What say you?...

US stock market future heads for a dive tonight as the bail out plan for GM and Chrysler was halted by US senate.Main reason to the failure of the US14bil bailout was rather perculiar from my perspective... why so??Simple, the unionized autoworkers (UAW) are unwilling to accept a reduction in wages starting from next year but prefer to do it somewhere in 2011.This is how it works....People who are desperate for help don't have much right to negotiate the rule to be honest...This is the people's tax money we're talking about and these people are still living in the state of denial by believeing that they are too big to fail...

Now answer this,
1) Is Lehman Brothers not big?
2) Did AIG take the loan even though the Fed set a ridiculously high interest rates on the bail out loan?

The answer is yes,... and frankly... without the big 3, the japanese car makers are still there.If the UAW still insists on not having any paycut, I tell you, GM and Chrysler will have to get the bail out money from somewhere or just opt for bankruptcy and liquidate their company and get out of the business cause these people just don't evolve.... the management and the employees are like dinosaours living in today's world... they cannot accept the fact that they are no longer indisposable....
My advise, as long as the pay cut is not ridiculously huge to the extend that it affects the people's ability to survive and sustain the economy (which is the ultimate factor for the economy to recover) i say just take the deal and move on...having a smaller income is better than losing your job at this difficult time.... be realistic!

Greeting....

Happy Thanksgiving guys!!!

Revelation from the heart....

As the KLCI continue to behaves in oblivion to the world market movements.... I receive an email about this article and thought it is good for people to read and do some reflection just so we plan our future wisely... so here it goes.

*A Malaysian diaspora speaks up....*

I am a female Chinese Malaysian, living in the Washington DC area in the United States . I have read many of the letters that often talk about foreign countries when the writers have no real knowledge of actually living in those countries. Many draw conclusions about what those ountries are like after hearing it from someone else or by reading and hearing about them in the media or after four years in a college town in those countries. I finished STPM with outstanding results from the prestigious St George's Girls School in Penang . Did I get a university place from the Malaysian government? Nothing. With near perfect scores, I had nothing, while my Malay friends were getting offers to go overseas. Even those with 2As got into university. I was so depressed. I was my parents last hope for getting the family out of poverty and at 18, I thought I had failed my parents.

Today, I understand it was the Malaysian Government that had failed me and my family because of its discriminatory policies. Fortunately, I did not give up and immediately did research at the Malaysian American Commission on Education Exchange (MACEE) to find a university in the US that would accept me and provide all the finances. My family and friends thought I was crazy, being the youngest of nine children of a very poor carpenter. Anything that required a fee was out of our reach.

Based on merit and my extracurricular activities of community service in secondary school, I received full tuition scholarship, work study, and grants to cover the four years at a highly competitive US university. Often, I took 21 credits each semester, 15 credits each term while working 20 hours each week and maintaining a 3.5 CGPA. A couple of semesters, I also received division scholarships and worked as a TA (teaching assistant) on top of everything else.

For the work study, I worked as a custodian (yes, cleaning toilets), carpet layer, computer lab assistant, grounds keeping, librarian, painter, tour guide, etc. If you understand the US credit system, you will understand this is a heavy load. Why did I do it? This is because I learnt as a young child from my parents that hard work is an opportunity, to give my best in everything, and to take pride in the work I do. I walked away with a double major and a minor with honours but most of all a great lesson in humility and a great respect for those who are forced to labour in
so-called `blue collar' positions.

Those of you who think you know all about Australia, US, or the West, think again. Unless you have really lived in these countries, i.e. paid a mortgage, paid taxes, taken part in elections, you do not understand the level of commitment and hard work it takes to be successful in these countries, not just for immigrants but for people who have lived here for generations.

These people are where they are today because of hard work. (Of course, I am not saying everyone in the US is hardworking. There is always the lazy lot which lives off of someone else's hard work. Fortunately, they are the minority.) Every single person, anywhere, should have the opportunity to succeed if they want to put in the effort and be accountable for their own actions. In the end, they should be able to reap what they sow.

It is bearable that opportunities are limited depending on how well-off financially one's family is but when higher education opportunities are race-based, like it is in Malaysia ; it is downright cruel for those who see education as the only way out of poverty. If you want to say discrimination is here in the US, yes, of course it is. Can you name a country where it doesn't happen? But let me tell you one thing - if you go looking for it, you will find it. But in Malaysia, you don't have to go look for it because it seeks you out, slaps you in your face every which way you turn, and is sanctioned by law! Here in the US , my children have the same opportunity to go to school and learn just like their black, white, and immigrant friends. At school, they eat the same food, play the same games, are taught the same classes and when they are 18, they will still have the same opportunities.

Why would I want to bring my children back to Malaysia? So they can suffer the state sanctioned discrimination as the non-malays have for over 30 years?

As for being a slave in the foreign country, I am a happy 'slave' earning a good income as an IT project manager. I work five days a week; can talk bad about the president when I want to; argue about politics, race and religion openly; gather with more than 50 friends and family when I want (no permit needed) and I don't worry about the police pulling me over because they say I ran the light when I didn't.

Have we seen the light at the end of the tunnel yet (PKR)? Or is it the head light of an oncoming train ? Lets hope its the former for the sake of all fair minded Malaysians.

The real agenda behind Najib economic stimulus EPF reduction

The government of Malaysia (specifically najib razak the country's deputy prime minister) which recently swap ministry with the prime minister abdullah announced econommic stimulus plan of RM7bil... we know the details of where the RM7 bil were allocated but I'm not going to talk about the details of those. Not because they make sense but I'm interested to bring up the evil plan pertaining to the EPF reduction from 11% down to 8%.

First of all have you ever ask these questions
1) Why the gov wants this reduction to be done?
2) Why made them compulsory?

Well, today I'll tell you why.... the concept is simple but rather subtle for those who never really thought about it.
Here're the reasons...
Malaysians get to deduct RM6k from taxable income for contributing to EPF and purchasing insurance.... now with lesser EPF contribution of 8%, the people of this country who falls into the income group which cannot maximize the RM6k deduction in the taxable income will be taxed more compared to having 11% EPF contribution. Less deductables more taxable income... as simple as that.

On top of that those people who are affected by the above stand to lose more if they happen to be marginally standing in a particular tax bracket.
let say e.g. taxable income of <= 50k will be taxed with 24% the extra will be taxed 27%. Now with the increase in taxable income, someone who happens to have a taxable income of 49,800 may now likely to shoot past RM50k due to the lesser EPF deductables. therefore these people will be taxed with higher tax bracket of 27%... So effectively, what is the impact? people of lower income groups will be having far lesser savings for the old age when they retire and at the same time the government will take a portion of their 3% as tax and hope the people will spend the money away to "boost" the economy. Who stand to gain? the people or the gov (which in this case is Barisan National)? It's obviously the gov! they earn a net income in increase tax Who stand to lose? The lower income group and the poor on the street.. Who's idea? Najib . Now you tell me why would any sane individual would want to vote for such a government?
In times of difficulty like this economic crisis which Obama claims is of historic proportion, the government of Malaysia is stealing from its people (specifically the poor ones)?!?
Instead of helping the people of Malaysia who voted them into power, this ungrateful government is using the economic crisis to cash in...

What an evil plan.... who ever approves this plan is very evil indeed.

My comment: If the Malaysian gov really wants to help the people ride out this difficult time, they should just do a tax rebate.... that would surely boost the economy... consumers are the fundamental driver of the country's economy.... it's a no brainer.

Lessons learned....

Post taken from Michael Yoshikami, President and Chief Investment Strategist of YCMNET Advisors, a wealth management firm...

With the announcement that Citigroup is being rescued by the U.S. Treasury, the FDIC, and the Federal Reserve, a long journey has ended for this fabled financier. Citi has now agreed to government regulation which will forever alter this once proud institution.
In New York where I'm writing this, the mood at Citigroup is one of relief and resignation that their world has forever changed. Who would have thought!

What lessons can we learn across the globe as we watch Citigroup fall under the Federal government’s umbrella? Are the lessons the same in Asia? America? Everywhere?
Indeed they are! They are universal truths we can all profit from. Understand these lessons and it will help you navigate your way through today’s treacherous environment.

Do not underestimate the downside for any investment. Citi hoped real estate markets would not fall. They hoped we would not fall into a recession. They hoped that the consumer would spend forever. Now they are paying the price for unbridled optimism. Examine every investment you make and ask yourself this simple question: What can go wrong and can you live with the pain? If the answer is no, get out.

Leverage can be dangerous. Use at your own risk. Citigroup has many great businesses generating hundreds of millions of dollars of revenue, but like AIG, a few decisions left unchecked by risk controls brought the entire company to its knees. The reason for the dramatic impact -- leverage was involved. Anyone who has ever faced a margin call knows what leverage can feel like when it goes against you. So Be Careful: Leverage can take you down a nightmare path and unwind every other profitable investment in your portfolio.

Face reality and run from denial. Looking at the truth about your current situation is important if one wants to survive these volatile times. Believing your own marketing and chants that "everything will be okay" is a recipe for disaster. Here’s a simple question to ask: If you had cash to invest today, would you buy that same investment? If the answer is no, then it's time to take another look at whether you should be in that position. I'm sure there are a few assets that Citi wished it didn't own. According to news reports about $300 billion worth.

Learn to swallow hard and take action. In a previous column on CNBC.com, I mentioned how important it was to not be like a deer in the headlights. Inaction rarely makes problems go away. Take discomfort in the chops and face reality. Facing the truth now is far better than waiting until you are forced under dire circumstances to see reality.
Citigroup did many things right this weekend. And with this capital injection, they hopefully, will get back on track. I’m rooting for them despite the mistakes they’ve made.

But here’s the difference between Citigroup and you: Your government -- whether it’s China, Australia, a European country or the United States especially Malaysia– will never consider you(and me) too big to fail.... :)
Making Citigroup’s mistakes will cause you more pain than even Citi shareholders. Follow these suggestions and it will provide a good foundation for investment success.
So in the end, maybe the Citigroup debacle has some winners after all. We can learn from their errors and hopefully they will as well. Three cheers for lessons learned. It’s the silver lining in any investment disaster....

Like I always believe, there is always a lesson to learn in everything we do... just don't repeat it.

Where are we now....which stage???

Why did the Fed ease the Fed Funds rate by a whopping 125bps in eight days this past January? It is true that most macro indicators are heading south and suggesting a deep and severe recession that has already started. But the flow of bad macro news in mid-January did not justify, by itself, such a radical inter-meeting emergency Fed action followed by another cut at the formal FOMC meeting.

To understand the Fed actions one has to realize that there is now a rising probability of a “catastrophic” financial and economic outcome, i.e. a vicious circle where a deep recession makes the financial losses more severe and where, in turn, large and growing financial losses and a financial meltdown make the recession even more severe. The Fed is seriously worried about this vicious circle and about the risks of a systemic financial meltdown.

That is the reason the Fed had thrown all caution to the wind – after a year in which it was behind the curve and underplaying the economic and financial risks – and has taken a very aggressive approach to risk management; this is a much more aggressive approach than the Greenspan one in spite of the initial views that the Bernanke Fed would be more cautious than Greenspan in reacting to economic and financial vulnerabilities.

To understand the risks that the financial system is facing today I present the “nightmare” or “catastrophic” scenario that the Fed and financial officials around the world are now worried about. Such a scenario – however extreme – has a rising and significant probability of occurring. Thus, it does not describe a very low probability event but rather an outcome that is quite possible.

Start first with the recession that is now enveloping the US economy. Let us assume – as likely - that this recession – that already started in December 2007 - will be worse than the mild ones – that lasted 8 months – that occurred in 1990-91 and 2001. The recession of 2008 will be more severe for several reasons: first, we have the biggest housing bust in US history with home prices likely to eventually fall 20 to 30%; second, because of a credit bubble that went beyond mortgages and because of reckless financial innovation and securitization the ongoing credit bust will lead to a severe credit crunch; third, US households – whose consumption is over 70% of GDP - have spent well beyond their means for years now piling up a massive amount of debt, both mortgage and otherwise; now that home prices are falling and a severe credit crunch is emerging the retrenchment of private consumption will be serious and protracted. So let us suppose that the recession of 2008 will last at least four quarters and, possibly, up to six quarters. What will be the consequences of it?

Here are the twelve steps or stages of a scenario of systemic financial meltdown associated with this severe economic recession…

First, this is the worst housing recession in US history and there is no sign it will bottom out any time soon. At this point it is clear that US home prices will fall between 20% and 30% from their bubbly peak; that would wipe out between $4 trillion and $6 trillion of household wealth. While the subprime meltdown is likely to cause about 2.2 million foreclosures, a 30% fall in home values would imply that over 10 million households would have negative equity in their homes and would have a big incentive to use “jingle mail” (i.e. default, put the home keys in an envelope and send it to their mortgage bank). Moreover, soon enough a few very large home builders will go bankrupt and join the dozens of other small ones that have already gone bankrupt thus leading to another free fall in home builders’ stock prices that have irrationally rallied in the last few weeks in spite of a worsening housing recession.

Second, losses for the financial system from the subprime disaster are now estimated to be as high as $250 to $300 billion. But the financial losses will not be only in subprime mortgages and the related RMBS and CDOs. They are now spreading to near prime and prime mortgages as the same reckless lending practices in subprime (no down-payment, no verification of income, jobs and assets (i.e. NINJA or LIAR loans), interest rate only, negative amortization, teaser rates, etc.) were occurring across the entire spectrum of mortgages; about 60% of all mortgage origination since 2005 through 2007 had these reckless and toxic features. So this is a generalized mortgage crisis and meltdown, not just a subprime one. And losses among all sorts of mortgages will sharply increase as home prices fall sharply and the economy spins into a serious recession. Goldman Sachs now estimates total mortgage credit losses of about $400 billion; but the eventual figures could be much larger if home prices fall more than 20%. Also, the RMBS and CDO markets for securitization of mortgages – already dead for subprime and frozen for other mortgages - remain in a severe credit crunch, thus reducing further the ability of banks to originate mortgages. The mortgage credit crunch will become even more severe.
Also add to the woes and losses of the financial institutions the meltdown of hundreds of billions of off balance SIVs and conduits; this meltdown and the roll-off of the ABCP market has forced banks to bring back on balance sheet these toxic off balance sheet vehicles adding to the capital and liquidity crunch of the financial institutions and adding to their on balance sheet losses. And because of securitization the securitized toxic waste has been spread from banks to capital markets and their investors in the US and abroad, thus increasing – rather than reducing systemic risk – and making the credit crunch global.

Third, the recession will lead – as it is already doing – to a sharp increase in defaults on other forms of unsecured consumer debt: credit cards, auto loans, student loans. There are dozens of millions of subprime credit cards and subprime auto loans in the US. And again defaults in these consumer debt categories will not be limited to subprime borrowers. So add these losses to the financial losses of banks and of other financial institutions (as also these debts were securitized in ABS products), thus leading to a more severe credit crunch. As the Fed loan officers survey suggest the credit crunch is spreading throughout the mortgage market and from mortgages to consumer credit, and from large banks to smaller banks.

Fourth, while there is serious uncertainty about the losses that monolines will undertake on their insurance of RMBS, CDO and other toxic ABS products, it is now clear that such losses are much higher than the $10-15 billion rescue package that regulators are trying to patch up. Some monolines are actually borderline insolvent and none of them deserves at this point a AAA rating regardless of how much realistic recapitalization is provided. Any business that required an AAA rating to stay in business is a business that does not deserve such a rating in the first place. The monolines should be downgraded as no private rescue package – short of an unlikely public bailout – is realistic or feasible given the deep losses of the monolines on their insurance of toxic ABS products.

Next, the downgrade of the monolines will lead to another $150 billion of writedowns on ABS portfolios for financial institutions that have already massive losses. It will also lead to additional losses on their portfolio of muni bonds. The downgrade of the monolines will also lead to large losses – and potential runs – on the money market funds that invested in some of these toxic products. The money market funds that are backed by banks or that bought liquidity protection from banks against the risk of a fall in the NAV may avoid a run but such a rescue will exacerbate the capital and liquidity problems of their underwriters. The monolines’ downgrade will then also lead to another sharp drop in US equity markets that are already shaken by the risk of a severe recession and large losses in the financial system.

Fifth, the commercial real estate loan market will soon enter into a meltdown similar to the subprime one. Lending practices in commercial real estate were as reckless as those in residential real estate. The housing crisis will lead – with a short lag – to a bust in non-residential construction as no one will want to build offices, stores, shopping malls/centers in ghost towns. The CMBX index is already pricing a massive increase in credit spreads for non-residential mortgages/loans. And new origination of commercial real estate mortgages is already semi-frozen today; the commercial real estate mortgage market is already seizing up today.

Sixth, it is possible that some large regional or even national bank that is very exposed to mortgages, residential and commercial, will go bankrupt. Thus some big banks may join the 200 plus subprime lenders that have gone bankrupt. This, like in the case of Northern Rock, will lead to depositors’ panic and concerns about deposit insurance. The Fed will have to reaffirm the implicit doctrine that some banks are too big to be allowed to fail. But these bank bankruptcies will lead to severe fiscal losses of bank bailout and effective nationalization of the affected institutions. Already Countrywide – an institution that was more likely insolvent than illiquid – has been bailed out with public money via a $55 billion loan from the FHLB system, a semi-public system of funding of mortgage lenders. Banks’ bankruptcies will add to an already severe credit crunch.

Seventh, the banks losses on their portfolio of leveraged loans are already large and growing. The ability of financial institutions to syndicate and securitize their leveraged loans – a good chunk of which were issued to finance very risky and reckless LBOs – is now at serious risk. And hundreds of billions of dollars of leveraged loans are now stuck on the balance sheet of financial institutions at values well below par (currently about 90 cents on the dollar but soon much lower). Add to this that many reckless LBOs (as senseless LBOs with debt to earnings ratio of seven or eight had become the norm during the go-go days of the credit bubble) have now been postponed, restructured or cancelled. And add to this problem the fact that some actual large LBOs will end up into bankruptcy as some of these corporations taken private are effectively bankrupt in a recession and given the repricing of risk; convenant-lite and PIK toggles may only postpone – not avoid – such bankruptcies and make them uglier when they do eventually occur. The leveraged loans mess is already leading to a freezing up of the CLO market and to growing losses for financial institutions.

Eighth, once a severe recession is underway a massive wave of corporate defaults will take place. In a typical year US corporate default rates are about 3.8% (average for 1971-2007); in 2006 and 2007 this figure was a puny 0.6%. And in a typical US recession such default rates surge above 10%. Also during such distressed periods the RGD – or recovery given default – rates are much lower, thus adding to the total losses from a default. Default rates were very low in the last two years because of a slosh of liquidity, easy credit conditions and very low spreads (with junk bond yields being only 260bps above Treasuries until mid June 2007). But now the repricing of risk has been massive: junk bond spreads close to 700bps, iTraxx and CDX indices pricing massive corporate default rates and the junk bond yield issuance market is now semi-frozen. While on average the US and European corporations are in better shape – in terms of profitability and debt burden – than in 2001 there is a large fat tail of corporations with very low profitability and that have piled up a mass of junk bond debt that will soon come to refinancing at much higher spreads. Corporate default rates will surge during the 2008 recession and peak well above 10% based on recent studies. And once defaults are higher and credit spreads higher massive losses will occur among the credit default swaps (CDS) that provided protection against corporate defaults. Estimates of the losses on a notional value of $50 trillion CDS against a bond base of $5 trillion are varied (from $20 billion to $250 billion with a number closer to the latter figure more likely). Losses on CDS do not represent only a transfer of wealth from those who sold protection to those who bought it. If losses are large some of the counterparties who sold protection – possibly large institutions such as monolines, some hedge funds or a large broker dealer – may go bankrupt leading to even greater systemic risk as those who bought protection may face counterparties who cannot pay.

Ninth, the “shadow banking system” (as defined by the PIMCO folks) or more precisely the “shadow financial system” (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that – like banks – borrow short and in liquid forms and lend or invest long in more illiquid assets. This system includes: SIVs, conduits, money market funds, monolines, investment banks, hedge funds and other non-bank financial institutions. All these institutions are subject to market risk, credit risk (given their risky investments) and especially liquidity/rollover risk as their short term liquid liabilities can be rolled off easily while their assets are more long term and illiquid. Unlike banks these non-bank financial institutions don’t have direct or indirect access to the central bank’s lender of last resort support as they are not depository institutions. Thus, in the case of financial distress and/or illiquidity they may go bankrupt because of both insolvency and/or lack of liquidity and inability to roll over or refinance their short term liabilities. Deepening problems in the economy and in the financial markets and poor risk managements will lead some of these institutions to go belly up: a few large hedge funds, a few money market funds, the entire SIV system and, possibly, one or two large and systemically important broker dealers. Dealing with the distress of this shadow financial system will be very problematic as this system – stressed by credit and liquidity problems - cannot be directly rescued by the central banks in the way that banks can.

Tenth, stock markets in the US and abroad will start pricing a severe US recession – rather than a mild recession – and a sharp global economic slowdown. The fall in stock markets – after the late January 2008 rally fizzles out – will resume as investors will soon realize that the economic downturn is more severe, that the monolines will not be rescued, that financial losses will mount, and that earnings will sharply drop in a recession not just among financial firms but also non financial ones. A few long equity hedge funds will go belly up in 2008 after the massive losses of many hedge funds in August, November and, again, January 2008. Large margin calls will be triggered for long equity investors and another round of massive equity shorting will take place. Long covering and margin calls will lead to a cascading fall in equity markets in the US and a transmission to global equity markets. US and global equity markets will enter into a persistent bear market as in a typical US recession the S&P500 falls by about 28%.

Eleventh, the worsening credit crunch that is affecting most credit markets and credit derivative markets will lead to a dry-up of liquidity in a variety of financial markets, including otherwise very liquid derivatives markets. Another round of credit crunch in interbank markets will ensue triggered by counterparty risk, lack of trust, liquidity premia and credit risk. A variety of interbank rates – TED spreads, BOR-OIS spreads, BOT – Tbill spreads, interbank-policy rate spreads, swap spreads, VIX and other gauges of investors’ risk aversion – will massively widen again. Even the easing of the liquidity crunch after massive central banks’ actions in December and January will reverse as credit concerns keep interbank spread wide in spite of further injections of liquidity by central banks.

Twelfth, a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit. The triggering event for the next round of this cascade is the downgrade of the monolines and the ensuing sharp drop in equity markets; both will trigger margin calls and further credit disintermediation.
Based on estimates by Goldman Sachs $200 billion of losses in the financial system lead to a contraction of credit of $2 trillion given that institutions hold about $10 of assets per dollar of capital. The recapitalization of banks sovereign wealth funds – about $80 billion so far – will be unable to stop this credit disintermediation – (the move from off balance sheet to on balance sheet and moves of assets and liabilities from the shadow banking system to the formal banking system) and the ensuing contraction in credit as the mounting losses will dominate by a large margin any bank recapitalization from SWFs. A contagious and cascading spiral of credit disintermediation, credit contraction, sharp fall in asset prices and sharp widening in credit spreads will then be transmitted to most parts of the financial system. This massive credit crunch will make the economic contraction more severe and lead to further financial losses. Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.

A near global economic recession will ensue as the financial and credit losses and the credit crunch spread around the world. Panic, fire sales, cascading fall in asset prices will exacerbate the financial and real economic distress as a number of large and systemically important financial institutions go bankrupt. A 1987 style stock market crash could occur leading to further panic and severe financial and economic distress. Monetary and fiscal easing will not be able to prevent a systemic financial meltdown as credit and insolvency problems trump illiquidity problems. The lack of trust in counterparties – driven by the opacity and lack of transparency in financial markets, and uncertainty about the size of the losses and who is holding the toxic waste securities – will add to the impotence of monetary policy and lead to massive hoarding of liquidity that will exacerbates the liquidity and credit crunch.
In this meltdown scenario US and global financial markets will experience their most severe crisis in the last quarter of a century.

In short, one should be prepared for the worst, a systemic financial crisis.

courtesy of Dr. Doom....

KLCI stock market direction?

Well, many things have been said and many assurance were given including the RM7bil "stimulus" plan.... so questions many investors are asking,. is this the bottom of KLCI?
So let's do a recap here...

Internally,
1) Mal gov is using EPF money to fund the valuecap bail out.... why not use the national reserve?
- if we have such huge reserves, why not take some to benefit the people, afterall these are the people's money?
2) EPF contribution reduced from 11% to 8%... hoping the people will use the 3% to spur the economy... what bloody strategy is that??!? more importantly, does it help?
3) No fund was allocated to improve the people's cost of living and purchasing power, (eg. tax rebate, BLR reduction, etc...) --> fuck that RM500mil for police station and army camps maintenance... is there a war? or should I say does the police work so damn hard that our crime rate have reduced? then why the fuck does the gov think the RM500mil (people's hard earn money) should be spent this way? have we found out the person who supplied C4 bomb in the mongolian murder? if the police can't even solve such an outright simple and straight forward case, what makes us think by spending that money, it will improve the services of these incompetent and useless pricks? -> what maintenance will cause RM500mil?? RM1mil for an aircon pipe? RM50k for painting a police station? ACA in this country is a fucking puppet.... that's why.
4) RM1.2 bil for low cost housing? kid me not... is the gov not aware of the state of the consumer confidence and financial conditions? why not invest in building better public transport to lower the cost of living and ease traffic congestion? then the people will have more allowances to cope with the rising cost of living... that's simple economic moron!! -> to the Malaysian leader who approve the "stimulus" plan... get an education!

now let's go external...
4) Sentiments on Oct jobs report in US are extremely negative.... out tonight.... expected to top the number of payroll cuts.... >300k people to be jobless.
5) other data such as home sales and inventories for wholesale will be revealed..
6) GM and Ford will lead the market to south tonight. Both are expected to report huge losses and cut jobs to preserve cash while its management are pinning for Fed's help to inject funds into the company...
7) if GM and Chrysler were to merge (which I think highly possible due to the bleak outlook for auto industry) more heads will roll...with at least close to 33,000 jobs to be cut.
8) GM needs USD14bil at least to keep the business running...GM burned through a little more than $5 billion in the first half of this year, ending the second quarter with $19.4 billion. On the other hand, Ford spent the same amount, but had more cash on hand, ending the second quarter with $30.1 billion while Chrysler ended the second quarter with $11.7 billion.
--->errosion of consumer confidence and inability to borrow from banks are the key problems...
8) Warren Buffet's Berkshire Hathaway is expected to report a relatively significant drop in earnings tonight.
9) Mr. Obama is not going to take over the office until Jan '09... so don't expect much of his promises to materialize anytime soon in the future...

its a no brainer that the stock market will continue to head south... but the key message is we have not yet reach the bottom....

Definitely a better way to run a country...

I couldn't agree more with this suggestion... but how many Zaid Ibrahim do we have in the current gov to make this change a reality?... sad

Pay politicians based on SMS charges
Cedric Oct 21, 08 4:00pm
I have a simple idea that I would like to share with your readers. I think we should all gang up and not pay all our taxes. This way there will be no corrupt ministers trying to vie for the top posts that would grant them access to the nation’s wealth.
What’s the use of having ministers that siphon money from the people? No corrupt minister would want to be in the ‘fight’ if there isn’t a pot of money at the other end of the ‘rainbow’.
Those willing to fight for the people should be persons who want to make a difference to our nation. But the corrupt people obviously can't resist the temptation when all that money is under their noses and is easy to grab.
With regards to taxes, we should only pay for what we want. Those who want something should pay for it, while those who don’t want it will not need to fork out a dime.
For instance, those who support the purchase of the jets or submarine, do please go and register at some website/booth. Once the registration has closed, and if the decision is to still proceed with the purchase, then share the cost amongst the voters who voted ‘yes’.
Therefore, any major project undertaking should be transparently proposed and it will be the minister’s job to convince members of the public to help finance the project.
As such, there would be no improper investment or project that is overpriced or either abandoned halfway through.
To keep the government running, we can, however, pay a yearly fixed rate for those necessary items.
These include for security and policing, roads, housing, broadcasting (radio/TV), garbage collection, health services, education etc.
Of course, the amount to be paid would be fine-tuned but you get the drift. And as we workers have to endure every year a performance review, we should also have a performance review of our prime minister and ministers.
We should have an SMS poll whereby if a politician does well, the people can vote for him or her and maybe a RM0.20 can be added to the total SMS charge. This 20 sen can then be given to /her salary/income/bonus.
If the politicans slack or try to be clever in their undertakings causing them to lose popularity, they might as well go into other businesses. And guess what? We don’t have to bear any cost in employing them if we don’t like them at all.
Do you think people will be still be complaining about not having enough to live on due to heavy taxation and corrupt practices with this kind of model? Imagine how much Malaysians would have prospered if not because of wastage.

Is that all?.....

Financial crisis sparked by subprime rage.... have we seen all of it?
UK unveils £500b rescue plan for financial sector....UK banks set for £45b injection
German bank rescue may cost $400b euros
US approves bank rescue $700b dollars
Russia approves £51b bank rescue.

More banks to tank? or how is it possible that no insurance companies tank(AIG biggest insurer needs double fund injections, others still ok)? am I missing something here?... credit card crisis to wrap up the damage and bring us to great depression of the 21st century?

When US dollar goes down, ringgit malaysia follow.... yet Malaysia's finance minister najib insist the country's economy is good... am I missing something here or he knows something I don't? (he's an economist as claimed by badawi)... we'll see....

If US dollar crash, what's the implication to all malaysians? (our KLCI is not showing the true picture)... i wonder how long can najib prove many of us(who believe otherwise) wrong?

Is history going to repeat itself?... I encourage all of us to prepare for the worst... I believe in my own analysis rather than taking it from a politician.

Malaysian stock market future? - episode 2

Let's take a look at Malaysia today....

1) Plague by political instability and uncertainty... weak gov...

2) Dragged down by foreign investors who left due to the above reason and the weakening world economy and financial crisis in US...

3) Inconsistency in government policy (ISA - to protect individual?!?)... what if one day, ISA is imposed on foreign funds to prevent them from wiring out cash to their own country? bear in mind anything is possible now that we have a home minister who define ISA according to his bloody own preference... for all you know, the next time we sell stocks during a bear market, we might be charged with ISA for causing the stock market to fall hence a treat to security.

4) Worst still, pm is not able to control his people from misuse of power.

5) dpm is too engross with setting up own spider web.... can't be bordered with the problem faced by the people of this country.

6) a.i from BB is set to go on nation wide tour to spread racist and wrongful teaching to the people.... remember, no ISA was impose on this faggard.... even the army chief and the JIM chief condemns his actions.... yet aab is not doing anything nor the retard in home ministry.

7) possibility of PK takeover... not sure when?? uncertain

Taking into account these points, be it technical nor fundamental analysis, just forget it. Its all about externalysis now.... :D but I think Genting is worth a shot for all the prospects linked to this company.

you should think about it...

Beyond rescue...

Being a local leader, ahmad holds huge responsibility towards the people of this country at least to those around his respective area... B)... instead, this so called UMNO chief choose to disgrace, disrespectful, and shame the ruling gov barisan national. He acted like a warlord....UMNO is the leading component of barisan holds the responsibility to show leadership, respect and govern the interest of the minorities in BN. ahmad not only unfit to be a leader, he does not even deserve to be a Malaysian.

If I'm PM, I would sack him and he should be charged for sedition. Which i'm sure he will be guilty and jail will help him to think over his irresponsible actions....This would send a strong message to all people that no one should stoke racial sentiment in this country. Only then Malaysian can leave in peace.

Where are Malaysians heading?

When we started work around 1973 a 1.3 Litre Japaness car was RM 7000

Today the equivalent let's say it is RM 60000............8.5 times I

n 1973 a double storey house was about RM 45,000...or less

Today it is about RM 300,000............6.6 times

In 1973 an Engineer's pay was RM 1000

Today it is about RM 2000 +/-............2 times....

From 1973 to 2008........35 years......what is the Trend.? Bearish !!!!

In a stock market when the trend is bearish , what do we do?..Exit !!! When a country's trend is bearish what do we do?.....? This Bearish trend is more difficult to turn around as compared to the stock market. I have used these 3 items House, Car & Salary as a measurement of the country' s performance for the past 35 years....

There is a book I saw in MPH bookshop entitled : Malaysia: The Failed Nation some of you may be interested to read up. I agreed with the writer..... This morning I was having Coffee at McDonald ( now the coffee..100 % Arabica beans..is quite good @ RM 2.90....free refill !!. I asked how much per hour is their pay? RM 3.00 ! x 8 hours = RM 24 per day... x 25 days = RM 600 per month My daughter works part-time during her University days...she worked at Gloria Jeans Coffee ..the pay Australian $ 14.00 ( @ 3.15 = RM 44 per hour.....x 8 = RM 352 per day !!! x 25 days = RM 8800 13.3 times more !!!!! ......Price of houses in Perth is about the same in KL

Price of cars are about 23 % cheaper...in Perth.( Australia ) I think more and more people are becoming aware of this Bearish trend. Developed country by 2020?...means High income country Let's look at some as of year 2005 ( Financial Times ) USA GNP per capita US$ 35400 UK GNP per capita US$ 25510 Australia GNP per capita US$ 19530 Singapore GNP per capita US $ 20690 These are developed countries by income measurement Malaysia GNP per capita US$ 3540 Year 2020..developed country? Really...a sad story. Worrying Trends, isn't it??????

Ringgit sliding further and further under BN
Gan Jul 8, 08 4:03pm
Recently, I interviewed some fresh graduates applying for jobs with my engineering company. I accepted two applicants on a starting salary of RM1600. It struck me as odd that 15 years ago, I myself started work as a fresh graduate engineer for the same pay. Indeed, if you compare the salaries of graduates now and 15 or even 20 years ago, you'll find little difference but that their purchasing power is vastly different. It's the same story when you compare salaries of shop assistants, office staff, factory workers and others.

To compound the effect of inflation, the ringgit has depreciated greatly against all major currencies. The real income of most Malaysians has moved backwards. This is why many Malaysians suffer under the petrol hike. The root of the problem is that our real incomes have shrunk in the face of inflation and depreciated currency.. Malaysians have not been spoiled by subsidy but are unable to move out of the time lock of stagnated and depreciated incomes. If you compare the per capita incomes of Singapore, Hong Kong, Taiwan and South Korea, they are a few multiples of ours although at independence all these countries were the on the same economic level as Malaysia.

What has gone wrong? We were the rising star of East Asia, a country rich in natural resources with the most promising potential. The reason is massive corruption, plundering of resources, wastage of funds for huge non- economic projects, anti-public interest deals with politically-linked companies and passing-of-the -buck to the man in the street.. Four decades of NEP where education, economic and employment policies are defined by race ensured that meritocracy took a back seat.

Our university standard has declined and the today best and brightest of our youth emigrate to escape the racial inequility only to contribute to the economies of foreign lands. The reputation of our judiciary which was held in high esteem worldwide has sunk so low that foreign investors now insist on arbitration in Singapore in case of any dispute. We also have a slew of oppressive laws such as the ISA, OSA, Uuca and PPPA which stifle free speech and are designed to keep the ruling parties in power. We have become less attractive to foreign investors and now lag behind our neighbours in Asean for foreign direct investment.

Even some corporations who have established themselves here are moving out. All the economic and social malaise cannot help but affect the value of our currency. The strength of a country's currency is after all, a reflection of its fundamentals. Furthermore, Bank Negara has a policy of weak ringgit to help exporters, never mind the burden on the common folk. The government is pro-corporation, not pro-rakyat. While the poor and middle-class are squeezed, an elite group gets breathtakingly rich. We have the distinction of having the worse income disparity in Asean.

A re-distribution of wealth is under way from the poor and middle-class to a select group of politically-connected elite. The end result of this re-distribution will be a small group of super-rich while the majority are pushed into poverty and the middle-class shrinks. This is what happens when the rich gets richer and the poor get poorer. There is much that is wrong with Malaysia. The responsibility for pulling the country backwards can be laid squarely at the door of the ruling regime. It is BN's mis-governance, racial politics and culture of patronage which has seen the country regress economically and socially. We seem to be sliding down a slippery slope, further down with each passing year of BN's rule.

Another five years of BN rule and we'll be at Indonesia's standard under Suharto. Another 10 years and we'll be touching the African standard. What a way to greet 2020. Is there any hope for Malaysia? Faced with the reality that BN will never change, many Malaysians desperate for change turn their lonely eyes to Anwar Ibrahim. Pakatan Raykat has promised to treat all races fairly, to plug wastage, fight corruption, reform the judiciary and make Malaysia more competitive. But some have questioned whether we can trust Anwar and his loose coalition of disparate parties.. The question is not whether we can trust Anwar and Pakatan Rakyat but whether we can afford not to. Do we have a choice?

Can we afford another ten years of misrule?

"I do not know anything!" sound familiar?

Umno veteran lodges ACA report on top leadership
By TEH ENG HOCK


KUALA LUMPUR: An Umno veteran lodged a report with the Anti-Corruption Agency against the party’s top leaders.

Selangor veteran leader Datuk Mazlan Harun, who is also a former Umno Youth exco member, did not make it clear what the report was about but said it was to alert the ACA on possible abuse of power in the run-up to the party elections in December.

“The ACA report is to ensure there is no abuse of power because we all want a free and fair elections,” he told reporters Tuesday after spending an hour being interviewed by ACA officers at the agency’s office here.

Muar branch leader Datuk Kadar Shah, the son of the late Umno permanent chairman Tun Sulaiman Ninam Shah, accompanied Mazlan as he presented documents as proof to the ACA.

Asked who were the leaders implicated in the report, Mazlan said: “Those in power”.

“Who do you think is most powerful in Malaysia?” he said.

It is understood that the complaint was based on an open letter written by Umno Petaling Jaya Selatan division chief Kapt (Rtd) Datuk Zahar Hashim and addressed to the party’s secretary general demanding that both party president Datuk Seri Abdullah Ahmad Badawi and his deputy Datuk Seri Najib Tun Razak be disciplined for allegedly abusing their power.

In the letter, dated July 11, Zahar asked for the party’s 2008 version of the Code of Ethics to be enforced only in December instead of July.

This was because Abdullah and Najib had breached the code on July 10 in a briefing with division, Youth, Wanita and Puteri leaders.

Zahar said they had openly campaigned and appealed for the top two posts to be uncontested, while Abdullah also promised to hand over power as party president to Najib in mid-2010.

Zahar called the act as "political corruption of the highest order", and claimed the duo had abused government machineries and given cash and gifts to Umno members in a bid to sustain their position in the party.

Other Umno veterans present at the ACA office were Kadar's brother Hassan Tun Sulaiman, who is also Muar division Umno committee member and former Bandar Tun Razak division secretary and Sang Kelembai blogger Zaharin Mohd Yasin.

Hassan said the transition of power between Abdullah and Najib in 2010 was wrong, as the current Supreme Council can only decide if it was carried out before December.

"The new members of the Supreme Council elected in December are the ones who can make a decision on the transition of power in 2010," he said.

Zaharin said the transition was unconstitutional, as the party constitution does not provide for a transition of power.

"But we accept resignations. It actually means Abdullah is resigning in 2010, but that is if he is still party president then," he said.

In a statement, Civil Movement Against Corruption (Gerak) chairman Mohd Nazree Mohd Yunus urged the ACA to investigate all those involved in money politics in the Umno elections at all levels.

"Gerak supports Datuk Mazlan Harun for reporting political corruption involving the Umno president. The allegations by Datuk Zahar Hashim that the Prime Minister is involved in money politics should be looked into," he said.

_____________________________________________________________________________________

KUALA LUMPUR: Umno Deputy President Datuk Seri Najib Tun Razak has refused to comment about an Anti-Corruption Agency report against him and party president Datuk Seri Abdullah Ahmad Badawi.

"I do not know about any report or anything about it," he said when asked about the report.

Earlier, Umno veteran Datuk Mazlan Harun had lodged an ACA report on the two leaders for alleged abuse of power.

The former Umno youth exco claimed that Abdullah and Najib had allegedly misused government machineries to get support from party members to retain their position in the coming party elections.

The complaint was based on a letter by Umno Petaling Jaya Selatan division chief Datuk Zahar Hashim, which was addressed to the party's secretary general.

Zahar had demanded for Abdullah and Najib to face disciplinary action for allegedly abusing their power.

Note: How can anyone expect someone who has a skull filled with air to think or even to know anything? Its just impossible... all this shit is going to bring the economy down... stock market will be the first to get hit...

What is next best steps...

The stock market is on the slide and will continue to do so and the magnitude of the fall depends on the cases involving the DPM and Anwar... all these SD is a start to trigger people to think and to link up the loose ends but will not be sufficient to bring retribution to the guilty ones... the people needs hard facts... video, picture, sms records from telco companies, and other witnesses who were there to witness the deal in Paris. This will wrap up the cases quickly and also help dollah's camp to regain the Rakyat's confidence that he's serious for a revamp. If dollah refuse to severe the alliance with DPM and continue to pour in support without considering all the evidences that have surface would bring the coalition down for good.. and it'll be down much faster than anyone would believe....
You don't stick around shit that would make you smell disgusted let alone holding on to them... be wise dollah... for this is an opportunity of a lifetime for you to turn around and fix things after the dismal results in March 08. The rakyat may then realize that there is a back bone afterall...

Comments from,
Smurf

A Malaysian sad story... do we deserve it???

I just could not stay silent anymore after all the things that are happening in Malaysia. Few things I would want all Malaysian to know and think carefully as their future, all their investment in stock market, property, and how their lives will change if the current condition continues…

Statements..
1) Promise of a reform in the police and judiciary system in this country remains a wish…
2) Arrogance of gov to treat its citizen like slaves… Give what it likes and do what it wants without having to care much about your feelings and welfare…
3) Senseless and meaningless Sukhoi jets purchase by the defense ministry using the people’s tax money!!!!!
4) Police officers and a political analyst of DPM in being charged in the brutal and barbaric murder of Mongolian model using C4 explosive which is highly dangerous and can only be obtained after being approved by the defense ministry.
5) The claim of submarine commission of >RM500 mil given to the person authorizing the purchase of some useless submarines…is this being investigated? Do you know who much we can do with RM500mil? And the billions used in the submarines purchase…???
6) Amendment of 9mp by the fed gov by canceling all project in the Pakatan Rakyat controlled states!!... Which tells us the promises made by the fed gov before election is of no meaning because they can change the plan anytime they want!... the people in these states need the developments!!!
It’s all but lies!!... to win votes. (How pathetic)..the rakyat knows better…
7) Charging Malaysia today chief editor Raja Petra Kamarudin of sedition...what sedition?? By revealing evidence in a murder case?
8) The return of the 1998 joke of the century, accusation of Mr. Anwar Ibrahim (leader of Pakatan Rakyat) of sodomising an “aide”… or a mole? (from the existing xxx - you know lar)
9) How can a country as rich as Malaysia, has more than 80% of its people living at or below the poverty line???!!?

Questions Malaysians must ponder…
1) Are we being denied of what we deserved?... we pay RM2.70 for a liter of petrol… what other benefits the people get in return of that? Public transportation in my view is a failure in this country… take Selangor alone…90% of the people go to work with their own transport!!!.. Are you satisfied? Compare to Singapore and Australia to see much we lag behind in development…
2) Are you willing to invest more in this country?
3) Why are we paying heavy taxes?
4) Do your children have a future here?
5) Who gives the mandate to form the gov? (The people!!!)
6) Then WHY are the policies not favouring the people?? But makes the lives of the people harder day by day..
7) Real inflation rate is 6% at least… if not higher than BLR… so are you building wealth or losing wealth each day?
8) Is the gov doing its job well? (I think they suck big time)…

Ultimate question for all….
* Should we give our tax to the State government instead of the Fed gov? Since we dictate our future? We can build our own subway with our own money in Penang!!! Screw the fed gov... they are where they are because we give them the power to run the country... the people can take it back one way or another!

Malaysian stock market future?

With the political crisis looming in the governing party BN, many projects unveiled in the 9mp will not be materialize. The likelihood of project like the northen pipeline that span across the east and west is similar to the likelihood that the prosecution in the Altantuya murder case would call the 3 names revealed in the statutory declaration of Raja Petra (cousin of Sultan Selangor) to court.

With the rising consumer goods and the all time high inflation of ~7.5% (as real as it can be)... the malaysian people are struggling to cope with the daily expenses that seems to rise everyday from food to utility and other general necessities....

From foreign investors perspective, most of them that I know of have been shorting the market for the past few months now... and some even speculated a huge sell off in time to come... many have advised their clients to stay away from the Malaysia market in view of the current situation... while the new state government continue to clean up the administration and start a new beginining, can of worms are bound to be unveiled... that's a fact many would agree since the change in power seems to have caught the previous government by surprise... more revelation of misused of power by individuals elected by previous gov would mean better publicity for the new government called "Pakatan Rakyat".

For the next few years the Malaysian market will not be a good place for investment.... in a nut shell, the outlook is gloomy and uncertain... not a favourable place for investment for now...

Maybank.. a laughing stock?

National bank in Malaysia, Maybank buying Bank of International Indonesia (BII)... a news that caused maybank stock price to plunge since the news starts spreading through insider to investors... What logic would it be that when all other banks have withdrawn their bid but Maybank still pays more than 4.5 times book value of BII??... Is there any reason behind this transaction that public(tax payers) is not aware of?

First of all, in the short run (3-5 years) Maybank will reap nothing but continue to pump in cash into this blood sucker in the first few years... having paid so much to Temasek (~RM2.63bil)... what does Maybank stands to get in return? this is an insult to Malaysian if the management of Maybank were to say that BII is worth that much.... even the attempt of buying Public bank at 4.5 times its book value deserve grave consideration....

The way I look at this, it's nothing but a "negotiated" move... someone has gotten their shares so it's just paying what they have taken.... from business point of view, it's a lousy move... if they do their homework, this is definitely not an option to go.... pure stupidity from business standpoint.

Is genting fairly priced?

Genting is spending lots of money on the Singapore casino project and would only start to reap from it by end of 2010....will this giant be a good buy at current price below RM5.95? If the market is efficient, neither technical analysis nor fundamental analysis would be meaningful as none of them would be of any advantage to investors.... identifying systematic mispricing is impossible, any information on earning prospect and dividend is worthless, even insider info might be of little use if market is of strong efficiency...

i personally think malaysian market is a strong market, given the fact that insider trading is rampant... and our SC is just a white elephant... regardless, there will be exception and historical trend will continue to emerge and repeat itself...

Now back to Genting, believe I'm seeing a positive divergence in the making... and thought anything below RM5.75 is a good deal. The company’s plantation together with it’s oil and gas exposure also gives this company the best of both worlds now that the oil price stands at a staggering USD135 per barrel.

Ranhill

This stock has been losing steam since Jan this year and current stood at around RM1.50. The possibility of the pipe line project located in the northern region is likely to be a long shot now that all the states involved are control by opposition parties. Truth is even if the government is controling these states, it would not have take off easily let alone the situation Malaysia is currently in.

The Ranhill is therefore likely not to benefit from this "project" in the future given the uncertainty of the policy lead by the fed government. Without this project Ranhill still have plenty of project on hand to keep them busy for the next 5 years. Given the company's historically strong operating margin of ~30%, well diversified business and strong income from it's utility business makes it worth for you to keep this company in your radar.

I do not rule out possibility of privatization yet... ;)

What next?....

Many people has started to question the Malaysian market these days ever since the ruling government lost 4 of its the important states in the peninsular.

Question such as will the NCER, SJER, ECER and other major projects such as the 2nd Penang bridge in Penang state and other government enforced contract such as the the PGCC.

Well first of all, in my opinion the PGCC is doom.... it will never materialize. Realistically, it is not fit for implementation... PORR is another project poised to be scrapped....property buyers in Malaysia, becareful before you sign up for any new property... for you may end up holding it for a very long time...

Mortgage crisis is ending, oil price is hogging the lime light for now... >USD120 a barrel is just obscene...for a limited resource, those suppliers surely know how to squeeze the world consumers dry... credit crisis is not gonna end as quickly as some of us wanted it to be.... it's just gonna get tougher from here on... financial crisis from credit card spending is inevitable... one after another, the world just have to ride this one out... inflation is already here... the question is when it will recover?... banking sector is facing an uphill task in keeping up with the rising expectation of skeptical investors hoping for capital return on their investments...

Shortages of building materials is stifling the construction industry and for a house that needs RM250k to build from scratch a year ago, now needs ~300k on average across the country....

the fed gov has got to do better than this... projects announced in the 9mp have to be continued and supported from all angles to ensure that promises are kept....

US economy is reaping the bad seeds planted since the time Greenspan is in office and Bernanke is just clean up mess... US dollar is not going to recover its value unless they end the Iraq war and stay quietly at home building the new foundation for the country's economy going forward...

China market has retreated quite a big chunk in view of the nearing Olympics...Shanghai stock exchange will be hovering around 4k come the next 6 months... I expect nothing interesting... rather Singapore stock market is one of the best location to invest in for now in view of the good corporate governance and stability of the country in the Asian region....

For traders, I anticipate the Malaysian market will not have any major movement until the UMNO general assembly meeting draws nearer...so if you have been actively trading for quite a while, take a break la... what's the rush?... you won't lose much.... :)

Leader set to rise again...

Leader has been lagging since the down trend a few months ago... will the business be affected in anyway?, personally I don't think so...business is set to get better in the 2nd half even though many projects appears to be vulnerable to the high costs and are likely shelved by the current gov.... cable business is expected to rise at least 15% Q-to-Q... and anything less than that is a sign of a slow down... revenue from power segment is expected to rise slightly even though high cost will offset a big chunk of the profit...

The company's interim dividend payout of 1.5% is timely....psychological impact from this is far more significant than the amount involved....
Not a bad price to accumulate for immediate term... chart wise, the stock price is well supported at current level... 0.965 is a resistant level running out of time... Wimax is another factor not to be forgotten...

Election impact on NCER...

Many people have not expected Barisan rakyat to win 5 states from the 12th election in Malaysia and not even the opposition parties themselves... the government have to sit down and ponder hard and deep before they layout their plans for the country for the next 5 years because this will be the determinant to its survival in the next election to come.
The barisan rakyat is expected to clean up all the "bad sector" in all the previous state governments and honour its promises to give a fair chance to all and to eradicate poverty irregardless of race... now is the chance for them prove to the people that they are the right choice..

Regardless, the federal government on the other hand is expected to continue to work with the state govenments and make the 9mp projects a success. Any act of sabotage will be viewed as immature and will costs them dearly in time to come. NCER in particular is now in question... PGCC is even more questionable... the people don't like it... not because its not good for development but because the gov does accounts for the infrastucture that needs to be available to support the PGCC development. Access to the site is crucial....PORR is not ready, traffic problem is not fixed and after so many years of BN ruling the state is still without a decent public transport like a monorail... is embarrasing for Penang particularly when it has so many foreign investors there and has help the gov rake in billions in taxes...

Questions remained is whether the ruling gov BN will go honour their words or turn their back to Penang....? I personally think there will be changes... and the NCER projects will be continued but am doubting the flow of budget from the federal gov to the state... As of the question of how gentleman the ruling party is, we're here to witness.... stay away from those company affiliated with projects in NCER....for now.... though I don't think it will be scrapped.
There are many reasons why we should be cautious....

Gamuda issue is a classic example of why Malaysia cannot compete with other ASEAN countries... why Datuk Lin sold of his shares at such price?... why at that time? and what's the motive? .... bear in mind he's a main reason why the company is where it is today.... but now he's dumping it?... it's obvious there are powerful people forcing their way into the company... and change in the shareholding structure is imminent... will it benefit Gamuda? you should know by now.... everyone favours prosperity....if were to prosper with chance, why leave?

Well, enough of my Sunday morning gossip... more will come, hold your horses... view it from an eagle's perspective before you act...

Back to square one....

I have written about melewar previously and is still a favourite stock for me because of the high NAV it possess.... the main thing is it's business is profitable.... business model is sustainable and going forward may continue to post slightly higher profit quarter to come... current level is attractive enough, cyclical trend has chance to resume and at this level it's cheap. Think this may be one of the lowest possible for this stock. If you have money, this is where you might wanna consider rather than unit trust. Its time to get out of highly equity based unit trust fund for now as they will only continue to slide....I'm actually in favor of a technical rebound for this stock in the short term...as usual, some may just disagree... its your money, therefore your call...

Ranhill...forgotten?

Well, this stock has been sliding since it hit a hit of $3.60 in Sep last year... loaded with huge projects in hand, this counter seems to have reached the bottom of the hill..... being one of the biggest engineering company in Malaysia, this stock is a valuable bet for long term construction boom... Malaysia is poised to engage in lots of construction activities in 5 years to come... steel price will rise too.. :P Latest rumour of privatization is not a suprise as this company seems to be viewed more on the speculative side rather than fundamentally stable company with huge exposure to government projects...

Based on chart, I'm seeing a positive convergence in a making and believe, the slide is over and its about time to buy into it.... privatization is a possibility but not necessary... You think about it.

Happy Chinese New Year!!!

God bless all of you with good health, wealth and happiness... and always love your family.

Happy Chinese New Year!!!

Market kong?.. not for Hong Kong.

HSI has retreated close to 30% from its peak of ~32k in Nov last year... memory of the first subprime victim is vividly lingering in most people's mind.. US will continue to cut rate and the dollar will continue to fall in the short term, US market are extremely vulnerable and should be avoided in general... Hong Kong the next best destination for me now.... fairly valued at close to 24k, with HK dollar being the main gainer from the weaker US dollar...this market is a bang for months to come... chart wise, i'm extremely bullish on HK stock future.... with or without the implementation of the direct investment train.. so buckle up...swoop in when its low.. go for state back assets mainly in energy related counters mainly O&G, not to forget telecommunication too... these sector are highly likely to return more in future to come.... take alook yourself.

Steel with one way street....

Well, construction projects are plenty, SJER, NCER, ECER and PGCC, what else.... you name it... steel price is only going to go higher from here... the recent increase in ceiling price by the gov is only the beginning... more will come later of the year... If you like construction, you'll wanna take a look at Kinstel... its revenue is expected to increase sequentially from the last reported quarter... any price below RM1.40 is worth to have,... based on projected revenue for 2008, this counter is expected to be valued at $1.82 at least... you can verify yourself.... :)

Are you ready to move?

Humans are generally creature of habit....we do things the way we think it should be done.... and we normally use the recommended methods to do things because we believe the result is going to be favourable if not what we anticipated...

Thanks to technology we're living a pretty hectic and fast pace life and couple with the inexorability of globalization, things are getting lesser while human continue to increase... to ensure we have the things we want to have, we work hard and strive to be the best in everything we do... however, how many of us here spend time educating ourselves on the knowledge of equity investment? how many investors are financially "good"?

most of us jump into the market hoping to join the crowd to grab a piece of the market bull... well, how many are successful in this goal? Perhaps I should ask, How many set a goal? Is there a strategy to take you there? what about mental preparation? are you discipline enough to ride the wave of the market this year?

Well, I'm pretty sure many wouldn't want to admit this but like it or not, until you're prepared... you can't win big money and trade for a living... in fact, chances of losing money is extremely high and based on the risk and reward, it's probably the best thing to take a step back and think if you have given yourself a fair chance to get ready before you take the leap to trade with real money... money is one thing, time is another... don't waste it....

Well it's 2008 now, waste no more...