100% accurate because it's based on the news report. By right, I should count his cost of buying out the warrants too)

Here comes the multi million ringgit question.

MBF Cards was sold for how?

Yes, how muchie?

How? How?

Yeah.... see my thinking?

I believe the offer to buyout the rest of the MBF shares should be much more.

The owner, already own the bulk of the company already. To buy out the rest, won't cost him too much money. So I hope the offer should be fair to the shareholders of MBF Holdings.

Dare I say, show me 2.50?

Thursday, March 14, 2013

Shareholders SO UNHAPPY with MBF

The following was posted on the Edgemalaysia.

  • Minority shareholders unhappy with MBf   Business & Markets 2013
    Written by Shalini Kumar of   
    Thursday, 14 March 2013 10:18

    KUALA LUMPUR: Minority shareholders of MBf HOLDINGS BHD [] (MBfH) are hoping the authorities will delay the suspension of the company until a dividend payment — which they were looking forward to following the sale of the MBF cards business in September last year — has been paid out.

    A minority shareholder said yesterday a group of them had sent a letter to Bursa Malaysia, the Minority Shareholder Watchdog Group and the Securities Commission appealing against the suspension of MBfH shares that will take place five days after the issuance of an independent advice circular (IAC) to shareholders — in relation to a takeover offer being done by major shareholder Tan Sri Dr Ninian Mogan Lourdenadin.

    Lourdenadin, who now holds 92.77% of the company, launched a takeover on Feb 7, offering RM1.50 for the shares,  50 sen for the warrants and RM4.64 for the Redeemable convertible secured loan stock (RCSLs). When he launched the takeover, he had 87% of the shares.

    On Feb 27 after his stake increased to more than 90%, the company said the stock would be suspended five days after the issuance of the IAC.

    But the stock will continue to be listed as Lourdenadin cannot compulsorily buy the rest of the shares because the acceptance level has not reached the required threshold.

    For an offeror to compulsorily buy all the shares, the acceptance level has to be more than 90% of the outstanding shares at the point of making the offer. In this case, it should reach an acceptance level of more than 98%.

    A minority shareholder said they would accept the offer provided the dividend payment was made from the proceeds of the disposal of MBF Cards.
    “We will support the major shareholder’s bid to take over the company as per the price offered after the special dividend is paid,” he said.

    Proceeds from the sale of the cards business of RM172.07 million, if distributed, works out to about 30 sen per unit.

    It is understood that the IAC was to have been released last week, but this has yet to happen.

    Another minority shareholder feels the independent directors are not paying attention to safeguarding the interest of the minority.
    “I don’t think it’s right that the independent directors jumped the gun and sold their shares even before the IAC was released.
    “I’m all right with the decision to take the company private. But independent directors should act in the interest of the minority,” he said, adding that he feels the take-over offer of RM1.50 per share is not a fair price.

    “The stock is currently valued at RM2.37 per share. How can we be happy with an offer price that is low?

    “Also, if the takeover were to be successful, it would deprive us of what is owed in the first place. It’s not right to have something printed in black and white and then not follow through with it.”

    At the close of trading yesterday, MBfH was flat at RM1.52, having reached an intra day high of RM1.59.

    On Monday, Lourdenadin extended the takeover offer by another two weeks to April 3, from the original date of March 20.
And ....
  • MBF hits 9-yr high amid demands for higher takeover offer   Business & Markets 2013
    Written by Chong Jin Hun of   
    Thursday, 14 March 2013 10:59

    KUALA LUMPUR (Mar 14): MBf HOLDINGS BHD [] (MBFH) soared as much as 17% to its highest in over nine years amid minority shareholders' unhappiness over the takeover offer  by the diversified company's controlling shareholder,  dealers said.

    At 10.47 am, MBFH shares were traded at RM1.75 with some 955,000 shares done, placing the stock among ten top gainers. The stock had earlier risen as much as 26 sen to RM1.78 --  its highest since June  2003, Bloomberg data show.

    A dealer said the gains in MBFH shares were due to investors are asking for a higher offer from Tan Sri Dr Ninian Mogan Lourdenadin, who is offering RM1.50 a share to take over the firm.

    "The public will reject the offer as they are not happy. Minority shareholders are hoping that the acquirer will offer a higher price,"  the dealer told

    The yesterday received calls from some shareholders saying they were even prepared to go to court on this.

    Ninian had owned 87% of MBFH when he offered to buy the remaining shares of the firm at RM1.50 each on February 6 this year.

    He also offered to acquire its remaining warrants at 50 sen each and outstanding redeemable convertible secured loan stocks issued by MBFH’s wholly-owned subsidiary Wellink Invesments Ltd at RM4.64 each.

    For the exercise to succeed, the acquirer will have to secure an acceptance level of more than 90% of the remaining 13% stake he plans to acquire. This means Ninian's stake in MBFH will have to go up to 98.7% for the takeover to go through.

    However, that has not happened so far. Exchange filings show that his latest reported equity portion had only touched 92.77%. As such, the deadline for the offer has been extended to April 3 from original date on March 20.

    Minority shareholders are unhappy with the offer as they feel the price does not reflect the true value of the firm. The offer price of RM1.50 per MBFH share is a 37% discount to the company's latest reported book value per share of RM2.37.

    MBFH’s website indicates that the firm was initially set up as a private limited entity on October 10 1963 before it was converted to a public limited company on October 21 that year under the name Island Hotels & PROPERTIES [] (M) Ltd.

    The firm had, subsequently, changed its name to Island Hotel & Properties (M) Bhd and Pacific Development Credit Bhd on April 15 1966 and May 26 1976 respectively before adopting its current name on July 20 1981.

    MBFH’s businesses include real estate, financial services, and education. The firm also operates tea, coffee, cocoa PLANTATION []s.
My say?

The shareholders should be given a fair share from the sale of MBF Cards.

It is the ONLY FAIR thing to do.

Please stop screwing the shareholders!


  • Controlling shareholder ups MBf takeover price to RM1.70  
    Business & Markets 2013
    Written by Kamarul Anwar and Shalini Kumar of   
    Thursday, 14 March 2013 14:50

    KUALA LUMPUR (Mar 14): In an apparent attempt to sweeten the deal, MBf HOLDINGS BHD []’s (MBfH) CEO and largest shareholder Tan Sri Dr Ninian Mogan Lourdenadin has raised the takeover offer of its shares to RM1.70 per share and 70 sen per warrant, in order to take his company private.

    However, the revised offer price for MBfH’s shares is still inferior to the company’s book value of RM2.37 per share, or 39.41% higher than the new offer price.

    In a filing to Bursa Malaysia, the group said that the joint offerors – comprising Tor Private Ltd, Nadin Holdings Sdn Bhd, Impact Action Sdn Bhd and Market Share Investments Ltd – have revised the offer prices of the shares from RM1.50 apiece and the warrants from 50 sen apiece.

    The filing also stated that minority shareholders who have accepted the previous offer will receive another 20 sen per share or 20 sen per warrant to match up the new offer prices.

    The new offer price for MBfH’s shares is at a 22 sen or 14.86% premium to the closing price of RM1.48 on February 5, 2013, which was the last trading day before the takeover offer was officially made.

    The revised offer price for its warrants is also 27 sen or 62.79% higher from the closing price of 43 sen on the aforementioned date.

    Lourdenadin, who had previously attempted to take MBfH private in January 2013, has extended the takeover offer by two weeks to April 3 -- from March 20 -- in a bid to mop up all the remaining MBfH shares he does not own.

    Currently, he already owns 535,685,704 shares, or 92.77% stake, in the company.

    For an offeror to compulsorily buy all the shares, the acceptance level of has to be above 90% of the outstanding shares he does not own at the point of making the offer. In this case, it should reach an acceptance level of more than 98%.

Thursday, March 07, 2013

Merril Lynch Gives A Price Target of 1.85 For AirAsia.

On the Edge last night:

  • BA Merrill Lynch pegs AirAsia low at RM1.85 Business & Markets 2013
    Written by Ho Wah Foon of
    Wednesday, 06 March 2013 17:30

    KUALA LUMPUR (Mar 6): Bank of America Merrill Lynch (BAML), saying it is keeping its “negative” stance on AIRASIA BHD [] ahead of the general elections, has given a price objective of RM1.85 to the airline -- a 37.5% discount to its last traded price of RM2.96.

    The research house said: “We believe increased news flow over Malindo’s launch in the coming weeks and fears of how severe the resulting price erosion will be, as well as uncertainty over the upcoming Malaysian elections, will keep the stock under pressure.”

    BAML, which released this analyst report after a meeting with AirAsia’s management at ASEAN Stars Conference 2013 in Singapore today, said:

    “Malindo entry is a key concern....Given the imminent start of new rival Malindo in its home market in Malaysia, AirAsia’s stock price could face an intensification of headwinds in the coming weeks.”
    It noted Malindo has received its Air Operators Certificate last week and is on-track to launch its operation within the next two months.

    It added that although AirAsia is ramping up its capacity aggressively, it is “doubtful” that these additional seats can be filled at the same unit revenues.

    Noting that Malindo Air launch means even more capacity added, the US research house said: “In addition to AirAsia's growth plans, we expect the pricing environment to see added downward pressure with the Malaysian-based LCC fleet swelling by 30% in 2013.”

    The research house also commented that AirAsia’s management “looks increasingly thinly spread”.

    It noted that Japan and the Philippines are still loss-making and its proposed venture in India is likely to consume significant time.

    “While Indonesia had a good 4Q results aided by seasonality, Thai AirAsia remains the star performer among associates due to a lack of domestic competition, with its holding company Asia Aviation our preferred LCC play in the region.”

    BAML said its PO of RM1.85 is based on 6x recurring PE for 2013E, inclusive of recognised and unrecognised associate profits and losses.

    “This is a trough valuation multiple reflecting our expectation of a sharp decline in earnings through 2014 as main rival Lion Air aggressively expands in Malaysia,” it said.
My comments?

As mentioned several times, I had noted the improvement in AirAsia balance sheet back in 2010. ( You can refer  this posting And what about AirAsia's earnings? ) But all this 'good work' is undone when it announced back in 2011 it's new air craft purchases. ( Refer: How Is AirAsia Going To Finance This New Airbus Order? )

It made no sense at all.

AirAsia was already struggling in 2010 to accept new delivery of air crafts.

Back in 2007, AirAsia placed an order of 175 new air crafts. I had felt that order was way too huge. By Aug 2010, I was proven correct.

AirtAsia had to defer acceptance of new air crafts. The new air crafts deliveries was choking its cash flow and balance sheet.. Debts had been increasing astronomically to finance the deliverance of the new air crafts.

So in 2010, after the deferments,  things improved.

AirAsia balance sheet started to improve.

All this changed for the worse again come Jun 2011.

With 90 new crafts YET to be delivered from the 2007 order of 175 new air crafts, AirAsia stunned everyone by placing a new 200 air crafts!

It blew my mind away.

Why the need to rush to place a new order?

They were already struggling with their old and yet they are placing such a new, bigger order.

The amount of capital commitment from this new order is absolutely insane in my opinion.

Capital commitment contracted for now stands at 64 Billion ringgit and I would expect it to increase to some 74 billion or so.

This amount is simply staggering.

And now comes Malindo.

New airline means more compeition.

Can AirAsia manage a new compeitor right now when it is heavily committed to new air crafts?

And mind you, AirAsia total debts currently stands at 8.4 Billion. Debts is now increasing again and it will increase rapidly again with AirAsia committed to all these new air crafts.

    Wednesday, March 06, 2013

    Octagon’s auditors issues disclaimer of opinion

    I was reading this article on the Edge.

    • Octagon’s auditors issues disclaimer of opinion
      Business & Markets 2013
      Written by Lee Wen Ai of
      Wednesday, 06 March 2013 09:06

      KUALA LUMPUR: OCTAGON CONSOLIDATED BHD []’s (OCB) auditors have expressed a disclaimer of opinion in the company’s latest audited accounts for the year ended Oct 31, 2012 (FY12).

      Its external auditors Messrs Baker Tilly AC expressed “significant doubt” on OCB’s ability to continue as a going concern pending the implementation of a proposed rationalisation scheme (PRS) as a result of OCB’s default on term loan payments during the year.

      OCB had earlier submitted the PRS for its lenders’ consideration. OCB was informed on Jan 9 that the PRS was approved. OCB is said to be in the process of finalising and executing its debt settlement agreement with its lenders.

      The auditors said there was “material uncertainty” over the recoverability of the group’s RM79.4 million work-in-progress for a waste tyre project, a RM71.8 million development expenditure for a waste-to-energy project in Sri Lanka and the company’s RM33.6 million investment in relevant subsidiaries as at Oct 31, 2012 — which were dependent upon the successful implementation of the projects and the PRS.

      The auditors also highlighted that the group had a contingent liability of RM11.9 million from transactions entered into with YEM Holding Company WLL, a shareholder of a subsidiary, for advances made to fund the waste-to-energy project in Sri Lanka.

      “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 an audit opinion. Accordingly, we do not express an opinion on the financial statements,” said Baker Tilly AC.

      OCB is a financially distressed company under Practice Note 17 (PN17) status because of its inability to fulfil its payment obligations to Amanah Raya Capital Sdn Bhd last June.

      For FY12, the group incurred net losses of RM68.6 million. The group had net current liabilities of RM190.6 million as at end-October.

      OCB engages in the coating of consumer electrical and electronics products and providing clean energy from renewable sources.

      This article first appeared in The Edge Financial Daily, on March 6, 2013.
    I had posted on this company before back in 2010.

    Here are the links to those postings.

      What? What is Top Glove Trying To Do???

      Posted on the Edge.

      • Top Glove to acquire tycoon’s building Business & Markets 2013
        Written by Madiha Fuad of
        Wednesday, 06 March 2013 08:54

        KUALA LUMPUR: Top Glove Corp Bhd will acquire a three-year-old building located in Jalan Tun Razak here from tycoon Tan Sri Law Tien Seng for RM226 million.
        However, the transaction will be done through Value Add Sdn Bhd, a company that is at present controlled by Top Glove executive chairman Tan Sri Lim Wee Chai and executive director Lim Hooi Sin (HS Lim).

        In an announcement yesterday, detailing the two-step purchase, Top Glove has proposed to subscribe to ordinary shares and preference shares that will give it 27% in Value Add for RM12.2 million.

        Following that, Value Add proposes to acquire from TS Law Realty Sdn Bhd a commercial building known as East Wing of The Icon@Tun Razak for RM226 million.

        Top Glove will fund the the subscription via an internally generated fund.

        According to the announcement, Lim is chairman of Value Add and holds a 68% interest in the company while HS Lim has a 5% interest in Value Add.

        Lim has a 38.12% of direct and indirect interests in Top Glove while HS Lim has a 38.11% of direct and indirect interests in the glove producer.

        East Wing the Icon@Tun Razak has a gross built-up area of 278,182 sq ft.

        The first phase of the subscription to Value Add shares was completed on Feb 28, 2013 with 270,000 ordinary shares of RM1 and 5.8 million redeemable preference shares of RM1.

        TS Law Realty is an investment holding company with an authorised capital of RM5 million comprising five million shares of RM1 each. Law, who is a major shareholder of Hiap Tech Ventures Bhd, holds 80% of TS Law Realty while Puan Sri Saw Geok Ngor holds the remaining 20%.

        Top Glove said although the proposed transaction is a related party transaction it does not require shareholder approval because the materiality of the transaction is less than 5% of the percentage ratio threshold.
        The company, however, said Lim and HS Lim have abstained from all board deliberations on the matter.

        “The purchase consideration of the commercial property will be funded through a combination of borrowings and equity through subscription of shares in Value Add by its shareholders,” said Top Glove in its announcement.

        East Wing of The Icon@Tun Razak, which is built on freehold land, has a gross built-up area of 278,182 sq ft and a 98% occupancy rate.

        Top Glove said the acquisition would generate a higher return on its current investment and potential capital appreciation in the future.

        “The subscription and acquisition will not have a material effect on the earnings of the group for the financial year ending Aug 31, 2013 but is expected to contribute to the group’s earnings in the future,” it added.

        This article first appeared in The Edge Financial Daily, on March 6, 2013.
      Buying properties????

      226 Million?????

      Investment or what?????

      Related Party Transaction?????

      Does not need shareholder approval?????

      Man United Exits Champions League 2013.

      It's a shame how Man United lost to Real Madrid.

      It's a shame because it has been a LONG time since Man United played 'well' in the Champions League.

      I felt United were clearly the better team in both legs and with a little bit more luck, United should have another 3 goals at least.

      But that's how it is.

      It's a football match and sometimes the better team doesn't win.

      Them conspiracy theorist would probably chalk this off as United losing because of the referee. Despite me despising that red card decision on Nani's high kick, after cooling off from the initial outrage, I thought about it. Nani's leg did caught Arebola and a high kick is a high kick. It was dangerous because Arebola decided to challenge bravely.

      I was outraged by the decision when I was watching the match. I felt Nani was playing the ball and he did not even know where Arebola was and more so, I thought Arebola barged into Nani. And to make matters worse, not one of the Madrid players were expecting neither were they calling for a red card.

      The ref, however did flash the red for that high kick.

      I guess a high kick is a high kick.

      END of.

      It's a shame.

      Kudos to Mourinho for instantly reacting to the decision instantly by bringing off Arebola and sending in Luka Modric. It was a bold decision by a coach who saw this incident as an opportunity to attack, whereas Sir Alex decided to hold on and not make any changes. It was an understandable decision from Sir Alex. United was really in control and were leading 1-0 before the sending off and Madrid wasn't playing that well then. I did not even recall De Gea having to make a save during the first hlaf.

      That was where the match was won and lost.

      Modric, later, smashed in an unstoppable equaliser and Ronaldo followed up with a brilliant winner.

      Hats off to Ronaldo.

      He has improved as a player since joining Madrid and at this moment of time, he's simply unplayable. A gladiator.

      Monday, March 04, 2013

      Investing In A Relisted Stock?

      • "We study the past to understand the present; we understand the present to guide the future." -- William Lund.

      Think about it.

      In terms of the stock market, we need to study/understand the stock past. The stock history's tells us what has happened to the stock before and what had happened before could happen once again in the future.

      An investor invests for the long term. The long term gives the investor the edge and allow the investor to reap the benefits of seeing the investment grow over time. The time factor is crucial.

      However, what if.

      What if the time factor turns out to be a risk?

      For example, is it a good idea to invest in a stock which had been relisted again?

      Think about it.

      We are seen many companies whose stock was taken private cheaply in the past getting relisted once more. These companies have turned the stock market into their own playground where they can list and delist their stocks based on their own fancy.

      That is the stock past.

      The risk, of course, is the delisting could happen again in the future.. In such case, the time factor becomes a risk. The longer time the stock is listed, the greater the chance the stock could be taken private if the stock is trading cheaply.

      You invest in Kow Kow stock at 2.00, which is a 10% discount over its relisting IPO price. Five years later, a crisis could happen to the stock market causing Kow Kow to trade at 1.20.

      Yes, in most cases, when the stock trades at super low valuations, funds would come in and invest the stock. That's the mechanism of the stock market. Stock prices come up and they do come down. The problem is the owners see the cheap valuation too. Instead of implementing company stock buybacks, the owner do a private buyback. They buy back these shares but via a privatisation offer, benefiting themselves and not the minority shareholders. So the owner launches a privatisation bid at 1.56, which is a so-called impressive 30% premium over the stock price. But what good is such a premium to Kow Kow stock investor who had bought the stock at 2.00?

      The investor can mount an outrage and then hope and pray that the privatisation bid fails.

      But what good would it do?

      Wouldn't it be better if the stock had taken the prevention is better than cure route?

      Know the stock past. Don't let the stock past hurt us. Don't let a company who is a chronic privatisor fool you and your money.

      Protect yourself is always much better than hope others to protect you.

      Saturday, March 02, 2013

      Smartag Sinks Deeper

      After posting on Masterskill yesterday, I remembered those postings on this stock called

      Here are the past postings on the stock.

      I wondered if Smartag is still reporting losses. My guess was yes.

      Here's a screen shot.

      As mentioned in the posting Since Listing, Smartag Had Reported Losses Every Quarter! , from the screen shot above we can see that on 13th April 2011, Smartag made two quarterly earnings report. But Smartag made its listing debut on 18th April 2011. Which means those 2 set of earnings was made before Smartag was listed.

      Which means since listing Smartag has recorded losses for 7th consecutive quarters!!!!

      And needless to say, the lack of sales revenue, since listing, is truly shocking. A sales revenue of 75 thousand for its latest quarterly earnings announced last month!

      How could such a company be granted listing??

      I then wondered if there was any disposals of shares by its shareholders.

      So I checked Bursa Malaysia website.

      The first link, 25 Jan 2013: Changes in Director's Interest (S135) - Lim Peng Keong. - The above disposal of 7,000,000 ordinary shares represents 0.44% of the issued ordinary shares of the Company at a price of RM0.14 per share.

      That doesn't sound good at all because that's the CEO dumping his shares!

      7,000,000 shares sold at 14 sen.

      That should work out to some 98 thousand (not counting the normal stock transaction charges) which works out to be more than the company's sales revenue of 75 thousand for the current quarter!!!! Yes, that's how lacking Smartag sales revenue is!!

       Now the disposal of shares by the CEO was highlighted in the first posting, Is Smartag Worth A Bet?

      I wrote the following:

      • then I saw the following announcements:

        Changes in Director's Interest (S135) - Lim Peng Keong

        Lim Peng Keong? That's the CEO and according to that announcement some 6,800,000 shares were disposed on 9th May.

        Macam mana ni? On the 19th April, Smartag was announced that it will be getting a slice of the ETP projects. On the 9th May, the CEO shows his confidence in his own company by selling a substantial chunk of his shares? Average price of disposal was 0.352.

        What lah!

        And then on the 20th June, there was another disposal of shares!

        Changes in Director's Interest (S135) - Lim Peng Keong

        Accordingly the CEO said that 'The disposals were transacted by Namnan Co. Ltd, which my spouse has controlling interest.'
        The wife's company also sold shares. Some 4,250,000 were disposed at a price of 32 sen. ( Just one sen above the ipo price of 31 sen).


        Project is supposed to be big.

        Big money is there to be made.
      Oh yeah that big project.

      I can still recall that 70 million statement made on the local business media, Business Times. (link for the Business Times article is now broken... )
      • KUALA LUMPUR: Smartag Solutions Bhd stands to make a minimum RM70 million a year once its Radio Frequency Identification (RFID) solution to track container movements is made compulsory.

        Smartag, together with the Royal Malaysian Customs Department, will undertake a trial run of the RFID system at the latter's checkpoints from June 1.

        Smartag chairman Datuk Abdul Hamed Sepawi said the pilot project will run for three months with major companies from the logistics and manufacturing sectors such as Western Digital, TNT, Federal Express Brokerage and Priority Cargo having signed up for the test run.

        Abdul Hamed said the company may charge around RM10 per trip/container for journeys within the country. Taking into this account, Smartag is set to make at least RM70 million a year once the RFID solution is made mandatory. However, this was just an indicative pricing for now, he added.....
      Smartag last traded at 13.5 sen!!

      This is how Smartag has traded since listing...