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Sunday, November 28, 2010

Tae Guk Gi Korean Brotherhood A Touching Story

At tense "warlike" moments like now November 2010, we can only try not to imagine if an onset of war, or world war can create to human, a person, families and earth itself.

I can recall one poignant movie I saw at the Scala in Bangkok in 2004. Titled "Tae Guk Gi" or "Brotherhood". Incidentally, Guk Gi means flag, and in a chinese dialect, "gork gii" means flag too. Tae Guk Gi also means the pre-war flag of Korea.

A nice big question for you. Why is Korea separated? Why is it North and South?
The movie answers it in its own way. Just imagine, as villagers, as farmers, as nobodies. When a group of people with guns come to our village, and demand tapioca, or all the poultry. We have to give in to their demands, give them what they wanted. Then we toil the soil again. Then another group of armed men comes into our village. Now they accuse us of helping the other group. And they want to teach us a lesson by burning our huts. We cry. We cried. We are beaten. And we don't know why.

Think about Vietnam. And the Vietnam war. And why finally some villagers with nothing can defeat a military superpower with limitless ammunition and budget.

Sounds familiar or not? Well this is how war is. How it is to the nobodies. We do not know what is really going on and who to help and who not to trust. But when a gun is pointed at our heads, we give to that person. Whether it is CIA, so-called guerillas, militias, drug masters, Nazis, or whoever who has a big gun, we succumb to the basic tenets of preservation of life. Give in.

So these poor villagers. Be it "communist" or not or whatever label the Western propaganda made about Vietnamese. These are humans and farmers.

So now all the mess of brain-washing, propaganda, deceit, confusion - is left with a nation torn into two for over 50 years. When I was on a flight out of South Korea in 2006, there was no other passenger in my cabin. I had some kimchi which I bought and requested the flight stewardess to keep it in the aircraft fridge. We talked about Korea. At that time, I didn't know much of the history. But felt their passion to succeed and pride and making their country successful. That's how they leapfrogged Malaysia from a recipient nation to a donor nation in just 4 decades. I just commented about the movie, Taegukgi, and just my wish the Korean nation can be united. She was very touched. The flight stewardess offered me the whole bottle of wine.

This movie goes beyond talking about a relentless sacrifice a brother was willing to make for the younger brother. This story happens in real life throughout South East Asia. How sacrifice means letting your siblings go to school. How sacrifice means working and saving money now, for the future. How sacrifice meant taking a 3 month boat ride out of China, to work hard for years, to send money home.

Thursday, November 25, 2010

Jim Rogers Lessons for Life and Investing

Legendary investor Rogers co-founded the Quantum Fund with George Soros in 1970, retired at the age of 37 in 1980, and spent a number of years traveling through China and six continents by motorcycle.

He recently fathered two daughters in his sixties and wrote this small memoir to share with them some of the insights that he has garnered from his experiences. He advises to make your own decisions in life rather than listening to others, to figure out what you love to do and focus on that rather than what is expected of you, and to have a dream and to live your dream.

In the area of finances, he says to save and invest early on rather than spending frivolously, so that you will be able to afford the important things in life later, and to do your own research, draw your own conclusions, and look to the future - not the past - for great ideas. These and other nuggets of wisdom from this self-made man are worth reading several times over. -- David Siegfried

Against all odds and protectionism AirAsia still soars

The age old David and Goliath story continues with David growing bigger. While MAS being protected by the government is not. Not that we want to see such story of glory, but the long corporate culture of government bailouts, handouts, protectionism, inequality, unfairness and the list goes on, has but underscore the capital letter "I" in inefficiency - unfortunately in Malaysia.

 To snub the so-called supremacy and protection, and irony of the "supremacy" with fear and calling it distributing income to other lesser native people, I guess the best way is via the most legal and yet enterprising way. Buy AirAsia. AirAsia is the proven model that no matter how much lop-sided things are, as long as you have a very sound plan, very good corporate governance and seed culture (grow your culture during its infancy) - stay united and synergise every employee's energy without regard to race, religion, shape - you can and you will be better than be crippled with crutches that are unnecessary.

Sometimes if the competition or "The Others" is still looking narrow-sightedly about chasing tails, such as giving promotion whenever and wherever AirAsia is promoting (e.g. AirAsia did an Australian promotion, and MAS countered with all AU cities that AirAsia served only - disregarding Sydney) - AirAsia didn't look back anymore. But so much more forward. Have to point out the other case which is creating Kota Kinabalu as the second hub for AirAsia in Malaysia. Next day, MAS announces the same! This reminds me of what

TO quote and rephrase Buzz Lightyear: "To Asia and Beyond". (To Infinity and Beyond)
I believe that has been what AirAsia has been focusing on. Now everyone can fly, and now everyone can own a company they can be proud of. Definitely if you are a Malaysian national, you'd be proud when a stranger from France talking about your country and the next thing besides Petronas Twin Towers is AirAsia!

Impressive AirAsia 3rd Quarter 2010 results

AirAsia showing super strength with impressive 3rd Quarter 2010 results:
+ earnings up 152% from RM130 mil to RM328 mil
+ revenue up 34% from RM739 mil to RM987 mil
+ Earnings Per Share (EPS) at 11.90 sen
+ 12% passenger growth
+ 22% higher fare from RM142 to RM173
+ Seat load factor up 3% to 78%
+ Core operating profit up 539% at RM216 mil
+ Core operating profit margin 21.9% from 4.6%

Share price of AirAsia rose 10sen to close at RM2.55. Still a relatively good buy comparing to any other airline out there. With the new Haneda (Tokyo) route and Seoul route opening soon, all of the top Asian economies are now connected via AirAsia. Here is a breakdown into "regions".
1) Whole of Asean
2) Japan, Korea, Taiwan - economic powerhouse
3) China
4) India
5) London and Paris (Orly)
6) Australia

Risks to think about:
AirAsia had handled well air transportation crises in the past. So even the recent earthquake and volcano in Indonesia, was handled efficiently. Past risks tackled nicely includes SARS, Bali bombings, Thailand government political changes and fuel surcharge situation during 2007-2008.

AirAsia made travelling on budget a reality. Many of those who convert to AirAsia may still complain. But they know the savings gained far outweigh any "difficulties" moving from a full fledge commercial airline, to a budget airline. Very soon, the population may have "forgotten" what is was like to travel by air in "luxury". Which is a good thing. What you never had, you will never miss. And what you had for a relatively low price, you'll want more - you'll want to FLY AirAsia more.

Buying Genting Singapore at $2.00

Staying focus takes courage and patience. Recent testing environment made many a seller of Genting Singapore. As well as a slew of other top rated stocks. While those who have the patience, would have picked up some good deals.

Focusing on high end and nitrile gloves Kossan beats competition

As you may recall, I wrote a recent rubber industry (mainly rubber gloves) round-up some weeks ago. Personally I was trying to determine which stock to enter. I finalise to two - Rubberex and Kossan. Then finally chose Kossan.

Kossan has been moving production to nitrile gloves since July 2010. Focusing on powder-free nitrile and surgical gloves, and basically to go higher-end of the glove market.

Nitrile gloves are made of synthetic latex. They contain no latex proteins and offer excellent resistance to punctures and tears. Nitrile gloves are three times more puncture resistant than rubber and can be used to offer superior resistance to many types of chemicals.

Unlike other latex gloves, nitrile gloves have low resistance to friction and are very easy to slide on. There are a few other reasons that nitrile gloves are more popular than other latex or vinyl gloves, including a higher degree of flexibility and superior solvent resistance.

There are several ways these companies now operate.
A mix of both nitrile and natural rubber gloves. Purely rubber. Purely nitrile. Natural rubber gloves have long been contended by synthetic rubber glove. Mainly from US propaganda machine to reduce a dependence on natural rubber products which only several countries in the world produces. Politics aside, going both ways is best. Given the nature that diversification is how financial management and investment should be played.

So you have zoomed in onto the sector. Rubber Gloves. And now choose a company that offers good growth and specialisation - yet enough product diversification.

Watch rubber gloves. Recent bird flu news in HK might bring about a new demand.

Wednesday, November 24, 2010

If unable to buy BigMac why not try KFC?

Perhaps we have long thought of the wisdom in investing in sure-win stocks such as Microsoft. And the other M - McDonald's the burger company. BigMac - is synonymous with McDonald's worldwide. The BigMac we always have tasted one time or another. The BigMac index is used to calculate the cost of living comparisons. And Happy Meals. McDonald's branding is so powerful, the red and golden arches, the tagline "I'm Loving It" goes everywhere. Fact: Very high chance when travelling abroad in an unfamiliar country with exotic food - perhaps first time in Thailand - one will look for McDonald's Value Meal set. Actually, McDonald's Restaurant was "looking" at you. It's placed at strategic locations. Prime locations. Powerful ads.

How about a trip to Luxembourg or Hong Kong or London the first time for budget travellers? Yes you CANNOT afford a local 20 EUR meal. So you are likely looking for the Golden Arches. And it will be there to rescue you.

McDonald's is listed in US market and currently going for 80 USD. So alas, it seems to late to want to invest in this well-known sure-bet fast food company.

How about Kentucky Fried Chicken? KFC is listed in Malaysia and currently goes for 4RM (or less than $2.00 SGD)

Monday, November 22, 2010

Oil and gas - KNM gets momentum

Would you buy a stock with a potential to go 5 fold ups? Taking a historical approach, KNM is trading at 40 sen. The all time high is over $2.40 during the 2007 oil grab.

KNM Group Berhad is engaged in investment holding and the provision of management services. The Company and its subsidiaries are engaged in the designing and manufacturing of process equipment for the oil and gas, petrochemicals, minerals processing, desalination, renewable energy, environmental and power industries. Its products and services include process gas waste heat recovery systems, membrane technology systems, sour gas and sulfur technology, compression systems, fired and heat recovery boilers, quench coolers, scraped surface exchangers, process and pressure vessels, heat transfer equipment, storage facilities and others. Its direct subsidiaries are KNM Process Systems Sdn. Bhd., KNM International Sdn. Bhd., KNM Capital Sdn. Bhd., KNM Management Services Sdn. Bhd., KNM Renewable Energy Sdn. Bhd., KNM Capital Labuan Limited and KNM Services (Singapore) Pte. Ltd. In July 2009, the Company, through its wholly owned subsidiary, acquired Compart Technology GmbH & Co.
  Wright Quality Rating: CBA2

Historical chart wise, the price is at the bottom of an upside down bell curve.

KNM has just signed a new contract with Lukoil Uzbekistan. Total job wins exceed RM2 billion YTD.
Buy suggestions because:
1) Fundamentally KNM has been improving.
2) Inexpensive price - this is one of the methods of risk management.
3) Oil and gas going upwards again.
4) Last few laggards that haven't pick up much after this years double rally. Most top market capitalised companies have gained on average 40-50%.

Will be exploring other choice picks that seems to have been left out by investors and speculators. Finding the gems is a lifelong quest.

Still good chance to pickup stocks now

Best opportunity now to buy more with the recent market correction.
Some picks:
SPH - giving big dividend soon
Suntec - down from $1.55 to %1.54
Costco - $2.00 (all time high was over $8.00!) - oil and marine
Genting Singapore - $2.04 (from high of $2.35) 

AirAsia - $2.30 from high of $2.65
KNM - 40 sen from 85 sen
YTLPower - good bet for new age 4G system. Low innovative tariffs and bundling - a very strong position to challenge not just internet service providers but also regular mobile companies. YTLPower owns YTL Communications which owns the 4G network called YES in Malaysia. $2.50 - Current price comes with dividend.

Friday, November 12, 2010

Buying in dips - AirAsia Genting Singapore Kossan Scomi KNM

Today's dips could be a chance to buy-and-accumulate before more funds are released and the imminent QE2 money coming into Malaysia and Singapore markets. Both these markets attained 20% gains this year compared to over 40% for Thailand and Indonesia. Therefore it is safe to suggest foreign funds will have a higher likelihood to invest in equities in Malaysia and Singapore.

Some choice picks:
Singapore - Genting Singapore (casino and integrated resort), China Oilfield, China Aviation Oil, (start to accumulate oil and gas related stocks), Golden Agri (palm oil), Ezra (oil and gas), SATS, SMRT (just given out dividend and prices pressed down).
Malaysia - AirAsia (low cost carrier), Kossan, Hartalega, Supermax (rubber industry, rubber gloves), Scomi, KNM (industrial engineering) both below 50 sens.

Thursday, November 11, 2010

What does breaking all time high suggests in SGX and Bursa?

Is breaking all time high in the index of Singapore and Malaysia a positive or a negative? A braking sign?

When does breaking constitutes and overly bought situation signalling a wrong valuation or wrong exuberance?

Mostly, whatever prices were before the 2008 GFC (Global Financial Crisis) has been attained. "Back to normal". So what is normal, and what does the future hold? The uncertainly of currencies especially USD may bring in more funds, meaning a bigger flow of money into equities and thus stock prices will generally increase. And those with strong fundamentals, will benefit.

US QE2 will not actually help their own economy simply because of that reason. The money released will flow out to better paying investments abroad. The investment could be merely currency. For instance, exchanging USD into Australian or New Zealand Dollars, and then parking there seeking term interests of over 5-6% minimum. And investing in commodities that are in demand - rubber, Malaysia or rubber equities will benefit. Palm oil. Minerals - Gold, Iron Ore, Australia will benefit.

The money released will not go much into the US economy. Simply because it is not consumption and what US is seeking is consumption by local (domestic) and thus trying to boost Gross Domestic Product value will not be achieved. These funds are managed and channelled in unit trust, trust funds, private banking investments - which are all based on very technical risk calculation models, by highly paid and highly intelligent financial analysts that have graduated from Harvard Business School and other top institutions - meaning they will seek out the best chance and best possible return. And not for the best of the nation as one might hope for. Eventually a higher return for the investor (US investor) is doing something best for the nation ironically - it is not going to be giving back or creating jobs in the US economy.

The natural or obvious solution thus is not shown from where the money is heading. Remember how the US dollar went up when the economy was choked by the housing foreclosure crisis? Which was caused by greed in "investing" in property priced out of one's means of paying. If you are not supposed to be eating dinner at a 5 star restaurant, then you are not supposed to because it cost you a week's salary. Yes, you may have that week's salary in your hands. And yes logically you can pay for a $300 dinner meal in the 5 star restaurant. But you should realise you cannot "afford" it. The end.

US system of trying to create jobs this way is actually going against what they have been trying to achieve for the last 50 years. Trying to go back into heavy industry, or making thousands of menial low paying jobs will not materialise. You cannot copy a cheap economy after you have attained a high paying economy. And because of rights and democracy and liberty, the working class unions will not be wanting to see a lower paying situation. That's also the problem with the media. Creating jobs is not just - here you have a task to perform in this car factory. Done. It is more than that.

The disparity between the illusion of attaining wealth and having a job is quite a dangerous way that the media has cooked up in mostly free-open market economy citizen's mind.

These two questions to connect the dots:
1) Have you travelled to a country (or if you never travelled abroad to another province or town) that will give you twice or even 5 times the value of your current cash? Meaning where $10 dollar can buy you a meal. Now $10 dollar can buy you 4 meals?

2) When you read jobs are being created in Asia, China, India, will you willingly swap your current job with a same folk there? Example you are a post-office clerk in Sweden. And many times I have met from travelling, the First World person will comment that it is so cheap in Asia. But you know it is expensive in Europe. So I suggested, ok why not you swap jobs and life with a similar person with similar job. Swap a post office job in Sweden with a post office job in Thailand.

That person will not be willing to accept this after considering many other things. Like health benefits. School. Medical. The power of the Swedish krone. At best, working in Thailand in the post office, he could perhaps have a holiday twice a year in the nearby beach or waterfall. While he knows the same Swedish job he has, can afford him a 5000 mile holiday at a 4 star resort in THAILANDE every year!

Tuesday, November 9, 2010

Making same mistakes in Singtel and Noble Group

Here is a sharing about a repeat of my trade that resulted in a lower gains.
I bought Singtel at close to 3.15 and they went down to below 2.95 for a period of time that took some toll in my emotions. When it found the momentum to move above 3.20, I sold them - still at a profit - but prices were supposed to lead up to $3.50 (it eventually headed around $3.35). This was early this year.

Similar, I bought in again, and when it hit 3.16 earlier last week, I sold them. Only to see prices going over $3.34 now.

Noble Group: My target was to buy when it went below $2.00. And had bought at $1.87. Prices went to about $2.00, then sank back to $1.93. Went the next upward movement hovered around $1.98 I sold them, thinking it cannot break the $2.00 "barrier". Perhaps I was trying to think like a day trader, or TA. And forgo my original plan of a 6 months to 1 year holding period. Now Noble is over $.2.19.

SPH momentum $4.50 target price

Singapore Press Holdings (SPH) price will get a boost from dividends announced (CD). Recommended Buy before XD.

Lithium is the next commodity to hold

My thoughts again regarding Lithium - buy. I guess the question many fellow readers are asking and wondering is how, where - since what, why, when - you have read from my writings.

Anyway to sum it all up: Lithium is used in your Nokia phone. The battery. It is also used in the battery of hybrid cars. Laptop computers and camera batteries all use lithium. To see the magnitude of potential demand let us examine the amount used for a mobile phone. Mobile phones are small, compact, lightweight and uses about 5 to 10 grams of Lithium. Now a hybrid car battery uses 6 kg. That is 1000 times more.

Here is a case study.
There are 100 000 new cars added to Singapore each year. Total cars on the road are about 500 000. If the government in the effort to go green, and create a gradual reduction in the reliance of petrol, it may want to support and promote hybrid and electric cars.

At the lowest estimate of 50% new cars being hybrid, that would use up = 50 000 cars x 6 kg Lithium = 300 tons of Lithium demand. Current worldwide production estimates are about 100 000 tons. That gives about 0.3% usage of worldwide production. Now supplant this demand for Lithium for hybrid cars into the passenger car markets of USA (12% from estimates of 40x population of Singapore). Then Europe who are normally environmentally conscious. Plus Japan itself the producers of hybrids - Toyota and Honda. Half of world supply will be used for just these economies. What about China, India, Brazil and Russia?

Soon, there would be an exponential growth for demand.

And this demand is definitely exponential or parabolic - have we forgotten oil prices in the middle of 2008? It sure drove many car people into taking public transport. It sure led to a frenzy to retrofit a CNG/LNG/LPG tank into passenger cars in Thailand, and Malaysia as far as I can remember. And that is even for net producers of petroleum. Today oil prices are hovering at $90 USD. Possibly will go upwards relative to the percentage the dollar is coming down with QE2 (Quantitative Easing 2).

Other factors that will fuel demand is innovation and technology. More consumer products require the storage of energy. Battery life. Electric bicycles. MP3 players. Movie players. Portable devices. Car ownership increases as economies around the world flourishes. Demand for electric public transport to reduce carbon footprint and pollution will boost an even higher demand for Lithium. If a small passenger car uses 1000 times Lithium than a mobile phone, what about a commuter bus?

Lithium stocks are listed mainly in NYSE and ASX (Australia). Australia apparently is not just a gold mine, coal mine and koala. It seems to be the lucky country to have other minerals and one of them in abundance is Lithium, plus also Rare Earth Elements (REE) which I will talk about in another posting.

Commodity Investing: Maximizing Returns Through Fundamental Analysis (Wiley Finance)

So here are the NYSE Lithium stocks:
Sociedad Quimica y Minera de Chile SA (SQM) capitalized at $13.4 billion is the world’s largest lithium producer. SQM produces 30,000 tonnes per year from massive Chilean brines located in the Atacama salt desert, where it has a number of other projects producing fertilizers and chemicals.
SQM is a Chilean producer of specialty plant nutrients and chemicals. The Company's activities are structured in four business units: Specialty Plant Nutrition (SPN), comprising the production of organic fertilizers and nutritional solutions under the Ultrasol, Qrop, Speedfol and Allganic brands; iodine extraction and the production of iodine derivates; lithium exploitation and production of lithium carbonate, lithium hydroxide and lithium metal, and Industrial Chemicals, including the production of such chemicals as sodium nitrate, potassium nitrate, boric acid and potassium chloride, among others. Through its subsidiaries and affiliates, the Company has operations established in South, Central and North America; Europe; North, Central and South America, Asia, the Middle East, Africa and Oceania. In addition, the Company's products are sold and distributed in more than 100 countries worldwide.
  Wright Quality Rating: BBA1

FMC - FMC Corporation (FMC) is a chemical company serving agricultural, consumer and industrial markets with solutions, applications and products. It operates in three business segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. Its Agricultural Products segment develops, markets and sells three classes of crop protection chemicals: insecticides, herbicides, and fungicides. Specialty Chemicals consists of BioPolymer and lithium businesses and focuses on food ingredients that are used to enhance texture, structure and physical stability, pharmaceutical additives for binding, encapsulation and disintegrant applications, ultrapure biopolymers for medical devices and lithium specialties for pharmaceutical synthesis, specialty polymers and energy storage. Its Industrial Chemicals segment manufactures a range of inorganic materials, including soda ash, hydrogen peroxide, specialty peroxygens and phosphorus chemicals.
  Wright Quality Rating: ABA1

And listed in ASX:
Orocobre Limited is an Australia-based mineral exploration company. The Company focuses on lithium, potash and boron resources in Argentina. The Company's projects include Salar de Olaroz Project, Santo Domingo Project and South American Salars Project. The Salar de Olaroz Project is located in the Puna region of Jujuy, approximately 230 kilometers northwest of the capital city of Jujuy. The Salar de Olaroz Project consists of 118 square kilometers of tenements over a salar (salt lake). The Santo Domingo Project is located in the San Juan Province. The South American Salars Project has approximately 60,000 hectares of tenements on 10 salars in the provinces of Salta, Jujuy and Catamarca. During the fiscal year ended June 30, 2009 (fiscal 2009), the Company drilled 16 vertical cored holes (1136 meters) and six monitoring holes (360 meters).
  Wright Quality Rating: DBNN

Galaxy Resources Limited (Galaxy) is engaged in mineral exploration in Western Australia. The Company's principal activities consists of the development of the Mt Cattlin Spodumene Mine; development of the Jiangsu Lithium Carbonate Plant and exploration for minerals. Its subsidiaries include Galaxy Lithium Australia Limited and Galaxy Lithium International Limited.
  Wright Quality Rating: DBNN

AirAsia technical analysis from Technical Analysis Talk

Recently I made some requests to a fellow blogger who is from the "other side" - Technical Analysis. Often I like reading his analysis and charts, and sparkled by the beautiful lingo used such as symmetrical triangle, ten black candles, head and shoulders (not the shampoo) and MACD (not MacDonald's!)

First were the round-up of rubber stocks in response to the recent trend in commodities and flooding that may have potential effects on pricing and supply and thus value of shares related to rubber gloves and such.

And my final request was for AirAsia - my favourite stock that I had been holding for over 3 years - and sold earlier last month at $2.34. It was all of my holdings of AirAsia in one go.

I really like AirAsia and one of my strategy or motto is to buy stocks that I use personally. Being an avid traveller, AirAsia has been my number choice since 2003. I have clocked over 90 flights - one way calculations. Some flights I do a combo of one-way trips for instance. KUL-Hanoi. Then Hanoi to Bangkok. Then Bangkok back to KUL. This is a tremendous advantage AirAsia has over other "regular commercial" airlines. Normal airlines will want you to do a return trip for e.g. 800 RM for KUL-BKK AND must be completed in 2 weeks. And one-way fare you get "penalise" with a hefty fare of 600 RM. Meaning consumers are literally funnelled into buying two ways, and make their holiday plans around a duration set by the airline. Yes you can buy a one-year return ticket. Price - over 1200 RM. So this is one fact and also factor, that tilts to AirAsia and the consumer's favour. While normal airlines want to load up the return leg of the flight with the same passengers, AirAsia's gameplan is if you book early like 8 months ahead, then you get the lowest fares.

Back to why I sold. I have been holding the stock for over 3 years. And to realise the profit was the basic reason. While I have since bought back some of the lots that I sold for a "premium" of 15 sen - buying them back around $2.50. I still see positive upward signs coming. The horizon might be 2-3 years while the benefits and potentials are there. See my previous postings on AirAsia by clicking on the "AirAsia" label on the right panel bar.

So here is some nice technical analysis talk by Radhys on AirAsia: (thank you Radhys)

Monday, November 8, 2010

Thomson Medical plus TMC Life equals super medical synergy

After buying up Thomson Medical, and now investing a bigger stake in TMC Life Science, seems to suggest that the medical-healthcare-biotech industry is the new target for the long-term investor Peter Lim.

Long horizon or in short, patience, is the system that Peter Lim uses. The time-line could be 3-5 years or more. Definitely only for those who are into long term investing. At 56 sen (approx 25 cents), I suppose it is a risk that any newbie, investor can partake. Say 10 lots just costing $2500. And just hold till the end.

Sunday, November 7, 2010

Rubber Company - Missed out Hartalega

Missed out Hartalega in the Rubber Roundup write-up.
So here it is:
Hartalega Holdings Berhad is a Malaysia-based investment holding company. The Company is engaged in the manufacture and sale of latex gloves. The Company's products include latex gloves and nitrile gloves. As of March 31, 2010, the Company's subsidiaries included Hartalega Sdn Bhd, Pharmatex (Australia) Pty Ltd, Pharmatex USA, Incorporated and Sentinel Engineering (M) Sdn Bhd. The Company's manufacturing facility is located in Selangor Darul Ehsan, Malaysia.
  Wright Quality Rating: CANN $5.50 $572mil

Saturday, November 6, 2010

Oil and gas SGX roundup

) Cosco Corporation (Singapore) Limited is a Singapore-based investment holding company. The Company has ship repair, ship building and offshore marine engineering operations in China. The Company also operates in dry bulk shipping, shipping agency and other sectors. The Company has operations in ship repair, ship building and offshore marine engineering. During the year ended December 31, 2009, the Company completed the construction of 11 new vessels comprising eight bulk carriers, one heavy lift ship, one accommodation and work barge and one offshore driller.
  Wright Quality Rating: BCA1 $1.85 $2899mil

2) KS Energy Services Limited (KS Energy) is a Singapore-based energy services provider to the global oil and gas, marine and petrochemical industries. Its principal activities include trading in hydraulic products, instrumentation and equipment for the shipbuilding, marine and oil and gas industries, trading in hardware products and oilfield equipment, and investment holding. It operates in two segments: Distribution and others, which includes sales of hydraulic products, hardware products and tools and equipment and provision of design engineering, project management and fabrication of systems equipment for industrial applications to the marine and oil and gas industries, and Capital equipment and related services, which includes provision of capital equipment and related services to the oil and gas industry. During the year ended December 31, 2009, it acquired the remaining 50% interest in United Oilfield Services Pte. Ltd. and remaining 60% interest in Landrig 5 (BVI) Ltd.
  Wright Quality Rating: CBNN $1.04 $489mil

3) Ezra Holdings Limited (Ezra) is a Singapore-based company. The principal activities of the Company are those of investment holding and provision of management services. It is organized into three operating divisions: Offshore Support Services, which is engaged in the owning, chartering and the management of offshore support vessels serving the oil and gas industry; Marine Services, which is engaged in the provision of management services, supply of marine gas and oil, provision of engineering, design and fabrication works, and Energy Services, which is engaged in providing drilling and well intervention related works. In July 2009, it disposed 50% interest in United Oilfield Services Pte. Ltd. In September 2010, it incorporated a wholly owned subsidiary, Lewek Crusader Shipping Pte. Ltd. In October 2010, the Company incorporated Emas Offshore Angola Pte. Ltd., a wholly owned subsidiary in Singapore.
  Wright Quality Rating: CCB1 $1.75 $491mil

4) Swiber Holdings Limited (Swiber) is engaged in investment holding and provision of corporate services. It offers a range of offshore engineering, procurement, construction and installation (EPIC) and marine support services to support the a range of offshore oil and gas exploration projects. Swiber consists of four business units: Swiber Offshore Construction Services, Kreuz Offshore Marine Services, Kreuz Offshore Subsea Services and Equatorial Offshore Development Services. Swiber Offshore Construction Services provides a suite of offshore construction services. Kreuz Offshore Marine Services offers a spread of offshore marine support services that are complementary to its offshore EPIC services. Kreuz Offshore Subsea Services provides commercial saturation and air diving services. Equatorial Offshore Development Services provides offshore wind farm engineering, transportation and installation services. In September 2010, it incorporated a subsidiary, SWIBER INTERNATIONAL PTE. LTD.
  Wright Quality Rating: CBNN $1.02 $570mil

Friday, November 5, 2010

Rubber Companies New Potential for 2011

Rubber is a commodity that has been revived earlier this year due to the H1N1 influenza saga. Prices of rubber gloves companies went over the roof earlier this year. Rubber gloves are not cyclical. In fact it is a slowly increasing industry as more and more people get health care and ageing, and requiring medical care, the demand of gloves increases over time. A spike comes when there is a calamity or panic in a communicable disease such as SARS. War time, there will be a demand too. So whichever way the world is moving ahead, population growth, wealth, ageing, better access to medical, it seems the rubber gloves industry will benefit.

Here is roundup of these companies mainly listed in Malaysia with Market Price at 29th October 2010 and 2009 Sales.
1) Supermax Current $4.50 $803mil
Supermax Corporation Berhad is a Malaysia-based investment holding company. The Company operates in three segments: manufacturing of gloves; trading of gloves, and investment holding. It has nine factories that manufacture various types of latex gloves, which are exported to over 146 countries, including the United States, European Union, the Middle East, Asia and South Pacific countries. As of December 31, 2009, the Company's subsidiaries were Supermax Latex Products Sdn. Bhd., Supermax Glove Manufacturing Sdn. Bhd., Maxter Glove Manufacturing Sdn. Bhd., Supermax Incorporated, Spenser Glove Manufacturing Berhad, Supermax International Sdn. Bhd., Supermax Energy Sdn. Bhd., Seal Polymer Latex Products Sdn. Bhd. and SPI Gloves Sdn. Bhd.
  Wright Quality Rating: DBB2

2) Top Glove $5.50 $2079mil
Top Glove Corporation Berhad is a Malaysia-based investment holding company providing management services. The Company's subsidiaries are engaged in the manufacture and trading of gloves; producing and selling latex concentrate, and property investment and trading of machinery. It operates in Malaysia, Thailand and People's Republic of China. The Company's subsidiaries include Top Glove Sdn. Bhd., TG Medical Sdn. Bhd., Great Glove Sdn. Bhd., Top Glove Engineering Sdn. Bhd. and TG Medical (U.S.A.) Inc. On March 25, 2010, the Company acquired Top Quality Glove Sdn. Bhd.
  Wright Quality Rating: CAA2

3) Kossan $3.12 $842mil
Kossan Rubber Industries Bhd. is a Malaysia-based company engaged in investment holding and manufacturing and sales of rubber products. The Company offers molded rubber products, extruded rubber products, engineered rubber products, colored ethylene propylene diene Monomer (EPDM), rollers, ethylene vinyl acetate (EVA), polyurethane (PU) products and gloves. It has 49 production lines with an annual production capacity of 3.9 billion pieces of gloves. Its ultimate holding company is Kossan Holdings (M) Sdn. Bhd. As of December 31, 2009, the Company's direct subsidiaries were Kossan Latex Industries (M) Sdn. Bhd., Perusahaan Getah Asas Sdn. Bhd., Hibon Corporation Sdn. Bhd., Doshin Rubber Products (M) Sdn. Bhd., Ideal Quality Sdn. Bhd., Kossan Engineering (M) Sdn. Bhd. and Top Calibre Sdn. Bhd.
  Wright Quality Rating: CAA2

4) IRCB 47 sen $147mil
Integrated Rubber Corporation Berhad is a Malaysia-based investment holding company. The Company operates in two business segments: manufacturing, which is engaged in the manufacturing and trading of latex gloves, and investment holding, which covers investment of ordinary and quoted shares. The activities of the Company are carried out solely in Malaysia. The United States, Canada, Japan and Europe are the major export markets for the manufacturing division, while the major market for the other divisions is principally in Malaysia. The Company's subsidiaries are Comfort Rubber Gloves Industries Sdn Bhd., PBT Sdn. Bhd. and Quality Gallant Sdn. Bhd.
  Wright Quality Rating: LCNN

5) Rubberex 87 sen $317mil
Rubberex Corporation (M) Berhad is a Malaysia-based investment holding company. Through its subsidiaries, the Company is principally involved in the manufacturing and sale of household, industrial and disposable rubber gloves. The Company has two production facilities: China plant, which is located in Buluo, Huizhou City, Guangdong province, and Malaysia plant, which is located in Ipoh. Its China plant is for the production of reusable synthetic gloves and disposable vinyl gloves. It offers industrial gloves, consumer gloves, disposable gloves and condoms. During the year ended December 31, 2009, the Company acquired an additional 40% equity interest in Pioneer Vantage Limited, Lifestyle Investment (Hong Kong) Limited, LPL (Hui Zhou) Glove Co. Limited and Lifestyle Safety Products (Hui Zhou) Co. Limited, as well as an additional 20% equity interest in Rubberex (Hong Kong) Limited.
  Wright Quality Rating: LBC5

6) Adventa $2.41 $287mil
Adventa Berhad is a Malaysia-based company engaged in investment holding and the provision of management services to its subsidiaries. The Company's operations are divided into three segments: Healthcare Products, which is involved in the manufacture, distribution and trading of healthcare products; Energy Provider, which is involved in the generation and supply of energy and electricity using biomass technology, and Others, which include the provision of management services to its subsidiaries. It offers surgical and synthetic gloves. The Company distributes its products within Malaysia and to Hong Kong, Germany and Uruguay. During the fiscal year ended October 31, 2009, the Company acquired 100% equity interest in Cytotec (M) Sdn. Bhd. and had incorporated a new subsidiary in Malaysia under the name of Icodex Sdn. Bhd.
  Wright Quality Rating: DBD5

My picks are Kossan and Rubberex. The number 1 and 2 are Top Glove and Supermax which are still strong. While Kossan seems to have good sales. And Rubberex at a good position for volume with the current price tag.

Tuesday, November 2, 2010

Impact of Quantitative Easing 2 by US

Palsm are jittery because of the coming QE2 - Quantitative Easing 2 by the US government.

What sort of impact will 500bil USD have on the world economy, and especially your stocks and portfolio?

Firstly, we read about "priniting money" and that could mean an easing and reduction in value and exchange rate for the USD dollar AND those currencies that are pegged to it. Such as the Hong Kong Dollar. In a way, this will flood "money" into the market, and a case of money seeking money, will make stock prices increase, at least in those economies. Secondly, it may also increase the stock values of other economies. Why? The USD is deemed to be heading south, so to safeguard the value, fund managers will be seeking higher yield currencies such as the Australian Dollar. Forecasted to be on parity with USD.

This in turn would mean mining stocks in Australia will get another boost. First from the demands of mining commodities, then now with this new money.

Now it is best time to plan ahead. What are the possible impact on your current investments. If you hold US stocks, their price could rise, even though USD is coming downwards.

Another situation that is in perpetual check is foreign reserves of US currencies and debt. China being pressured to revalue the yuan is holding vast amounts of US debt. What if the pressure is too great, and the imminent downturn of USD may even push China to do what US wanted. But not just merely revaluing the currency. But firstly, to protect national interest, China will sell off all US debt, US stocks, US T-bills. Why revalue and then still holding a loss-making interest in US stocks, currency, debt? So that could happen too and I have not seen any analyst thinking of this action.

Perhaps it seems impossible. But nothing is impossible. If China just raises the yuan, China will lose double. This is perfectly logic. So be careful of what you (US) wish for!

Monday, November 1, 2010

Peter Lim A Wilmar and Golden Agri story

Most of you would have known this story - Peter Lim made his fortune investing in Wilmar many many years ago. Back then he invested when the company was at a low price, then now the price is over the moon. One factor was palm oil demand and prices went up through the years.

Wilmar along with Golden Agri, are listed in Singapore. While all their palm oil producing plantations are located in Indonesia. They are both the largest and second largest palm oil producers.

So now, if we are presented the scenario that Peter Lim had many years ago, when Wilmar was affordable. What would you do? With the knowledge that palm oil is heading upwards. And there is this second largest palm oil company being offered at a reasonably low price?

When I first invested in AirAsia, the similar situation hit. This airline is smashing records, over 75 destinations with over 183 routes, all over Asean and China and India, Australia. Recently it had gone from average of 1.50 RM, to over 2.50 RM in 4 months.

So I wonder if the day comes when Golden Agri had moved from 60 cents, to $1.00, to $5.00. What is the target price of Golden Agri? What was the target price of Wilmar? And that "was" was some time ago.

Similarly, what was the target price of Genting Singapore? Remember some powerful research house, or investment group were giving Genting Singapore $1.20 target price. 90 cents target price because of a Rights Issue. $1.25 target price and fear of estimating the gains. Fast forward to today, apparently the target priced has been revised upwards, conveniently.

My wish was to find such a Wilmar. And I had found it several times and several times too were swayed by wrong information, too much information, lack of confidence and believe in myself. So if you have found yours, believe in yourself and hopefully one day, you will know how Mr Peter Lim felt.

"When you first look at kungfu, it appears to be so easy.
When you are training in kungfu, it is very difficult.
When you have mastered kungfu, it appears to be so easy."

This was the legendary kungfu exponent Bruce Lee's philosophy about mastery. Which level of investment mastery are you at?
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