Tuesday, 31 May 2011

OSK Stock Picks for June 2011

The KLCI performed as expected as a reasonable stream of results provided a stable floor while strong news flow drove up Bigger Caps. For June, while the 4 upcoming IPOs and the KLCI review may draw some attention, OSK believe all eyes will be on the potential tussle between CIMB and Maybank over the control of RHB Cap.
OSK Research
Outlook: Possibly not as quiet as expected

With a total of 4 IPOs going for listing in June and July, it was expected that the market to be somewhat quiet as investors stored away funds to subscribe to the IPOs or buy into them when traded. Despite concerns that the amount of funds raised by the 4 IPOs, namely UOA Development, MSM Malaysia, Axis International REIT and Bumi Armada, would suck the liquidity out of the market, but the amount of funds (RM7.7bn) is far less than that raised in 2010 with the listing of MMHE and Petronas Chemicals (RM14bn). Thus, there should not be much of an issue on the liquidity of the market post the 4 IPOs.

Funds to be raised by IPOs in 2011 (Source: Company Data, OSK)

Together with the KLCI review
Another market's attention factor is the upcoming KLCI review, which are to be announced on 6 or 7 June and become effective in the 3rd week of June. In this review, OSK see MMHE and UEMLand possibly replacing PLUS and MAS, which will be privatized and has fallen below the Top 40 stocks by market cap respectively.

OSK Research, Bloomberg

Banks and Situational
Given what may still be a lackluster broader market in June, we are focusing on a number of situational stocks that should see better news flow during the month.
  1. First, we have UEMLand who will likely joining KLCI before end June.
  2. We also have KimLun Corporation which may see a pick up news flow on Iskandar Malaysia during the month.
  3. Next, we have Khazanah's Pos Malaysia stake sale completed in the 3rd week of June coupled with details of what DRB-Hicom plans to do with the company.
  4. Finally, we have 2 smaller banks, namely RHB Cap and Alliance Financial Group that should see sentiment on improved M&A rumors.
Source: OSK Research

Don't Buy It

The rumor that the German government is considering endorsing a new bailout package for Greece has sent world stock markets soaring. Don't buy it. All this means is that Germany is willing to throw good money after bad. Along with the German government's ridiculous decision to abandon nuclear energy by 2012 (why not get rid of electricity as well?), the German government continues to live in it's own island of self delusion. Stocks should have a nice run today, but, after that, watch out.

Monday, 30 May 2011

Dionne in Dreamland

E. J. Dionne, the columnist for the Washington Post must not be reading his own employer's newspaper. Dionne devotes his column today to praising "other countries," who have, in his view, successfully overcome the challenges of health care, budget deficits, and unemployment. Dionne is careful not to list these countries or mention any specific country by name. Which countries is he referring to?

Europe? Japan? He must mean China and India where there are no entitlement programs and not much in the way of a tax system. If somehow Dionne thinks that Europe and Japan are doing well in regard to the various items he ticked off in his article, he must have been living in a cave the last few years. Europe and Japan cannot afford any of the things that Dionne is talking about and their economies are on life support. He complains about US unemployment. Most of Europe would trade for our unemployment rate (now, or in the past four decades). Europe is busy trying to dismantle all the things that Dionne talks about. Where has Dionne been?

Dionne is typical of folks who memorize a position and then repeat it ad nauseum no matter how untrue it happens to be. Enjoy his silly article in today's Washington Post. You have to admire how he doesn't let the real world intrude on his views.

Sunday, 29 May 2011

Bursa Malaysia: e-Share Payment

Do you know that Malaysia now has two types of dividend? In default, listed companies are giving away dividend in cash. But, this kind of scenario has been changed, whereby shareholders are sometimes are given the "share-dividend" instead. Maybank rocks the market last year by purposing a share-dividend plan, in contrary to the usual cash dividend. Then, few listed companies are following the latest trend. Here, let us know more about scheme.

Similar to eDividend, one of the main objectives of implementing e-Share Payment is to promote greater efficiency of the payment system which is aligned to the national agenda of migrating to electronic payment.

What is e-Share Payment?
It is a service provided by all stockbrokers for the purpose of:
  1. payment of share sales proceeds by the stockbroker directly into your bank account; and/or
  2. providing an option for you to initiate payment via e-channels (e.g. Internet banking, mobile banking, ATM) or to authorize the banks where you maintain your bank account to allow the stockbroker to debit your bank account for the purpose of share purchases
Why should shareholders subscribes to the facility?
  • Convenience of electronic settlement (eliminates the need to collect and issue cheques);
  • It eliminates the need to travel to the bank or stockbroker;
  • Funds will be made available in your bank account on the same day (T+3); and
  • Incidents or misplaced, lost or expired cheque can be avoided
How do I subscribe?
You must complete the relevant prescribed form and submit it together with the required supporting documents to your stockbroker. Your stockbroker would then verify your particulars and signature and update your payment records accordingly in their system under e-Share Payment.

What supporting documents are required?
When providing your bank account information for e-Share Payment, please bring along the following:
  • Copy of MyKad
  • Copy of your bank statement / bank saving book / details of your bank account obtained from your bank's website that has been certified by your bank.
Which types of bank accounts are allowed?
Any saving or current accounts are allowed. However, investors can only use one bank account for trade settlement for each trading account maintained with a stockbroker.

Can I provide a separate bank account for each of my trading accounts if I have more than one trading account?
Yes, if the trading accounts are with different stockbrokers.

Is there any transfer limit?
There is NO transfer limit for both crediting of sale proceeds and auto debit. For payment of purchase, the transfer limit via e-channels is set by the individual bank. Please contact your bank in the event you wish to request for a higher transfer limit.

Will the stockbroker charge me?
This facility is offered by the stockbrokers FREE. While the auto debit facility is also offered free, stockbrokers may levy a penalty of up to RM10 if the transaction fails due to insufficient funds in you designated bank account.

Can a payment be made to/from a third party bank account?
Or, my own overseas bank account?
No, it must be under your own name and it is a Malaysian bank offering MEPS IBG service.

Can I cancel or terminate my e-Share Payment facility and how do I go about doing it?
Yes, you can do so by contacting your stockbroker and completing the e-Share Payment termination form.

If I close my stock trading account, will the e-Share Payment facility be automatically terminated?

Source: Bursa Malaysia

Friday, 27 May 2011

Even If There Were No Debt

The current discussion of Western European sovereign debt problems are ridiculous. So, too, are the discussions of American sovereign debt problems (state, local and federal). If you spend a multiple of your income every year, would it matter, long run, how much you owed on day one? Eventually, you would go broke regardless of the initial level of debt. In fact, if anyone bails you out now, you will just take a little longer to go broke and the debt will be much, much larger when you eventually do go under.

There are not enough assets in the Eurozone to prop up Greece, forget about Portugal, Ireland, Italy and Spain. For that matter, there is no real hope for ultimately paying off the national debts of Germany, France and the UK. They all spend too much relative to their income. Ditto for the US.

The Great Experiment, promising future old folks a guaranteed income and free or inexpensive health care cannot work. It's simply a matter of numbers. Debt can postpone the bankruptcy of these systems, but, in time, they will fail. The problem is that someone needs to be setting aside acorns for the winter...no one is doing that in the US and western countries. The irony is that Asians don't have the same worry (except Japan which has the same habits as the US and Western Europe). Asian countries don't have safety (sic) nets; what they have is high personal savings rates, which is, frankly, all you need to provide for retirement and old age health care. You really don't need anything else but that. But, that is precisely what the US and Europe lack.

These continual discussions of bailouts and debt restructuring will continue until they can't continue any longer. Anyone foolish enough to buy the sovereign debt of these countries deserves their fate. Even US treasuries cannot hide from the cold hard numbers. There is no serious political activity to halt the steady march to bankruptcy in every major western country, including the US.

Is this bad, necessarily? No, not really. As long as the productive resources of the economy are in play and incentives remain in place. The problem is that governments will seek to find ways out of their problem through higher taxes and broken promises. That changes the game. Bankruptcy is much better, though that, too, involves broken promises.

The only way to provide for income and health care in old age is to save during the working and productive years. If a society doesn't do that, then there is nothing around to consume when the old folks need it. Is there anything else worth saying about this topic? If you want health costs to quit spiraling out of control, then get government out of the health care business entirely, except in the provision of "charity" hospitals and medical care for the truly indigent (which is a very tiny fraction of any modern industrialized country). Free market health care would provide choice, low prices, and excellent care. Any other solution condemns the citizenry to long lines and poor health care.

Wednesday, 25 May 2011

New Fund: AmAdvantage Brazil

If you are a football fans, sure you know at least a bit about Brazil - the country of football. Almost everyone in Brazil knows football, male or female. Brazil is going to host the FIFA World Cup. But, did you know that Brazil is one of the top emerging markets in the world currently. BRIC, which comprise of Brazil, Russia, India and China is the main growth engine of the world now. Do you want to invest in the mighty Brazil? This is the only fund available in the market that invest directly and solely in Brazil. Let's check this out.

AmAdvantage Brazil fund is managed by AmInvestment Services Berhad. This is a feeder fund, which will invest a minimum of 95% of Fund's NAV into the HSBC Global Investment Funds-Brazil Equity (Target Fund), a sub-fund of the HSBC Global Investment Funds domiciled in Luxembourg.

The fund is suitable for an investor seeking:
  • Long Term capital growth on their investment,
  • Participation in the upside potential of the Brazilian market,
  • Medium to High risk investment vehicle.

The Target Fund:
It was launched on 22 December 2004 and the total fund size is USD 3.08billion as at 30 October 2010.

The Investment Manager will not, in response to adverse market and other conditions, take temporary defensive positions that are inconsistent with the Fund's investment strategy. This implies that this is a passive fund which mirrors the performance of the Target Fund.

This means that any temporary defensive positions taken in response to adverse market conditions, if any, will be taken at the Target Fund level.

As such, investors need to monitor the Fund's performance to exercise their own discretion on whether to redeem from the Fund.

Source: AmMutual

Tuesday, 24 May 2011

Government to increase electricity tariff? And, RON95 price? (24 May 2011)

Before Government making the decision on two of the most important necessity of Rakyat, let us make a guess first. I know this would be a hot debate on whether Government should increase the electricity tariff and RON95 petrol price. Actually, both are linked closely with crude oil - the black GOLD.

Electricity Tariff

For TNB, the revise is crucial for its sustainably of the company to continue electrified Malaysia's economy. In fact, this is a long overdue issue, delay and postpone until now. But, why now? I believes that Government, initially wanted to review the tariff once the much anticipated general election. But, the Sarawak state election result could have derailed the early election plan. If we don't review now, TNB may facing financial difficulties which may impact the cash flow and credit ratings of its debts. High natural gas price is affecting the bottom line of the company.
Petrol RON95 price
Comparing to its brother (RON97), we should be more than happy to still pumping at current price. The last review is on December 2010, and the 6 months grace period will end by June 2011. In other words, next month (June 2011) would be schedule to revise the price again. Actually, this is not a surprise move given that the Government had already gradually cutting subsidies since last year. And, he did mentioned that petrol price will be subsidy-free by 2013.

Conclusion by Finance Malaysia
Confidently, we predicts that Government will revise both electricity tariff and RON95 price UPWARDS. Inflation will shot up to 4% this year. BNM will continue its OPR hiking. Believe it? You can watch TV news and advertisements these few days. Government is "previewing" the increase, letting Rakyat to welcome it mentally. Not enough? That's why we saw news from economists saying that "Malaysia will Bankrupt, if Government do not cut subsidies". BNM governor is embracing the increase, saying "We can ride out high costs".

Monday, 23 May 2011

New IPO: UOA Development Berhad

Being one of the most established developer in Klang Valley, UOAD is going to be a darling property stocks for investors once listed. The strong "UOA" brand name as a developer of high end residential and commercial properties, makes it stands out from its competitors.

What's so interesting about UOAD?
Based on the IPO price of RM2.90 per share, the company is listing with a market capitalization of RM3.5bn, which eventually will place UOAD to be the 4th largest property company in Bursa Malaysia. The top 3 are UEMLand, SP Setia and IJMLand.

Don't forget about UOA REIT, which is the real estate investment trust of UOA Group in Malaysia. In other words, whatever properties that was construct by UOAD may inject into REIT one day. With UOAD being granted a "Right of First Refusal" to inject its completed commercial buildings into UOA REIT, it definitely provides UOAD the opportunity to redeploy its capital where the proceeds from asset injections will be re-utilized for future development projects. This would act like a "ready-exit" strategy for UOAD's asset. Not good enough?

Source: OSK Research

By managing its construction works in-house, this gave UOA a very competitive cost advantage, resulting in gross development margins of 50%, which is way above the industry average. They got their own team of architects, planning experts, M&E and civil engineers and quantity surveyor, hence, giving UOAD the edge to respond wisely and promptly to any unforeseen changes.

At last but not least, of course, is UOAD's flagship integrated property development project - Bangsar South. RM8bn, 60-acre located near Federal Highway and Mid Valley. According to HL Research, the land was acquired in 2005 for RM46psf, and its Horizon project has commanded pricing of RM600psf despite its leasehold status. In short, strategic location with huge value enhancement potential.

Fair Value?
OSK gave RM3.57
RHB gave RM3.45
HLIB gave RM2.57

Source: HLIB Research

Thursday, 19 May 2011

New Fund: OSK-UOB Multi-Asset Recovery Strategy Fund

With the ongoing global economic recovery and the various opportunities created from the vast stimulus packages put forth by governments around the world, we are currently witnessing differing levels of economic expansion across all economies. And different asset classes such as equities, bonds, commodities, currencies and cash perform differently under different stages of economic expansion.

Hence, OSK-UOB now offer investors a fund that will capitalize on the potential opportunities arising from the different market conditions resulting from this economic expansion phase by dynamically investing in multi-asset classes that are expected to do well in specific market conditions.

The OSK-UOB Multi-Asset Recovery Strategy Fund is a fund-of-funds which aims to achieve long term capital appreciation by investing in a portfolio of exchange traded funds (ETFs).
The fund aims to achieve its objective through a portfolio of ETFs chosen from 5 major asset classes, i.e equities, bonds, commodities, foreign exchange (currencies) and money market instruments selected from the global markets. The fund's name reflects the fund's strategy that capitalize on the recovery of the global economy by dynamically investing in multi-asset classes through a portfolio of ETFs.

How much return?
This fund is benchmark against an average annual return of 8.00% over the long term. This is the targets of the fund.

Investor Profile?
This fund is suitable for investors who:
  • want to capitalize on the recovery of the global economy with an investment that invests dynamically in multi-asset classes through a portfolio of ETFs
  • seek capital appreciation
  • have a medium risk tolerance
  • have a long term investment horizon

Source: OSK-UOB Unit Trust Management Bhd
Click here to download prospectus

Tuesday, 17 May 2011

New Fund: Am-Mateen Asia Pacific Equity Fund

Launched on 5th May 2011, AmIslamic Funds Management Sdn Bhd presented to investors an opportunity to participate in the growing Asia Pacific region and also investing according to Shariah principles.

The Fund is a Shariah compliant equity fund that seeks to grow the value of investments over the medium to long term by investing in listed equities, equity related investments and other approved instruments across Asia Pacific (ex-Japan) that conforms to the Shariah investment guidelines.


The investment style is active and focuses on strategic structuring of the portfolio. Meanwhile, the investment strategy is to select a core portfolio of low volatility and high dividend stocks with a 3 year time horizon coupled with a value approach to identify undervalued companies due to economic cycles which have been ignored relative to historical patterns.

However, the Manager may adopt temporary defensive strategy by maintaining 100% of the fund's NAV in liquid assets/cash weightings that may be inconsistent with the Fund's principal investment and asset allocation strategy.

The countries in which the Fund will be investing includes but are not limited to Malaysia, Hong Kong (including H-shares which refer to companies incorporated in mainland China that are traded on the Hong Kong Stock Exchange), Korea, Pakistan, Philippines, Singapore, Taiwan, Thailand, Australia, Indonesia and New Zealand.

Asset Allocation
  • 70% - 95% in equity and equity related instruments
  • 5% - 30% in liquid assets

The fund is suitable for investors who:
  • want investment exposure to Asia Pacifc (ex-Japan)
  • seek steady growth-potential capital appreciation with lower volatility
  • have medium to long term (3-5 years) investment horizon goals

Interestingly, the base currency of this fund is USD. As such, the initial offering price is USD 0.2000.

Source: Am-Mateen Asia Pacifc Equity fund prospectus
Click here to download the prospectus.

Sunday, 15 May 2011

3 Hints given by BNM (16 May 2011)

Bank Negara Malaysia (BNM) hiked the OPR by 25bps to 3% on 5 May as what some analysts said "Surprising". The OPR hike was a pre-emptive strike on inflation pressures as the output gap closes. Many analysts are expecting hikes to resume only in July as inflation remains largely supply side driven. However, BNM seems to act before demand pull pressures dominate and before the output gap turns positive. In our view, the OPR and SRR hike is indicating two things here.

Hints #1
Inflation is going to threaten the Malaysian economy in the near-term (at least). Recent increase in prices of petrol and sugar will further accelerate the numbers. With ongoing efforts by Government to reduce the subsidies, inflation numbers for sure will gone up.

Citi Research: Regional Policy Rates as at 10th May 2011

Hints #2
Related to inflation also, BNM is trying to reduce the increasing food and resources prices. If we can reduce the import price, by having a stronger currency, this would be a wise move. So, BNM is trying hard to cramp down our money spent on these import items. Not by reducing the quantity of imports, Malaysia are buying at a cheaper price. How to that? Of course, by raising the OPR rates, which will lead to a stronger currency RM.

Citi: Regional Currency Performances as at 10th May 2011
Hints #3
Maybe, BNM foresees that Malaysia economy is going to face some real challenges (Asian financial crisis?). If the situation really turns bad in a year or two, how are we going to reduce the rate to spur economy given the current low rates? We must have room for BNM to decrease the rate by that time. That's why BNM so pro-active now?

Friday, 13 May 2011

Protecting GM Products

Suppose the government decided that GM cars are so great that consumers should take much better care of them than they do. So, to protect GM cars, henceforth all GM owners will be required by law to have them washed and waxed once a week. Surely their owners can afford that...that would only be about $ 35 per week for the wash and wax. Definitely affordable.

Would that affect the sale of GM cars?

Apparently, the answer, according to the government is no. Since owners can afford to wash and wax their GM cars every week then they should be required to do so.

What about Ford cars? Let's suppose the government doesn't like them, so it doesn't care whether Ford cars get washed or waxed, so they decide not to "protect" them with legislation requiring a weekly wash and wax. Why "help" those guys?

How would all of this effect the sale of GM cars? Ford cars? Who wins with this kind of legislation GM or Ford?

The answer is obvious: Ford wins. Consumers can afford the wash and wax, but if they simply buy Ford they need not bother with the wash and wax. That was easy.

So, it is with American low-skilled labor. Congress has loaded American labor up with various "protections." Unemployment compensation, medicare, social security, the right to sue for real or imagined indignities, and so forth. Think of American low-skilled labor as GM cars. The government is protecting them and business can afford it. But will they do it?

Nope. Why hire American low-skilled labor when you can outsource or simply buy labor-saving equipment? Labor saving equipment requires no unemployment comp taxes, no social security taxes, no medicare taxes, no health care benefits and, best of all, the machine can't sue you!

Cutting taxes, raising spending, conservative schemes, liberal schemes.....none of this really matters. The government is "protecting" low-skilled employees by making them much more expensive than outsourcing or capital equipment. The market response is the same as in our GM/Ford example. If you protect GM cars, then Ford will be the winner. If you protect low-skilled labor, low-skilled labor will be the loser.

That, in a nutshell, is why we are now entering a "new-normal" for unemployment among the relatively unskilled part of our labor force. They have been artifically priced out of the market by overt government policy. Highly skilled employees need not fear -- they are less likely to sue and all of these add-on costs are a relatively smaller fraction of their overall compensation.

Once again government welfare schemes hurt the poorest among us.

Thursday, 12 May 2011

Tax Big Oil? Who Pays

The new solution to high energy prices proposed by the Administration is to increase taxes on oil companies. An interesting energy policy! Forbid drilling and exploration of new energy sources and tax existing production. Is the plan to eliminate energy supplies?

Who pays the tax on oil companies that Obama is proposing? Who owns the oil companies? The answer: the average middle class American in their pension funds and college endowments and foundations. They are, by far, the biggest owner. So, the plan is to tax middle American pension funds through their holdings in stocks. There isn't some unseemly rich guy out there owning American oil companies. It is the average American. He is the greedy oil guy. So, by all means, lets tax him.

So another "soak the middle American" scheme proposed by Obama -- this time as a solution to higher energy prices.

You can't make this stuff up,

Tuesday, 10 May 2011

Insurance: New Bank Negara ruling to impact claims ratio? (10 May 2011)

Now, every cars can get covered...
RHB Research:
Bank Negara Malaysia (BNM) announced last week that effective immediately, members of the public will be able to obtain motor cover from all general insurers and their branches as well as at Pos Malaysia and its branches nationwide. All general insurers are committed to provide motor cover to all motorists including the "displaced vehicles" which generally comprise private vehicles exceeding 10 years old and motorcycles currently underwritten by the Malaysian Motor Insurance Pool (MMIP).
Obligation to provide cover with NO excessive loading

Based on this new ruling, general insurance players are obligated to provide cover to all insurance seekers, without excessive loading and cross selling of other classes of insurance to mitigate the risk. Although, general insurance players could still load the policies, albeit at a more reasonable amount and not 200-300% as previously charged by the MMIP for the so-called high-risk "displaced vehicles" or vehicles which are aged 10 years and above.

Finance Malaysia: Good to car owners, Sorry to insurers...
According to analysts, as a whole, this new ruling is negative for the industry. Although, this is good to owners of old cars, insurers is at the losing side. Insurers are facing with a probability of higher claims, coupled with a lower premiums charged. Of course, this would be underscoring the bottom line of insurance companies. According to RHB reseach, they are forecasting a higher claim ratios on insurers as follows.

RHB research: Changes in claims ratio and earnings

Short-term pain, Long-term gain
However, Finance Malaysia believes this is just a short-term disadvantages to insurers only. Do you still remember the new motor framework which will allow insurance companies starting 2012? That will allow insurance companies to increase the motor policy premiums in the long term according to the claims experience of the industry. More or less, this will balanced out the current negative implications once the gradual liberalizations begins next year.

Source: OSK and BNM

Source: OSK and BNM

Monday, 9 May 2011

OSK Stock Picks for May 2011

The KLCI lagged the region in April as it suffered from the fallout ahead of the Sarawak state elections. With that behind us, OSK see the market recovering in May as they believe the 1Q2011 will at least meet downbeat expectations after the past 4 quarters of disappointments. With the potential for reasonable results, we believe the market will shift back to fundamentals and look back at Big Caps.

KLCI was a laggard
With the KLCI recording a total return of -0.25% in April, Malaysia's standing YTD slipped significantly to being the 4th worst performing market from being the 4th best. As mentioned earlier, the key drag on the Malaysian market was the Sarawak state elections. While the market had put in some gains ahead of the Invest Malaysia conference on 12 and 13 March, by these dates concerns that the incumbent Barisan Nasional would fare below expectations in the state elections led to significant profit taking in the Malaysian market. Towards month end, with the BN retaining its two thirds majority in Sarawak, there was a modest recovery given continued strength in global markets.

OSK: Total Returns year-to-date
For April, no sector strongly outperformed or underperformed with the biggest gainers being the Gaming and Consumer sectors driven by Genting and F&N, while the biggest losers were the sectors hardest hit by the Japanese calamities namely Autos and Technology with drops seen in UMW Holdings and JCY International.

OSK: FBM100 gainers and losers in April 2011
Strategy - BUY Big Caps, Trade property
After October 2010 which saw a jump in investors sentiment on property counters spurred by the 3 M&A proposals of UEM Land-Sunrise, IJM Land-MRCB and Sunway-Suncity, news flow on property counters has generally tapered down. We believe this is set to change soon with the likelihood of more announcements on Government land developments around the Klang Valley such as Sungai Buloh land, the Sungai Besi airport and others as well as annoucements relating to developments in Iskandar Malaysia. As such, we would advise investors consider trading in property counters with good Government ties such as SP Setia, UEM Land and Glomac.

OSK: Top Picks for May 2011
Inline with the view that Big Caps could do better in May with the focus back on earnings, we shift our Top Buy calls for May all on Big Caps. We pick our Top 2 banking buys CIMB and Maybank coupled with our Top Telco Buy Axiata. We include our Top Transport buy call AirAsia which just completed an analyst corporate visit in Bangkok and Jakarta in preparation for the upcoming listing of its Thai and Indonesia associates. And round it all off with UEM Land which is an excellent proxy to the upcoming potential news flow in the property sector and also as recognition to its likely inclusion into the FBM KLCI in June. Do note that aside from AirAsia, all the other 4 stocks have been laggards or market performers over the past 3 months.

Source: OSK Research report

Saturday, 7 May 2011

Finally, Some Job Growth

Friday's unemployment numbers were undeniably good news, even though the headline unemployment rate increased from 8.8 percent to 9.0 percent. The important news is not the unemployment rate but the number of new jobs created in the private sector of the economy. That number, nearly 300,000 after including revisions to earlier reports, is a very, very good number. Lets hope future months continue at that pace. Such growth would make my forecasts too pessimistic, but, heck, I've been wrong many times before. Lets hope that this month is the start of something big.

Wednesday, 4 May 2011

After Obama K.O Osama...

In fact, this year's Labor's Day is marred with some terrorist-related news. First, UN successfully bombarded a key area of Libya's dictator Qaddafi, killing his son and injuring scores of his followers and relatives. Then, US troops was successfully and secretly raid the most notorious terrorist leader, Osama bin Laden. The whole raiding process was witnessed by Obama and his key personnel in white house. After several minutes of heart-beating attempts, Obama made an historic announcement on Labor's Day: "Today and finally, we defeated Osama bin Laden, the mastermind behind the 9/11 terrorist attack. We had done the DNA on the body, and it was Osama."

Why Obama, and not Bush?

Through 10 years of hunting Osama, ex-US president George W.Bush launched several military efforts. This led to the Afghanistan war and the Iraq war. When Obama took over, all had been settled down until the Libya attack lately. If you ask me, I think it bodes well for Obama's next election campaign not by winning the war, but in winning the heart of people, rejuvenate the spirit of US citizen, and regain the trust and confidence of the world. Obama is the man, simply because his name is almost same with Osama. Even news reporters sometimes wrongly spell out the name and read: "Obama is dead in the latest raid by US". You see?

Life goes on...
As spoken by Obama himself, the war against terrorists doesn't stop here. We will continue our job to assure the safety of the world, and to safeguard the interest of the world population. Share market rose initially after the news, but succumbed to losing ground later. The victory doesn't bring much joy to the share market. Instead, it spurred up the revenge spirit of fellow Osama's followers. Actually, we are now in a very watchful days. Security alerts are at all-time high, especially for US embassies globally.

Economy sense...
US government now can cut down on its budget deficit, by lowering the military expenses. USD may gain some lost ground, after sliding for weeks. A technical rebound on USD could again ignite the flames of currency trading volatility. Locally, it is likely to be downward biased due to lacking of positive news. Traders are waiting for the upcoming reporting season to gauge the entry level. Coupled with some bad news on several financial distressed counters like Sumatec, DBE, Viztel... and skeptical result for Fitters and Ramunia, everyone is staying sideline.

Finance Malaysia opines that we need another victory to boost the market sentiment. How about the victory against Qaddafi?

All these years, Osama is very famous, below is some arts dedicated to him.

Sunday, 1 May 2011

A Glimpse of Sanity in Massachusetts

Massachusetts, a state on the brink of financial disaster, has removed the right of collective bargaining by public employees over health care issues. Massachusetts' overwhelmingly Democratic legislature acted for the same motives the state of Wisconsin legislature acted earlier this year -- to reign in the exhorbitant "deal" provided to public employees that taxpayers cannot afford.

The public employee unions cannot demonize the Massachusetts action as a Republican attack on unionism since the Republicans were not in the forefront of the effort in Massachusetts to strip the public employee unions of bargaining rights -- it was done by the Democrats!

Wonder why the President didn't weigh in on the Massachusetts action?

Pump Prices

One way to discourage energy production is to raise taxes on energy producers. That idea is at the center of Obama's energy strategy. Four bucks a gallon for gas is cheap, I suppose, to the Obama crowd, so why not remove the tax incentives in current law to increase oil production?

This continues the Obama Administration's strategy of punishing those who make good decisions -- in this case the oil industry.

On the Obama Administration logic, why not have a special tax for Apple? Apple created products that consumers wanted -- the Iphone, the Ipad. Why not go after them with a special tax increase? Apple, like oil companies, guessed right. Why not punish them too?

Imagine you know a way to increase oil production at lower cost. Would you consider investing in such a process knowing that Obama is waiting in the wings to raise your taxes if you are successful?

One more example of absurd government policy designed to make a serious problem -- higher oil prices -- even worse.