Tune Money mulls second share sale

The company may place out up to 10 per cent of new shares to any interested parties, which may be local or international investors next year

By Chong Pooi Koon

Published: 2007/11/18

TUNE Money Sdn Bhd, Malaysia's first "no-frills" provider of financial products, may raise more money through private equity next year to support its expansion, its chief said.

Chief executive officer Tengku Zafrul Aziz said the privately-held company, which has a paid-up capital of RM20 million, is looking at a second round of private equity funding early next year.

It may place out up to 10 per cent of new shares to any interested parties, which may be local or international investors.

In addition, he said, the existing shareholders will need to put in at least RM20 million more in the next two years to grow the company before a planned stock market listing in 2009.

"The current shareholders have put in a lot of money and when we reach certain goals, we think we can go to the private quity market and raise more money," he said in an interview in Kuala Lumpur.

"We can also borrow from the banks, but being in the services sector, we have no tangible collaterals such as planes or factories, so the ability to gear is not as good," Zafrul said.

Tune Money, which sells cheaper and simpler financial products through the Internet, needs to invest heavily in technology and marketing at this start-up stage.

The company, whose business model is one that relies on volume, also needs more money to finance expansion into other Southeast Asian countries next year.

"We are now doing (a) study on how much we need, for which market, and (how) to value the company accordingly," Zafrul said.

The company is currently 44.83 per cent owned by Tune Ventures Sdn Bhd, a company in which AirAsia Bhd's founder Datuk Tony Fernandes has a 40 per cent stake.

CIMB Structured Investments, a unit of CIMB Group, owns another 25 per cent of Tune Money. Other shareholders are Zafrul (10 per cent), Datuk Kalimullah Hassan and Lim Kian Onn (each holding 8.21 per cent), Tune Money Employees Sdn Bhd (2.25 per cent) and Kaneswaran Avili (1.5 per cent).

Naza targets listing in Q1 2008

August 27 2007

THE privately-owned Naza Group plans to raise funds from an initial public offering (IPO) in the first quarter of next year to finance expansion, its chief said.

The automotive group initially wanted to be listed on Bursa Malaysia in the third quarter of 2006.

"We are still doing the preparation, but we will announce properly maybe by early next year," chairman and chief executive officer Tan Sri S.M. Nasimuddin S.M. Amin said.

Nasimuddin said the group was still considering a few factors regarding the proposal.

"We are still looking into it. The demand is there," he said in Kuala Lumpur on Saturday.

It was earlier reported that Naza was hiring CIMB Group and ECM Libra Avenue Bhd to arrange its IPO, slated to be one of the biggest in 2006.

Naza is believed to be planning to list either of, or both, its units, namely Naza Automotive Manufacturing (its assembly plant in Kedah) and car distributor Naza Kia Sdn Bhd.

The IPO will fund the group's future expansion, namely the construction of its new RM1 billion plant in Bertam, Penang, and the development of new models.

Last weekend, Naza Bike Sdn Bhd - the franchise holder of the Ducati superbikes in Malaysia - introduced its latest line-up: the Ducati Hypermotard.

The bike, tagged at RM98,000, is a collectible item for superbike enthusiasts. It was initially launched in Europe two years ago. Locally, Naza aims to sell about 50 units in the first year.

The Ducati franchise contributes about 10 per cent to Naza's total revenue per year. The Naza Bike division sells almost 4,600 motorcycles a year.

Deutsche Bank: Property stocks a 'must have'

July 12 2007

DEUTSCHE Bank, which continues to maintain an overweight stance on the Malaysian market, says property stocks are a "must have" for the second half of 2007.

The bank, in a recent research report, said despite the stock market having performed well in the first half of the year - it has risen by about 24 per cent so far - now is not yet the time to take profit.

It highlighted three key events that it expects will drive the market further.

The first is an anticipated slew of positive measures targeted at the property market, and the second, the Government's incentive packages for the northern and eastern growth corridors by end-July and the ongoing implementation of the Ninth Malaysia Plan which it expects will lift sentiment in the third quarter.

Third is a possible consumer-friendly Budget in September, followed by speculations of a general election by the end of 2007 or early 2008.

"The sector to benefit most from all three drivers is the property sector," it noted.

Deutsche Bank's property favourites are IGB Corp, E&O Property, SP Setia and Mah Sing.

Other stocks it likes include Hong Leong Bank and Malaysia Airlines, which are expected to surprise on the upside with their turnaround plans, as well as Resorts World and KPJ Healthcare.

Deutsche Bank is also keen on Bursa Malaysia as a proxy to its positive view on the market and Kuala Lumpur Kepong as the most leveraged plantation big-cap to strong palm oil prices.

Deutsche Bank has a bottom-up target of 1,486 for the benchmark Kuala Lumpur Composite Index (KLCI), based on the stocks it covers. The KLCI last closed at 1,359.27.

The bank expects the months of July and August to stay relatively quiet, but believes this will recover by late August.

It added that the key risks to its overweight call would be poor implementation of government incentives and an acceleration in companies going private, as this would lead to a reduction in Malaysia's weightings in various indices.

27-06-2007: ETF: Something new for investors

Email us your feedback at fd@bizedge.com

Local investors will soon have the option to invest in a new type of instrument — Equity Exchange Traded Fund (ETF). The FBM30etf will be the first ETF, introduced by AmInvestment Bank Group, to be listed on the Bursa Malaysia next Monday.

What is an ETF?
An ETF is very similar to open-ended unit trusts. It's an instrument representing a basket of stocks that is most commonly designed to track the performance of all kinds of indices. For example, there could be an ETF to track the KLCI, the Second Board Index; a sector index, like the Property Index; or in this case, the FTSE Bursa Malaysia Large 30 Index. More innovative ETFs can track commodities like oil futures and gold.

Why invest in ETF?
ETFs, like unit trusts, offer investors the benefits of diversification. For instance, an investor buying the FBM30etf will gain exposure to the 30 largest companies by market capitalisation, all in one. In other words, they don't have to fork out a lump sum of money to buy each and every one of the 30 stocks — just the minimal one board lot (or 100 units) of the FBM30etf.

Better yet, ETFs usually has lower expense ratio than comparable unit trusts. Annual management fee for unit trusts usually range between 1% and 2%. By comparison, the annual administrative fees for FBM30etf are estimated to total around 0.65%.

The lower fees and expenses are, primarily, because ETFs are passively managed funds. That means the underlying portfolio of stocks and weightings simply mirror the indices they're tracking. In short, investors do not get the benefit of fund managers stock picking or timing the market. Having said that, it remains arguable whether actively managed funds do perform better over the longer term.

Unit trusts also have higher sales charge, typically 5% or higher, whereas the transaction costs for ETFs are similar to those for normal shares trading including brokerage commission (0.3% to 0.6%), stamp duty and clearing fees.

How to buy and sell ETFs?
Trading in ETFs is also a simpler and more convenient process — it's just like stock trading. Investors can buy or sell the ETF by calling their remisiers at any time during trading hours and using the same trading/CDS accounts. This allows investors to be more responsive to market changes. Transactions are settled in the usual way as stocks are, on T+3.

The price of an ETF is determined by demand and supply but shouldn't stray too far from the market value of its underlying portfolio. ETFs also normally have a dividend policy. The FBM30etf expects to distribute any dividends and interest income it receives semi-annually, after netting expenses.

In a nutshell...
ETFs offer investors a relatively low cost, passive way of investing in the market. Returns will more or less mirror the future performance of the underlying index. Under prevailing trading conditions, we suspect that the FBM30etf will do fairly well.

While sentiment for the broader market has been somewhat ambivalent of late, share prices for key blue chips have been inching higher. The FBM30 Index has risen some 47% since its creation just over a year ago, while cumulative gains year-to-date stand at roughly 25%.

INVESTMENT TALK
By ROBERT ROUNTREE

IT would be nice if the good times kept rolling; they do not. The party “spoiler” inevitably joins the crowd. This job has traditionally fallen on the humble economist, whose job it is to water down the punch bowl just as the party is getting real good.

The global equities party is well under way and has, in fact, been on for four years. The “spoiler” has appeared, as if on cue, although it is too early for most partygoers to have noticed.

Ironically, the spoiler may decide that the time for an appearance is not quite right, and then exit the scene with scant notice. But at the moment, the spoiler is in the room. Whether this will be enough to undermine the party has yet to be determined. But we are at a critical juncture; a major reason for equity markets to embark on another correction is now in place should investors start looking for a convenient excuse to sell.

This begs the question as to why investors should want to sell in the first place if the longer-term outlook remains solid. Here’s the answer. We have consistently argued that although we think there is good long-term value to be found on a three-year time horizon, especially within Asia, short-term valuations are again at cyclical highs.

While markets are pretty efficient at pricing in short-term growth and potential, they are lousy at pricing in the longer-term. This situation thus creates times at which the short-term is fully discounted, but investors remain uncertain as to the value of the longer-term potential. They thus revert to selling, often aggressively, shaking out weak holders and “testing” the commitment of longer-term holders. If few sellers appear, or if buyers quickly reappear, then investors may feel that the longer-term potential remains intact.

This is a process we have written about several times, especially as we have seen it play out three times since the global rallies first began in May 2003 – and herein lies another story.

If one looks at the depth and duration of the three major bouts of selling that have punctuated the Asian rallies since May 2003, one notices two things; the sell-offs are getting progressively more shallow and they are also getting shorter. In other words, investors seem to be increasingly buying the longer-term growth story and are beginning to price in that potential. We could easily be building a “launch pad” from which to propel valuations higher.

This situation, however, probably opens the door to a final humdinger of a sell-off before valuations are pushed to new highs; investors want a final “test” before committing themselves to higher valuations. This is where the “spoiler” comes in. It stands to reason that investors could look for another reason to sell. If that reason has solid grounding rather than merely reflecting the “scare tactics” that lay behind February’s sell-off, then any resulting selling could be quite severe. This is what seems to be building up.

Few investors, for example, would be unaware that the world is awash in liquidity. This liquidity first found its way into bond and housing prices. Then, from May 2003, it was equities’ turn as investors recognised the low valuations of the time.

The record liquidity pool originally resulted from policies followed by many key central banks, most notably the US Federal Reserve Board and the Bank of Japan, which pumped money into their respective banking systems so as to offset the global economic slowdown that followed the bursting of the IT bubble.

Liquidity was subsequently created by other central banks which did not want to see their currencies appreciate significantly against a falling US dollar. They thus bought the dollar and sold their own currencies, which boosted domestic liquidity (unless the central bank “neutralised” this liquidity injection, which is what Bank Negara has been doing).

While the reasons how and why this liquidity appeared are complex, the important messages for the equity markets are not. A fair measure of this liquidity, for example, is absorbed by day-to-day economic activity and price increases. The liquidity that is left over generally ends up in equities after a time lag of around six to nine months. Put another way, changes in this “free” liquidity and equity market changes track each other closely.

In recent months, the situation has changed significantly – enter the “spoiler”. Although many central banks are still creating liquidity via their US dollar exchange rate policies, etc, etc, etc, the demand for money has risen, not only as economic activity has remained strong but also as isolated instances of higher prices have emerged. Thus, the huge pool of liquidity that was created after 2000 has not only been slowly depleted but is now contracting. Once this realisation hits the financial markets, the reaction could be explosive.

Under “normal” conditions, we would urge investor caution. But this time, that caution is tinged with two major caveats.

The first caveat is that as the global liquidity tide recedes, huge lakes of liquidity are appearing trapped in the “rock” pools. Japan is one of these lakes. This liquidity has been slowly seeping abroad in search of both higher income and value, seepage which has resulted in a yen that is far weaker than the economic data would otherwise suggest.

Much has been made of the hedge fund industry that has been borrowing the cheap and low yielding yen to invest in higher yielding offshore currencies. But to focus on the activity of this group of investors is to ignore the growing demand for value and yield emerging from the “Mom and Pop” brigade.

Japan, along with many other developed economies, has a pension crisis. The difference is that Japan also has a population “bubble” that is more advanced as people are increasingly joining the ranks of retirees. With the parlous state of Japan’s pension industry, many investors are increasingly looking for value and income abroad, which could very well ensure that the outflow of funds continues and the yen remains perennially weak. In short, Japan’s huge savings pool is showing signs of funding global markets and economies rather than those in Japan, a development about which many commentators are only becoming aware.

The second major caveat is that of valuations.

While short-term valuations are undeniably at cyclical peaks, valuations on a three-year view look cheap. In fact, one can make the case strongly that the global equity rallies seen since May 2003 have only removed the record low cheapness to which equities fell following the bursting of the technology bubble.

Equities have not, we can argue, discounted the strong global economic and profits growth that we are witnessing today. Put another way, global equities would have to rise some 300% (based on the consensus earnings forecasts) just for valuations to rise back to the peaks of 1980/81, 1989/1990 and 1999/2000.

So, even if the liquidity “spoiler” does its worst and equities enter a severe sell-off, is the party over? It does not look like it. As we argued last month, equities look to be extremely good value on a three-year (and longer) view. We reiterate; do not let the short term dust cloud the long-term outlook because that outlook is pretty good.

Rountree is head of investment marketing, Prudential Fund Management Services Singapore

NB: The views expressed above are those of the author and do not necessarily reflect those of Prudential Asset management.

AmanahRaya REIT to buy properties

June 11 2007

AMANAHRAYA Real Estate Investment Trust (REIT), through its management company AmanahRaya-JMF Asset Management Sdn Bhd (ARJMF), has proposed to acquire several properties from Amanah Raya Bhd (ARB).

It will buy two parcels of leasehold industrial land in Klang for RM28.5 million; a parcel of freehold industrial land in Selangor for RM92 million; and two parcels of leasehold industrial land in Shah Alam for RM19.2 million.

The acquisitions will be satisfied by the issuance of new units in AmanahRaya REIT at an issue price of RM0.94 per unit.

The Klang land includes 12 units of single-storey warehouses and two units of guardhouses collectively known as the Tamadam 1 Bonded Warehouse Complex, with approximately 237,033 square feet total built-up area.

It is currently being occupied by Tamadam Bonded Warehouse Bhd through a lease agreement with ARB for 10 years, effective 1 January 2007.

The freehold Selangor land houses the Silver Bird Complex, used for bread and confectionery manufacturing by Silver Bird Group Bhd subsidiary Standard Confectionery Sdn Bhd. It has a 10- year lease agreement effective October 11 2006.

The land in Shah Alam, meanwhile, includes a factory complex occupied by AIC Corp Bhd for use in the manufacturing of motor vehicles spare parts, flat screen television and computer monitors.

AIC has a 10-year lease agreement with ARB from September 13 2006.

All these lease agreements will be novated to AmanahRaya REIT upon completion of the proposals.

ARJMF also plans to buy a parcel of leasehold commercial land in Sugai Buloh from SEG International Bhd for RM145 million, and a leasehold industrial land in Kedah from Teras Globalmas Sdn Bhd for RM23.97 million.

Both these acquisitions will be satisfied by cash, AmanahRaya REIT told Bursa Malaysia.

"The vendors of the aforesaid properties have agreed in principle to sell the properties to AmanahRaya REIT subject to the signing of the sale and purchase agreements at a later date," the company said.

In addition, the company also proposed a private placement of up to 100 million new units in Amanah Raya REIT at an issue price to be determined at a later date.

There was a one hour interview on CNBC with Warren Buffet, the second
richest man who has donated $31 billion to charity. Here are some very
interesting aspects of his life:

1. He bought his first share at age 11 and he now regrets that he started too late!
2. He bought a small farm at age 14 with savings from delivering newspapers.
3. He still lives in the same small 3-bedroom house in mid-town Omaha,
that he bought after he got married 50 years ago. He says that he has
everything he needs in that house. His house does not have a wall or a fence.
4. He drives his own car everywhere and does not have a driver or security people around him.
5. He never travels by private jet, although he owns the world's largest private jet company.
6. His company, Berkshire Hathaway, owns 63 companies.
He writes only one letter each year to the CEOs of these companies, giving them goals
for the year. He never holds meetings or calls them on a regular basis.
He has given his CEO's only two rules. Rule number 1: do not lose any
of your share holder's money. Rule number 2: Do not forget rule number 1.
7. He does not socialize with the high society crowd. His past time
after he gets home is to make himself some pop corn and watch Television.
8. Bill Gates, the world's richest man met him for the first time only
5 years ago. Bill Gates did not think he had anything in common with
Warren Buffet. So he had scheduled his meeting only for half hour. But
when Gates met him, the meeting lasted for ten hours and Bill Gates
became a devotee of Warren Buffet.
9. Warren Buffet does not carry a cell phone, nor has a computer on his desk.

His advice to young people: "Stay away from credit cards and invest in yourself and

Remember:
A. Money doesn't create man but it is the man who created money.
B. Live your life as simple as you are.
C. Don't do what others say, just listen them, but do what you feel good.
D. Don't go on brand name; just wear those things in which u feel comfortable.
E. Don't waste your money on unnecessary things; just spend on them who really in need rather.
F. After all it's your life then why give chance to others to rule our life."

Mulpha going big abroad

Lee Seng Huang

PETALING JAYA: Mulpha International Bhd has emerged as the largest Malaysian real estate investor and developer in Australia with assets worth RM2.2bil.

They include the Sanctuary Cove and Hyatt Regency Sanctuary Cove, both in Queensland, and the InterContinental Hotel in Sydney.

The company also owns the Hilton Melbourne Airport, Bimbadgen Estate in New South Wales' Hunter Valley.

Its Malaysian properties are worth about RM1.1bil.

Executive chairman Lee Seng Huang said Mulpha’s overseas operations contributed about 75% of total revenue, with the rest from Malaysia.

He said Mulpha was strengthening its overseas position through smart partnerships with selected companies to do major projects.

“We believe this approach will help us understand the local market better,” he said, adding that Mulpha was also keen on India.

He said one of the company's strengths was its ability to identify properties and land that have commercial potential. “For instance, we were already in Vietnam in 1991 when only now people are investing there,” he told StarBiz.

Lee expects revenue growth to come from Mulpha's overseas operation as its investments abroad is bigger than in Malaysia.

He added that the group's investments in Malaysia would eventually “balance out” by increasing its revenue contribution.

“We've maintained a low profile but we have been around for sometime and have been involved in many large property developments locally and abroad,” he said.

Mulpha’s RM2bil Leisure Farm Resort in Gelang Patah, Johor, boasts a 36-hole golf course.

Mulpha has recently been looking for more property projects in Malaysia, attracted by the revival of the property sector.

Locally, its most prestigious project is the 1,371-acre freehold RM2bil Leisure Farm Resort in Gelang Patah, Johor, that boasts a 36-hole golf course, clubhouse and equestrian facilities. It is within the South Johor Economic Region (SJER).

Lee said the resort's latest launch was the 22-acre Bayou Water Village with a “Kampung Ku” concept.

“The project will attract more people to Leisure Farm with its back-to-nature concept once the development of the IDR is completed,” he said.

He said Mulpha has another 700 acres of land that has yet to be developed in SJER, making it one of the largest landowners in south Johor.

Analysts believe the company is gearing up to acquire more land in the economic region.

“We view the SJER, especially the IDR, very favourably and expect properties in our Leisure Farm Resort to do well,” Lee said.

Mulpha's other local property projects are the RM400mil Desa Aman in Kulim, Kedah (via its 100%-owned subsidiary Golden Cignet Sdn Bhd) and Bandar Seri Ehsan near the Kuala Lumpur International Airport.

Lee said Mulpha was focusing on building its brand.

“We are also looking to revive some of the projects put on hold during the 1997 Asian economic crisis such as the Section 16 mixed development in Petaling Jaya and the Jalan Sultan Ismail project,” he added.

Meanwhile, on last Tuesday's sale of 75 million treasury shares of Mulpha worth RM144.5mil, Lee said they were sold via an off-market transaction.

He said in a statement that the entire placement of 75 million shares were taken up by foreign institutional investors.

“Mulpha shares were very well supported by foreign funds and we will continue with the management strategy to institutionalise our shareholder base,” he said.

He added that the placement was well received and substantially oversubscribed.

A local analyst said the fact that Mulpha shares were fully snapped up by foreign institutional investors showed their confidence in the company.

“These investors must believe they're buying into a company with quality assets,” said the analyst.

02-04-2007: Yen-RM carry trade very much in play

The yen carry trade has played a significant part in causing the rise and volatility of Bursa Malaysia for the past few months, and will continue to do so as long as the wide interest rate differentials between the United States and Japan stays.

MIMB Investment Bank Bhd’s technical analysis manager Lee Cheng Hooi said there has been a strong correlation between the yen/ringgit exchange rate and the KL Composite Index (KLCI).

He said so long as there were profits to be made due to the wide interest rate differentials, there would be still positive flows in the yen-carry trades and this practice would continue.

Yen-carry trades are any investments in all asset classes, which are financed by yen-denominated loans, bearing very low Japanese interest rates.

The danger is when such carry trades are pulled back such as February’s equity sell-off in Asia as investors panicked partly due to Japan raising its interest from 0.25% to 0.50%.

Lee said factors, which will cause the unwinding of such positions, were the narrowing of the yen and the US dollar interest rates or regulatory intervention similar to those imposed by Thailand in mid-December 2006.

“I don’t think all those trades were unwound yet in Malaysia or the rest of the world,” Lee said.

MIMB research head Pong Teng Siew said the size of the outflows of yen from Japan to the rest of the world could be as large as US$9 billion (RM31.4billion) to US$10 billion per month.

“Nobody really knows how large the yen-carry trades are in Malaysia. But we believe these trades are working in the background and dominating the current volatility of the stock market.

“In the past, hedge funds used to be involved in the yen-carry trades. However, this profitable practice has spread to some of the conventional international equity funds.”

Pong added that the yen-carry trades strongly fuelled the Malaysian equity market rise since October 2006. Earlier, these practices started globally as early as the first quarter of 2004.

He said the yen hit a high of 101.60 yen/US$ in that year and the US Federal Reserve increased its target interest rate on May 2004 from 1.00% to 1.25%, the first hike of the eventual 17 consecutive hikes.

“The continual divergence of the yen and US$ interest rates has resulted in the weakening of the yen and hence fuelling more yen-carry trades worldwide, including Malaysia” he said.

When contacted, Bank Negara Malaysia did not respond to queries for this article.

http://www.theedgedaily.com

Govt to waive RPGT from April 1
By Jimmy Yeow
Email us your feedback at fd@bizedge.com

The Prime Minister said the government has decided to waive real property gains tax throughout the country commencing April 1 to further improve the national property sector.

"This is long-awaited news for developers and investors alike and I hope that it will inject more excitement and dynamism into both the property and financial sectors," Datuk Seri Abdullah Ahmad Badawi said at the Invest Malaysia 2007 conference on March 22.

He said the relaxation of the Foreign Investment Committee (FIC) rules to enable foreigners to purchase residential properties above RM250,000 without FIC approval, was received very positively.

“Based on feedback received, the state governments were also told to provide the same relaxation for the purchase of residential property," he said.

Bursa to implement direct access trading

Bursa Malaysia Bhd will be implementing Direct Market Access (DMA), a zero-touch electronic trading solution that enables real time execution of trade orders, in stages the exchange's chief executive officer Datuk Yusli Mohamed Yusoff said.

He said the DMA would be carried out in two phases, whereby under the first, it would see the deployment of Derivatives DMA, which is targeted for completion towards year-end.

The second phase, encompassing equities and derivatives on a single DMA trading platform, will be implemented following the launch of the equities platform of Bursa Trade early next year.

Yusli said DMA effectively reduced the latency of trading order executions from the current system’s five seconds per transaction to a matter of milliseconds.

DMA would be implemented on the back of Bursa Trade – the exchange’s highly scaleable integrated trading system for derivatives and equities that is currently in its second phase of deployment.

The derivatives portion of Bursa Trade was implemented in November 2006, replacing the former derivatives platform (KATS), which had a technical capacity of 10 transactions per second.

Bursa Trade Derivatives has been tested to a capacity of more than 1,000 transactions per second. The equities portion of Bursa Trade is expected to be completed by early 2008.

Yusli said the DMA was essential for the Malaysian capital market to remain competitive in the global investment arena.

“DMA is already well-established in some of the world’s more developed markets like the United States, Europe and Australia.

"Globally, investors' preferences are increasingly aligned to more efficient markets where trades are fully electronic and offer investors more control over their trade,” he said in a presentation at Invest Malaysia 2007 conference on March 22.

“DMA changes the trading landscape of the Malaysian capital market. Investors will enjoy immediate execution of trade orders at a faster speed.

"By automating the trade order process, DMA provides investors greater control over trading execution and strategies,” Yusli added.

“In addition, it also widens the spectrum of trading activities to include higher value added trading activities such as market-making, algorithmic and basket trading to take place,” he said.

Bursa chief operating officer Omar Merican said the DMA would be mainly used by large investors such as fund managers.

“The fund managers can now key in the order instead of going through the dealers and normally when you pay a brokerage, you also pay for the dealer’s time to key in your orders. We can expect brokerage rate to be lower but I am not sure what the numbers would be.”

“This will lower the cost for brokers and some of these cost (savings) could be passed on to customers. Both brokers and customers can benefit from the system,” Omar said.

Successful trading calls for the ability to find 2 groups of ill-informed individuals:

1) those gripped by fear and anxious to give up their merchandise (stock) to you too inexpensively

2) those led by greed, willing to take up your merchandise (stock) too expensively

The key buy setup was designed to help the master trade come into the market as a buyer, precisely when the group gripped by fear and fright is anxious to leave the game

This simple entry technique is one of the most powerful concepts in our trading arsenal.

Highway firm Bright Focus proposes RM200m IPO
By Shahriman Johari
ashahriman@nstp.com.my

March 19 2007

BRIGHT Focus Sdn Bhd, a unit of Maju Holdings Sdn Bhd, plans to raise more than RM200 million from the sale of new shares in an initial public offering (IPO) this year, a source said.

right Focus, which is building a RM1.4 billion highway linking Kuala Lumpur, Putrajaya and the KL International Airport (KLIA) in Sepang, has hired Kenanga Investment Bank to arrange the main board IPO.

The company's IPO has been approved by the Securities Commission and the listing will come under the infrastructure segment, which requires no profit track record.

Bright Focus' listing will be one of the biggest for the local stock exchange this year. The market has had a sluggish start to IPOs despite an early rally that pushed it to a 13-year high recently.

The company plans to offer some 104 million shares under its IPO and the bulk of it, or 72 per cent, will be offered to institutional investors. Retail investors will get the rest.

"The highway is almost finished and they plan to start toll collection in 2008," the source said.

The highway link will initially connect Kuala Lumpur and Putrajaya.

Bright Focus holds a controlling 51 per cent in Konsortium Lapangan Terjaya Sdn Bhd (KLT), which has the concession to build and manage the highway for 33 years.

Anson Perdana Bhd holds 30 per cent of the group, while Hi-Summit Construction Sdn Bhd has the remaining 19 per cent stake, according to previous reports.

Construction of the highway is scheduled to be completed by the end of the year, Tihana Yon, senior manager of corporate communications for KLT, told Business Times.

Officials of Maju Holdings did not return calls to comment.

The highway will connect the Middle Ring Road 1 at Jalan Tun Razak in Kuala Lumpur with the Middle Ring Road 2 at the Kesas Highway, KLT said on its website.

It will also be a traffic dispersal link, relieving traffic congestion along the Kuala Lumpur-Seremban Highway at Jalan Tun Razak.

Technical Indicator Explantion-Moving Average Convergence Divergence (MACD)

Technical Indicator Explantion-Moving Average Convergence Divergence (MACD)

Moving Average Convergence Divergence (MACD)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.

There are three common methods used to interpret the MACD:

1. Crossovers - As shown in the chart above, when the MACD falls below the signal line, it is a bearish signal, which indicates that it may be time to sell. Conversely, when the MACD rises above the signal line, the indicator gives a bullish signal, which suggests that the price of the asset is likely to experience upward momentum. Many traders wait for a confirmed cross above the signal line before entering into a position to avoid getting getting "faked out" or entering into a position too early, as shown by the first arrow.

2. Divergence - When the security price diverges from the MACD. It signals the end of the current trend.

3. Dramatic rise - When the MACD rises dramatically - that is, the shorter moving average pulls away from the longer-term moving average - it is a signal that the security is overbought and will soon return to normal levels.

Traders also watch for a move above or below the zero line because this signals the position of the short-term average relative to the long-term average. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true when the MACD is below zero. As you can see from the chart above, the zero line often acts as an area of support and resistance for the indicator.

Saturday, January 13, 2007

Technical Indicator Explantion-Stochastic Oscillator

Stochastic Oscillator

Developed by George C. Lane in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows the location of the current close relative to the high/low range over a set number of periods. Closing levels that are consistently near the top of the range indicate accumulation (buying pressure) and those near the bottom of the range indicate distribution (selling pressure).

A 14-day %K (14-period Stochastic Oscillator) would use the most recent close, the highest high over the last 14 days and the lowest low over the last 14 days. The number of periods will vary according to the sensitivity and the type of signals desired and %D is a 3-period moving average of %K.

The 80% value is used as an overbought warning signal, and the 20% is used as an oversold warning signal.

Signals

The Stochastic Oscillator generates signals in three main ways:
1. Extreme values when the 20% and 80% trigger lines are crossed.Buy when the stochastic falls below 20% and then rises above that level. Sell when the stochastic rises above 80% and then falls below that level.

2. Crossovers between the %D and %K lines.Buy when the %K line rises above the %D line. Sell when the %K line falls below the %D line. Beware of short-term crossovers. The preferred crossover is when the %K line intersects after the peak of the %D line (right-hand crossover).Crossovers often provide choppy signals that need to be filtered through the use of other indicators.

3. Divergences between the stochastic and the underlying price. For example, if prices are making a series of new highs and the stochastic is trending lower, you may have a warning signal of weakness in the market.


One of the most reliable signals is to wait for a divergence to develop from overbought or oversold levels. Once the oscillator reaches overbought levels, wait for a negative divergence to develop and then a cross below 80. This usually requires a double dip below 80 and the second dip results in the sell signal. For a buy signal, wait for a positive divergence to develop after the indicator moves below 20. This will usually require a trader to disregard the first break above 20. After the positive divergence forms, the second break above 20 confirms the divergence and a buy signal is given.


In Nov-99, a buy signal was given when the indicator formed a positive divergence and moved above 20 for the second time. Note that the double top in Nov-Dec (gray circle) was not a negative divergence -- the stock continued higher after this formed. In Jan-00, a sell signal was given when a negative divergence formed and the indicator dipped below 80 for the second time.

Technical Indicator Explantion-Bollinger Bands

Bollinger Bands

Developed by John Bollinger, Bollinger Bands are an indicator that allows users to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security's price action.

1. A simple moving average in the middle
2. An upper band (SMA plus 2 standard deviations)
3. A lower band (SMA minus 2 standard deviations)

Standard deviation is a statistical term that provides a good indication of volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.

The centerline is the 20-day simple moving average. The upper band is the 20-day simple moving average plus 2 standard deviations. The lower band is the 20-day simple moving average less 2 standard deviations.

Signals:

a) Double bottom buy
A double bottom buy signal is given when prices penetrate the lower band and remain above the lower band after a subsequent low forms. Either low can be higher or lower than the other. The important thing is that the second low remains above the lower band. The bullish setup is confirmed when the price moves above the middle band, or simple moving average.

The stock penetrated the lower band in late September (red arrow) and then held above on the subsequent test in October. The October breakout above the middle band (green circle) provided the bullish confirmation.

b) Double top sell:
A sell signal is given when prices peak above the upper band and a subsequent peak fails to break above the upper band. The bearish setup is confirmed when prices decline below the middle band.

Sharp price changes can occur after the bands have tightened and volatility is low. In this instance, Bollinger Bands do not give any hint as to the future direction of prices. Direction must be determined using other indicators and aspects of technical analysis. Tight bands indicate low volatility and wide bands indicate high volatility.

In November, the bands were relatively wide and began to tighten over the next 2 months. By early January, the bands were the tightest in over 4 months (red circle). A little over a week later, the stock exploded for a 10+ point gain in less than 2 weeks

Even though Bollinger Bands can help generate buy and sell signals, they are not designed to determine the future direction of a security. The bands were designed to augment other analysis techniques and indicators. By themselves, Bollinger Bands serve two primary functions:
· To identify periods of high and low volatility
· To identify periods when prices are at extreme, and possibly unsustainable, levels.

Remember that buy and sell signals are not given when prices reach the upper or lower bands. Such levels merely indicate that prices are high or low on a relative basis. A security can become overbought or oversold for an extended period of time. Knowing whether or not prices are high or low on a relative basis can enhance our interpretation of other indicators and assist with timing issues in trading.

Technical Indicator Explantion-Relative Strength Index

Relative Strength Index

Relative Strength IndexThe Relative Strength Index (RSI) is a popular oscillator developed by Welles Wilder, Jr . RSI measures the relative changes between higher and lower closing prices, and provides an indication of overbought and oversold conditions. RSI is plotted on a vertical scale of 0 to 100. The 70% and 30% levels are used as warning signals. An RSI above 70% is considered overbought and below 30% is considered oversold. The 80% and 20% levels are preferred by some traders. The significance depends upon the time frame being considered. RSI signals should always be used in conjunction with trend-reversal signals offered by the price itself.
RSI can be plotted for any time span. Wilder originally recommended using a 14-day RSI. Since then, the 9, 10 and 25-day RSIs have also become popular. The shorter the time period, the more sensitive the oscillator becomes. If the user is trading short-term moves, the time period can be shortened. Lengthening the time period makes the oscillator smoother and narrower in amplitude.


Signals
a) Double Top Formation
Traders watch for double tops or what Wilder referred to as "failure swings." If the RSI makes a double top formation, with the first top above 70% and the second top below the first, you get a sell signal when the RSI falls below the level of the dip.

b) Double Bottom formation
Conversely, a double bottom at or below 30% (with the first low below 30% and the second at or above the same level) gives you a buy signal when the RSI breaks above the previous peak.

Failure Swings
Failure swing is a term that Wilder uses to refer to "very strong indications of a market reversal". Wilder uses failure swings to confirm his buy and sell points, and in the two figures below you can see that failure-swing points clearly do just that.These failure swings can lead to divergences between the price action and the RSI. For example, a divergence occurs when a market makes a new high or low, but the RSI fails to set a matching new high or low. A divergence can be an indication of an impending reversal. In Wilder's opinion, divergences are the most important signal provided by RSI.

taken from :http://stocktradingskills.blogspot.com/

Stock Market Rules: H.J. Wolf Stock Speculation Rules

Stock Market Rules: H.J. Wolf Stock Speculation Rules

“Success means adapting stock market knowledge to one’s individual needs and emotional make-up.” He was no doubt influenced in making this statement, which are strongly oriented to the maintenance of trading discipline through money management controls.

1. Do not overtrade. Maintain a margin of not less than 10 points on stocks quoted under $50 a share, not less than 20 points on tock quoted from $50 to $100 a share, and 20% on stock selling above $100 a share.
2. Limit Losses. Place stops at technical danger points on all trades, and if the location of the danger point is uncertain use a 2-point or 2-point stop, or await a better opportunity.
3. Follow the Trend. Do not buck the trend, and do not hedge. Be either long or short, but no both at the same time.
4. Favor Active Issues. Do not tie ups funds in obscure or inactive stocks, and avoid thin-market issues except in long-pull operations.
5. Buy during Weakness. Buy only after reactions confirming higher support.
6. Sell during Strength. Close out on unusual advances at first sign of hesitation; and sell short only after evidence of distribution with lower support followed by lower top.
7. Distributed Risk. Do not concentrate in one issue, but trade in equal lots of several different issues, aloof which are definitely attractive. Avoid spreading over too many different issues.
8. Protect Profits. Never let a 3-point profit run into loss, and never accept a reaction of over 5 points unless the favorable trend of the stock has been definitely established.
9. Avoid Uncertainty. When the trend is in doubt, stay out. Avoid a trader’s market when the ultimate trend is uncertain unless the trade can be protected by a small stop and justifies the risk.
10. Discount Fundamental Outlook. Never ignore fundamental conditions, and always favor the trade wherein fundamental and technical conditions cooperate. Avoid a trade wherein fundamental and technical conditions are opposed, except in cases of imminent liquidation, or overextended short interest.

taken from : http://stocktradingskills.blogspot.com/

MRCB eyeing REIT market

January 31 2007

bt@nstp.com.my

MALAYSIAN Resources Corp Bhd (MRCB), which owns and manages the RM2 billion Kuala Lumpur Sentral property development, is eyeing the Real Estate Investment Trust (REIT) market.

MRCB group managing director Shahril Ridza Ridzuan said the conglomerate sees the REIT market as one of the many development funds of the future.

"But we must first allow the assets, revenue and yield to mature before looking into any REIT disposal," Shahril told reporters in Kuala Lumpur yesterday after launching the company's latest RM50 million property project the "Sooka".

On another note, Shahril said the company expects better growth this year riding on its RM400 million property projects in Dubai, United Arab Emirates.

"We are focusing on Dubai but at the same time we are looking at other operations in the region as well," said Shahril.

He reiterated that the group, which also owns a power plant, is ready to propose to the Government with a transmission solution for power to be generated at the Bakun Dam and denied reports that it is eyeing a stake in Talam Corp Bhd.

Shahril said MRCB, which is an engineering, property, infrastructure, construction and power group, currently has an order book of RM1.8 billion and derives 20 per cent of its revenue from overseas.

On the "Sooka" project, Shahril said the leisure centre will be fully completed in the third quarter of this year with an occupancy rate of 85 per cent.

Spanning 180,000 sq feet, the six-storey oval-shaped Sooka can accommodate 40 retailers and has already roped in The Sweat Club, Gold's Gym, Secret Recipe, Nosh, Istmus and Kelantan Delights as part of its tenants.

Axis-REIT records RM40.97m revenue

January 31 2007

AXIS Real Estate Investment Trust (Axis-REIT) recorded RM40.97 million gross revenue and RM33.13 million net rental income for the financial year ended December 31 2006.

During the year, Axis-Reit registered RM33.17 million total trust income and RM26.67 million net trust income.

Axis Reit Managers Bhd (ARMB), the manager of Axis-Reit, said the trust recorded RM10.8 million gross revenue, RM8.91 million net rental income and RM6.7 million net trust income (realised) during the unaudited fourth quarter ended December 31 2006.

ARMB declared RM26.4 million or 98.8 per cent of the year (2006)'s income plus RM309,340 tax exempt income brought forward from 2005.

"This translates into a total income distribution of RM26.67 million, of which RM12.77 million was paid as interim income distribution for the first half of 2006.

"Income distribution for the second half of 2006 amounted to RM13.9 million," it said.

For the year under review, shareholders were paid 12.95 sen, of which 6.2 sen was paid as interim income distribution for the first half of 2006, and 6.75 sen for the second half of the year.

According to ARMB, the revaluation of all the investment properties have also increased the net asset value per unit from RM1.39 to RM1.43 upon incorporation of the revaluation surplus of RM8.09 million on December 31 2006.

Axis-Reit owns a portfolio of nine commercial, office and office/industrial real estate. The properties are Axis Business Park, Menara Axis, Crystal Plaza, Infinite Centre, Axis Plaza, Kompleks Kemajuan and Kayangan Depot, Axis North Port Logistics Centre 1 and Wisma Bintang.

Ogawa listing by end of Q1

January 24 2007

HOME-GROWN provider of healthcare and lifestyle equipment, Ogawa World Bhd, expects to complete its listing exercise before the end of first quarter 2007.

The group has received approval from the Securities Commission (SC) to be listed on the Main Board of Bursa Securities Malaysia Bhd.

"Prospects in the healthcare and lifestyle market remain very promising, driven by growing middle income populations and rising health awareness among general consumers," Ogawa chairman Richard Wong said in a statement.

He said the listing will further enhance Ogawa's brands and provide the group with a stronger platform for growth.

Co-founded by Wong and his business partner, Lim Poh Khian in 1986, Ogawa has successfully grown from the trading of household and electrical products to a dominant retailer of healthcare and lifestyle equipment through its retail outlets in Malaysia.

Its range of equipment and supplementary appliances, including its top selling massage chairs, are marketed under its own brand names, OGAWA and DEKI.

The group's listing exercise is advised by Public Investment Bank Bhd (formerly known as PB Securities Sdn Bhd).

Petra Energy gets SC nod for listing

January 24 2007

PETRA Perdana Bhd subsidiary Petra Energy Bhd has received Securities Commission approval to list on the main board of Bursa Malaysia.

"The timing is just right for Petra Energy to take its Brown Field operations to the next level. We are confident of expanding our role not only in the domestic but also in the regional market," Petra Perdana executive chairman and chief executive officer Tengku Datuk Ibrahim Petra said in a statement.

He said although the price of crude oil is hovering around the US$50 per barrel range, lower than what it was before, there is still potential for maintenance, operations and retrofitting services for existing oil and gas platforms as oil companies seek to maintain or increase production output.

Market studies show that about 150 of the 270-odd oil and gas platforms in Malaysia and more than 600 platforms in the region exceed 20 years of age, he added.

Petra Energy's listing will entail a public issue of 46 million new ordinary shares of RM0.50 each and a bonus issue of 65 million new shares to be issued to all shareholders of Petra Energy prior to the listing on the basis of one new share for every two shares held after the public issue.

The listing exercise is expected to be completed in the second quarter of 2007.

Based on the indicative issue price of RM2.49 per share (or a theoretical ex-bonus price of RM1.66 per public issue share), Petra Energy expects to raise a total of RM114.54 million.

Tengku Ibrahim said the listing would also improve the group's gearing, resulting in a healthier balance sheet and enabling continued expansion into the Brown Field market.

Alliance Investment Bank Bhd has been appointed adviser, underwriter and placement agent for the listing of Petra Energy.

Boustead REIT to distribute 98% of earnings from Islamic plantation REITs

bizedge.com

Boustead REIT Managers Sdn Bhd plans to distribute 98% of the distributable earnings from the Al-Hadharah Boustead REITs (real estate investment trusts), which is scheduled to be listed on the Main Board on Feb 8.

Its chairman Tan Sri Lodin Wok Kamaruddin said on Jan 15 the Al-Hadharah Boustead REITs would be well positioned to declare a dividend distribution of 7.38 sen per unit for the next three years, beginning from 2008.

The projected earnings before taxation for the REIT, which is the first Islamic plantation REIT on Bursa Malaysia, is RM34.51 million for the financial year ending Dec 31, 2008 and RM34.82 million for FY09.

Boustead REIT Managers, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), will manage the REIT.

The listing exercise involves 20 million units offered to the public at a retail price of 99 sen per unit. Another 198 million units would be offered top institutions and selected investors at RM1.05 per unit.

Lodin, who is also Boustead Holdings Bhd group managing director, was speaking to reporters after the release of the prospectus in Kuala Lumpur on Jan 15 by Second Finance Minister Tan Sri Nor Mohamed Yackop.

He said the initial REIT would involve eight oil palm estates and two palm oil mills in Peninsular Malaysia, valued at RM472 million.

Lodin said the current flood in Johor did not have an impact on the REITs as the plantation in Kota Tinggi was on high land. He added the only problem was to transport the fresh fruit bunches.

"The only issue is with accessibility. However, at the current CPO (crude palm oil) prices, we do not see this as a major problem,” he said.

On the PSC Industries Bhd (PSCI), Lodin said he expected it to perform well this year.

“There are many positive things happening for the company. We will be making the announcement at the appropriate time. PSCI is moving in the right direction, which we hope could help it turn around this year,” he said.

Boustead owns 32.5% or 56.57 million PSCI shares as of July 2005. PSCI posted a net loss of RM47.78 million for the third quarter ended Sept 30, 2006 compared with RM391 million net loss in the previous year.

Short selling makes comeback in Malaysia after 9-year ban

Biz time online

MALAYSIA began yesterday to allow short selling of a limited group of company shares, lifting a nine-year ban imposed in the wake of the 1997/98 Asian financial crisis.

Malaysia, which had banned short selling to halt speculative sell-offs, will allow the practice for 70 selected stocks to boost foreign interest in the market.

Analysts welcomed the move, saying it showed the Malaysian Government's effort to further develop its stock market.

"Short selling sends a signal to the market that Malaysia doesn't have a restrictive framework and it is up with most developed markets in the ability to short sell," said Jay Moghe, managing director of Opes Prime Asset Management Pte Ltd in Singapore.

"Most institutional investors prefer the ability to hedge in a stock market... it's a key component of hedge fund activity."

Short-sellers borrow shares and sell them in expectation that prices will have declined by the time they need to buy them back and return them to the share lender.

Typically, they are a feature of developed markets, enhancing market liquidity and boosting returns for fund managers who lend out their shares for a fee.

But analysts say they did not expect a high level of short selling in Malaysia yet. Investors have largely been bullish on Asian equity markets after a strong 2006.

"Short selling has not been ignored, but no one wants to take a chance," said Kuala Lumpur-based Kenny Yee, head of research at OSK Research.

"With the market on an uptrend and everyone entering the new year expecting the Malaysian market to touch 1,200-1,300 points, how can you find anyone with the guts to short sell the market?"

The KLSE Composite edged up 1.9 per cent at 1,117.09 points.

Malaysia wanted to resume the practice by the end of September, but put it off due to technical problems. In October, the stock exchange said short selling could begin in January.

Under the new rule, owners of stock will get a 2 per cent return on lending a minimum of 50,000 shares to a central lending pool, with Bursa Malaysia as the counter party. Lenders previously received 1 per cent, analysts said.

Short-sellers may borrow a minimum of 100 shares, paying a 2.2 per cent charge and a RM100 borrowing fee.

They are also required to provide at least 105 per cent collateral on the amount they borrow, which can be in a combination of cash and shares and only on the list of 70 stocks which are listed as acceptable shares.

Despite the change, some investors said they still feared a repeat of 1998, when Malaysia imposed capital controls to shield the economy from the effects of the Asian financial crisis.

"There would be two broad things. One is the legacy of 1998 when Malaysia did impose capital controls and it can do so at any time. That is a legacy financial players don't forget," said a Singapore-based hedge fund manager who declined to be identified.

"Secondly, Malaysia is not a market with a large volume. I think the flood of global money coming into this part of the world would target Singapore before Malaysia. The basic summary is - yes a positive move, but don't expect to see an enormous flood going in."

Among the 70 permitted stocks available for short selling are low-cost carrier AirAsia Bhd, which rose 7.3 per cent to close at RM1.62 yesterday on an anticipated global alliance.

They also include smallest local mobile phone operator DiGI.Com Bhd, whose shares have more than doubled to RM16 in 12 months and gaming firm Genting, whose stock has gained 64 per cent to RM34.50 in the same period. - Reuters

EPF restructures members’ accounts

The Employees Provident Fund (EPF) will restructure its members’ accounts with effect from Jan 2, 2007, in a move to enable its members to increase their savings for retirement.

The EPF said on Dec 29 under the restructuring, the current three accounts would be consolidated into two.

The current three accounts are Account One (60% of members’ savings), Account Two (30%) and Account Three (10%).

With effect from Jan 2, the number of accounts would be consolidated into Account One (70% of members’ savings) and Account Two (30% of members’ savings).

“The savings currently in Account Three, which are used for critical illness-related withdrawals, will be incorporated into Account Two initially. Subsequent contributions after Jan 2, 2007 will be channeled into Account One and Account Two in the proportion of 70% and 30% respectively,” it said.

The EPF said this would result in the members having a larger amount for housing, education or medical withdrawals.

“With the changes, members will have to prioritise their pre-retirement withdrawals carefully. This is because all these withdrawals will be made from the same account – Account Two,” said EPF senior public relations manager Nik Affendi Jaafar.

He said the restructuring of the members’ accounts from three to two would bring a multitude of benefits to members in the long run in the form of increased funds for retirement and greater flexibility and control over the management of their funds for their current needs.

Account One cannot be withdrawn by members before they reach 55. However, the members can invest a portion of their savings in Account One in investments managed by approved external fund managers.