Wednesday 31 October 2012

Guinness Anchor Berhad

Statistics that may help in analysing alcohol stocks

Source: GAB 2012 Annual Report

Reading vs Arsenal 5-7

This is neither about stock nor investment but somehow there are some similarities between stock investment and football such as excitement, upset, winner & loser, trend analysis, strategy, defensiveness :p

The match between Reading and Arsenal was too incredible not to blog...

1) A total of 12 goals in a match. 8 goals in 90 minutes
2) Arsenal, being one of the top teams gave away 4 goals in less than 40 minutes
3) Even it was 4 goals behind, Arsenal managed to level the score and overturned it into a win
4) Arsenal managed to level the score when the team was 2 goals down in the 89th minute.
5) Scored 2 winning goals in injury time in the extra time
6) 4 goals in injury time
7) Arsenal scored 7 goals in a game of 120 minutes
8) Arsenal scored in added time at the end of the first half, the second half and of extra time

Watch the video here

SCORE - Samalaju

The RM4b 944MW Murum hydroelectric dam in the upper Rajang basin is expected to begin producing power for energy-intensive industries in early September. Installation of the turbines is currently underway and the wet commissioning of the first unit of the four turbines has been set on Aug 1. The Murum dam will have 4 turbines with a capacity of 236MW each as compared with Bakun dam’s 8 turbines. 6 turbines of the Bakun dam are in operations, with the final two turbines expected to be commissioned by the middle of 2014. The Murum and Bakun dam, which is owned by the Federal Government, are expected to generate firm outputs of 635MW and 1,771MW respectively (combined 2,406MW) when fully operational.

SEB has also inked a PPA with Indonesian power company PT PLN (Persero) to export 230MW to west Kalimantan from Jan 1, 2015.

Currently there are 5 companies started operations in Samalaju Industrial Park with total investment of RM29.1b and 15,000 employment opportunities.

They are:
1) Tokuyama LTD of Japan (polycrystalline silicon) - 140MW
2) Asia Mineral Ltd of Hong Kong (silicon manganese) -270MW
3) OM Holdings Ltd of Singapore (fero manganese) - 500MW
4) Press Metal Bhd of Malaysia (aluminium ingots and billets) - 700MW for smelters in Samalaju and Mukah
5) Asia Advanced Material of Korea (metallic silicon)

16 companies including one Malaysian-owned company have been approved to invest in SIP

30 October 2012

Samalaju Industrial Port Sdn Bhd expects construction of phase one of the RM1.8b Samalaju Port to be completed by the 1Q2016.

It will have an annual handling capacity of 18m tonnes of cargo for SIP.

In the interim, the port plans to provide facilities for industries at SIP starting in the 2Q2013 with an annual handling capacity of 4m tonnes of cargo.

For future expansion, if the need arises, the port can handle a total of 30m tonnes annually.

Bintulu Port Holdings Bhd has been given the task to build, own and operate the Samalaju Port on some 450ha of land set aside by the state government.

Monday 22 October 2012

Sunday 14 October 2012

Genneva Gold Investment Scheme - Isn't it obvious?

When the news of Bank Negara Malaysia raided Genneva Gold surfaced in the newspapers, I expected the investors to swarm Genneva 's office. They did. But to my surprise, they were not hostile against the company but the consultants and investors united to show support for the company and demanded BNM to unfreeze the investors' gold assets. Facebook page was even set-up by the Genneva's supporters.

Did the investors ask, "why don't the banks or funds like EPF, PNB which are run by the professionals and have better access to investment opportunities invest in Genneva gold? Wouldn't the bankers be happier to receive 24-36% of return per annum than the mid single digit interest rate from lending out the money for housing loans, and yet when the investment capital is so called guaranteed? Furthermore, housing loans may turn into non-performing loan. Wouldn't EPF and PNB love this kind of return? What's more without having the trouble of scouting for investment opportunities and getting experts to manage the investments?

Wouldn't Genneva be happier to manage one single big investor instead of handling thousands of retail investors?

It is obvious, isn't it?

Friday 12 October 2012

Kassets Reference Price Post Distribution-in-Specie

Kassets had a distribution-in-specie of Igbreit to the shareholders of Kassets on the basis of 524 units in Igbreit for every 100 shares in Kassets held on 5 October 2012.

To arrive at the share reference price of Kassets on the ex-date (3 Oct 2012):

Kassets's share closing price immediate before ex-date - 5.24 (Igbreit's unit closing price before Kassets' ex-date for the distribution)

= 9.51 - 5.24 (1.38) = RM2.27/ share (rounded down)

More examples of calculation of theoretical ex-price for various corporate exercises here.

Thursday 11 October 2012

Reference Price Post Transfer of Listing Status

Mithril underwent restructuring and its listing status was transferred to Pesona.

Consolidation of every 5 Mithril shares of RM0.05 each into 1 Pesona share of RM0.25 each.
Mithril last traded at RM0.10/ share before the transfer of listing status.

The reference price of Pesona was RM0.25/share, based on the face value of RM0.25 each instead of RM0.50/share, multiplying the last closing price of Mithril by 5. (Consolidation of 5 shares into 1)

More examples of calculation of theoretical ex-price for various corporate exercises here.

Wednesday 10 October 2012

Malaysia Steel Stocks

What to look at?

1. Price-to-book value (PBV)
Analysts say the PBV measurement is a more indicative of the performance of the steel sector, although the common measurement of the performance of a stock is the P/E ratio. This is because the earnings of steel players can be very volatile. The current down-cycle in the steel industry has shown that players are experiencing PBVs similar to those seen in 2008 and 2009, during last global financial crisis. Most analysts say a good way of evaluating a stock is to compare the company's current PBV with that seen in the last global financial crisis. If it is much lower, it means the stock might be undervalued. The PBV of steel players is between 0.2 and 0.8 times currently.

2. Gearing level
As the steel sector is considered capital-intensive, steel companies tend to have higher borrowings compared to their counterparts in other industries. The gearing levels are averaging about 1 time here. The levels are quite manageable, although they are still higher compared with Chinese steel companies listed in countries such as Hong Kong, which are currently about 0.4 times and 0.5 times. One reason why a company's gearing levels could be higher than usual is that it may be looking to expand. However, the returns made on the expansion should be reflected as soon as possible. For instance, Ann Joo Resources completed a new electric arc furnace last October - the first in the Asean region. "We always had levels below 1 time, but it is now slightly higher at about 1.4 times because of the furnace. Things should stabilise by 4Q2012. If there is no fresh expansion, a gearing of above 2 times for steel companies should be examined closely by the investors," says Datuk Lim Hong Thye, its group managing director. The rule of thumb is to be on the alert when gearing levels exceed 1.5 times.

3. Inventory management
Inventory management is just as important because this is a cyclical industry. Companies have to tread a fine balance between holding enough just before demand picks up and not holding too much. "If a company holds too much inventory and prices come down, they will make losses. It is considered prudent if a company keeps within two to three months' worth of inventory. If they keep stock of up to five or six months, they could be taking on a risky directional bet.

4. Strategic tie-ups
Other non-valuation indicators would be news of tie-ups and collaborations with strategic foreign investors, which are increasing in popularity among companies. Such tie-ups are expected to be positive for steel companies. "For example, Ann Joo Resources tied up with Tangshan Iron and Steel Company Ltd of China to build their blast furnace. Hiap Teck Resources Bhd has teamed up with Jinan Iron and Steel Group Corp to construct a new slab plant while Lion Industries has been trying to get suitors to invest in its blast furnace project."

Steel Industry in Malaysia
The steel industry in Malaysia can be divided into two segments - the long steel products and the flat steel products.

Long products are commonly used in the construction industry and include items such as rods, tubes, bars, wires and rails. The flat steel products are cold-rolled coils, hot-rolled plates and sheets, and boiler and pressure vessels. They are commonly used in the automotive, aviation, manufacturing, construction, appliances and oil and gas businesses.

In the long steel segment, the major integrated players are Lion Industries, Ann Joo, Southern Steel Bhd, Kinsteel Bhd, Perwaja Holdings Bhd and Malaysia Steel Works (KL) Bhd. The only flat steel integrated player is Megasteel Sdn Bhd, which is a subsidiary of Lion Industries. Integrated players produce steel products right from the raw material stage, mainly for local consumption.

In flat steel segment, Megasteel is the only producer of hot-rolled coils (HRC) and plates in the country. Its monopoly is further strengthened by the 20% import duty imposed by the government on high-grade iron and steel products in 2002. Those in industries such as automotive, electrical and electronics, oil and gas, shipping, iron and steel furniture are exempted from this tariff.Companies that still want to import these steel products are required to apply for special import licenses or approved permits (AP). Secondary steel producers that are listed on Bursa Malaysia include Mycron Steel, CSC Steel Holdings Bhd and Yung Kong Galvanising Industries Bhd.

Abstracted from: Investing in local steel stocks, Personal Money, October 2012

Sunday 7 October 2012


Gadang Holdings Bhd has won a contract for an undisclosed sum from Petroliam Nasional Bhd. (See announcement)

How investors assess the impact of the award if crucial information such as the contract sum was not disclosed? This is against the spirit of continuing disclosure to ensure a credible and responsible market in which participants conduct themselves with the highest standards of due diligence and investors have access to timely and accurate information to facilitate the evaluation of securities.

Shouldn't the company at least explain why the contract sum was not disclosed in the announcement?

Monday 1 October 2012

When the exam passing rates and number of students getting Straight A's are so high in Malaysia

Should Malaysians feel proud of high passing rates and high number of students getting straight A's in STPM, SPM exams?

Below are some points highlighted in The Edge dated 1 October 2012.

In spite of being among the highest spenders on education in East Asia, Malaysia's performance in international assessments of student performance between 1999 and 2007 slipped below the global average in both science and maths.

In the Trends in International Mathematics and Science Study, 18% and 20% of Malaysian students failed  to meet the minimum proficiency levels in math and science respectively in 2007, a two to fourfold increase from 7% and 5% in 2003. In the Programme for International Student Assessment for 2009, Malaysia was in the bottom third of 74 participating countries, below the international average.

The scores showed that 15-year-old Malaysian students were performing as if they had three years of less schooling than students in Singapore, South Korea, Hong Kong and Shanghai..