Saturday, February 16, 2013

Warren Buffet acquired HJ Heinz

HJ Heinz (HNZ +19.87% to $72.5): a consortium comprised of Berkshire Hathaway and 3G Capital has agreed to buy the Co for $72.50 per share in cash.

Friday, February 15, 2013

HK : Hengdeli (3389): Update on market rumors

According to an article by the HK Next Magazine, Hengdeli, a luxurious timepiece retailer in HK and the PRC, had lost its distribution license to sell some brands. The article speculated that Hengdeli lost its exclusive distribution licenses for certain brands, including  Rado, Longines , Omega, and Fendi in China.

According to Hengdeli Management :
it has maintained good partnerships with numerous worldwide renowned watch suppliers, achieving a win-win situation. As at yesterday, there was no notable change in the operation policy of the firm and operations were at a normal and stable manner.

Who's shareholder?
The Swatch Group, which owns the Omega, Longines and Rado brands, holds a 20.4% stake of Hengdeli. The major shareholder Mr. Zhang Yuping, holds a 36.0% interest.

We expected that Hengdeli 2012 core net profit to be RMB740M, down 2% YOY, or EPS of HK$0.21 per share. At HK$2.60 per share, the shares are trading at estimated 2012 P/E of 12.3x. While Hengdeli has long-term growth potential, as the base figures of HK’s luxurious retail figures are still high, the slowdown risk could cap its valuation.

At the moment, it is not yet confirmed if Hengdeli would lose some of its distribution rights.

Buy HKD2.50-HKD3.00

16 investment rules by Sir John Templeton

1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often

KLSE: How to make money in Malaysia General Election 2013?

Special Situation encourage reader to stay focus on Malaysia General Election Results. The panic selling could be the top opportunity for us to accumlate great biz in Malaysia.

Top Counters:
2) Boustead
3) Berjaya Group
4) Maybank
5) Genting
6) Cypark
7) Berjaya Toto

If Malaysia is going to collapse after election, Penang/Kedah/Kelantan are the good example where nothing happen.

Malaysia General Election 2013 : Will the Share Market Rise or Fall if there is a Pakatan Victory?

Will the Share Market Rise or Fall if there is a Pakatan Victory?

by Koon Yew Yin

Quote from an angry Internet reader
If [the] market plunge(s), it will rise up again but if a country goes bankrupt, it is gone forever. I don't know why you can't get it in your brain unless your brain is always thinking of sex with your mistress.

During the last few weeks there have been increasing predictions from Barisan leaders emphasising that there will be a sharp fall in the share market should there be a Pakatan Rakyat victory.

The latest prediction by MCA leader Chua Soi Lek in a party event at Kepong argues that Malaysia will witness a “‘huge financial disaster if Pakatan Rakyat comes to power in the 13th general election”.

This type of electioneering tactic aimed at frightening the electorate is dangerous and irresponsible. How can the MCA president be so confident as to openly declare that our stock market will drop to 500 points within a week if the opposition wins power?

Challenge to Dr. Chua Soi Lek
Let us subject his prediction to closer analysis. Firstly, it is not clear whether he stated that the KLCI will drop by 500 points or drop to 500 points.  Whichever is the correct version, his claim implies that anything from one to two thirds of the total share value of the KLCI will be wiped out due to the election result.

Now if this were to happen, the drop will be unprecedented in the history of share markets anywhere in the world. So far as I am aware, no modern national stock exchange has had such a sharp fall as a result of a national election outcome and I am sure it will not happen in Malaysia.

I am willing to place a big bet with Dr. Chua that his fears of a 500 point are unfounded and baseless.  The loser of the bet will have to donate an agreed sum of money to the other person’s preferred charity.   I hope he will agree to this and prove to be a man of his word.

Will the market rise on a BN victory
Not only should we discount the possibility of a sharp fall, but we should also – on the basis of stock market behavior elsewhere in the world – not assume that the Malaysian share market will automatically rise as the result of a Barisan victory. For example, on November 7th, immediately after Obama, the incumbent Democrat president was returned to power, the Dow Jones industrial average plummeted as much as 369 points, or 2.8 per cent, in the first two hours of trading. It recovered in the afternoon, but ended down 313, its biggest point drop for more than a year.

Various analysts that I have talked with have made the point that Chua Soi Lek is not a stock market expert. They argue that in trying to exaggerate the prospect of a market meltdown, Dr. Chua is contradicting the Barisan’s argument that the economy is fundamentally sound and resilient.

At the same time, these analysts anticipate that there could be a market fall in the KLCI even if the Barisan is returned to power. They base this prediction on several factors:

1.       the BN through its control of EPF and other major government and government-linked investors has been supporting the market and propping up UMNO-linked counters such as Felda Global Ventures Holdings Bhd (FGV) which is struggling to hold on to its initial public offer price of RM4.55.  Without this pre-election support aimed at placating the Felda settlers and gaining their vote, FGV will definitely be trading below the IPO price.

2.       The European and American economies are still going through a phase of recovery. Although there has been an inflow of foreign funds into the Malaysian market, there could just as quickly be a reversal of financial flows.

Prediction of market rise with Pakatan victory
What is likely to happen should there be a Pakatan victory? My prediction is that there will be a rise in the share market should there be no attempt at violence or a coup d’etat by the losers.  This is because of the following factors:

1.       The Malaysian economy has been under-performing all these years while under BN rule. We already should be familiar with the growth of GDP per capita of South Korea, Taiwan, Singapore and Malaysia. Since 1980 to 2011 we have been under performing every single one of those countries cited where once we we ahead of them.  Should we continue under BN rule, our economy is likely to continue to under-perform and our stock market will continue to stagnate not only in the short term after the elections but for the long term.

2. Foreign investors who have long been underweight in the Malaysian market due to Mahathir’s Disastrous Economic Model built around mega projects, crony capitalists as key players, and other distortionary policies will be attracted back into the market. As recently as in 2011, Bank of America Merrill Lynch noted that Malaysia remained a “big underweight” for investors in emerging markets. An underweight call is a recommendation for investors to reduce their investments in a particular security, asset class or, in this case, country. Malaysia also slipped from 14th place to dead last among the 15 countries studied by the investment bank, despite the roll out of big ticket Economic Transformation Programme projects.
There are other indicators that the market will not take fright but will rally on account of a Pakatan victory. As pointed out by an SME investor, they include:

1.       The fact that the opposition states of Penang, Selangor, Kedah and Kelantan have attracted more investment that the ten BN states by accounting for RM25 billion in investments comprising 53 per cent of Malaysia’s total investments of RM47.2 billion in 2010.

2.       If a major sell-down occurs in the Bursa as a result of a Pakatan victory, the nation’s economic institutions such as EPF, PNB, Khazanah and other GLCs would support the market.

3.       PAS has administered Kelantan for more than 20 years, and Kedah for five years. These two PAS state administrations have neither acquired nor appropriated property, assets or businesses belonging to non-Muslims.

Proposals for a sustainable market rise
Although I am optimistic that the market will rise on account of a Pakatan victory, it is necessary for the new government to act decisively when it comes to power.  I would like to propose the following measures to ensure that the post-elections market rise is sustainable:

1.       To form a business council with captains of the leading industries to find ways for economic improvement and expansion

2.       MACC directly under Parliament to look at illicit money outflows and recovery of the monies

3.       Investigate the way Petronas sells our national oil and to verify the rumour that it has a long term contract with a company which buys it at much lower than current prices.

Tuesday, February 12, 2013

Feb 2013 : Strong Recovery in Global Economy

Special Situations expects a strong recovery in Global Economy in 2013. Undervalued Stock Markets like China/HongKong, South Korea and Precious Metal industry.

As value investor, we're looking for growth and low valuation in stock market. Hope our reader can take this opportunities to make some profits from global economy recovery megatrend.

US banking - Bank of America, Citibank, are going to recovery strongly in coming months. High Risk and Briliance Fund Manager, who are taking positions in US banking sector, should able to make some good reputation for their funds.

Sunday, February 10, 2013

Sands China FY net profit of $1.24B

Sands China (1928) announced FY net profit of $1.24B, up 9.1% on net revenue of $6.51B, up 33.4% from $4.88B in 2011 "mainly driven by the opening of our newest integrated resort, Sands Cotai Central, in 2012, as well as strong visitation". Net casino revenues surged 35.6% on the year to $5.74B. The Board declared a HK$1.16 dividend for 2012.