Sunday 29 May 2016

It is shocking that Tan Teng Boo missed the big picture

Tan Teng Boo was pessimistic about the economy of Malaysia. He sees the possibility of FBMKLCI dipping below 1,000 points in medium term.

In Capital Dynamics' newsletter dated 29 Jan 2016, he commented "MRT project is near completion with no viable large scale infrastructure projects imminent".

But... didn't he notice the following before the issuance of the newsletter dated 29 Jan 2016,

i) MMC-GAMUDA JV was appointed as the PDP for MRT line 2? (Bursa announcement dated 29 October 2014)
ii) Execution of PDP agreement for MRT line 2? (Bursa announcement dated 13 July 2015)
iii) NST artcile "Advance works for MRT Line 2 ongoing" published on 23 February 2016, just about a week before Tan Teng Boo's article
iv) Article by The Star dated 20 February 2016, saying MRT line 2 would be completed by 2022, published slightly more than a week before Tan Teng Boo's article.

MRT line 2 is expected to cost about RM28b to RM30b, the single largest construction project being implemented in Malaysia.

Besides MRT line 2, another mega project, Pan Borneo Highway was launched in 2015. (source)

On top of that, MRCB-GKENT JV was appointed as the PDP for RM9b LRT line 3 in September 2015. (source)

How could Mr Tan, which based in KL was so ignorant about the development in Malaysia and missed the information which is publicly available?

Separately, he has been complaining the distance between KLIA and KL city centre. To quote him, “Why was Sepang chosen to house the Kuala Lumpur International Airport (KLIA) and not Subang? The KLIA is 80km from Kuala Lumpur. Today the KLIA is the furthest airport from the city centre in the world." (Source)

However, if we "google map", the distance is about 60km. Which is right? Did Mr Tan get his fact right?

Capital Dynamics claims it is an independent fund management and investment advisory house. I wonder how this could be achieved. If he finds a very attractive stock in Bursa Malaysia, but the trading of the stock is not liquid, do you think Capital Dynamics will write about the stock in his newsletter before the funds under his management have accumulated sufficient amount of shares?


  1. It is sad that it has come to this.

  2. Such foresight. Haiz.

    Hotshot fund manager Tan Teng Boo has a very gloomy outlook on equities. He says so in an interview published in the current edition of The Edge Singapore.

    That's why his Singapore-registered iCapital Global Fund is sitting on 80% cash.

    And Mr Tan, 61, the MD of Capital Dynamics Asset Management in Malaysia, has no interest in touching blue-chips which have fallen because of the global oil price crisis.

    He says: "In Singapore, there are quite a number of cheap stocks. But they are cheap for a good reason. For rig builder Keppel Corp and Sembcorp Industries, I wouldn't want to touch these stocks. I bought Keppel in March 2009 at $4 a share. The stock is going to hit $4 very soon. But now, I wouldn't even buy it when it is trading at $4 because the economics of its business has changed. And for the longer term, it is not attractive."

    Still, there is at least one Singapore-listed stock he has some love for -- China New Town Development.

    The stock once traded at more than 60 cents in 2008 but now is going for about four cents.

    "We are looking at China New Town Development. I am interested in it because it is not the usual property developer in China. It is more of a township developer. The company is not building on vacant land but is more of a redeveloper (that implements) policies of the Chinese government. If the local government has a shanty town and wants to redevelop it, it will partner China New Town Development," says Mr Tan.

    At four cents, the stock has reached a major support line, which was established in 2011, according to Mr Tan's technical analysis team, which has a 'buy' recommendation on this counter and a target price of nine cents.