Is Tan Sri Quek Leng Chan buying Kencana?

One of my blog readers,UB, pointed out the following remarks.

• Quek to emerge a major shareholder in Kencana? click here for article
  
  "...TYCOON Tan Sri Quek Leng Chan, owner of the Hong Leong Group, may emerge as a substantial shareholder of oil rig builder Kencana Petroleum Bhd, sources said." ...
  
  "Quek may buy between 12 and 15 per cent of the company's shares from existing shareholders, one of the sources said." ...

UB then went to say "For comparison purpose, I wonder whether other countries' newspapers also come up with reports based on citing unnamed sources?

In Singapore, Aussie, UK or US... do they come up with articles in this way as well? Is this a norm thing in financial news reporting?

Anybody with overseas experience care to enlighten us?

Actually this kind of reporting in our local dailies has been going on for as long as I started reading the financial news...I mean if the newspapers can tell us something without naming their sources, what is the difference between their information, and that given by the ah-soh buying vegetables at the market?

(I mean apart from... the ah-soh's rumours won't cause the stock price to move sharply the next day.. or trading session.. whereas that which is published in the newspapers will...)"

I fully agree with what UB is saying here.

The press should not be used as a mean to promote stocks!!

And if and when this article is denied then how?

Shouldn't the reporters be questioned who exactly these ssources are?

Are they, these sources, even real?

And what vested interest does these sources have on these stocks? Hmm...

Replies to Comments regarding Bashing of A Whistle Blower

Received a couple of comments to the blog posting: Correction And Bashing of a Whistle Blower?

Here are some my replies to some commnets posted.

• Anonymous said...
  Moola asked : So does it matter who made the reporting first? Isn't it more important to have financial news with better integrity and not based on uncomfirmed sources?IT DOES MATTER, When you choose to defame one writer, and leave the other alone. It shows, Malfide INTENT. You are a racist. Dont think yourself as a whistle blower.This is the end of your blog...you can ramble all you want from now on, about barrock, fernandez ect ect. Nobody cares from a proven racist. Atleast we dont. Like the saying goes, if you dare defame them, than do it in the open, like people such as Rocky Bru and Jeff Oii. These are gentlemen bloggers, unlike your kind.

Mr.Anon. or should I call you Moolaracist or should I call you 60.51.127.195?

Firstly, I accept a mistake in not noting that the MTD Infraperdana posted on the Bursa website was in reference to the news posted on the Sun. I have publicly acknowledged this error.

Now I do not expect that you accept this apology and neither do I want it.

And you have the absolute right to call me a racist. That's your opinion.

Now here's my opinion of you.

You are a gutless coward! You call me of not doing it in the open. How about being you being a gutless, hypocrite coward yourself?

Like I said, you can me attack however you like but what about your impersonation of my name in my chatbox and your spineless, vulgar attack of me, my mother and my grandmother?

Do you need me to attach more screen-shots? (Sorry, I do not think you longer earn this right!)

So how do you rate your own behavior of sending private gutless attacks via emails? How?

If you do not like my opinions, you can always voice your opinions. And I have always posted them. But the personal vandetta against me and my family proves that you are nothing but a coward.

And the issue of defaming?

LOL!

Firstly I have hightlighted an important issue that our financial press have been constantly publishing articles based on unconfirmed sources and phrases like 'it is believed'. Now when these stories has been denied, how about questioning what the reporters have done? Or does it not matter?

Take the same MTD Infra issue yet again. Both the Sun and the Business Times article was written on Nov 17th. The Sun article stated 350Million. Why and how did Business Times get 460 million!??? Why?

Or perhaps I am rocking the boat too hard?

Or should I ask if you had bought these stocks based on these financial reports. LOL!!!

So instead of focusing on the issue, you decided to question me. Hey no problem! You then turned it into a racial issue.

Oh my gosh!

• You are a racist. Dont think yourself as a whistle blower.This is the end of your blog...you can ramble all you want from now on, about barrock, fernandez ect ect. Nobody cares from a proven racist. Atleast we dont.

What planet are you from?

A proven racist!

Ho ho ho.

Aren't you really pathetic?

Have I mentioned anywhere and focused on the journalist's race?

You are really so pathetic!

Here are some comments from other readers for you.

• Anonymous said...
  Defamation? I don't think so, not when facts and reasonings are clearly stated.Racism? This is even funnier and totally avoids the issue.This blog is clearly getting more and more popular. Keep it up.
• Anonymous said...
  Wah, I didn't even think Francis Fernandez and Jose Barrock are Indians until Mr Anonymous #1 accused Moola of being racist. Come on la, Mr Anonymous#1 - you are the real racist! It's people like you that's running Malaysia down. Don't obfuscate the issue with a red herring racial claim!
• And swifz said...
  This is a multi racial country. Anything can become racial. But I know Moola's intention is good.Maybe no need to mention names, just cut and paste the original article.Keep up the good job!

Did you read this blog posting, Privatisation of Scomi?

Hmm.. perhaps I was a racist in that blog posting too?

Again I remind the Dialog issue again: Is There An Intent To Decieve?

A story based on According To Sources. A story which has been denied by the Dialog. But what about the wrongly stated important financial data such as the earnings per share?

Does this all not matter?

Do we, Malaysians, want to see our financial press journalist writing news (or should I call them as stories?) after news after news after news based on 'According to Sources'?

How?

By the way, Mr. Anon, Mr. MoolaRacist or 60.51.127.195. Due to you turning this issue into a personal vandetta, you no longer earn the right to see your comments posted on this blog.

A tale of 2 Hiap Teck

Hiap Teck Ventures (rm1.32) just released its earnings last Friday.

Saw two different research reports on it.

RHB Research has an underperform rating on it. Target price of rm1.10.

• X Hiap Teck’s has a dominant market position in the local bare steel pipe/structural hollow section industry, underpinned by its commanding market share. However, earnings risks are on the rise with the current upcycle in steel and steel product prices turning out to be short and fast slipping away. Valuation is rich with share price trading above our indicative fair value of RM1.10 based on 8x CY2007 EPS of 13.8sen. Maintain Underperform.

OSK has a target price of rm1.93.

Interesting, yes? The below is the screen shot taken of OSK write-up.

For me, the interesting point lies in the fy2007 numbers.

AS can seen from the above screen shot, OSK is estimating Hiap Teck net earnings (net profit) to be a very optimistic 69.3 million. Which as stated in their own table, this represent a growth (or change) of 76.6%!

RHB estimates?

Have a look at the screen-shot of RHB write-up below.

RHB's net earnings (net profit) estimates for Hiap Teck's fiscal 2007 earnings as seen from the above screen-shot if only 48.5 million.

Oh yes, an estimate is an estimate is an estimate.

But... in the case of Hiap Teck, don't you wonder why the estimates is varying by so much? RHB Research is estimating 48.5million while OSK is estimating 69.3 million.

I guess this explains why one's Target Price for Hiap teck is rm1.10 while the other is rm1.93.

Correction And Bashing of a Whistle Blower?

Bashing out on howour financial news reporters uses the phrase 'it's believed' and 'according to sources', Iblogged the following post: Can Our Financial Reporters Report Facts And Not Heresay?

Well, I made a mistake when I wrote the following:

Again, its believed. How about some actual factual reporting and not it is believed or according to sources?

• MTD Infraperdana plans RM460m capital payout
  By Francis Fernandez
  bt@nstp.com.myN
  November 17 2006
  MTD Infraperdana Bhd, country's second largest toll road operator, is believed to be considering a proposal to return as much as RM460 million to shareholders, bankers familiar with the matter said yesterdayIt is believed that the proposal alongside a plan to raise fresh debts was submitted for consideration to the board this week.A capital repayment of 40 sen a share translates into a total cash payment of RM460 million, based on MTD Infraperdana's paid-up capital of RM1.16 billion.

And of course MTD Infra denies such proposal

• We wish to clarify that the Company is always evaluating opportunities to enhance its shareholders' value but the Board of Directors has not deliberated on the capital repayment proposal

Made the error of not reading the message in full:

ARTICLE ENTITLED: "MTD INFRA MULLS RM350M CASH PAYOUT"

Error was the MTD reply was made in respect to the Sun article and not the Business Times article.

• We refer to Bursa Malaysia Securities Berhad's ("Bursa Securities") query letter dated 17 November 2006 regarding the above titled news article which appeared in The Edge Daily on page 32 of theSun, on Friday, 17 November 2006.

Many thanks for correcting me.

Now here's an even more interesting issue. Both written on Nov 17th. The Sun article stated 350Million. Why and how did Business Times get 460 million!?

All this from a comment posted on this blog posting: How Now SC?

• Wow, great investigative report moola, but sounds like you have twisted your facts. I checked the MTD Infraperdana story, and wow there was a query from Bursa Malaysia, but it was on a financial daily article, written by a CHINESE writer, one DAY before the Business Times article appeared. Same way I checked the Time DotCom story written by Mr Barrock. It seems to me that the Edgedaily had an article out, a GOOD day before Mr Barrock wrote it in the Star, by the SAME CHINESE reporter. But Moola, obviously you did not see it, the same way you did not see the Bursa Query on MTD. Or maybe you saw it that is why even though you took pains to post the Bernas reply in full, you somehow was a bit lazy to do so for the MTD story. Are you a racist, plain stupid or just incompetent? please let us all know. By the way, why hide behind your mirror site? Last I checked on the IJM-Talam story, you forget to mention that few CHINESE papers also carried it?.....Is it get the Indian reporters, so that chinese financial reporters can dominate again....Hey moola, we are all waiting for your comments on CS Tan's the world is the oyster for GP Ocean....where is it? Padi Beras up six sen? what is the commission for it?

Bashing of a whistle blower?

Turning this into a racist issue?

Incredbile but I am sorry if it's a fault that I do not read Chinese.

And does it matter who reported it first? As a financial journalist reporters, can they not confirm their sources? See this is the problem, yes? And on a broader perspective, is it not wrong to do wrong even though one is not the first to do so? Take for example, the case of rioters. A rioter is a rioter is a rioter. Does it matter if the rioter is not the first rioter? So does it matter who made the reporting first? Isn't it more important to have financial news with better integrity and not based on uncomfirmed sources?

Take MTD infra again. Both written on Nov 17th. The Sun article stated 350Million. Why and how did Business Times get 460 million!?

I guess I am rocking the boat too much that the only way you could attack me via turning this into a racial issue.

Doh!

And posting in a chatbox under my name?

And this one?

*** snapshot has been removed due to the vulgar words posted ***

Are you proud of yourself?

The MMM story.

The story about MMM (Malaysian Merchant Marine) dated as far back as 2004, when I chatted with a friend in a now closed forum about Arisiag (a fund which prided themselves about being a 'value investing' fund) investment in MMM.

Here is a snaphot of my comments on the discussion.



And one of my forum friends commented the following based on an Edge news report:

• Caught with their hand in the cookie jar .....! MMM, Informatics, the shady deals with the HK company (insider trading) ...... yes, another fundmanager that I won't respect. There are still some good ones, though!
  
  ================================================
  
  29-04-2004: Arisaig disposes 1.78m MMM shares
  By Jimmy Yeow
  
  
  Singapore-based Arisaig Asean Fund reduced its stake in Malaysian Merchant Marine Bhd to 6.75% or 7.65 million shares after disposing of a 1.5% stake or 1.78 million shares.
  Filings with the stock exchange showed that the fund disposed of the shares over nine trading days from April 14 to April 26.
  The filings did not disclose the price at which the shares were disposed of. The counter was trading between RM1.54 and RM1.74 on those days.

And on July this year, i chatted with some friends about the grave danger in investing in companies with questionable corporate governance issue.

• remember all the poor corporate governance issue regarding mmm? remember the issue of how one of them boss who Bought unashamed millions of shares in MMM from unexpected minorities in the open market, to sell them at more than 3 times the price a few weeks later to Maruichi (which deal later was cancelled). see how it's so important to avoid companies with poor corporate governance?

And back in July 2006, MMM's earnings was already rather poor.

This was its trailing earnings then. 4 Quarters of successive losses!

Rather poor, wasn't it? And the chart back then, said it all.

And if that wasn't bad enough, on October 2006, it posted the following shocker.

Quarterly rpt on consolidated results for the financial period ended 31/8/2006

It posted a quarterly loss of over 118 million! (total fiscal year loss amounted a whopping rm146 million!)

• MMM's FY06 net loss at RM146.93m
  
  Malaysian Merchant Marine Bhd (MMMB) posted a net loss of RM146.93 million for the year ended Aug 31, 2006 againsts a net profit of RM5.6 million in FY05, mainly due to ageing vessels impairment and escalating dry-docking expenditure.
  
  Revenue for the year fell 30% to RM97.65 million from RM127 million. MMMB said on Oct 31 it would continue to sell underperforming assets and replace tonnage sold, and was looking at forming strategic chartering alliances at the regional level.
  
  It has engaged Grant Thornton to conduct a strategic review to develop a comprehensive plan and effect a sustainable operational turnaround within two years

Effectively the company was said the following:

• The Group expects write downs in values of ageing vessels in this financial year resulting in further losses after the review of declined revenue and negative contributions from respective ships

This got me thinking.

Remember those comments from my forum friend? That one fellow had bought tons of shares and then tried to pawn it off at more than 3 times the share price within a few weeks to Maruichi back in 2004.

One and a half year later... MMM is being asked to write down the value of their ageing vessels.

So, don't you find it strange?

I mean, these vessels just do not age suddenly, do they? Surely someone knew right?

Today, 16th December, there is a write-up on Business Times: here

• The bankers had to buy unsubscribed shares of MMM as they underwrote a rights issue that raised RM111 million for the firm last year. They claim the company did not disclose material information in the prospectus for the rights issue.
  
  Tunku Mahmood Fawzy Tunku Muhiyiddin, MMM's managing director and chief executive officer, declined to comment when contacted and told of the allegations.
  
  "It is inappropriate for me to comment regarding a discussion with the shareholders during an annual general meeting," he said.
  
  The shareholders are upset that the company had swung to a net loss of RM147 million in the financial year ended August 31 2006, after writing down some RM80 million in value of its ships.
  
  Other operating losses, including some RM3.8 million loss of deposits, RM5 million loss related to a subordinated bond and RM6 million of bad debt written off, also contributed to the loss.
  
  Shares of MMM has slid 75 per cent from the RM1 per rights share, which was issued in April last year, to 25 sen yesterday.
  
  "Marpol 73/78 rules state that certain type of ships will have to be phased out and the company has cited this ruling as the basis for the write-down," a banker said.
  
  "We are upset that this writedown has come out of the blue with no forewarning, when in fact such a ruling has been informed to the shipping industry since 2003," the banker said.

WOW!

Poor bankers!

But they indeed have a valid point as they argued that the write-down ruling has been informed to the shipping industry since 2003.

So why didn't MMM do anything about it?

Now if the earlier chart of MMM stock price was terrible, this recent chart of MMM's current stock price performance is even more horrible!

How?

I feel sad for the minority shareholders but somehow I feel that these investors could have probably done much better. The warning signs were there since 2004.

The insane earnings projections mentioned in 2004. And more especially with that funky corporate exercise in which that one fellow had bought tons of shares and then tried to pawn it off at more than 3 times the share price within a few weeks to Maruichi back in 2004.

That was one insane funky music being played.

The investor should have had headed for the exit doors right there and then!

Now? Too late to cry over spoilt milk, eh?

Insane Money

Saw this article posted on CNN.

• Is John Mack worth $40 million?
  When a CEO takes home tens of millions, even after a great year, some critics wonder if it's worth it.
  By Rob Kelley, CNNMoney.com staff writer
  December 15 2006: 5:20 PM EST
  
  NEW YORK (CNNMoney.com) -- Morgan Stanley's John Mack has just taken home $40 million in stock and options - the largest bonus ever given to a Wall Street CEO - and it's expected that the record will be broken in coming days.
  
  And you can't say that Morgan Stanley, one of the nation's biggest brokerage houses, hasn't had an exceptional year - its stock has risen 40 percent so far and analysts surveyed by Thomson expect the firm to report annual earnings of $7.1 billion, up 45 percent from last year's $4.9 billion. (Full story)

$40 Million bonus?

Comeon. This is getting really absurb, don't you think?

A $40 Million bonus equates to a bonus of $109,589.04 per day.

Totally insane!

How Now SC?

It's here.

The other day I blogged on the following issue: Can Our Financial Reporters Report Facts And Not Heresay?. In it, I mentioned about how the reporter wrote a financial news based on 'it is believed' and 'according to sources' that PadiBeras Nasional was to taken private at a price of rm2.50.

Well, it's here.

ARTICLE ENTITLED : "Plan to take Bernas private nears completion"

The Querry:

• We refer to the above article appearing in The New Straits Times, Business
  Times Section, page 40 on Thursday, 14 December 2006, a copy of which is
  enclosed for your reference.
  In particular, we would like to draw your attention to the following
  sentences:-
  "Tan Sri Syed Mokhtar al-Bukhary is believed to be nearing completion of a plan to take private Padiberas Nasional Bhd (Bernas),..."
  "...the tycoon is close to finalising a proposal to offer RM2.50 a share for
  the shares they do not own in Bernas."
  In accordance with Bursa Securities' Corporate Disclosure Policy, you are
  requested to furnish Bursa Securities with an announcement for public release confirming or denying the above reported article and in particular the above sentences after due and diligent enquiry with all the directors, major
  shareholders and all such other persons reasonably familiar with the matters about which the disclosure is to be made in this respect. In the event you deny the above sentences or any other part of the above reported article, you are required to set forth facts sufficient to clarify any misleading aspects of the same. In the event you confirm the above sentences or any other part of the above reported article, you are required to set forth facts sufficient to
  support the same. Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.
  Yours faithfully
  
  TAN YEW ENG
  Head, Issuers
  Listing Division
  Group Regulations
  TYE/LPY
  cc: Encik Chung Tin Fah, Securities Commission

The Reply from PadiBeras:

• Reference is made to your query dated 14 December 2006, pertaining to an article appearing in The New Straits Times, Business Times Section, Page 40, on Thursday, 14 December 2006.
  
  We wish to inform that at this stage, the Company is not aware nor has any knowledge of the proposed exercise as stated in the said article.
  
  Meanwhile, we are making due enquiries with all the directors and major shareholders of the Company on this matter. The Company shall make the necessary announcement upon receiving confirmation from the said relevant parties.

I have shown in the posting Easy Money!! how such a story helped popped up the stock price.

Consider this. The day before the story was published, Padiberas last traded on the market at a price of r1.95.

Then the following day, the reporter came out with his guns blazing saying that PadiBeras will be taken private a price of rm2.50. A nice decent premium over rm1.95.

And what did the stock do the following day?

Well the stock rose as much as 20 sen before closing the day with a gain of 6 sen.

Highly impressive when that trading day was rather terrible for the general market.

Now the Security Commission has querried Padiberas and Padiberas has denied this privatisation issue.

So again, I ask who is these sources who keep churning out such stories?

Hey someone is making easy money from these stories based on these sources.

So how now SC?

Why don't you queery our financial reporters and ask them where on earth did they their sources?

Whatever happened to responsible journalism?

Whatever happened to the Integrity of Our Financial Press?

Easy Money!!

It's just unreal.

Money falling from the sky.

Easy Peasy!

Get the pen out and pen out stories based on what is believed and according to sources.

Make the story as sexy as possible. Fudge some facts here and there.

And viola.

Easy Money Dude!!!

Yeah.. so what gives these reporter such divine right?

Let me show you some proof to what I am saying. Take for example the stock Bernas I blogged on yesterday.

Have a look at the picture below.

See how the trading increased drastically on a terrible down day yesterday?

And the stock churned out a 6 sen gain?

ps when i blogged on it during yesterday morning, the stock shot up as high as 15 sen or 7.69%!!!!

See the opportunity to benefit from writing such articles?

Totally incredible!

By the way, do you know the Security Commission always querry public listed companies whenever there is such a story published? For example, in the alleged intention by Telekom to purchase TimeDotCom. Telekom was querried by the SC.

Now how about querrying the reporter instead?

Ask them where them to show us the sources?

How brown cow?

Or should we allow our financial reporters the divine right to publish as per their unknown and unconfirmed sources?