Friday, December 17, 2010

No turning back to agro-base economy, says Dr M

Friday December 17, 2010


KUALA LUMPUR: Malaysia should not go back to an agriculture-based economy
because the country would not be able to achieve the economic growth that the
Government desires and overcome unemployment, said former prime minister
Tun Dr Mahathir Mohamad.

“Sometime ago, the Govern­ment decided to focus on agriculture. However, we
have rejected agriculture because it was not able to solve the problem of
unemployment,” he said at a dialogue session on Vision 2020: Malaysia’s Looking
East concept here yesterday.

“We can still give attention to agriculture because it is making advances in terms
of technology and we cannot neglect that. But to depend entirely on agriculture
will not be productive.”

For example, he said, one acre (or 0.4ha) of land could not produce enough food
even for one family.

“However, if we build a factory on that one acre of land, then a factory can be
set up and create jobs for 500 people,” he said.

He said that even with modern agriculture, the Government would still not be able
to create enough jobs for the people.

“That is why we have switched to industrial-based economy but to do that,
we must equip our people with necessary knowledge and skills,” he said.

He said Malaysians were not inferior but instead would be able to perform like
their counterparts in Europe and Japan if they were given necessary training.

Dr Mahathir also urged the country not to rely on foreign direct investment (FDI)
for economic growth.

“Japan and South Korea did not depend on FDI but they got the technology from
other developed countries and worked with their own capacity to maximise the return
of their companies,” he said.

He said Malaysian companies now had the capacity, capital and management
to “grow big” by acquiring foreign technology.

Tuesday, December 14, 2010

PMCorp : Balance Sheet ~ 2010 Q3



First glance
Cash RM 104,096
Total Debt RM 65,062
Net Cash 6 sen per share.
Strong balance sheet.

How about "Net Cash Equavalent" assets ?

Net "Cash Equavalent" assets stands at (8+15-9) = 14 sen per share.
If i add "unquoted invested after provision of 14 sen,
the liquidity value will be no less than (14+14) = 28 sen.
.
PMCorp current price at 12.5 sen appears "attractive" to me.
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PMCorp : Annual Report 2009

FINANCIAL PERFORMANCE

For the financial year ended 31 December 2009, the Group recorded a revenue of RM72.9 million compared with RM125.0 million in the previous financial year. The decline in revenue was mainly due to the discontinuation of products by the Group’s food and confectionery business that did not fit with its direction or had low margins or slow sales. The rationalization of its product portfolio coupled with the rebranding of key house brands resulted in a temporary drop in revenue.
.
Despite the lower revenue, the Group had achieved improved results, posting a marginal pre-tax loss of RM0.1 million compared with a pre-tax loss of RM36.2 million in the previous year. The improvement was due to significantly lower finance cost and also the stabilization of the global economy as well as strong recovery of Malaysia’s economy in the fourth quarter. The economic recovery enabled the Group to record gains on foreign exchange and a much lower allowance for diminution in value of investments compared with significant losses or allowances in the previous year. For the financial year, the Group’s results were affected by higher advertising and promotion expenditure incurred for its product rebranding exercise.
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The Group had in December 2008 and January 2009 repaid a substantial amount of its banks borrowings. This improved the financial position of the Group, thus placing the Group in a better position to focus and channel its resources on expanding its food and confectionery business.
.
REVIEW OF OPERATIONS
.
The Group is primarily engaged in the manufacturing, marketing and distribution of food and confectionery products through its wholly-owned subsidiary company, Network Foods International Ltd (NFIL). The Network Foods group operates out of Malaysia, Singapore and Hong Kong and exports to more than 50 countries.
.
Malaysia
.
In Malaysia, the Group’s operations are undertaken by two NFIL subsidiaries, Network Foods Industries Sdn Bhd (NFI) and Network Foods (Malaysia) Sdn Bhd (NFM).
.
NFI manufactures chocolate and confectionery products under established brands such as Tudor Gold, Crispy, Tango, Kandos and Kiddies.
.
During the year under review, NFI’s revenue decreased by 30.1% to RM47.5 million due to weak market sentiments in the domestic market. However, exports continued to increase and contributed 50% of its total sales.
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During the year, the company undertook a major rebranding exercise for several of its products. This undertaking, which involved the improvement of product quality, taste and packaging, successfully elevated their brand positioning and greatly improved market acceptance.
.
For the financial year under review, the company recorded a reduced profit of RM3.2 million. The lower profit was due to the significantly higher advertising and promotion expenditure that was necessary to relaunch the upgraded products.
.
As part of the company’s continual effort to grow its markets, NFI will strive to secure ISO22000:2005 standards so as to be able to export to Britain and European Union countries. ISO22000:2005 is a Food Safety Management System in the International Organization for Standardization and will be used in tandem with our existing ISO9001:2008 and HACCP certifications.
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NFM is the marketing and distribution arm of the Network Foods group and also acts for other agency lines in the distribution of their products.
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For the financial year under review, NFM recorded a lower revenue of RM32.9 million due to temporary market disruptions resulting from product rationalization undertaken by the company as well as its ongoing exercise to improve product quality, taste and packaging. Consequently, NFM suffered a loss before tax of RM4.3 million. During this transitional period, NFM continued to relaunch some existing house brands while adding new agency lines, and creating new house brands on other food items. It expects to return to profitability in this financial year.
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NFI completed the acquisition of the piece of property adjoining its existing factory in Shah Alam. The enlarged site will allow for the Group’s manufacturing, sales and distribution divisions to be situated in one central location. This will result in improved efficiencies and better synergies in the operations of the two companies as well as making adequate allowance for future growth in manufacturing and warehousing capacity. Construction is expected to commence in the second half of 2010.
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Singapore and Hong Kong
.
The operations of the Group in Singapore and in Hong Kong are undertaken by Network Foods Distribution Pte Ltd (NFD) and Network Foods (Hong Kong) Ltd (NFHK) respectively. During the year under review, NFD undertook aggressive marketing to establish the revamped Tudor Gold and Crispy brands. This has led to an improvement in revenue and profitability in the fourth quarter of 2009. Despite operating under a difficult economic environment in Hong Kong, NFHK performed satisfactorily in 2009 and managed to record revenue and profit which are comparable to the previous year.
.

Collected another 40,000 PMCorp shares at 12.5 sen

Pan Malaysia Corporation

Today, I collected another 40,000 PMCorp shares at 12.5 sen.

Wish me LUCK !
.

Monday, December 13, 2010

Perodua outlines its green strategy

Monday, December 13, 2010

"In the meantime, we will refocus on improving our internal combustion engine to be as good as those trending new green technologies," he said. Currently, the company is pushing for more improvements for its internal combustion engine by replacing its cast iron engine parts to full aluminum components in the first stage of its roadmap.

"Although we are still on internal combustion engines and with the effort that we have put in these engines will be on the same footing with hybrid and EV technologies. "The first stage is in the works, and the products would hit the market anytime in the next two to three years," he said.

Perodua is also working on a two-cylinder direct injection turbo-charged engine under its second stage roadmap for engine development. "The car will have more power by then with the extra boost and we strongly believe that with the turbo charged engines, we can improve fuel efficiency and cut down on carbon emissions, both by 30 per cent," he said.

Elaborating on the Electronic Automatic Transmission (E-AT) system meant for production soon, he said it has reached the final stage of production study. "We need to set up a completely different plant for the E-AT systems, and I'm sure investments of more than RM150 million will be made and production will start within two to three years. "We are currently going into the details like the plant layout and selecting the vendors that can help us put some of the components together," he said.

He added investments made could be considered as domestic direct investments (DDI), answering the government's call for the private sector to invest more. "This is the kind of technology transfer we desire from Daihatsu and they will help us train our local engineers, operators and vendors to be compliant. "E-AT is a high-technology dust free extremely sensitive system and quality is of the paramount criteria this time," he said.

With the move to reduce its carbon footprint and improve fuel efficiency, Aminar is calling on the government to recognise the carmaker's efforts and extend incentives for hybrid vehicles and EV to Perodua too. Besides, he added the company would continue to improve the plant's manufacturing facilities as well.

Touching on the widely discussed Proton-Perodua merger, he said the company does not know the outcome and recommendations of the study. "Let's wait for the announcement but we will proceed with our roadmap and address the issues as well as weaknesses we have currently.

"Allow us, together with Daihatsu, to continue on this exciting journey that we have. It will require some time to execute but this is the future as we see it," he said.

-Bernama

Sunday, December 12, 2010

When Stock Prices Drop, Where's the Money?

QUOTED from BB investing notes Blogsite

When Stock Prices Drop, Where's the Money?

by Investopedia Staff
Monday, March 16, 2009

Have you ever wondered what happened to your socks when you put them into the dryer and then never saw them again? It's an unexplained mystery that may never have an answer. Many people feel the same way when they suddenly find that their brokerage account balance has taken a nosedive. So, where did that money go? Fortunately, money that is gained or lost on a stock doesn't just disappear. Read to find out what happens to it and what causes it.

Disappearing Money

Before we get to how money disappears, it is important to understand that regardless of whether the market is in bull (appreciating) or bear (depreciating) mode, supply and demand drive the price of stocks, and fluctuations in stock prices determine whether you make money or lose it.

So, if you purchase a stock for $10 and then sell it for only $5, you will (obviously) lose $5. It may feel like that money must go to someone else, but that isn't exactly true. It doesn't go to the person who buys the stock from you. The company that issued the stock doesn't get it either. The brokerage is also left empty-handed, as you only paid it to make the transaction on your behalf. So the question remains: where did the money go?

Leno's Response ~

This is an example of simple things are perceived wrongly or at least i will csaid "mal-represented." The answer or explanation lies firstly by re-correcting the "mal-representation," or simply re-stated the whole perception from the beginning.

When I bought a "second-hand" car from someone (similar as stocks which are traded thru secondary market), I will pay a certain amount for eg. RM 20,000 to Abu. Now, i am less RM 20,000 in my bank or just let presume my bank balance left zero after witdrew to pay Abu, in exchange for the ownership of the "CAR."

If another car of the same type is transacted at RM 15,000, let's say in between Ah Chong and Ramasamy, could we safely presumed my car has depreciated by RM 5,000 ?

If another car of the same type is transacted at RM 25,000 again between others buyer and seller, could I say, "WHOA ! I just made RM 5,000 !" ?

Funny right ? Of course by now, someone will try to educate me about the so-call "paper" loss or gain.

Now, let's say I sell-off my Car at RM 15,000 to Jay. Therefore Jay will have "less RM 15,000" by owning the car, Abu (the one who sold the car to me at the first place) still holding RM 20,000 but with no car and, I will have RM 15,000 and car-less as well.

Let's rephrase whole scenario using a table

Previously,
Abu got 1 car / RM 0 cash
I.. got 0 car / RM 20,000 cash
Jay got 0 car / RM 15,000 cash
_______________________________
total...1 car / RM 35,000 cash

Later
Abu got 0 car / RM 20,000 cash
I.. got 1 car / RM 0 cash
Jay got 0 car / RM 15,000 cash
________________________________
total...1 car / RM 35,000 cash

Now
Abu got 0 car / RM 20,000 cash
I.. got 0 car / RM 15,000 cash
Jay got 1 car / RM 0 cash
________________________________
total...1 car / RM 35,000 cash

The car and the cash are just shifting between the 3 of us.
The total cash remain the same at RM 35,000.
I have less RM 5,000 but could we said Abu had earned RM 5,000 from me ?

There is no FINAL answer until we truly figure out the true value of the car.

What if Jay found RM 100,000 cash inside the car drawer ? Obviously, both,Abu and I just missed or actually LOSS the RM 100,000 to Jay !
What if the car totally "unrepairable" broke down forever, just 1 day after Jay bought it ? Wow ! Now I just earn RM 15,000 evernthough i have less RM 5,000 from my initial RM 20,000 bank balance ?

The moral will come back the same. Transacted price tell us not much. Sooner or later, it is the "true" value of the car that determined who make or who lose what.
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Getting more Confused ?
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Wisdom of Continuing the Business should be Considered

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The question, viz., that of retaining the stockholders's capital in the business, involves considerations that are basically identical. Managements are naturally loath to return any part of the capital to its owners, eventhough this capital may be far more useful - and therefore valuable - outside of the business than in it. Returning a portion of the capital (eg., excess cash holdings) means curtailing the resources of the enterprise, perhaps creating financial problems later on and certainly reducing somewhat the prestige of the officers.

Complete liquidation means the loss of the job itself. It is scarcely to be expected, therefore, that the paid officers will considered the questions of continuing or winding up the business from the standpoint solely of what is the best interests of the owners. We must emphasize again that the directors are often so closely allied with the officers - who are themselves members of the board - that they too cannot be counted upon to consider such problems purely from the stockholders' point of view.

Thus it appears that the question whether or not a business should be continued is one that at times may deserve indepedent thought by its proprietors ~ the stockholders.

(It should be pointed out also that this is, by its formal or legal nature, an ownership problem and not a managemet problem.)
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Saturday, December 11, 2010

Implications of Liquidating Value

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Wall Street holds that liquidating value is of slight importance because the typical company has no intention of liquidating.

This view is logical, as far as it goes. When applied to a stock selling below break-up value, the Wall Street view may be amplified into the following :

"Although this stock would liquidate for more than its market price, it is not worth buying because :
1. the company cannot earn a satisfactory profit, and
2. it is not going to liquidate.

In the previous post suggested that the first assumption is likely to be wrong in a number of instances, for, although past earnings may have been disappointing, there is always a chance that through external or internal changes the concern may again earn a reasonable amount on its capital.

But in a considerable proportion of cases the pessimism of the market will at least appear to be justified.

We are led, therefore, to ask the question :
"Why is it that no matter how poor a corporation's prospect may seem, its owners permit it to remain in business until its resources are exhausted? "
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Discrimination Required in Selecting "Stocks selling below Liquidating Value"

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There is scarcely any doubt that common stocks selling well below liquidating value represent on the whole a class of undervalued securities. They have declined in price more severely than the actual conditions justify. This must mean that on the whole these stocks afford profitable opportunities for purchase.

Nevertheless, the securities analyst should exercise as much discrimination as possible in the choice of issues falling within this category. He will lean toward those for which he sees a fairly imminent prospect of some one of the favorable developments listed in "previous post."

Or else he will be partial to such as reveal other attractive statistical features besides their liquid-asset position, eg., satisfactory current earnings and dividends or a high average earning power in the past.

The analyst will avoid issues that have been losing their current assets at a rapid rate and show no definite signs of ceasing to do so.

Apply Clear, Accurate Thinking

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Examples of "UN-Clear" thinking are :
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1. Blaming others or circumstances for our shortcomings.
2. Waiting for others to lead us instead of leading ourselves.
3. Wishing things were easier, instead of making ourselves better.
4. Wanting fewer chanllenges instead of developing more skills to handle them.
5. Wanting to be a millionaire without first becoming a thousandaire.
6. Saying things cost too much, instead of admitting we can't afford them.
.
.
CLEAR, Accurate thinking is vital to success.
Here are some tips :
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1. Learn to separate facts from information.
2. Deal only with relevant facts.
3. Don't exaggerate or over-react.
4. Look for evidence before drawing conclusions.
5. Question everything, including your own assumptions.
6. Concentrate your effort and thought.
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Sarawak Energy to finish six more projects by 2020

Saturday December 11, 2010

SIBU: Sarawak Energy Bhd (SEB) is focused on delivering six other hydro electricity dam projects besides the RM7.4bil Bakun and the RM3bil Murum dams before 2020. Chief executive officer Torstein Dale Sjotveit said these additions would represent 6,000- to 7,000-megawatt new capacity, which in turn would produce around 35,000 to 40,000 gigawatt hours of energy units. This is eight to nine times what we produce today, he said, adding that by 2020, SEB would be the leading producer of renewable energy in South-East Asia.

SESCO is a subsidiary of SEB.

Sjotveit said this clean renewable energy will power the development of the growing local markets, the establishment of new major industries and export to neighbouring countries like Brunei and Indonesia.

On the Bakun dam, he said SEB was committed to ensuring that energy from the dam, which is to be operational by next year, would be used to drive the state's economic growth. He also said SEB, on behalf of the state government, was now in the midst of a challenging negotiation with the federal government for Bakun's successful takeover.

On the Murum dam, he said its diversion tunnel was completed while the construction of the main dam was underway. On other projects, he said SEB had progressed negotiations with around 20 potential energy customers in Sarawak Corridor of Renewable Energy.

We are achieving price offering from them at 25% to 40% above what they offered last year. By this month too, we will be able to firm up agreements with at least four new customers in addition to the MEMC branch in Kuching and the Mukah Press Metal (second phase), he said.

Sjotveit is confident of a very strong financial performance for SEB this year. - Bernama
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Friday, December 10, 2010

Psychology

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The problem with trying to understand people, though, is that people are complex, and change all the time. We learn from our experiences, we form good intentions, and we are acted on by circumstances. So what we do can be influenced by a great many different factors. Also, everyone has their own ideas and opinions about what people are really like. These ideas can influenced what we do and also how we interpret what other people are doing. And since we each have had different lives, and have learned from our experiences, these ideas can be very different from one person to the next.
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Collected 123,600 LCTH shares at 27.74 sen avg.

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22.11.10 Buy LCTH 62,000 @ 0.2875
30.11.10 Buy LCTH 50,000 @ 0.2700
08.12.10 Buy LCTH 11,600 @ 0.2550
_____________________________

Total 123,600 LCTH shares @ 0.2774
_____________________________

Wish me LUCK !
Thanks.
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Perodua eyes bigger slice of car market in Nepal

Friday December 10, 2010


KATHMANDU: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) aims to grab a bigger slice of the motor vehicle market in Nepal, despite the congested market which is largely dominated by Indian and Japanese makers.

Mihika Dhakhwa, managing director of Nemlink International Traders Pvt Ltd, the sole distributor of Perodua vehicles in Nepal, said regardless of the slow-paced economy and sluggish motor vehicle sector growth, demand was steadily rising.

“Next year will be better compared with 2010.
“We sold about 300 units of all Perodua models last year and hope to sell 400 units next year,” she told Bernama yesterday.

Mihika said the market was competitive and it was not easy to sell a third (brand) car.
“People did not have confidence in Malaysian cars earlier. But after nearly five years, we saw a major breakthrough. We rolled out about 100 units in 2006,” she said.

Though Nepal is grappling under a shaky government and a weak economy, it’s largely surviving on inflow of billion-dollar remittances from its nationals working overseas.
Its economy is growing at about 4.5% annually.

Ironically, car sales had shot up tremendously in recent years.
According to the Nepal Automobile Dealers Association, only 6,850 units (in the car/jeep/van category) were sold last year, but figures had easily doubled in 2010, touching nearly 12,268 units.

Mihika said overall, the car sector was growing in Nepal and more cars were on the road these days. “Now people are also confident of Malaysian cars.
“The customers are satisfied because of our after-sales service and Perodua’s maintenance cost is about 40% cheaper than the others,” she said.

Perodua models, such as Viva and MyVi, are gaining popularity in the Himalayan state, as these slick and economical vehicles best suit city driving. — Bernama

Thursday, December 9, 2010

Attractiveness of Stocks selling below Liquidating Value

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Common stocks in this category practically always have an unsatisfactory trend of earnings. If the profits had been increasing steadily, it is obvious that the shares would not sell at so low a price.
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The objection to buying these issues lies in the probability, or at least the possibility, that earnings will decline or losses continue and that the resources will be dissipated and the intrinsic value ultimately become less than the price paid. It may not be denied that this does actually happen in individual cases.
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On the other hand, there is a much wider range of potential developments which may result in establishing a higher market price. These include the following:
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1. The creation of an earning power commensurate with the company's assets. This may result from :
a) General improvement in the industry.
b) Favorable change in the company's operating policies, with or without a change in management. These changes include more efficient methods, new products, abandonment of umprofitable lines, etc.
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2. A sale or merger, because some other concern is able to utilize the resources to better advantage and hence can pay at least liquidating value for assets.
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3. Complete or partial liquidation.
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Wednesday, December 8, 2010

Sunrise at Sematan ~ dec 2010











Perodua to ramp up exports

KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) aims to increase its exports to at least 10% or 20,000 units in line with its five-year roadmap besides developing further the vendor community so that they too boost their exports of auto parts.

Although we are relatively strong in the domestic market, at some point in time, the domestic car market will not grow as much, nearing saturation. By that time, we need to be globally competitive to survive, and this is why we need to seriously look into exports, managing director Datuk Aminar Rashid Salleh said in an interview recently. Currently, the national carmaker is exporting only 2% to 3% of its total output.

Things were not as rosy as they seemed for the local car market, Aminar said, adding that it could be approaching its saturation point based on demand and the population. This year alone, MAA (Malaysian Automotive Association) forecast the total industry volume (TIV) to hit 570,000 units, which will be the highest ever in the automotive history of the country, he said.

Comparing Malaysia with Taiwan based on the similarities in population, he said Taiwan reached its saturation point somewhere at a TIV of 800,000 units. We will be reaching the 600,000th mark next year and in the next five to seven years, the local car market may hit a saturation point, dampening any growth potential.

This is the reason we want to contribute and develop the local vendor community so that they can become globally paced as well, he said. Currently, the carmaker is supported by 141 vendors, with local vendors comprising 60%-70% while the rest are joint-venture companies with foreign partners or independent foreign companies.

This is something we are doing to give back to the community; by generating the socio-economic development needed, creating jobs, and purchasing local parts. We purchase these locally made parts to the tune of RM3bil to RM4bil a year, said Aminar.

However, he said vendors faced a high turnover of workers. There must be more concerted effort from the industry, manufacturers and the Government to tackle this problem; to reduce the dependency on foreign workers and increase the participation of locals. The quality of components will obviously be affected as new workers need to be retrained, he said.

These vendors had helped with the localisation of the cars, he said, citing the Perodua Alza which had 90% local content. Aminar said 75% of Perodua's sales and services were undertaken by independent entrepreneurs. We are creating business opportunities for our dealers and providing them not only with products, but also training development to make sure they are competent, he said.

To date, Perodua has invested about RM3bil mainly for its plant as well as its sales and distribution division, to the extent that there are more independent dealers than its own outlets. It currently has more than 11,000 employees, of whom 8,000 work at its plant in Rawang.

Aminar said Perodua also aimed to at least double its engine components export business to RM50mil by increasing trade around the South-East Asia region in the next three years. We are at the tail-end of a feasibility study to export to Thailand and we are currently exporting to countries like Pakistan, Indonesia and Japan, he said. The company is also looking at opportunities to export completely-built-up units to South Africa.

Perodua's shareholders are UMW Corp Sdn Bhd, which holds a 38% equity; Daihatsu Motor Co Ltd of Japan, 20%; MBM Resources Sdn Bhd also 20%; PNB Equity Resources Corp Sdn Bhd 10%; Mitsui & Co Ltd 7% and Daihatsu (M) Sdn Bhd 5%.

On Perodua's foreign partner, Aminar said the relationship with Daihatsu had been a successful partnership. The important factor with Daihatsu is that they have been around much longer and are more knowledgeable with vast experience, not just in technical aspects but also technology that involves huge sums of money. It helps small players like us understand the challenges to being export-driven, sharing of resources and platform, as well as huge amount of data that we can benchmark ourselves against, he said.

On car sales, he said as at end-October, Perodua was the top selling carmaker with a market share of 31.1% at 157,200 units. Our target to sell 185,000 cars this year is achievable and we have already revised upwards next year's target to 190,000 units. He attributed the stellar performance to star model, the Myvi, which contributed 41.1% to total sales this year, followed by the Viva, which accounted for 37%, and Alza 22%.

Competition is everywhere and it has kept us on our toes all the time. Customers have a choice and our performance is determined by them, he said. We are driven by market forces. We had put a lot of emphasis on the whole gambit of the auto business like our showrooms, networks, customer cars, product line-up improvement and retention programme.

Aminar said he hoped Perodua would retain its top spot on the country's car sellers list this year for the fifth consecutive year. - Bernama

Monday, December 6, 2010

Financial Reasoning vs Business Reasoning

We have here the point that brings home strikingly perhaps than any other the widened rift between financial thought and ordinary business thought. It is an almost unbelievable fact that Wall Street never asks, "How much is the business is selling for ?" Yet this should be the first question in considering a stock purchase.
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If a business man were offered a 5% interest in some concern for $10,000, his first mental process would be to multiply the asked priceby 20 and thus establish a proposed value of $200,000 for the entire undertaking. The rest of his calculation would turn about the question whether or not the business was a "good buy" at $200,000.
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This elementary and indispensable approach has been practically abandoned by those who purchase stocks.
.
Recomendation.
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These examples, extreme as they are, suggest rather forcibly that the book value deserves at least a fleeting glance by the public before it buys or sells shares in a business undertaking. In any particular case the message that the book value conveys may well prove to be inconsequential and unworthy of attention.
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But this testimony should be examined before it is rejected. Let the stock buyer, if he lay any claim to intelligence, at least be able to tell himself, first, what value he is actually setting on the business and, second, what he is actually getting for his money in terms of tangible resources.
.

Tuesday, November 30, 2010

Practical Significance of Book Value

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The book value of a common stock was originally the most important element in its financial exhibit. It was supposed to show "the value" of the shares in the same way as a merchant's balance sheet shows him the value of his business. This idea has almost completely disappeared from the financial horizon. The value of a company's assets as carried in its balance sheet has lost practically all its significance.
.
This change arose from the fact,
~first, that the value of the fixed assets, as stated,
frequently bore no relationship to the actual cost and,
~secondly that in an even larger proportion of cases
these values bore no relationship to the figure at which they would be sold
or the figure which would be justified by the earnings.
.
The practice of inflating the book value of the fixed property is giving way to the opposite artifice of cutting it down to nothing in order to avoid depreciation charges, but both have the same consequence of depriving the book-value figures of any real significance.
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It is a bit strange, like quaint survival from the past, that the leading statistical services still maintain the old procedure of calculating the book value per share of common stock from many, perhaps most, balance sheets that they publish.
.
Before we discard completely this time-honored conception of book value, let us ask if it may ever have practical significance for the analyst. In the ordinary case, probably not. But what of the extraordinary or extreme case ?
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Insas ~ 2011 Q3 report



01 Dec 2010 ~ current price 52.5 sen


Insas cash RM 595 million (87 sen per share)
Total Liabilities RM 447 million (65 sen per share)
Therefore just "net Cash" alone stand at = 595-447 = RM 148 million (22 sen per share)
Very STRONG balance sheet.
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Next, is to identified the "Cash equavalent" elements and group them together.


Berkshire Chairman's Letter ~ 1978

.
We confess considerable optimism regarding our insurance
equity investments. Of course, our enthusiasm for stocks is not
unconditional. Under some circumstances, common stock
investments by insurers make very little sense.

We get excited enough to commit a big percentage of
insurance company net worth to equities only when we find
(1) businesses we can understand,
(2) with favorable long-term prospects,
(3) operated by honest and competent people, and
(4) priced very attractively.

We usually can identify a small number
of potential investments meeting requirements (1), (2) and (3),
but (4) often prevents action.
For example, in 1971 our total common stock position
at Berkshire’s insurance subsidiaries amounted to only $10.7 million at cost,
and $11.7 million at market.

There were equities of identifiably excellent companies
available - but very few at interesting prices.
(An irresistible footnote: in 1971, pension fund managers invested a record 122%
of net funds available in equities - at full prices they couldn’t buy enough of them.
In 1974, after the bottom had fallen out,
they committed a then record low of 21% to stocks.)

The past few years have been a different story for us.
At the end of 1975 our insurance subsidiaries held common equities
with a market value exactly equal to cost of $39.3 million.
At the end of 1978 this position had been increased to equities
(including a convertible preferred) with a cost of $129.1 million
and a market value of $216.5 million.

During the intervening three years we also had realized pre-tax gains
from common equities of approximately $24.7 million.
Therefore, our overall unrealized and realized pre-tax gains in equities
for the three year period came to approximately $112 million.
During this same interval the Dow-Jones Industrial Average
declined from 852 to 805.
It was a marvelous period for the value-oriented equity buyer.

We continue to find for our insurance portfolios small
portions of really outstanding businesses that are available,
through the auction pricing mechanism of security markets,
at prices dramatically cheaper than the valuations inferior
businesses command on negotiated sales.

This program of acquisition of small fractions of businesses
(common stocks) at bargain prices, for which little enthusiasm exists,
contrasts sharply with general corporate acquisition activity,
for which much enthusiasm exists.

It seems quite clear to us that either corporations are making
very significant mistakes in purchasing entire businesses at prices
prevailing in negotiated transactions and takeover bids,
or that we eventually are going to make considerable sums of money buying
small portions of such businesses at the greatly discounted valuations
prevailing in the stock market.
(A second footnote: in 1978 pension managers,
a group that logically should maintain the longest of investment perspectives,
put only 9% of net available funds into equities
- breaking the record low figure set in 1974 and tied in 1977.)

We are not concerned with whether the market quickly
revalues upward securities that we believe are selling at bargain
prices. In fact, we prefer just the opposite since, in most
years, we expect to have funds available to be a net buyer of
securities. And consistent attractive purchasing is likely to
prove to be of more eventual benefit to us than any selling
opportunities provided by a short-term run up in stock prices to
levels at which we are unwilling to continue buying.

Our policy is to concentrate holdings. We try to avoid
buying a little of this or that when we are only lukewarm about
the business or its price. When we are convinced as to
attractiveness, we believe in buying worthwhile amounts.
.

Insas ~ Annual Report 2010



For financial year end 30 june 2010, the Group achieved profits of 54 million compared to RM 57 million for the precious year.
.
The business environment was volatile last year, dominated by China and other international events, The financial year began quite favorably in July last year as financial markets appeared to be recovering well from the financial crash of October 2008 when Lehman Brothers (a major Wall Street firm) collapsed. However, at the end of November 2009, Dubai World defaulted on its loans to a consortioum of international banks. In December, the Greek Sovereign debt crisis became contagion and triggered a crisis of confidence in the stability of the European Union, and caused the Euro to drop sharply by about 21% in 5 months. This affected global investors' confidence badly, and financial and stock markets declined. Despite the recent recovery in stock markets, the US goverment just announced another round of "quantitative easing" to prevent a double dip recession.
.
In terms of operations, our investment management, project finance and IT divisions were the main earners, contributing profits of RM 24 million, RM 16 million and RM 14 million respectively.
.
Our stock brocking division's performance was satisfactory in light of low trading volumes on Bursa. We are trying to increase our presence and market share by opening branches in other states as a long term strategy. However, I am pleased to report that our corporate finace division was profitable in its first year of operations as it managed to to secure several advisory mandates for capital raising and initial public offerings.
.
Our high fashion retail business under Melium has rebounded quite strongly and we expect next year's performance to return to almost pre-crisis level. With the recent announcement of abolition of taxes on luxury goods, Malaysis will become as competitive as Singapore and Hong Kong for luxury goods. The goverment has also allocated increased budget to the Ministry of Tourism in a serious effort to increase the number of visitors to Malaysia. We expect all these positive factors to be favourable for our business.
.
Last year, we reported that we made a sizeable investment in London in Chantrey House, a residential cum commercial property in the Belgravia area, a prime property location with our UK partner, we took an equal interest in the investment amounting to 22.5 million British Pounds. Since we purchased that property, central London property prices have recovered strongly. Current prices for apartments in comparable locations are transacting at between 1,200 to 1,400 Pounds per square feet compared to our purchase price of 670 Pounds per square feet. We intend to hold on to this investment as we believe property prices should continue to rise in view of the low interest rate environment.
.
We ended the financial year with a strong and liquid balance sheet. We are continueing to look for new investments that can provide the Group with sustainable earnings in the future.
.
.
Dato' Thong Kok Khee
Executive Deputy Chairman/
Chief Executive Officer.
.

Sunday, November 28, 2010

SPNB awards RM1.7bil jobs for LRT extension

Saturday November 27, 2010


PETALING JAYA: Syarikat Prasarana Negara Bhd (SPNB) has awarded contracts worth RM1.7bil for the first phase (Package A) of the RM7bil light rail transit (LRT) extension project involving the Kelana Jaya and Ampang lines.

In a statement yesterday, SPNB, which was established by the Finance Ministry to facilitate, undertake and expedite infrastructure projects for the Government, said the main contractor facilities job for Package A of the Kelana Jaya line, valued at RM950mil, was awarded to Trans Resources Corp Bhd. The work will take 30 months to complete.

UEM Builders Bhd and Intria Bina Sdn Bhd were jointly appointed the nominated sub-contractors for the fabrication and delivery of segmental box girder jobs worth RM93.16mil, which is expected to take 21 months to complete.

Package A of the Kelana Jaya line will be a 9.2km extension from the Kelana Jaya station to Summit (Station 7). Package B will involve a 7.8km extension from Station 7 to the Putra Heights station.

Meanwhile, the main contractor facilities job for Package A of the Ampang line was jointly awarded to Bina Puri Holdings Bhd and Tim Sekata. Valued at RM634.64mil, the work will take 27 months to complete.

Bina Puri and Tim Sekata were also jointly appointed the nominated sub-contractors for the fabrication and delivery of segmental box girder jobs, which is valued at RM67.70mil and expected to take 19 months to complete.

Package A of the Ampang line will be a new 7.4km stretch from the Seri Petaling station to Station No. 5, while Package B will see a 10.3km extension from Station No. 5 to the Putra Heights Station.

SPNB said recipients of the main contractor facilities jobs would be responsible for all guideway sub-structure and main structure works, foundation work for stations and traction power sub-stations (TPSS), to launch and install segmental box girders and to supply and install parapets and noise barriers.

In addition, within the total contract value, the main contractors will also manage the nominated sub-contractors for contracts worth RM469mil (Kelana Jaya line) and RM305mil (Ampang line).

SPNB said the selection of the contractors was done through an open-tender process starting from November 2009. A total of 119 applications were received, but one was rejected due to failure to comply with application guidelines.

The tender for the facilities works under Package B for both lines will be called upon approval of the final railway scheme, which is expected by mid-2011.

With the appointment of the main contractors, it is expected that work on the line extension projects will start as soon as possible, SPNB said.

Intro Balance Sheet Analysis ~ Bruce Greenwald

The enduring value of Security Analysis rests on certain critical ideas that were then, and remain, fundamental to any well-conceived investment strategy. The first of these is the distintion between "investment" and "speculation" as defined by Graham and Dodd :

An investment operation is one which, upon thorough analysis,
promises safety of principal and a satisfactory return.
Operations not meeting these requirements are speculative.


The critical parts of this definition are "thorough analysis" and "safety of principal and a satisfactory return." Nothing about these requirements has changed since 1934.

A second related idea is that of focusing on the intrinsic of a security. It is according to Graham and Dodd,

that value which is justified by the facts,
eg., the assets, earnings, dividends, [and] definite prospects,
as distinct, let us say, from market quotations
established by market manipulation or distorted by psychological excesses.
.

Saturday, November 27, 2010

Berkshire Chairman's Letter 1977

We select our marketable equity securities in much the same
way we would evaluate a business for acquisition in its entirety.

We want the business to be
(1) one that we can understand,
(2) with favorable long-term prospects,
(3) operated by honest and competent people, and
(4) available at a very attractive price.

We ordinarily make no attempt to buy equities for anticipated
favorable stock price behavior in the short term. In fact, if
their business experience continues to satisfy us, we welcome
lower market prices of stocks we own as an opportunity to acquire
even more of a good thing at a better price.

Our experience has been that pro-rata portions of truly
outstanding businesses sometimes sell in the securities markets
at very large discounts from the prices they would command in
negotiated transactions involving entire companies.

Consequently, bargains in business ownership, which simply are
not available directly through corporate acquisition, can be
obtained indirectly through stock ownership. When prices are
appropriate, we are willing to take very large positions in
selected companies, not with any intention of taking control and
not foreseeing sell-out or merger, but with the expectation that
excellent business results by corporations will translate over
the long term into correspondingly excellent market value and
dividend results for owners, minority as well as majority.

Such investments initially may have negligible impact on our
operating earnings. For example, we invested $10.9 million in
Capital Cities Communications during 1977. Earnings attributable
to the shares we purchased totaled about $1.3 million last year.
But only the cash dividend, which currently provides $40,000
annually, is reflected in our operating earnings figure.

Capital Cities possesses both extraordinary properties and
extraordinary management. And these management skills extend
equally to operations and employment of corporate capital. To
purchase, directly, properties such as Capital Cities owns would
cost in the area of twice our cost of purchase via the stock
market, and direct ownership would offer no important advantages
to us. While control would give us the opportunity - and the
responsibility - to manage operations and corporate resources, we
would not be able to provide management in either of those
respects equal to that now in place. In effect, we can obtain a
better management result through non-control than control. This
is an unorthodox view, but one we believe to be sound.
.

Friday, November 26, 2010

Other requisites for common stocks of Investment Grade and a Corollary Therefrom

It should be pointed that if 20 times average earnings is taken as the upper limit of price for an investment purchase, then ordinarily the price paid should be substantially less than this maximum. This suggests that about 12 times earnings may be suitable for the typical case of a company with "neutral" prospects.

We must emphasis also that a reasonable ratio of market price to average earnings is "NOT the ONLY" requisite for a common stock investment. The company must be satisfactory also in its "financial set-up and management," and not unsastifactory in "its prospects."

From this principle there follows another important corollary, viz.: "An attractive Investment is An Attractive Speculation." This is true because, if a common stock can meet the demand of "conservative" investor that he get full value for his money 'plus' not unsatisfactory future prospects, then such an issue must also have a fair chance of appreciating in market value.
.

A suggested basis of "Maximum Appraisal" for Investment

The investor in common stocks, equally with the speculator, is dependent on future than past earnings. His fundamental basis of appraisal must be an intelligent and conservative "estimate" of the future earning power.

But his "measure" of future earnings can be conservative only if it is limited by "actual performances over a period of time." And in most instances he will derive the investment value of a common stock from the "average earnings of a period between 5 and 10 years."

This does not mean that all all common stocks with the same average earnings should have the same value.
The common-stock investor (@ the conservative buyer) will properly accord a "more liberal valuation" to those issues
> which have current earnings above the average or
> which may reasonably be considered to possess better than average prospects
> or possess an inherently stable earning power.

But it is essential that some moderate upper limit must "in every case" be placed on the multiplier in order to stay within the bounds of conservative valuation, suggested that "about 20 times average earnings" is as high a price as can be paid in an "investment" purchase of a common stock.

Limited Functions of Analyst in Field of Appraisal of Stock Prices

Confronted by the mixture of changing facts and fluctuating human fancies, the securities analyst is clearly incapable of passing judgement on common-stock prices "generally."

There are , however, some concrete, if limited, functions that he "may" carry on in this field, of which the following are representative :

1. He may set up a basis for "conservative or investment" valuation of common stocks, as distinguished from speculative valuations.

2. He may point out the significance of :
(a) the capitalization structure; and
(b) the source of income
as bearing upon the valuation of a given stock issue.

3. He may find unusual elements in the balance sheet which affect the implications of the earnings picture.
.

Exact Appraisal Impossible

Security analysis cannot presume to lay down general rules as to the "proper value" of any given common stock. Practically speaking, there is no such thing. The bases of value are too shifting to admit of any formulation that could claim to be even reasonably accurate. The whole idea of basing the value upon "current earnings" seems inherently absurd, since we know that the current earnings are constantly changing. And whether the multiplier should be 10 or 15 or 30 would seem at bottom a matter of purely arbitrary choice.

But the stock market itself has no time for such scientific scruples. It must make its values first and find its reason afterwards. Its position is much like that of a jury in a breach-of-promise suit; there is no way of measuring the values involved, and yet they must be measured somehow and a verdict rendered.

Hence the prices of common stocks are "not carefully thought out computations" but "the resultant of a welter of human reactions."

The stock market is a voting machine rather than a weighing machine.
It responds to factual data "not directly" but only as they "affect the decisions" of buyers and sellers.
.

Leader Universal expects diversification to pay off by 2013

Monday, 25 October 2010 00:00

Leader Universal Holdings Bhd is expecting its diversification away from its core business into power transmission and distribution to bear fruit within three years.

Leader Universal, which has its mainstay in manufacturing wire and cables, made its foray into the power transmission and distribution business in 1994 by building electric transmission cables and power plants in Cambodia.

The company is currently building a 100MW coal-fired power plant near the port city of Sihanoukville, Cambodia, which is funded by a syndicated term-loan facility and internally generated funds.

It undertook a financing facility of US$140 million (RM436 million) for the project and has seven years to repay the loan, with an option to extend the repayment period by another two years, subject to its lenders’ approval.

Besides power generation, Leader Universal is also building a 230kV, 110km overhead transmission line linking two substations near Phnom Penh.

The transmission project is partly funded by bank borrowings of US$65 million, payable over 13 years commencing from 2010, from Export-Import Bank of Malaysia Bhd and by internally generated funds. The cost of the entire power transmission project is estimated to be US$107 million. It is targeted for completion by mid-2011, while the substations north of Phnom Penh are expected to be ready by early 2012.

Based on Leader Universal’s latest quarterly report, its long-term borrowings are RM130.38 million while short-term borrowings are RM224.33 million, on the back of total equity of RM667.78 million.

The company, which derives only 6.55% of its revenue from the power transmission segment, expects to see this figure grow to about 20% by FY2013 ending Dec 31.

“Yes, we will see both projects completed by 2013. Currently, over 90% of our revenue is contributed by the wire and cables division,” says Leader Universal’s investor relations official Albert Wong.

Indeed, the company’s revenue for 1HFY2010 was RM1.22 billion, a rise of 33.3% from the corresponding period a year ago. Net profit was RM25.1 million, compared with RM26.2 million for the same period last year.

Earnings per share for the six months stood at 5.75 sen, while net tangible assets per share was RM1.25 on the back of a market capitalisation of RM384.08 million.

On Leader Universal’s outlook for 2H2010, Wong says the company is expected to achieve “better results” compared with the same period last year, barring any unforeseen circumstances.

The company recorded revenue of RM918.76 million for the first six months of FY2009. If it is able to repeat its performance this year, its annualised revenue could hit RM2.45 billion. This is almost equal the RM2.54 billion recorded in 2008, before the US subprime crisis hit the world economy, and also 25.6% higher than the RM1.95 billion revenue achieved in FY2009.

However, it should be noted that Leader Universal saw a 33.5% drop in its cash and bank balances for 1HFY2010 to RM135.11 million, compared with the same period a year ago. Its net cash flow from operations also dropped to RM23.92 million, from RM205.91 million.

Wong attributes this to the company’s increased sales, which led to an increase in working capital requirements and resulted in increased debtor balances that were not due for collection yet.

Wong is confident that a steady stream of jobs coming in will keep the company busy over the next few years. Among the projects he cites are
1. the RM40 billion mass rapid transit,
2. RM26 billion KL International Financial District,
3. RM5 billion 100-storey Warisan Merdeka Tower,
4. six highways,
5. schools and
6. hospitals.

Leader Universal also expects to benefit from the Sarawak Corridor of Renewable Energy programme and the implementation of other projects under the Ninth Malaysia Plan worth RM7 billion.

Leader Universal’s associate, Sarawak Cable Bhd, is the front runner to land plump jobs to provide cables in the state. Among its shareholders are Sarawak Energy Bhd, the sole electricity supplier in the state.

Leader Universal’s optimism in Cambodia is premised on its young population hungry for power as the country develops further. It is not a new market for the Penang-based company, which has been looking at Cambodia for some years now.

Given its persistence and expanding power plant business in Cambodia, the company’s diversification is expected to pay off in the years to come.

This article appeared in Corporate, The Edge Malaysia, Issue 829, Oct 25-31, 2010

Perodua sees higher sales on strong demand

Friday November 26, 2010


KOTA KINABALU: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) has revised upward its sales figure for the year, given the strong demand for its vehicles.

Managing director Datuk Aminar Rashid Salleh said the company was now expecting to sell 185,000 vehicles in 2010 compared with an initial projection of 176,000 units.

He said that MyVi remained the most popular of Perodua's range of vehicles, accounting for about 41% sales, while the Viva compact and Alza multi-purpose vehicle (MPV) made up 37% and 22% of sales respectively.

To us, the Viva will continue to be relevant for many years to come, Aminar said at the launch of the Viva Elite Exclusive here yesterday.

He said the Viva accounted for 10,500 of the 21,300 vehicles sold in Sabah and Sarawak so far this year.

Sabah contributed 46% to our sales in this region and I believe the market still has a lot of room to grow.

We aim to increase the sales contribution from this part of the country from 14% to 20% within five years, Aminar said, adding that this would be achieved through a concerted advertising campaign and various ground activities.

Asked about competition from foreign makers of compact cars, such as those from South Korea and China which were trying to make their presence felt in the country, he said Perodua had had a good headstart in terms of establishing its sales and service network nationwide.

We are an established brand as evident from the good resale value of our vehicles. This includes the Kancil which was introduced some 17 years ago, he said.

Aminar said Perodua also understood Malaysians' taste and that it designed its vehicles accordingly.

Thursday, August 5, 2010

Collected more MBMR at RM 3.00

I am still collecting MBMR at RM 3.00 ... wish me LUCK !

Saturday, July 31, 2010

Collected 174,000 MJPerak at 19.88 sen average

This month, I collected another 174,000 MJPerak at average price of 19.88 sen a share.
Wish me LUCK !

Collected Analabs at RM 1.62

I collected another 10,000 Analabs shares at RM 1.62 ...
Wish me LUCK !

Bought PMCorp at 13.5 sen

Yesterday I bought 174,200 shares of PMCorp at 13.5 sen

Wish me LUCK !

Saturday, July 24, 2010

Reserves ~ 15 Jul 10 : RM 309.9 b > 8.0 mo > 4.4 x

International Reserves of BNM as at 15 July 2010

The international reserves of Bank Negara Malaysia amounted to RM309.9 billion (equivalent to USD94.8 billion) as at 15 July 2010.

The reserves position is sufficient to finance 8 months of retained imports and is 4.4 times the short-term external debt.

Thursday, July 8, 2010

Perodua: Rate hike unlikely to affect sales

Thursday July 8, 2010
Perodua: Rate hike unlikely to affect sales


KUALA LUMPUR: Perusahaan Otomobil Kedua Sdn Bhd (Perodua) does not expect the recent rise in interest rates to affect its sales significantly.

Its managing director Aminar Rashid Salleh said interest rate rise in April and June had little impact on the car maker’s sales for the first half of the year.

“We are still recording good sales as consumer sentiments are strongly inclined towards affordable cars with good fuel economy which we are well known for,” he said at a media briefing on the company’s first-half performance here yesterday.

Aminar said Perodua sold 95,000 vehicles in the first six months of the year, representing an estimated 31.7% of the domestic market share. This is an increase from 77,000 units or 30.7% share in the same period of last year.

“The 23% increase in vehicle sales were due to the improving economy, contributions from the Alza MPV, and also the continued high demand for Myvi and Viva models.

“Barring unforeseen circumstances and higher demand for the festive season in the third quarter, we are confident of reaching our 176,000 units sales target for 2010,” he said.

Perodua sales in June rose to 16,300 units from 13,200 units in the same month of last year.

He also said Perodua’s aftersales had increased its vehicle intake in the first six months of the year to 823,000 units from 771,500 units in the first half of 2009 with higher productivity and the addition of eight new service dealers.

Perodua now has 163 service outlets consisting 45 branches and 118 service dealers.

At the briefing, Aminar also launched Perodua’s latest Myvi variant - the Myvi Limited Edition (LE) – which has been restyled for women.

“As more than 50% of Perodua car buyers are women, we feel a variant that is more fashionable and appealing to them should be introduced,” Aminar said.

Based on the standard Myvi 1.3-litre variant with a four-speed automatic transmission, the Myvi LE gets additional features including new interior trim colours, decorative cubic printing on centre cluster and door trims, chrome interior door release latches, vanity mirror on driver sunshade and side door mouldings.

Priced on-the-road at RM48,600 or RM1,700 over the standard Myvi variant, the Myvi LE also gets dual front airbags, USB and Bluetooth connectivity as standard equipment.

Monday, June 21, 2010

Bought Hwang DBS at RM 1.60

.
I just bought 5,000 shares of Hwang DBS (HDBS) shares at RM 1.60
Not very experience in analysing financial industries.
But collecting this for futures references and hoping to learn some new things.
.
PLEASE ...wish me LUCK !
.

Friday, June 18, 2010

Price ~ Copper, Aluminium, Zinc, Nickel

Date............Copper.......Aluminium.......Zinc...........Nickel

11.09.09......$ 6,250........
21.01.10......$ 7,387........$ 2,257......... .................$ 18,802
15.06.10......$ 6,600........$ 2,012........ ..................$ 20,225
22.06.10......$ 6,460........$ 1,901.......$1,727........$ 19,400

01.07.10......$ 6,354........$ 1,928.......$1,726........$ 19,150
07.07.10......$ 6,545........$ 1,954.......$1,810........$ 18,990
17.07.10......$ 6,650........$ 2,008.......$1,800........$ 19,220
24.07.10......$ 6,995........$ 2,008.......$1,891........$ 20,380___1,188___79___2,498

Date............Copper.......Aluminium.......Zinc...........Nickel____Gold__._Oil___CPO

UMW in charter talks

Two potential clients for its jack-up rigs, company hopes to announce deal soon

SHAH ALAM: UMW Holdings Bhd is currently in talks with two parties – one local and one foreign – to charter its two jack-up rigs Naga 2 and Naga 3, said president and group chief executive officer Datuk Abdul Halim Harun.

“There are a lot of negotiations going on. The signs are positive and the chances are very good. We hope to make an announcement very soon,” he told a post-AGM press conference yesterday.

UMW took delivery of Naga 2 recently while Naga 3 will be ready soon.

Abdul Halim expects revenue contribution from Naga 2 and Naga 3 from the last quarter of the financial year ending Dec 31, 2010.

The group’s other rig, Naga 1, is currently on charter at a rate of about US$145,000 per day.

Abdul Halim said the group had started to see signs of improvement in the performance of its oil and gas (O&G) business this year.

“There are a few areas we are watching such as WSP Holdings Ltd due to the anti-dumping and counterveiling duties imposed on its products by the US which affected sales,” he said.

WSP is UMW’s associate company in China that manufactures oil country tubular goods.

Nevertheless, chairman Tan Sri Asmat Kamaludin said WSP was expected to improve its performance in the second half of the year as the group planned to pursue new export opportunities.

Another measure to counter lower sales would be to set up a plant in Thailand.

On the listing of its O&G arm, Abdul Halim said the group was still waiting for the correct time to do so.

“We were planning for 30 companies to be involved in the initial public offering but more companies; especially those that are performing well, would be injected as well,” he said, adding that there were currently 50 to 60 entities in the division.

Asmat said UMW would have to re-submit its application to list its O&G arm to the relevant authorities as the last approval had lapsed.

“Even if we have approval, we will need to see that the time is right,” he said.

On the group’s automotive business, Asmat was confident that Toyota and Perodua would maintain their market share with strong customer service programmes, upgrading of models and by offering high value for money and fuel efficient vehicles to its customers.

Last year, total sales of Toyota and Perodua vehicles amounted to 248,521 units, representing 46.29% of the total industry volume.

UMW’s net profit more than doubled to RM132.86mil in the first quarter ended March 31 from RM65.96mil a year earlier mainly due to improved margins from a favourable model mix and higher sales volume achieved by its automotive segment. Revenue rose 29% to RM3.03bil from RM2.35bil.

Asked about a news report that Asmat and Abdul Halim would be leaving UMW, Asmat said there was no basis for the article.

“Nobody stays permanently but when the time comes for change to be effected, I think the major shareholders will do the necessary consultation with our principal partners before we make any announcement,” he said.

Wednesday, June 16, 2010

Metals News ~ 16 Jun 2010

Tuesday, June 15, 2010
Copper gains in New York on weaker dollar, manufacturing data

Copper was mixed in floor trade Tuesday it added 1 cent to $3 per pound in New York but three-month contracts on the London Metal Exchange fell $60 to $6,600 per tonne by the end of the trading day.

Later, however, the metal used in construction and manufacturing managed to come back to trade at $6,690 in after-hours electronic trade as the US dollar weakened,, spurring more demand, and new data from the New York Federal Reserve showed that manufacturing activity in the New York region is up this month for the eleventh month in a row.

Aluminium added $18 to $2,012 per tonne in London, although some analysts are predicting that prices could drop this fall, while zinc and lead each added $44 during the London session, to $1,840 per tonne and $1,759 per tonne respectively, and tin was up $550 to $17,500 per tonne.

Nickel prices, on the other hand, fell $25 in London trade to $20,225 per tonne.

Precious metals prices were higher as the euro gained 1 percent on the US dollar and some investors still worried enough about economic issues to look to gold as a safe place to put their cash.

August gold added $9.90 to $1,234.40 per troy ounce in New York trade, while July silver was up 17 cents to $18.57 per troy ounce and September palladium gained $12.95 to $475.55 per troy ounce.

Tuesday, June 15, 2010

Perodoa Sells 15,000 Cars in May 2010

KUALA LUMPUR, June 14 (Bernama) -- Perodua maintained its market leadership in May with sales of 15,000 cars and an estimated market share of 29.6 per cent on the back of continued strong demand for vehicles.

"The 15,000 units sold were 13.6 per cent higher than the 13,200 units achieved in May 2009," its Managing Director Aminar Rashid Salleh said in a statement Monday.

Year-to-date, Perodua sold 78,700 cars, which was 5.64 per cent higher than the 74,500 units forecast for the five months this year.

This was also a 23.16 per cent jump over the 63,900 units sold during January-May 2009.

Perodua is forecasting to sell 176,000 units of cars this year against 166,700 units sold last year.

"We are very encouraged by our sales numbers and we believe the run-up to the second-half will be better in view of the anticipated demand during Hari Raya Aidil Fitril and Deepavali," Aminar said.

He added car sales in Malaysia traditionally picked up in the third-quarter of the year.

Reviewing Perodua's after-sales performance, Aminar said in May 137,000 service intake were recorded compared with the forecast of 130,000 intake.

For the first five months of this year, total intake amounted to 681,000 or 46 per cent of market share compared with 666,000 intake achieved during January-May 2009.

-- BERNAMA

Thursday, June 10, 2010

Sunrise at Sematan, Sarawak




Bought Kian Joo at RM 1.17

Today, I bought 50,000 shares of Kian Joo at RM 1.17

EPS 13.2 sen
PE 8.9
Div expected 6.5 sen
DIY 5.5%

Profit margin 6.5%

Business prospect : Good

Sunset Photos at Sri Aman, Sarawak






Tuesday, May 25, 2010

MBMR result ~ 2010 1st Quarter : EPS 16 sen

Tuesday May 25, 2010
MBM plans RM100mil network expansion


KUALA LUMPUR: MBM Resources Bhd plans to spend RM100mil over the next three years to expand its distribution network.

Managing director Looi Kok Loon said this year, RM20mil was allocated to expand its Perodua, Hino and Volkswagen (VW) dealerships.

“MBM will set up 3S centres (sales, service and spare parts) in Butterworth, Ipoh, Shah Alam, Johor Baru, Batu Pahat and Kota Kinabalu to deliver growth potential,” Looi said after the company AGM yesterday.

Looi said MBM's 86%-owned subsidiary, Federal Auto Holdings Bhd, would make a significant investment in VW dealerships in Petaling Jaya and Johor Baru to reassert its multi-brand strategy in driving growth.

On the financial year ending Dec 31, 2010, Looi said the group was optimistic based on the positive first quarter results to March 31. MBM yesterday reported net profit of RM40mil on revenue of RM363.8mil compared with RM9.4mil and RM246.1mil in the previous corresponding period.

“We expect the second and third quarters to remain positive due to the outstanding orders and also the full impact of VW and Hino dealerships in 2010,” Looi said.

He said the first quarter numbers would be indicative of the trend for the rest of the year, adding that volume gains and the stronger ringgit would continue to support the group.

In notes accompanying its results filing, MBM cited the recovery in sales, the spillover of orders for new models launched last year and contributions from additional dealerships as having a positive impact on its overall performance for the quarter. - Bernama

Looi also said MBM was constantly looking for new brand partners as it had the economies of scale, assets and people. MBM is involved in distributorship and dealership of major international brands of vehicles in Malaysia.

Saturday, May 22, 2010

BNM Reserves ~ 14 May 10 : RM 314.1 b

The international reserves of Bank Negara Malaysia amounted to RM314.2 billion (equivalent to USD96.1 billion) as at 14 May 2010.

The reserves position is sufficient to finance 8.3 months of retained imports and is 4.4 times the short-term external debt.

UMW Pre-Tax Profit Up 146 Per Cent In 1st Quarter

KUALA LUMPUR, May 20 (Bernama) -- UMW Holdings Bhd's pre-tax profit for its first quarter ended March 31, 2010, rose 146 per cent to RM305.094 million from RM123.737 million in the same quarter last year.

The significant profit increase was due to higher sales volume and improved margins from a favourable model mix achieved by the automotive segment, said UMW in a statement Thursday.

As a result, the net profit for the first quarter of 2010 surged from the RM66.0 million registered in the same quarter of 2009 to RM132.9 million, it said.

UMW said the group revenue of RM3,033.2 million for the first quarter was 29.1 per cent higher than the RM2,349.8 million achieved in the preceding year's corresponding quarter.

The increase was due to the strong economic growth and improved consumer and business confidence which resulted in higher demand for its Toyota vehicles, industrial and heavy equipment as well as automotive parts, it said.

Total Toyota and Perodua vehicle sales of 70,550 units represented 47.9 per cent of the total industry volume of 147,415 units reported by the Malaysian Automotive Association for the first quarter of 2010.

The recent trade data indicated that economic growth for 2010 could be much stronger than expected, the group said.

All major sectors recorded robust expansion and both exports and imports had shown steady gains in the first quarter of 2010, a sign that the economy was on the path to a strong recovery, it said.

UMW president and group chief executive officer Datuk Abdul Halim Harun said the automotive segment was poised for a strong growth in 2010 based on a progressively stronger momentum of recovery since the second half of 2009.

"We are confident of achieving the 2010 sales target of our automotive segment, which aims to sell a total of 264,000 Toyota and Perodua cars in 2010, or 48 per cent of the forecast total industry volume of 550,000 cars," he said.

Both the equipment and manufacturing and engineering segments are expected to benefit from the strengthening domestic and external demand, supported by improving regional economic conditions, particularly in the Asian region where UMW has presence.

Abdul Halim said the oil and gas segment is expected to turn around and make positive contributions to group profits in the second half of the year when some of its greenfield investments begin operations and generate income.

Based on the current positive economic outlook, UMW is optimistic that the financial performance of the group may exceed its internal revenue and profit targets set for the financial year ending Dec 31, 2010.

-- BERNAMA

Tuesday, May 18, 2010

Auto Sales ~ Apr 10 : 48,706

Vehicle Sales Up 16.8 Per Cent In April

KUALA LUMPUR, May 17 (Bernama) -- Sales of passenger cars and commercial vehicles in April increased 16.8 per cent year-on-year to 48,706 units from 41,686 units, says the Malaysian Automotive Association (MAA).

It attributed the higher sales to the rush to take delivery of the vehicles before the hike in interest rate.

However, sale of cars and commercial vehicles in April was 7,433 units, down 13.2 per cent when compared with March as production could not meet the April delivery deadline.

Sales of passenger cars in April rose to 43,661 units from 37,810 units in the corresponding month last year while that of commercial vehicles rose to 5,045 units from 3,876 units, said MAA in a statement on Monday.

Sales of passenger vehicles in the first four months of this year increased to 176,718 units from 147,111 units in the corresponding period last year.

Sales of commercial vehicles in the same period shot up to 19,403 units from 14,964 units previously.

For Jan-April period, total industry volume was up to 196,121 units from 162,075 units in the same period last year.

MAA said total vehicle production in April jumped to 49,666 units from 39,574 units in April last year.

Passenger vehicles production in April increased to 46,045 units from 36.562 units in April last year while commercial vehicles increased to 3,621 units from 3,012 units.

Passenger vehicles production in the four-month period rose to 176,686 units from 138,890 units in the same period last year while that of commercial vehicles went up to 16,127 units from 14,693 units.

For May sales forecast, sales volume is expected to be maintained at April level but higher than May last year.

-- BERNAMA

Friday, May 7, 2010

Sarawak Cable to raise RM9.1m from IPO

Friday May 7, 2010
Sarawak Cable plans two new products
By SHARIDAN M. ALI
sharidan@thestar.com.my


( Notes : Leader Universal own 25% of Sarawak Cable as the later being an associate)

KUALA LUMPUR: Sarawak Cable Bhd, a power cable manufacturer, aims to raise RM9.1mil from its initial public offering (IPO).

Managing director and chief executive officer Aaron Toh Chee Ching said the proceeds would be used to produce and commercialise two new products – low-voltage aerial bundled cables and low-voltage two-core twin twisted cables – by year-end.

“To boost our production capacity, we are investing in three additional machineries and equipment that will see our production capacity increase by 47%,” he said after the company’s prospectus launch yesterday.

The event was officiated by Second Minister of Planning and Resource Management and Minister of Public Utilities of Sarawak Datuk Amar Awang Tengah Ali Hassan.

Sarawak Cable’s IPO involves the sale of 19 million 50 sen shares to approved bumiputra investors and a public issue of 13 million new shares, of which six million are made available for the public and the remainder for eligible directors, employees and business associates. All shares are offered and issued at 70 sen each.

The company seeks to list on the main market of Bursa Malaysia on May 25. CIMB Investment Bank Bhd is the advisor, underwriter and placement agent.

“Post-IPO, our 50%-owned dormant subsidiary Sarawak Power Solutions Sdn Bhd will seek to venture into power-related and renewable energy industry,” said Toh.

He said that after the listing, Sarawak Energy Bhd would hold a 16% stake in Sarawak Cable.

“Our orderbook stands at RM64.2mil as at April, of which the bulk is due by year-end,” he said.

On a proforma basis, Sarawak Cable posted a profit after tax of RM8.1mil on a revenue of RM89.8mil for the financial year ended Dec 31, 2009.

Thursday, May 6, 2010

News You Could Use

(paste from BB notes)

Stocks are crashing, so you turn on the television to catch the latest market news. But instead of CNBC or CNN, imagine that you can tune in to the Benjamin Graham Financial Network. On BGFN, the audio doesn't capture that famous sour clang of the market's closing bell; the video doesn't home in on brokers scurrying across the floor of the stock exchange like angry rodents. Nor does BGRN run any footage of investors gasping on frozen sidewalks as red arrows whiz overhead on electronic stock tickers.

Instead, the image that fills your TV screen is the facade of the New York Stock Exchange, festooned with a huge banner reading: "SALE! 50% OFF!" As intro music, Bachman-Turner Overdrive can be heard blaring a few bars of their old barn-burner, "You Ain't Seen Nothin' Yet." Then the anchorman announces brightly, "Stocks became more atractive yet again today, as the Dow dropped another 2.5% on heavy volume - the fourth day in a row that stocks have gotten cheaper. Tech investors fared even better, as leading companies like Microsoft lost nearly 5% on the day, making them even more affordable. That comes on top of the good news of the past year, in which stocks have already lost 50%, putting them at bargain levels not seen in years. And some prominent analysts are optimistic that prices may drop still further in the weeks and months to come."

The newscast cuts over to market strategist Ignatz Anderson of the Wall Street firm of Ketchum & Skinner, who says, "My forecast is for stocks to lose another 15% by June. I'm cautiously optimistic that if everything goes well, stocks could lose 25%, maybe more."

"Let's hope Ignatz Anderson is right," the anchor says cheerily. "Falling stock prices would be fabulous news for any investor with a very long horizon. And now over to Wally Wood for our exclusive AccuWeather forecast."


Quote from :
The Intelligent Investor by Benjamin Graham
Revised edition with commentory by Jason Zweig

Malaysia 2010 Q1 GDP growth more than 10%

Thursday May 6, 2010
Malaysia's Q1 GDP growth at 10-year high

The country’s economy is likely to register growth of more than 10%
in the first three months of the year
– an achievement not seen in the last 10 years.
The latest economic indicators show a positive trend.

Exports in March grew by 36.4% beating the market forecast of 22.4%.
Imports rose by 45.3% (forecasts were around 30%).

Crude ends under $80 for the first time since mid March

SAN FRANCISCO (MarketWatch) -- Oil prices settled under $80 a barrel on Wednesday, pulled down by a stronger U.S. dollar, concerns about the political unrest in Greece and the state of other European economies, and a higher-than-expected rise in crude inventories.

Crude oil for June delivery slumped $2.77, or 3.4%, to $79.97 a barrel on the Comex division of the New York Mercantile Exchange. That is the lowest price for a most-active contract since March 15, according to FactSet Research.

Losses were deeper mid-morning and in the last hour of trading.

"People are worried that the bull market is over, that maybe we are seeing the tipping point," said Michael Lynch, president of Strategic Energy & Economic Research, in Winchester, Mass.

Macroeconomic backdrop and the falling euro at the center of their concerns dominated trading.

Investors are feeling that prices pushing towards $90 a barrel recently were not "appropriate for this point in the economic recovery," Lynch said. "People were wondering when it would be time to sell, and it looks like the sell-off is here."

The euro fell to $1.2825 but came off lows hit earlier in the session, while the dollar index /quotes/comstock/11j!i:dxy0 (DXY 83.96, -0.12, -0.14%) rose 0.9% to 84.06.

Worries about a potential debt crisis in Europe flared up again Wednesday as Moody's Investors Service placed Portugal's debt under review for a possible downgrade and violence erupted in Greece following a nationwide strike. Three people were killed after fires broke out at riots near an Athens bank. Read more on Greek violence.

The Energy Information Administration on Wednesday said crude-oil inventories rose 2.8 million barrels in the week ended April 30, which included a 1.7 million increase in inventories in Cushing, Okla., the delivery point for Nymex oil.

Analysts surveyed by Platts had expected crude stocks to increase by 1.54 million barrels.

Gasoline stockpiles rose by 1.2 million, the EIA said, when the expectation was of a modest rise of 200,000 barrels.

Refineries operated at 89.6% of their operable capacity, the EIA said. The refinery utilization rate expected by the analysts polled was 88.66%.

Gasoline futures were the worst-hit among energy products on Monday. Gasoline for June delivery declined 10 cents, or 4.4%, to $2.22 a gallon, reverting to prices last seen in late March.

Natural gas for June delivery retreated 2 cents, or 0.6%, to $3.99 per million British thermal units.

Analysts polled by Platts expect the EIA to report an increase by 80 to 84 billion cubic feet for natural gas in storage in the week ended April 30. The agency releases its weekly report on natural-gas storages Thursday at 10:30 a.m. Eastern.

Oil trimmed some its losses earlier after the April ISM nonmanufacturing index. The index came in under expectations at 55.4, unchanged with March's level, but investors took heart it didn't show an economic contraction.

News that private-sector companies added 32,000 jobs in April, according to the ADP employment report released Wednesday, did little to change oil's direction. The increase in ADP employment was in line with expectations.

BNM Reserves ~ 15 Apr 10 : RM 313.1 b

The international reserves of Bank Negara Malaysia amounted to RM313.1 billion
(equivalent to USD95.7 billion) as at 15 April 2010.

The reserves position is sufficient to finance 8.8 months of retained imports
and is 4 times the short-term external debt.

Perodoa aims to increase Export

Perodua Aims To Increase Exports To 5 Per Cent In 3-5 Years

RAWANG, April 22 (Bernama) -- Perusahaan Otomobil Kedua Sdn Bhd (Perodua) aims to increase its exports to five per cent in the next three to five years from the current two per cent, managing director Aminar Rashid Salleh said Thursday.

The company was also looking to sell 3,000 units to overseas markets this year, up from only 2,000 units car sold last year due to the global economic crisis, he said.

"We will increase gradually, because we need to tackle a few areas, particularly quality, cost and productivity," Aminar told a press conference after Perodua's line-off ceremony for 1.7 million vehicles in 17 years by Deputy Prime Minister Tan Sri Muhyiddin Mohd Yassin.

"For the long term, we would like to increase it to about 10 per cent," he said.

To date, its export markets include Brunei, Fiji, Mauritius, Nepal, Singapore, Sri Lanka, and the United Kingdom, the company's biggest export market which makes up about 40 per cent.

Aminar said Perodua's focus was still in the Asean region as it wanted to take full advantage of the Asean Free Trade Area (AFTA).

"In the future, we are looking for countries where the regulations and standards are almost similar to those in Malaysia, making it easier for us to produce our vehicles in terms of emission control and safety requirements," he said.

Currently, Perodua is carrying out a feasibility study to enter the Thai market that will be completed in the third or fourth quarter this year and it will later look at opportunities in other Asean countries.

So far, the company has shipped 26,000 completely built-up (CBU) units under its Perodua badge, while 8,000 completely knocked down (CKD) units were shipped for Daihatsu in Indonesia.

It has recorded sales of a RM24 million since it started to export CKD components in 2003 to Pakistan, Indonesia and Japan.

"We would like to increase this to at least RM50 million over the next three years," Aminar said.

Also present at the event were International Trade and Industry Minister Datuk Seri Mustapa Mohamed and Deputy Human Resources Minister Senator Datuk Maznah Mazlan.

The 1.7 millionth vehicle, an Alza standard variant, was rolled out at a simple yet significant ceremony.

Perodua employed 10,000 workers currently while its plant has the capacity to produce up to 250,000 vehicles a year on a two-shift cycle.

-- BERNAMA

Auto Sales ~ Mar 10 : 56,139

Vehicle Sales In March Up 25 Per Cent

KUALA LUMPUR, April 21 (Bernama) -- Sales of passenger cars and commercial vehicles in March 2010 increased 25 per cent year-on-year to 56,139 units from 44,896 units.

This brought the January to March sales higher by 27,026 units or 22 per cent when compared with the same period of 2009.

The Malaysian Automotive Association (MAA) attributed the higher sales to continued improvement in market sentiment and consumers' confidence.

Sales of passenger vehicles in March 2010 rose to 50,533 units from 40,680 units in the corresponding month last year while that of commercial vehicles rose to 5,606 units from 4,216 units, it said in a statement on Wednesday.

Sales of passenger vehicles in the first three months of the year increased to 133,057 units from 109,301 units in the corresponding period last year.

Sales of commercial vehicles in the same period went up to 14,358 units from 11,088 units previously.

For the three-month period, total industry volume rose to 147,415 units from 120,389 units in the same period of last year.

MAA said total production of vehicles in March 2010 rose to 51,579 units from 35,950 units in March last year.

Production of passenger vehicles in March increased to 47,729 units from 32,922 units in March last year while that of commercial vehicles increased to 3,850 units from 3,028 units.

Production of passenger vehicles in the three-month period rose to 130,641 units from 102,328 units in the same period last year while that of commercial vehicles went up to 12,506 units from 11,681 units.

Going forward, MAA said that sales volume for April 2010 is expected to continue the expansionary trend in the absence of no negative developments in the economy and the automotive market.

It also expects supply to be increased to fulfill outstanding orders.

-- BERNAMA