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%).
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