Turtle's view on NEM

Three short comments on PM's speech:-

1) Declaration of intent is quite clear : (1) High income nation (2) Sustainability (3) inclusiveness

2) Articulating of what we want is also quite clear : (1) Market based (2) Merit based (3) Transparent (4) Needs based

3)"Government knows best" is over. Well said!

After browsing through some blogs, the constant area being attacked is credibility -

Can the government walks the talks?

Can the government continue to plug the leakages?

Where are RM52 billion Bumi shares, asks Guan Eng

By Shazwan Mustafa Kamal | The Malaysian Insider

KUALA LUMPUR, March 29 — DAP secretary-general Lim Guan Eng wants the government to investigate why RM52 billion worth of shares in public listed companies allocated for Bumiputeras under affirmative action policies were no longer in their hands.

He told reporters in Parliament today that the fact that the shares were no longer in the hands of Bumiputeras was an act of betrayal.

The Penang Chief Minister suggested a Royal Commission be set up to investigate such leakages.

He said that out of RM54 billion in shares allocated for Bumiputeras, only RM2 billion were still in their hands.

“According to a Bernama report, the Prime Minister had been quoted as saying that of the RM54 billion in shares allocated, only RM2 billion worth of shares were left in the hands of Bumiputeras,” said Lim.

“There is a leakage of RM52 billion which is not in the hands of the Bumiputeras. This is a betrayal. The government has to arrest and take action against the people who have hijacked the money,” he added.

http://blog.limkitsiang.com/2010/03/29/where-are-rm52-billion-bumi-shares-asks-guan-eng/#more-7823

Lim Kit Siang argued that the lack of political will to translate these ideals into actions will be an issue

Unless there is a political will to admit that the chief cause why Malaysia has become internationally uncompetitive, plagued by multiple problems such as brain drain, galloping corruption, falling FDIs and crisis of confidence in key national institutions as compared to neighbouring countries is the NEP – its abuses and in particular its perpetuation after 1990 – nobody believes that the Najib administration has the political will to craft and implement a New Economic Model fundamentally different from the NEP.

http://blog.limkitsiang.com/2010/03/30/najib%E2%80%99s-nem-has-not-been-able-to-come-out-of-the-long-shadow-cast-by-the-perkasa-inaugural-congress-which-was-attended-by-several-umno-deputy-ministers/#more-7828

The government countered critics by demonstrating their commitments by:-

1) Listing two units of sizeable subsidiaries of Petronas, Percetakan Nasional Malaysia Berhad, CTRM Aero Composites Sdn Bhd, Nine Bio Sdn Bhd and Innobio Sdn Bhd.

2) Corporatize MIDA

3) Khazanah Nasional Bhd will divest its 32% controlling stake in Pos Malaysia Bhd

4)several parcels of land in Jalan Stonor, Jalan Ampang and Jalan Lidcol in Kuala Lumpur have been identified to be tendered out for development by the private sector

These actions are a bit more on the "hard or materialistics" side but not on the "soft or intellectual" side. If we look at numbers of PhDs in South Korea and Taiwan or India and China, you will understand why they are widening the gap of technology leadership.



It's a shame, in contrast, if we read this:-

PUTRAJAYA, March 17 2009 (Bernama) -- The Higher Education Ministry has received 16 applications to pursue doctorate degree under a special scheme announced in the second stimulus package last week.

Minister Datuk Seri Mohamed Khaled Nordin said no applications received for the master's degree so far.

There was no closing date for the programme but candidates would have to fulfill the stipulated criteria before their applications could be considered, he added.

"The programme will go on until the number is filled. I believe the number is sufficient," he told reporters after tabling the progress report of the Second National Higher Education Strategic Plan here today.

Under the stimulus package tabled by Deputy Prime Minister Datuk Seri Najib Tun Razak, the government would provide a fund of RM20,000 each to students pursuing doctorate degree and RM10,000 for the master's degree.

Some 500 places would be provided for the doctorate degree and 10,000 for the master's degree.

Khaled urged students to take advantage of the programme.

He also hoped that more students would apply for scholarships to become academic staff in universities.

There would also be new programmes to be implemented within the next six months to strengthen teaching and learning in universities and polytechnics under the strategic plan, he said.

He said the ministry would also submit the tentative structure of the soon-to-be set up Malaysian Research Institute, which is aimed at assisting all centres of excellence to carry out research and development.

-- BERNAMA

Only 16 people apply but we have 500 slots available? Malaysia boleh!?!

Change has to be driven from inside out and not vice versa. While I'm still giving them a benefit of doubt, they had better hurry up.

Financial assets rally get broader

Finally, we are seeing commodities, China, Russia, stocks, etc rally together. We are entering the next phase of bull run. Looks like more bearish people are getting converted now. I'm still waiting for the last batch of people to get converted: retail investors!

March 29 (Bloomberg) -- Stocks and commodities gained as the dollar and the yen fell against the euro as signs of economic recovery sparked demand for higher-yielding assets. Oil rose the most in more than five weeks.

The Standard & Poor’s 500 Index rose 0.6 percent at 4:12 p.m. in New York to extend its gain since Dec. 31 to 5.2 percent, poised for its best first quarter since 1998. The MSCI World Index of 23 developed nations’ stocks climbed for a third day, advancing 0.6 percent, and the MSCI Emerging Markets Index increased 1.2 percent. The S&P/GSCI Index of commodities rose 2.3 percent, the most since Feb. 16. Crude rallied 2.7 percent.

Government data showed consumer spending in the U.S. rose in February for a fifth straight month and a jobs report on April 2 may show the largest increase in employment in three years. The European Union reported improvement in business and consumer confidence. Greece plans to sell 5 billion euros of seven-year bonds, its first offering since EU leaders and the International Monetary Fund pledged to help the nation finance its budget deficit.

“Given our trading background and approaches, we are impressed with the resilience of the market which, in effect, is what trading desks mean when they say the market ‘acts well,’” according to the report Birinyi sent to clients today. “Large stocks are now likely to be contributors rather than detractors.”

The S&P 500 traded at the lowest valuation compared with junk bonds in two years as of the end of last week, a sign the stock-market rally will continue, if two decades of history are any guide.


The Shanghai Composite Index jumped 2.1 percent, the most in more than seven weeks, while Taiwan’s Taiex index climbed 0.9 percent. China Resources Land Ltd. and China Construction Bank Corp. advanced after reporting higher profits. Stocks rose even after Stern Hu, the Australian executive who headed Rio Tinto’s iron ore business in China, was sentenced to 10 years in jail by a court in Shanghai after being found guilty of taking bribes and infringing commercial secrets.

The Micex index climbed 1.7 percent for the biggest gain since March 5 even after suicide bombers killed at least 38 people in the deadliest terrorist attacks in Moscow since 2004.

Mainland’s industrial margin recovers to pre-crisis level

Everyone is experiencing some kind of diorientations on the recent strong business recovery. I met quite a number of senior management from various corporations during this business trip. They have not been able to sort out very clearly on the reasons of strong business recovery. Orders flooded beyond what their current capacity can handle. Their attitudes were like "what the heck, make hay while the sun shines - just enjoy the ride while it's still good".

(SCMP)Profit margins at mainland industrial enterprises have recovered to pre-crisis levels, thanks to a massive domestic stimulus plan and a rebound in demand from abroad, the National Bureau of Statistics said on Friday.

The impressive recovery in industrial profitability is likely to give Beijing more comfort to exit its crisis-mode policies.

Mainland industrial profits jumped 119.7 per cent in the first two months of this year from a year earlier, the statistics agency said.

The agency said the strong growth was mainly due to a low base in the first two months of last year when mainland’s industrial profits plunged 37.3 per cent.

The core business profit margin for mainland industrial firms was 5.69 per cent in the first two months of this year, a hefty rise from the 3.62 per cent a year ago and a modest increase from the 5.57 per cent recorded in the first two months of 2008 when the international financial crisis had yet to erode mainland profit margins.

“It showed that China’s industrial profit margin has just recovered to the pre-crisis level,” the statistics agency said in a statement. But it added that profit margins in oil exploration, steel, electronics have yet to recover to pre-crisis levels.

A united effort

I picked up a copy of newspaper on the plane yesterday morning and saw Najib's speech got published. He got the big pictures right but does he have the political will to make things happen. Remember the judgement day 2013.

(SCMP)I arrived in Hong Kong this week encouraged by the progress Malaysia and the region have made in emerging from the global recession, yet aware of the challenges that lie ahead. We benefit from working together to build competitive economies that can succeed in the global marketplace.

Across the region, many nations acted quickly and aggressively to address the global recession. This allowed us to head off the worst effects and steer a path towards recovery.

In Malaysia, we introduced two economic stimulus packages totaling M$67 billion (HK$157 billion), liberalised many service sectors and the financial sector, and introduced a common-sense budget that both invested in public services and found savings opportunities. As a result, the fourth quarter of last year saw year-on-year growth of 4.5 per cent in the gross domestic product. And the market is expecting 4-5 per cent growth this year.

I am also happy to report that the deficit is forecast to be several points lower than expected. In addition, prospects for foreign investment have increased. Just last week, Coca-Cola announced a multimillion-dollar investment in Malaysia that will create thousands of new jobs.

The recovery is under way and the foundation for growth is in place, underpinned by a sound monetary policy. But our ambitions for Malaysia's economy don't end with an economic recovery.

Our goal is to develop a highly competitive, globally attractive nation that offers high-value, high-skill sectors for the future. This will create jobs, make Malaysia a high-income country and open new opportunities for investments that drive growth. Malaysia will not achieve these goals by chance. We can only develop our economy by addressing challenges and issues head on. We need to implement equitable economic reforms, stimulate investment in strategic growth sectors, continue to enhance the social welfare net and bring all Malaysians along with us on the path to prosperity (SEHK: 0803, announcements, news) .

In coming months, we will lay out a road map for Malaysia's long-term economic future. This will be a future in which no one is left behind or marginalised. The principles that underlie our approach address four key areas.

First, Malaysia must provide incentives in nascent, yet growing, sectors such as green technology and Islamic financing, both of which create high-value, high-income jobs. At the same time, we cannot ignore the successes we have had in traditional economic sectors.

This means investing in educational opportunities for all citizens to build a talent base that can compete with the best around the world. It will also require Malaysia's economic engine to succeed in hi-tech industries, green manufacturing and innovation. A second factor - we must be willing to implement difficult but necessary economic measures to increase Malaysia's competitiveness.

These include fiscal reforms that remove outdated subsidies and broaden our tax base through a goods and services tax. Our new economic model must be progressive and fair to all Malaysians and support families that need it the most.

Third, we must broaden our regional and international ties to strengthen trade and business opportunities. Malaysia's relationships with our regional partners - and with China in particular - are highly valued and beneficial. We look forward to expanding them in the months and years ahead.

Finally, we will build a new Malaysian economy for the new century in the spirit of the "1Malaysia" concept.

This means ensuring fairness and equity as core principles and recognising that diversity is our strength. All Malaysians must have an opportunity to fulfil their potential.

As in other nations, reforms are challenging to introduce and implement. But we have made great progress to date, initiating a national discussion about the steps we have to take and building a broad consensus for action that will serve as a building block for long-term prosperity.

Although much work remains to be done, I am confident we will rise to the challenge, united as 1Malaysia, where - together - all can prosper.

Pearl River's source now 'almost dry'

One of black swan theories: global climate change will drive some parts of the earth to extreme cold and some parts will experience drought. If the extreme temperature scenario happens, natural gas will be a great source of heating which I think now is one of the most undervalued commodities. Drought will put on more pressures on agricultural inventory.

(SCMP)The source of the Pearl River in Qujing , Yunnan , has almost dried up.

Zeng Lingyan , administrative director of the Pearl River Source Natural Reserve, said yesterday that the water which used to rush from a granite cave at the foot of a hill as a "thundering waterfall" was now "as big as a finger".

More than 100 million people depend on the river for drinking water and the drying up of its source signals that the impact of the drought in southwest China is spreading.

And because many major rivers originate or flow through Yunnan , mainland provinces such as Guangdong are not the only ones worrying. Many countries in Southeast Asia have also raised concerns.

Zeng said the Pearl River's source began to dry up at the end of December, about three months after drought hit the province.

"The water volume dropped very fast," she said.

"The ecological system in the reserve has not had time to adapt. We have lost more than 10,000 rhododendrons, as well as many other plants. If the city government hadn't called in fire trucks to spray water on the hills, the landscape would looked like we'd been nuked.

"But if the rain comes in June, as some experts predict, it will be too late. The reserve will be a wasteland. Everyone here, from ordinary citizens to government leaders, is praying to the sky for water."

Qian Yan , deputy director of the Drought and Flood Relief Department at the Pearl River Water Resource Committee, which is under the Ministry of Water Resources, said yesterday that the drought was having a significant impact on water flows to Guangdong from the west.

Water flow to the Tianshengqiao No1 Hydropower Station, at the first major reservoir collecting Pearl River water flowing out of Yunnan to Guangdong, was only 53 cubic metres per second yesterday morning, compared with hundreds of cubic metres a second normally and peak flow in the thousands.

"It's a record low," she said.

To make the situation worse, the reservoir itself was about to dry up, Qian said.

"The current water level is about 740 metres. The bottom is 730 metres. If the drought continues, most of the western sources of Pearl River will be cut off," she said.

But Qian said residents in Guangdong, Hong Kong and Macau should not panic.

"If you take a look at the water inflow to major dams in Guangdong, such as Feilaixia, it is ample," she said. "Water supply shortage is unlikely to occur in our province, because we not only have water coming in from the west, but the north and east as well. The Pearl River branches from the other two directions, so we will be okay."

But some Southeast Asian countries could have problems, according to Yu Xiaogang , an environmentalist based in Yunnan.

Several major rivers, including the Lancang (Mekong) and Nu (Salween), pass through Yunnan, where many huge dams have been built or are under construction. Countries such as Vietnam and Thailand have long been concerned that China could reduce the amount of water flowing south.

"The drought has intensified these worries," Yu said.

"Citizens and media of these countries are complaining that water levels in their rivers have been reaching historic lows in recent months, severely affecting their economies and ecological systems.

"The root of the issue is that the Chinese government keeps the operational data of the dams in Yunnan secret. Nobody knows how much water has flown in and how much comes out.

"Chinese government officials have reiterated they would never hurt the interests of neighbouring countries, but they never use data to back up the claim."

India's interest rate increase hurts the market?

March 20 (Bloomberg) -- India’s central bank will probably raise interest rates again next month as the first increase in two years is only the initial step in the battle against inflation, BNP Paribas SA and Standard Chartered Plc said.

The Reserve Bank of India yesterday increased the benchmark reverse repurchase rate to 3.5 percent from a record-low 3.25 percent and the repurchase rate to 5 percent from 4.75 percent, saying containing inflation has become “imperative.”

Governor Duvvuri Subbarao’s move comes after Australia and Malaysia increased rates this month, while Norway and Israel did so at the end of last year as the global economy’s recovery from the worst recession since World War II gathers pace. The World Bank indicated this week that China should also act to help contain the risk of a property bubble.

Read on: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayw4hVLY59EE&pos=7

Interest rate hike is signaling the economy is on a firmer footing. The recent months of Baltic Index though has been volatiles but the trend is clear - UP!



The global industrial company like GE is making new highs.



The economic sensitive index like Dow Jones Transportation is making new highs.



The interest rate disparity between emerging economies will eventually fuel carry trade though emerging markets have not make a new high yet(still in correction mode).



Commodity has not been able to make any new high yet, partly due to US$ strength.



There are still a lot of worries out there. The China's property bubble is one of them. How worried should we get?



Certain cities like Sanya and Haikou price appreciation resemble like a hockey stick there, is vulnerable to correction. Other cities are still looking reasonable.

The other worry that people have is potential trade war between the US and China. The tug of war started with politicians now spread to top notch economists, between Paul Krugman and Steven Roach, man this is fun!.

March 19 (Bloomberg) -- Morgan Stanley Asia Chairman Stephen Roach said that Paul Krugman’s call to push China to allow a stronger yuan is “very bad” advice and that increased Chinese spending is a better way of reducing trade imbalances.
“We should take out the baseball bat on Paul Krugman -- I mean I think that the advice is completely wrong,” Roach said in an Bloomberg Television interview in Beijing when asked about Krugman’s call, characterized as akin to taking a baseball bat to China. “We’re lashing out at China rather than tending to our own business,” which is raising U.S. savings, Roach said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=adVYlGeWMUJI&pos=5

Yeah, climb baby climb, wall of worries.

Where are we? Right here :)

Portfolio records update

Just realized that I've not updated Genting purchase record. Did some comparisons with my private portfolio and found that Turtle portfolio underpeformed significantly. Putting up a portfolio for the whole world to see is very different, a slight mistake will be perceived as a "public canning". While this Turtle portfolio did not lose any money but I still feel it has not performed to its fullest potential, now I know that why most portfolio managers will feel that as long as they deliver the funds result okay, they have done their job and not necessary stretching its to the fullest. Looking for a fund manager that is not fearful of public critism and yet to be able to deliver long term superior result is not easy.

Astro Holdings to take Astro All Asia private at RM4.30 per share

So you have got inside information but can you really benefited from it?

(TheEdgeMalaysia)KUALA LUMPUR: Astro Holdings Sdn Bhd is taking ASTRO ALL ASIA NETWORKS PLC [] (AAAN) private at RM4.30 per share or RM8.5 billion cash. This is a premium of 74 sen above the last traded price of RM3.56.

Astro Holdings comprises of Usaha Tegas Sdn Bhd, Khazanah Nasional Bhd and Bumiputra Foundations, all of whom collectively hold 72.9% of voting shares in AAAN. It has no plans to maintain the listing status of AAAN.

AAAN said on Wednesday, March 17 the offeror had obtained irrevocable undertakings to accept the offer from certain parties acting in concert, who currently hold 72.9% of the shares.

Astro counter was suspended trading on March 15 but there was surged of volume and price prior to suspension. This makes me think that there are people already know something was brewing. So, I’m going to safe my breath trashing how unfair and “un-transparent” the market is.

I was puzzled by EPF moves on that day. I don’t know what the heck were they doing, they reduced their stakes from 8.65% to 8.61%. They were account for 50% of the trading volume prior to suspension in the afternoon. If they were continue to dump shares on that day, we the EPF savers would lose a lot of money!

Now that Usaha Tegas Sdn Bhd, Khazanah Nasional Bhd and Bumiputra Foundations already control 72%, most will think that they are pretty much in control. Shall we accept RM 4.30? Negotiation 101, never accept the first offer even though you know it is close to its fair value. I would expect EPF who owns a big block to negotiate aggressively. The stock is also heavily owns by a lot of smart money, I would hope them too not to give in easily.

Don’t try to intimidate the minority shareholders, okay?. Just tell them that RM 4.30 is way below its intrinsic value and let them raise the offer.

Disclosure: The author owns Astro and Astro CW. So, the author may be bias. By the way, the author bought the shares much earlier than March 15, 10 on basis of the stock was undervalued.

What drives Penang property prices?

(BusinessTimes)The ever-rising prices of property in Penang are not just down to scarcity of land but are partly due to speculators, strong demand from investors and a low-interest rate environment.

Dr Michael Lim Mah Hui, senior fellow of Socio-economic and Environmental Research Institute (Seri), a think tank, said the investors comprise wealthy Malaysians and foreigners.

The price rise is making property increasingly out of reach for the average Penangites. The strong demand means that developers were putting more expensive price tags on their projects.

Lim, a banker who worked with Credit Suisse, Standard Chartered Bank and the Asian Development Bank, said from 1999 to 2008, the prices of property in Penang rose 40 per cent.

This increase is a tenth more than that for the whole country, and it is still going up.

Terrace houses in Penang now average RM700,000 to RM1.2 million, against RM445,000 to RM520,000 two years ago.

"Condominiums cost RM250 per square feet in 2008 but now the price is RM350 to RM500, depending on the location," Lim said during Seri's roundtable on housing affordability gap in George Town last week.

However, it is not surprising if entire development projects are sold out in two days now as buyers are easily taken in by attractive down payments as low as 1 per cent and the low interest rates for housing loans, he said.

The public may not fully understand the risks of adjustable-rate mortgage (ARM) when they sign up for loans, for example. An ARM gives low rates at the start of a loan but the rates go up after the promotional period.

"Such a situation can result in a (real estate) bubble, which nobody can tell when it will happen," Lim said.

He said certain developers were not helping the situation by reserving the best units for their "special customers".

"Some developers let their prime customers and insiders cherry pick the units they want first before everyone else.

"When the average house buyers visit the developers' sales galleries at the project launch, they find many units had already been sold, encouraging many of them to quickly make down payments for the remaining units as well," he said.

Lim expressed concern that there is a mismatch of supply and demand for properties in the state with many houses, flats and apartments vacant.

He said in 2000, there were 355,436 housing units in Penang but only 284,969 households, indicating an oversupply of 20 per cent.

"Since then, more units have been built. If you go round at night, you will notice that many homes are unoccupied, especially super-condominiums that are beyond the affordability of average households.

"This is also an indication that there is an undersupply of affordable housing in the state," Lim said.

He proposed that the state government study how Singapore's Housing and Development Board managed its public housing. Penang Development Corp should also undertake more land reclamation to develop more affordable homes.

I’ve been wondering why people would want to buy a house in Penang as it may easily take you between 30-45 mins if you try to move from Bayan Lepas to downturn or vice-versa. It will take you about the same amount of time if you move from Juru to Bayan Lepas or Georgetown(after the Penang bridge is widened). The big difference is you can get a double storey terrace house for RM 250k. For 1.2 million? You get yourself a nice big bungalow lot. Expectation of housing price appreciation is certainly a factor.

The government has to take strong and quick actions to improve the public transportation. Public transportation network has to improve within 70-100 km radius from Butterworth. This will create sufficient critical mass. The housing problems created a problem of labor shortage though some of the companies are providing transportation. It may not be a problem for MMC but it’s certainly a problem for SME make the same offer.

The second Penang bridge works have to be expedited. At the point of I’m commenting this issue, I have no idea whether the project is still alive or dead.

Seize the opportunity

The developed countries are struggling with high employment. This is one of the best time for developing countries to strike back. Seize the opportunity, your best time to attract overseas graduates with great talents back to Malaysia. Top company like Accenture is truly a top company, as they spotted the trend and take actions. If our government and private companies are serious about reversing our "brain drain" situation, this is it - act now!

US Return Home with Accenture Malaysia GRADUATE Opportunities 2010-00085941

Description

If you join Accenture you can make great ideas happen for some of the world's most dynamic companies. With broad global resources and deep technical know-how, we collaborate with clients to cultivate ideas and deliver results. Choose a career at Accenture and enjoy an innovative environment where challenging and interesting work is part of daily life.

Accenture's Consulting workforce is involved in business consulting, process design work and the application of technologies to business. A career in Consulting is varied and stimulating because each project presents a new challenge and will give you exposure to new clients, business issues, technologies and people. We need people who are able to challenge conventional thought, offer unique perspectives and conceive more innovative solutions for our clients.

Working as a consultant with Accenture, you will build core business, technology and industry expertise helping to deliver world-class business and technology solutions that enable clients to become high performance businesses. The Consulting workforce is made up of three groups: Management Consulting, Systems Integration Consulting and Technology Consulting. This consulting group structure provides outstanding opportunities to develop highly specialised skills that will help you advance your career.

Management Consulting professionals focus on strategy and take responsibility for organisational change and business transformation. They apply market-relevant skills such as business strategy and customer relationship management across industries. Alternatively, they may specialise in industry-specific functional areas such as insurance claims processing or pharmaceutical research and development.

Systems Integration Consulting professionals are responsible for delivering large-scale, complex programs that marry processes with technology to help our clients achieve high performance. They specialise in the design, development, integration and delivery of functional and industry solutions and processes for clients based on existing packages such as SAP and PeopleSoft, Retek, or custom-built systems.

Technology Consulting professionals are responsible for delivering technology innovation and providing the backbone of our systems integration business. They specialise in designing enterprise architecture and technology solutions, assessing and diagnosing technology environments, designing technology infrastructure such as networks, security and platforms, setting technology strategies, and tuning technology environments for optimal performance.

Source: http://accenture.jobs2web.com/job/MALAYSIA-US-Return-Home-with-Accenture-Malaysia-GRADUATE-Opportunities-2010-Job-MY/733728/

Disclosure: the author is not associated with Accenture.

Index may find it hard to breach all-time high

(TheStar-March 15, 10)PETALING JAYA: The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) may find it difficult to breach its all-time high of 1,516 points this year although the index is currently just 13% shy of that record.

While the stronger ringgit and government initiatives generally are expected to boost market sentiment, aggressive monetary tightening measures in the region could exert pressure on the index.

http://biz.thestar.com.my/news/story.asp?file=/2010/3/13/business/5856504&sec=business

This article conincides with my thinking to review what kind of strategy should I adopt as KLCI seems to have limited upsides. The market is selling for 16.59X which is very close to its historical 10-year average.

From money flow point of view, Ringgit appreciations is a short term catalyst. To break the previous all time high, yes I could agree that it will take at least a few attempts. The real catalyst under this environment is EARNING! If the 2010 earning is able to grow between 10 - 15%, the fair value of KLCI is around 1,450 to 1,525. In view of this, I'm going to hold on to my positions but will not want to add new positions aggresively. So, timing is not that critical to me whether 1,450 target will be attained in 1H '10 or 2H '10. I still do not feel at this point to chase laggards as sharp corrections will trigger sell down across the board. In short, I'm taking a defensive stance for now.

Malaysia has most number of billionaires in South-East Asia

I'm still trying to catch up news, this news is interesting. Why Malaysia has the most number of billionaires in SEA while we have one of the smallest population and economy. Talking about "smartness", we are behind Singapore. Talking about populous, we are way behind Indonesia, the Philippines and Thailand.

In case you miss this article, here is the link http://thestar.com.my/news/story.asp?file=/2010/3/11/nation/20100311205652&sec=nation

If you want to see the complete list, here is the link

http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html

The Malaysian billionaires/ranking in the world:-

1. Robert Kuok /33th
2. Ananda Krishnan / 89th
3. Lee Shin Cheng / 189 th
4. Quek Leng Chan /277th
5. Teh Hong Piow / 277th
6. Yeoh Tiong Lay / 421th
7. Vincent Tan / 828 th
8. Syed Mokhtar Al-Bukhary / 655 th
9. Tiong Hiew King/ 939th

The numbers of billionaires in SEA

Malaysia / 9
Indonesia / 7
Singapore / 4
Thailand / 3
the Philippines / 2

Let's look some samples of the businesses that these guys own.










My comments:-
My first impression of the businesses that they own are from old economy - property, banking, consumer products(franchises), concessionaires, media or telecommunication. These businesses are favorable at the macro level during their times. During the rapid development stage, property, banking and concessionaires are the natural winners. We are quite lucky that Malaysia happens to be one of the largest plantation producers in the world. Call it anyway you want - either luck or foresights, they certainly have both of them!

Second, they are sharing succeses with public. Listing their company will enable them to raise capital in large amount to grow their companies. They have been able to grow their wealth by acquiring great businesses at the right time. The investing community will certainly reward their efforts, i.e. market capitalization will grow in tandem with shareholders equity.

Third, these guys are certainly "stick-to-knitting". They know their area of competency and rarely acquiring businesses outside their competency.

Fourth, they are certainly well connected, either with other successful businessman or the government. The certainly commanding high level of moral authority - trustworthiness.

Lastly, these guys certainly have their own circle of influence to take care of their day-to-day running of the businesses.

Stronger ringgit boosts Bursa

Nice to see Bursa broke through 1,300 while I was away from the country.



Since I'm kind of tired after traveling whole day and just landed, I will get straight to the point. Where are we heading? I think it should go to RM $ 3.10 to 1 USD. KLCI should be heading to 1,450. 1H 2010 or 2H 2010? Not sure on the timing, will need to think over the weekend.

Is anyone cares that the recession is over?

With a lot of sideways movement lately, there are not many exciting news to comment. So I'm just going comment on some old news, it does not seems to excite anyone when a number of countries already out of recessions(not technically) but certainly turned positive for the last quarter. Malaysia economy grew 4.5% in Q4 '09 and now most analysts are forming a consensus of 4-5% growth for 2010. The bullish camp is aiming for 6%. Since the Bursa has already gone up by almost 50% since it bottomed out about 10 months ago in March '09. It's interesting to note how forward looking the market is sometimes.

(theStar 24-Feb-2010)PUTRAJAYA: The economy grew at a faster pace than expected in the final quarter of 2009 as a combination of government spending, a lower inflation rate and accommodative monetary policy helped boost domestic demand.

Gross domestic product (GDP) expanded 4.5% in the fourth quarter (Q4), the first positive growth after three consecutive quarters of contractions while for the full year, the economy contracted by 1.7%.

The positive news surprised economists, who were expecting an average growth of 3.2% for Q4 as shown in a Bloomberg survey. For 2009, a separate Bloomberg survey showed economists expected a contraction of 2%.

CIMB Investment Bank Bhd economic research head Lee Heng Guie told StarBiz there would be an upwards revision of the GDP figures for 2010 in light of the Q4 data plus Asia’s growth prospects.

“We’ll be revising the numbers, most likely in the region of 4% to 5% (from 3.5%) for 2010 especially given the expansion in the services and manufacturing sectors,” he said.

http://biz.thestar.com.my/news/story.asp?file=/2010/2/25/business/5741357&sec=business

Turtle bought 500 shares of Genting Berhad

Turtle bought 500 shares of Genting Berhad at RM $ 6.29. There are a plenty of research reports about this stock but my views will be given over the weekend write up.

Buffett Says U.S. Housing Will Recover by Next Year

Buffett does not make prediction very often, since he is making a call we had better pay attention:

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits.”

The worst housing decline since the Great Depression has left one in five U.S. mortgage holders owing more than their houses are worth. Record foreclosures last year flooded a real estate market already glutted with unsold property, causing new construction to fall to the lowest in at least 50 years. The fall in homebuilding is the only fix unless the U.S. decides to “blow up a lot of houses,” Buffett joked.

“People thought it was good news a few years back when housing starts -- the supply side of the picture -- were running about two million annually,” said Buffett, the chairman and chief executive officer of Omaha, Nebraska-based Berkshire. “But household formations -- the demand side --only amounted to about 1.2 million.”

Berkshire, which owns a real-estate brokerage, a business that constructs pre-fabricated houses and units that make products used in homebuilding, has suffered amid the slump. Profit at Clayton Homes, the pre-fab housing business, fell about 9 percent to $187 million before taxes, while earnings at carpet manufacturer Shaw Industries fell 30 percent.

http://www.bloomberg.com/apps/news?pid=20603037&sid=aPiB9cWQpGQo

Just a short comment on local Bursa, I saw people were very eager to take profits yesterday as it breached through 1,280. I thought the sellers were making a mistake by selling out too soon especially it has just cracked a resistance line.

Turtle Portfolio update - March '10

Just updated some of the records. Added $ 888 March saving and XDL shares acquisition.