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3: Malaysia REITs - Looking For My 2nd Durian Runtuh
4: Is Insurance Really Necessary?
5: Everyone Must be A Millionaire

Head to the watch list on the above tab to see my what's on my radar and foreseeable future postings =)

Decided to make adjustments on the way I blog & share due to time constraints and other commitments. In the coming weeks you should see them. Short updates but more frequent & concise.

Tuesday, July 26, 2011

Malaysians & Their Cars Again...

What is wrong with Malaysians? Are we shrouded in stupidity? For the pass six months I have heard many response towards buying a "luxury" car from proponents. I bought it because of safety features. Yay right, how many times do I actually see people comparing safety features between cars? Virtually NO. In most cases I see people comparing the additional "gizmos" within the car and how many bling bling features it has inside it. You did not ask the sales guy about how safe this car is, its safety ratings, its credentials...bla bla bla. Of course the basics e.g. air bags and ABS are now even present in local cars @ a cheaper price point. Do you know why speed crashes and test dummies are done at reduced speeds using high speed cameras? It's a high speed camera anyway; because you are most likely to die from a crash above a certain speed limit regardless how SAFE you perceived your car to be. Simply ask a car buyer who pays RM90,000 for a car how much safer is it compared to a local car at RM50,000. Close to being don't know is next to ignorance. You can ask me the same question but I do not know but why are you paying the extra RM40,000 for something you DON'T EVEN KNOW? Safety is the lamest excuse coming from Malaysians to date.

Another excuse: many Malaysians die from road accidents compared to terminal illness because we have many local branded cars on the road. If you take the statistics and weight it across brands you get roughly the same percentage regardless of make. Why is this? PLEASE, use your God given grey matter. In doesn't matter the type of car, it is because the Malaysian driver no longer respects the law. Go to NSE and you can see a car flashing you from behind every 5 minutes. Red lights are optional, motorists do not wear helmets and lorry/express bus drivers are RAJA JALAN. In fact, this laissez faire attitude towards traffic laws is equally represented in other areas of daily life in Malaysians and most notably the lack of common courtesy.
Sharon Xu
Our current public transport condition is to be blamed is another half baked excuse. Though it is not the lamest I have heard, it is certainly perplexing to put the blame solely on our transportation. Malaysians do not carpool (this is why I am a proponent of higher gasoline prices), parents fetch/drop their kids to school even when there is BAS SEKOLAH, we prefer to drive even if it is only a walk away and we usually blame the tropical weather. HELLO!! Are we the only country in the equator?? We even lose to Brazil in terms of trying public transport. Motorists in this country don’t blink an eye forking out large portions of their earnings just to pay for their car loans or upkeep. Do you own the car or does the car own you? Well it is easy to blame to government, our Proton and Perodua but not ourselves, yet we have consistently and persistently adhere to our indulgence to "Keep Up With The Joneses" and in denial of that fact.

For those scratching their heads and wondering why the government refuses to lower taxes on imported cars sold in Malaysia even for brands and models not in direct competition with national makes. I know that the import duty, excise duty and sales tax collected from imported cars range between RM 3 billion to RM 5 billion a year, which implies that there is little chance of the taxes ever going down and prices of imported cars reduced. And we are feeding this all the time by buying foreign cars with lame excuses. Out of a RM90,000 car, RM33,000 goes towards the government in terms of taxes. THINK! Sidenote:Top 10 Brand Cars In Malaysia.

Re-post: What do I find a justifiable excuse? You get what you payed for and as such the only reason people buy jacked car prices is for quality. In an industry which is plagued by x3 normal prices, the word quality is knitted closely to the word luxury. Believe it or NOT, cars have become status symbols where proud men showcase their ego and the capacity to indulge themselves while their continue to live in normal apartments. In Malaysia it has become more than a mere necessity.

Sources: MAA, AAM, PIAM and                   

We should start going back into:

Start a carpool group: On the way to work, fetch your neighbours kids to school etc OR hitch a ride with some pals. It's not on the way. COME ON! Since when our houses are built along one single street? Take a short detour to fetch someone and share the gasoline bill. As a proponent of higher gasoline prices, carpooling will solve the high price issues.

Buying locally made cars/used foreign cars: A reduction in AP generated profits will make the government change its stance to some extent.

Use public transportation when ever possible: Start from yourself so that your children will follow. Even if it is terrible, play a role to provide a solution rather than be part of the problem by adding more traffic in our clogged roads.

Monday, July 25, 2011

2011 Equities Reevaluation Part 1

Araya Hargate

Trading/Service: Genting Berhad
Results from annual report 2010 is impressive as expected. Previous DCF target price of RM12.25 is now revised to RM14.05 backed by encouraging outlook of the tourism-related sectors in Singapore. With the global economy in an almost stalemate climate, SG's 2Q11 economic indicator shows a yoy% increase of 3.3% for the services sector while the rest draw blanks (manufacturing @ -5.5% and construction @ 1.6%). Although the services sector has been in the downtrend since 2Q'10, tourism was not the cause of it. Wholesale and retail trade were weaken by trade flows while financial services sectors lag due to sluggish stock activities. Nothing beats the source from the ground and with many Malaysians situated in SG, many of my friends can attest that tourism is a booming industry in SG. Other source: MIDF Equity Beat.

As usual I'm ignoring other segmental info of GENTING (power, plantation, O&G and properties) because it is negligible; contributing only 18% of revenue though I do wish they exit from power generation. This is because the prices of raw materials for power generation such as coal is increasingly volatile and will be as the world struggle more with its power needs. GENTING remains my most favourite long-term (>5 years) pick and is a 5-star choice and SOLID BUY. The biggest risk I see is over expansion which leads to either too much debts OR losing focus; for now this is still in the region of being medium. And I have yet to visit Resorts World Sentosa, I plan to do so one day.

Trading/Services: Parkson Holdings Bhd
Parkson added 3 stores in China, 2 in Malaysia and 1 more in Vietnam. Because Parkson China remains the main contributor to the Group's result (71% of revenue & 91% of OP) I tend to overlook Malaysia (which does not have good long term economic outlook) and meager Vietnam due to this. Retail spending has increased 15% over the year, with GDP @ 10% and Parkson China registered store sales growth of 11%, I am optimistic and convinced that Parkson has a grip and strong presence in China's Tier 1 cities. Unlike MAMEE which made a mistake of going into China all by themselves, PARKSON went by proxy just like JOBST which is proving successful. Other healthy indicator includes another year of down trending D/E ratio; evident with rising ROCE.

This time I removed gains on partial disposal of subsidiary for Parkson China; the chart shows it all. Revenue growth rate is expected to balance itself between 5% to 10% as you remembered in my previous analysis that Parkson turned pure retail in 2007. PARKSON is another good pick for the long-term (>5 years) as China's middle class is expanding tremendously and has been for the pass decade. A 4-star choice and GOOD BUY. The risk I see would be the bubbling of China property market; if it goes boom it could spell lacklustre consumer spending like we see in the US. A medium to high risk region. Pay attention to the AR 2011 since they end their financial year in June. As such I have revised DCF target price from RM6.60 to RM6.80. Sources: Forbes & World Bank.
On a side note: I do not believe US will default and I also do not think the rich stage this, it is too soon for that. US will either increase the ceiling (40% chance) OR get a debt deal out (cut spending & increase taxes @ 60%). Reading: Next on I will examine FREIGHT, JOBST and F&N in Part 2. MAMEE and SUPERMX in Part 3. A special part on PANAMY and CARLSBG because some have said I have missed the boat =). Also I will start looking into AirAsia which I have been dragging for a very very long time.
Deborah Henry
Disclaimer: The reports, analysis and recommendations in this blog are solely my personal views. I do not link to any investment body or company. As such, I will not be responsible of any of your investment decision. Consult your investment adviser or come to your own conclusions before making any investment decision.

Saturday, July 9, 2011

Will BERSIH 2.0 Hurt the Economy?

This is to be a short posting. No doubt in the minds of most people that protests are disruptive, inconvenient and damaging to the country's economy. In fact there are some folks who think that protests do nothing but just a waste of time. Ah hah, before we go that far we should go back to history. I will put forth my argument that protests are not necessarily EVIL in nature.

1. The French Revolution was essentially a people's protest for a radical social and political upheaval. The result was the development of many of today's modern world ideologies. It gave birth to new ideas of liberty, equality and fraternity. American revolution was partially inspired by this French revolution. Since then the world's quality of life has improved tremendously. Point 1.

2. The Vietnam War protests eventually handed down massive pressure on the US government to withdraw from a losing war and also to stop the piling up of national debt. This one was unique in that the protests were staged for a long time (years) and in huge crowds. There were some violence but largely peaceful. America's economic growth at that time did not suffer because of the protests, in fact it continued to grow.
3. The Greek protest because of the introduction of austerity measures and the more recent in Egypt did much damage to the economy because there were not just protests, it was strikes after strikes. This closed lots of stores and factories plus tourists are evacuated because the government finds it difficult to handle the situation properly and correctly. The short terms effects are devastating but in the long run it should bring more benefit.

By examining the facts, one can deduce two things. First, the objective of the protest is the far most important element. Second, violent or harsh intervention of such protest only do more harm than it was never intended. Again I could list many of the world's history for such prove. So now we looked upon BERSIH's rally ahead in Malaysia today and wonder what effects it will place into the economy. My sincere observations:

1/2 day of rally hardly makes a dent on the economy and it is not always true that protests will bring harm to the economy. Protests that are facilitated and kept peaceful by the police will do no harm to the country. Take a look at America and modern day France (who has like union strikes all the time). Hardly any violence and no harm to the economy. The opposite goes when violent or harsh interventions happens. Draconian laws create fear and intimidation. I believed that protest is good if the objective is sincere. I see history was made by people that protested slavery, segregation and apartheid. There are some that say there are other what??

If you feel you don't have a voice, and your supposed representatives in the ruling government ignore letters and phone calls, then protest is sort of your only option! I don't support violence AT ALL, EVER, but it happens, it is kinda inevitable and it's been known to change things for better or worse. Violent protest that involves the destruction of property and violence is a bad way to get your point across. But a lot of protests aren't violent until the cops start busting heads just like what is beginning to happen in BERSIH 2.0. If this is the case, the short term effect to the economy is not going to hurt much contrary to what officials say (KLCI is already nearly hitting 1600 points). If you look at the long run, it will scare investors plus with the economic fundamentals that Malaysia is lacking ( right now there won't be such thing as an easy and simple life in the future if nothing changes. I don't need any economics degree to know that. God bless Malaysia going forward.

Thursday, July 7, 2011

VirtualPot Folio As At 7th July 2011

The Stock Performance Guide book will be arriving in two weeks time and I will be back to analyzing companies. Portfolio gains remains roughly the same @ 17.7% from the previous month's 17.6%. This time I see general weakening across all counters with JOBST having to lift the slump out from the rest. Phew....

I have already injected a few grands into conservative SIF and the coming month I will put some capital into FREIGHT if it is less than RM1.10. With market being saturated, I had no choice but to put more focus on building the conservative portfolio which already consists of SIF, endowment, REIT. My target is a reasonable 15% with a stretch goal of 20%. It is easier to project my returns by counter basis, I will go with this route. Seeing that the older counters of FREIGHT, ICAP and JOBST which are already more than 1 year old are well above the goal. BSDREIT is a special case, it is a dividend play hence I should probably exclude it in the next portfolio or add a new part for a conservative section. This leaves GENTING which I am looking forward for year's end and SUPERMX will need a mid reassessment.

Yes I know. Boring..boring..well to be frank there is nothing much to buy @ a discount right now. I don't just go blazing my guns, instead am just hording cash and crossing my fingers not to spend it. Going forward for the rest of the year it would be more of a survey analysis rather than a buy/sell call for the companies I am going into. I will also be needing to do a reevaluation on the smart pickings (when the book arrives of course).

Disclaimer: The reports, analysis and recommendations in this blog are solely my personal views. I do not link to any investment body or company. As such, I will not be responsible of any of your investment decision. Consult your investment adviser or come to your own conclusions before making any investment decision.