Marc Faber : "If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds.
Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities." in a recent interview with CNBC
Saturday, August 7, 2010
MAYBANK - Dissolution of subsidary
Its directly owned subsidiary, Mayban Factoring Bhd was dissolved on 5 August 2010.
Friday, August 6, 2010
Transocean Ltd
Transocean Ltd (RIG +8.16% to $57.93) reported 2Q net income of $715m ($2.22 per diluted share) on revenues of $2.505bln compared to respectively $806m ($2.49 per diluted share) and $2.882bln in the same period a year ago.
Marc Faber : we will have a credit problem in US, sooner or later
Marc Faber : "Investors should have listened to me already six months ago , when I wrote that the Fed would continue to monetize and this is my view...they will never let up. They will print and print and print, until the final crisis wipes out the entire system.
They are very bad forecasters of economic events in particular that was the case for Mr Greenspan but Mr Bernanke is in the same boat. He has no clue what the economy is doing and so they misread in 2007 the severity of the forthcoming crises and then they misread the last few months the strength of the economy, which shows no signs of strengthening but signs of weakening everywhere in the world and therefore I would argue that the Federal Reserve with its policy, and with the writings and papers Mr Bernanke has published about the great depression, that more quantitative easing will be forthcoming and significantly more.
Let’s say they push money into the system that is true it may not go into stimulating capital investments, it may not go into consumption but it will go somewhere. Now this somewhere in the last few years has been mainly emerging economies that have accumulated huge foreign exchange reserves as a result of the US trade and current account deficit that led to the surpluses in these emerging economies.
There isn’t outlet for excessive money creation. It can be in agricultural commodities or it can be in emerging economies or one day it could in wages in the United States I do not think it will happen. But we have inflationary pressures in emerging economies and eventually I suppose that this labor arbitrage in the world and the imbalances over-consumption in the US and capital spending and essentially savings in emerging economies , that this will lead to a readjustments of currencies and also to a readjustments of cost in other word that labor cost in emerging economies will go up substantially whereas in the Western world they will be flat to down in other words that real wages in the Western world will decline. But in this environment, you can’t be overly dogmatic. There will be a lot of bouts of inflation ...sudden explosions in prices like last year.
Everybody in the world has some concerns about the ultimate value of the US dollar and also obviously about the value of US government bonds, because if the fiscal deficits stay at this level and in my opinion, they are likely to actually increase over time, then you will have a credit problem in US, sooner or later. It will not happen in next three years, but thereafter. So I think that the diversification out of US dollar treasuries is desirable and that’s why I am not all that negative about equities.
If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds.
Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities.
I wrote already six months ago that unlike any other commodity the agricultural commodities had gone down in 2009 certainly unlike the industrial commodities and that wheat was, at the beginning of the year, at 200 years low in real terms and when food prices move they move a lot and they have a huge impact on the world because there are studies that have been made by the Federal Reserve Bank of St Louis that show that actually food prices are a leading indicator of inflation. So I think that at the agricultural sector is actually quite attractive.
There are two factors in agriculture ...obviously demand, expanding when you have people moving from poverty to the middle class and than to more affluent class they eat more specially protein rich types of food and then you have the other impact that is more meaningful and this is supply interruptions by droughts and floods and so forth. This year we have a lot of unusual weather. We have floods in Pakistan and we have heat waves in Russia and so forth that may disrupt crops."
They are very bad forecasters of economic events in particular that was the case for Mr Greenspan but Mr Bernanke is in the same boat. He has no clue what the economy is doing and so they misread in 2007 the severity of the forthcoming crises and then they misread the last few months the strength of the economy, which shows no signs of strengthening but signs of weakening everywhere in the world and therefore I would argue that the Federal Reserve with its policy, and with the writings and papers Mr Bernanke has published about the great depression, that more quantitative easing will be forthcoming and significantly more.
Let’s say they push money into the system that is true it may not go into stimulating capital investments, it may not go into consumption but it will go somewhere. Now this somewhere in the last few years has been mainly emerging economies that have accumulated huge foreign exchange reserves as a result of the US trade and current account deficit that led to the surpluses in these emerging economies.
There isn’t outlet for excessive money creation. It can be in agricultural commodities or it can be in emerging economies or one day it could in wages in the United States I do not think it will happen. But we have inflationary pressures in emerging economies and eventually I suppose that this labor arbitrage in the world and the imbalances over-consumption in the US and capital spending and essentially savings in emerging economies , that this will lead to a readjustments of currencies and also to a readjustments of cost in other word that labor cost in emerging economies will go up substantially whereas in the Western world they will be flat to down in other words that real wages in the Western world will decline. But in this environment, you can’t be overly dogmatic. There will be a lot of bouts of inflation ...sudden explosions in prices like last year.
Everybody in the world has some concerns about the ultimate value of the US dollar and also obviously about the value of US government bonds, because if the fiscal deficits stay at this level and in my opinion, they are likely to actually increase over time, then you will have a credit problem in US, sooner or later. It will not happen in next three years, but thereafter. So I think that the diversification out of US dollar treasuries is desirable and that’s why I am not all that negative about equities.
If you look at the different investment alternatives Equities, bonds, real estate, commodities and precious metals ... I think that equities should be represented in a portfolio, in particular, if you are very bearish about the world long-term, you probably be better off in Equities than in bonds.
Somebody said before that markets are now highly correlated and that’s true to some extent but not true from other perspective. Say 2008 everything went down and the US dollar rallied and the US government bonds rallied and more recently it’s been when you have a strong day in the stock market bonds go down and so forth. So not everything is correlated and the same applies to agricultural commodities.
I wrote already six months ago that unlike any other commodity the agricultural commodities had gone down in 2009 certainly unlike the industrial commodities and that wheat was, at the beginning of the year, at 200 years low in real terms and when food prices move they move a lot and they have a huge impact on the world because there are studies that have been made by the Federal Reserve Bank of St Louis that show that actually food prices are a leading indicator of inflation. So I think that at the agricultural sector is actually quite attractive.
There are two factors in agriculture ...obviously demand, expanding when you have people moving from poverty to the middle class and than to more affluent class they eat more specially protein rich types of food and then you have the other impact that is more meaningful and this is supply interruptions by droughts and floods and so forth. This year we have a lot of unusual weather. We have floods in Pakistan and we have heat waves in Russia and so forth that may disrupt crops."
Thursday, August 5, 2010
Affin : Acquires Bank Ina, Indonesia
Acquires Bank Ina, Indonesia
*To acquire 80% for indicative RM138.1m (blended P/B of 1.7x) with option to acquire another 18.01% (for 3.15x P/B).
*Bank Ina is small with 22 branches as well as FY09 net profit of RM4.7m but has strong asset quality.
* Marginal impact (-0.2%) on earnings while it has ample excess capital to complete the deal without jeopardizing its capital ratios.
* Neutral – gains access to fast growing market with low penetration at decent pricing and potential M&A in Indonesia in the future (given Bank Ina’s strong capital position). Offset by marginal impact on earnings and lack of size to compete with the big players.
* Maintain HOLD, TP: RM3.19 (Gordon growth – ROE of 9.8% and WACC of 9.9%).
*To acquire 80% for indicative RM138.1m (blended P/B of 1.7x) with option to acquire another 18.01% (for 3.15x P/B).
*Bank Ina is small with 22 branches as well as FY09 net profit of RM4.7m but has strong asset quality.
* Marginal impact (-0.2%) on earnings while it has ample excess capital to complete the deal without jeopardizing its capital ratios.
* Neutral – gains access to fast growing market with low penetration at decent pricing and potential M&A in Indonesia in the future (given Bank Ina’s strong capital position). Offset by marginal impact on earnings and lack of size to compete with the big players.
* Maintain HOLD, TP: RM3.19 (Gordon growth – ROE of 9.8% and WACC of 9.9%).
Wednesday, August 4, 2010
US: Fed may pass on more stimulus amid signs of weakness
Federal Reserve policy makers signaled they will probably pass on providing more stimulus at their 10 Aug meeting and wait to see if signs of a weaker economic growth persists. Chairman Ben S. Bernanke told lawmakers that consumer spending is “likely to pick up” amid a “moderate” expansion.
China: To further open gold market to trading, imports
China will let more banks import and export gold and open trading further to foreign companies as near-record prices and falling stock markets spur demand in the world’s second-largest buyer of the metal. Gold prices gained. China may “increase foreign members on the Shanghai Gold Exchange and will also study ways to allow foreign qualified bullion suppliers to deliver to the exchange,” the People’s Bank of China said
Tuesday, August 3, 2010
Maybank : The lowest Transaction fee?
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- Comments
Maybank2u.com is looking for expanding its securities brokerage business. The commission fee is lower than HLebroking.com (min RM12). They actually folllowed HLebroking's step to lower the transaction fee to attract more investors/traders. Price war, will benefit investor/trader!
Malaysia : Maybank
Company Description :-
The largest banking group in Malaysia in term of asset size. Lending is mostly channelled to the consumer segment, which accounts for almost half of its local loan portfolio. Maybank also has sizeable exposure to foreign markets, with foreign loans, mainly in Singapore and Indonesia, making up 33% of its total loan base.
Valuation:
Rating : BUY
Share Price : RM7.74
Target Price : RM8.80
Upside : +12%
Recommendation:
Maintain BUY with a target price of RM8.80, pegged at 2.2x P/B (at its 10-year mean), which is also the banking sector’s P/B. At RM8.80, we value Maybank at 18.8x FY10F PE and 16.0x FY11F PE. Maybank gives great exposure to a revival in loan growth from a resilient domestic economy coupled with strong overseas growth, especially in Indonesia, and strong treasury income.
Stock Impact:
1)Better communication and coordination to drive businesses.
It is repositioning its operations to capture more value from its existing large customer base. Improving communication between its investment banking and global markets units is translating into greater business volume. This should be seen in the next financial year (FY11), when management is likely to guide better-than-industry loan growth.
2) Domestic economic recovery play.
The above developments come at the right time to make it a Malaysian economic recovery play, especially to capture the resilient consumer loans and the strong recovery in business loans. This comes with the advantage of being the bank with the largest network in Malaysia. Investment banking is also finally making more aggressive moves, with a few initial public offerings (IPO) and big share placements recently to lead to greater pre-tax profit (PBT) contribution (9MFY10: 3%).
3)Indonesia is next growth story.
Contribution from Bank Internasional Indonesia (BII) is expected to grow 20-25% p.a. for the next five years to bring its contribution to the Group’s PBT from 5% currently to 15% by end-FY15. This strong growth will be supported by strong loan growth of 18-20% and high net interest margins of 6-7% (vs 2.3% in Malaysia) in the next 2-3 years.
The largest banking group in Malaysia in term of asset size. Lending is mostly channelled to the consumer segment, which accounts for almost half of its local loan portfolio. Maybank also has sizeable exposure to foreign markets, with foreign loans, mainly in Singapore and Indonesia, making up 33% of its total loan base.
Valuation:
Rating : BUY
Share Price : RM7.74
Target Price : RM8.80
Upside : +12%
Recommendation:
Maintain BUY with a target price of RM8.80, pegged at 2.2x P/B (at its 10-year mean), which is also the banking sector’s P/B. At RM8.80, we value Maybank at 18.8x FY10F PE and 16.0x FY11F PE. Maybank gives great exposure to a revival in loan growth from a resilient domestic economy coupled with strong overseas growth, especially in Indonesia, and strong treasury income.
Stock Impact:
1)Better communication and coordination to drive businesses.
It is repositioning its operations to capture more value from its existing large customer base. Improving communication between its investment banking and global markets units is translating into greater business volume. This should be seen in the next financial year (FY11), when management is likely to guide better-than-industry loan growth.
2) Domestic economic recovery play.
The above developments come at the right time to make it a Malaysian economic recovery play, especially to capture the resilient consumer loans and the strong recovery in business loans. This comes with the advantage of being the bank with the largest network in Malaysia. Investment banking is also finally making more aggressive moves, with a few initial public offerings (IPO) and big share placements recently to lead to greater pre-tax profit (PBT) contribution (9MFY10: 3%).
3)Indonesia is next growth story.
Contribution from Bank Internasional Indonesia (BII) is expected to grow 20-25% p.a. for the next five years to bring its contribution to the Group’s PBT from 5% currently to 15% by end-FY15. This strong growth will be supported by strong loan growth of 18-20% and high net interest margins of 6-7% (vs 2.3% in Malaysia) in the next 2-3 years.
Mermaid Maritime PCL : Opportunities on Big Sell Down...
Mermaid's current share price has plunged 48-50% since the beginning of 2010.
Financial Analysis:-
Year 2005 2006 2007 2008 2009
Sales 1,241.4 3,167.4 4,131.3 5285.4 5,209.9
Net Profit 45.67 538.3 541.1 1,156.3 714.5
ROE 4.05% 24.07% 19.92% 17.44% 7.53%
2011 PE Ratio:-
10.4 times FY11E EPS @S$0.48
Mermaid has strong balance sheet with low debt level. The temporary sell-down is just panic selling. From biz point of view, it should grow rapidly after major O&G contractors getting more projects and a lot orders coming soon. The low debt and potential high return should protect investor from downside.
Why Buy Mermaid?
1)Subsea engineering and drilling division underperforming, profitability in FY2010 is more likely to decrease. Current share price is trading at discount 40% to its average P/E ratio.
2)Current share price has stabilised in the USD70-USD80 per barrel range. When market condition improve, day rates in the subsea engineering division can adjust rapidly to any upwing in market rates.
3)Investment in offshort support vessels and ROVs at distressed price.
4)Right Strategies to turn around its business
Financial Analysis:-
Year 2005 2006 2007 2008 2009
Sales 1,241.4 3,167.4 4,131.3 5285.4 5,209.9
Net Profit 45.67 538.3 541.1 1,156.3 714.5
ROE 4.05% 24.07% 19.92% 17.44% 7.53%
2011 PE Ratio:-
10.4 times FY11E EPS @S$0.48
Mermaid has strong balance sheet with low debt level. The temporary sell-down is just panic selling. From biz point of view, it should grow rapidly after major O&G contractors getting more projects and a lot orders coming soon. The low debt and potential high return should protect investor from downside.
Why Buy Mermaid?
1)Subsea engineering and drilling division underperforming, profitability in FY2010 is more likely to decrease. Current share price is trading at discount 40% to its average P/E ratio.
2)Current share price has stabilised in the USD70-USD80 per barrel range. When market condition improve, day rates in the subsea engineering division can adjust rapidly to any upwing in market rates.
3)Investment in offshort support vessels and ROVs at distressed price.
4)Right Strategies to turn around its business
SMRT : 1Q profit declined 21%
SMRT Corp (MRT SP)'s 1Q profit declined 21% YoY to S$38.2m. The stock was downgraded to "sell" from "hold" at Deutsche Bank and reached a new 3-month relative low against the Straits Times index.
Manufacturing: Better Than Expected In July
The U.S. economy, badly in need of some better-than-expected business data, appeared to get some this morning in the form of the monthly report on manufacturing activity across the country. The report was issued by the ISM, or the Institute for Supply Management, some 30 minutes into the trading session, and it sparked some additional buying activity by the bulls.
Specifically, the ISM reported that growth in manufacturing eased to a reading of 55.5 in July, down from 56.2 in June. Still, that was somewhat better than the reading of 54.2 that had been expected. It also calmed fears that the manufacturing sector might be getting closer to an overall contraction. (Note that a survey reading of 50.0, or better, signals that manufacturing activity is expanding, while one that is below 50.0, but above 42.0, suggests that such activity is contracting, but that the aggregate economy may still be growing. A survey result below 42.0 is seen as consistent with a recession.)
The ISM, meanwhile, also released the various components of the overall index. Here, as well, the news was mixed, but a little better than expected. For example, the latest report showed that new orders increased last month, registering a score of 53.5; however, that was less than June's rate of gain, which was 58.5. The same story held true in production, where the index came in at 57 0, which was less than June's increase of 61.4. However, employment's growth increased to 58.6 from 57.8; supplier deliveries also gained more than in June (58.3 versus 57.3); and prices increased further (57.5 versus 57.0).
This report, notwithstanding the differing rates of improvement, is consistent with the rest of the data being issued, namely that the economy is still growing, but that it is doing so in an uneven, and often lackluster fashion. The nation's GDP, for example, which grew by a tepid 2.4% in the second quarter, was typical of the uninspiring inprovement now under way in the economy, at large. Our sense is that data in the upcoming weeks will be similarly unexciting.
Meanwhile, the ISM will also be reporting on non-manufacturing activity on Wednesday. Here, as well, we would expect some expansion, with a prospective reading of 53.3. That would be slightly below June's 53.8, though.
As for the stock market, it rallied further, adding to an opening gain that saw the Dow Jones Industrial Average climb by better than 100 points. That index is currently up be around 175 points, following a gain of better than 7% in July. Apparently, the bulls continue to see the economic glass as half full rather than half empty. Time will tell if they are correct.
Specifically, the ISM reported that growth in manufacturing eased to a reading of 55.5 in July, down from 56.2 in June. Still, that was somewhat better than the reading of 54.2 that had been expected. It also calmed fears that the manufacturing sector might be getting closer to an overall contraction. (Note that a survey reading of 50.0, or better, signals that manufacturing activity is expanding, while one that is below 50.0, but above 42.0, suggests that such activity is contracting, but that the aggregate economy may still be growing. A survey result below 42.0 is seen as consistent with a recession.)
The ISM, meanwhile, also released the various components of the overall index. Here, as well, the news was mixed, but a little better than expected. For example, the latest report showed that new orders increased last month, registering a score of 53.5; however, that was less than June's rate of gain, which was 58.5. The same story held true in production, where the index came in at 57 0, which was less than June's increase of 61.4. However, employment's growth increased to 58.6 from 57.8; supplier deliveries also gained more than in June (58.3 versus 57.3); and prices increased further (57.5 versus 57.0).
This report, notwithstanding the differing rates of improvement, is consistent with the rest of the data being issued, namely that the economy is still growing, but that it is doing so in an uneven, and often lackluster fashion. The nation's GDP, for example, which grew by a tepid 2.4% in the second quarter, was typical of the uninspiring inprovement now under way in the economy, at large. Our sense is that data in the upcoming weeks will be similarly unexciting.
Meanwhile, the ISM will also be reporting on non-manufacturing activity on Wednesday. Here, as well, we would expect some expansion, with a prospective reading of 53.3. That would be slightly below June's 53.8, though.
As for the stock market, it rallied further, adding to an opening gain that saw the Dow Jones Industrial Average climb by better than 100 points. That index is currently up be around 175 points, following a gain of better than 7% in July. Apparently, the bulls continue to see the economic glass as half full rather than half empty. Time will tell if they are correct.
Monday, August 2, 2010
V Shape Recovery on Track
Recovery is real or false? Big question for everyone in investing. Nobody can guess what's happening, but a lot of individual investor/non-institutional investor, who are trying to time market and now, they can't find direction of stock market.
Time will tell us whether is real recovery but you might missed this V shape Recovery trend.
If you looking at US productivity, it shows improving. To investor, they're too rush to see quick improvement. For me, i would rather wait for 2 quarters to see Real Recovery on US Employer Hiring...
It makes no sense for productity up but unemployment rate is still high because NObody HIRE ! When overload the employee too much, the employers are forced to hire again...
Time will tell us whether is real recovery but you might missed this V shape Recovery trend.
If you looking at US productivity, it shows improving. To investor, they're too rush to see quick improvement. For me, i would rather wait for 2 quarters to see Real Recovery on US Employer Hiring...
It makes no sense for productity up but unemployment rate is still high because NObody HIRE ! When overload the employee too much, the employers are forced to hire again...
Sunday, August 1, 2010
BAC : CFO buy
07/23/10 NOSKI CHARLES HOWARD, Chief Financial Officer Purchase Indirect $81,600.00 6,000 $13.50 - $13.70 21,000
Comments:-
CFO is the one, who really understand well about balance sheet. In this case, i make one big bet on next Strong Support for BAC share is around $13.50-$13.70.
Comments:-
CFO is the one, who really understand well about balance sheet. In this case, i make one big bet on next Strong Support for BAC share is around $13.50-$13.70.
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