dinarpmkum

I have been reading my earliest postings, some are worth reposting again. This was back in October 2005, gawd its nearly 7 years already, many people would have had two failed marriages within that period of time. The long standing argument of whether we want foreign institutions in our market or not is a good issue to debate. It forces us to think rationally whether we "need" them or not. To me, its not that we need them, but it is a reflection of the "openness" of our capital markets. Secondly it is also a reflection of the "number of sizable big growth companies" that are attractive enough for them to consider putting into their portfolio. Thirdly, its the "niche exposure that some of our companies avail to international investors", do we have the necessary industry specific companies, that holds sway with international investors. To those ends, we need international investors as a gauge. What we shouldn't be doing is to attract foreign fu...

The agreement reached on Thursday in the Eurozone sparked a major stock and bond rally in world financial markets.  There was a nearly two percent pop across the globe.  The agreement basically made each country responsible for every other country's commercial banking system.  The next step will be Eurobonds, which makes every country responsible for the sovereign debt of all the other countries -- "joint and several" is the usual phrase. Nothing, of course, in the agreement reigns in the growth of that sovereign debt or in way repairs commercial bank balance sheets.  There is just a new signatory -- Germany.  Now, if one looks only at Germany and ignores the rest of the Eurozone, it is clear that Germany itself is on the road to financial ruin, long before taking on the indebtedness of the likes of Greece, Spain, Italy, etc.  The main thing that these agreements do is to eliminate any rational reason for the profligate countries to take any measures to cur...

I like Helen Dragas.  I know that may sound strange, but I think she is very smart and well intentioned.  We all make mistakes.  I think her second term will prove out that she can be an outstanding member of the Board of Visitors. But, you have to wonder about Governor McDonnell.  What's he thinking?  He announced the appointment as if the opposition to Dragas was gender based, which is completely ridiculous.  What McDonnell still refuses to admit, at least publicly, is that he favored the ouster of Sullivan all along.  That is the only conceivable explanation for Dragas's reappointment. I would not worry about the Board of Visitors ganging up on Sullivan.  I don't see that happening.  I expect Dragas will be very cooperative and the future is likely to be harmonious. But, you have to wonder about the Governor in all of this.  No matter how you tell the story, the Governor's role is likely not to be one that history will look back on wi...

Conservatives are castigating John Roberts for joining with four liberals to provide a path to constitutionality for Obamacare.  Why pick on him?  When Republicans are in political control, they do exactly the same thing. Ever hear of "Americans for Disability Act," "The Prescription Drug Bill," "No Child Left Behind," etc.  These are Republican initiatives passed by Republicans.  Who were the biggest critics of Sarah Palin after she was the Republican nominee for VP?  Karl Rove and Peggy Noonan -- two Republicans.  What was her crime?  She didn't read the NY Times and thought Russsia was across the Bering Straights (which it is). Who coined the phrase "voodoo economics" to describe the Reagan tax cut plan?  A conservative Republican, that's who.  What Governor recently followed the advice of four liberal Democrats, against the advice of conservatives, to try to destabilize the University of Virginia?  A conservative Republican that's...

What was a disastrous future for the southern periphery of Europe is now being extended to the northern states as well.  Germany is the main target of this exercise.  Today's agreement to accept near worthless bank equity by the European banking stabilization fund is an admission of hopelessness. No one yet is reducing the yawning deficits or recapitalizing the insolvent banks that plague Europe.   That's off the table for now.  So, European debt continues to explode off to infinity while the paper-shuffling politicians rearrange the names of the guarantors.  In the end, it won't matter.  Germany will suffer the same fate as Greece and for the same reason.  They can't pay their bills. The problem in Europe is one of solvency, not one of liquidity.  These patch jobs only make the final outcome much more severe than it would be if the real problems were faced with candor.

After the spectacular performance of AmDynamic Bond fund, AmInvestment Services Bhd would like to replicate the success of the conventional fund into this newly launched shariah compliant fund. The Fund aims to provide capital appreciation by investing primarily in Sukuk both locally and globally.  To achieve the investment objective, the Fund will undertake active management  to enhance and optimize  returns from investing in sovereign, quasi-sovereign and corporate Sukuks. The sectorial weightings maybe  adjusted to maximize the performance. There is no minimum rating for a Sukuk purchased or held by the  Fund. More about the Fund Value-add of the Fund is derived from active tactical duration management, yield curve positioning and  credit spread arbitrage . Credit spread arbitrage and yield curve positioning is part of relative value approach that involves analysis of general economic and market conditions and the use of models to analyz...

HDBS Research: Sector valuation is overpessimistic.   Even with lower crude oil prices and the EU debt crisis, we believe plantation stock prices have been unjustifiably sold off despite precarious vegetable oil supply outlook. By end Sep12F quarter, the combined ending stock of palm, soybean and rapeseed oils (as a share of consumption) would have been at its lowest since Sep05. There is no remedy for lack of supply.  Looming end to soybean export boom.   We recently examined soybean export data issued by Oil World and found that global inventories are fast depleting, due to South American crop failure earlier this year. Any US crop setback in Sep-Nov12 – if El Nino developed – would exacerbate this situation; as South American stocks would already have been depleted by then. Aug12 global stock levels are now forecast to be the lowest since Aug05. Subsequent stock levels are due to decline further – ev...

Just how bad is Spain? Greece is Greece,its still relatively small in the whole scheme of things. Once the spotlight starts to shine on Spain, this will drag in Italy as well. Greece and Spain, and you can add in Portugal, and to a lesser extent Italy, have the same economy type, less export oriented, less high-tech, more rural, services, tourism, produce and crafts. In a significant way, these type of economies will find it extremely hard to export their way out of a financial crisis. Spain at many levels is much more dangerous because the government is high on ego and is still not willing to fully acknowledge just how deep in doo-doo the economy is. A snapshot of the problems: a) unemployment is at 25% of the labour force (and rising) b) 10 year bonds edging towards 6.8%, the debilitating rates will make any rescue difficult as the Germans insistence on budget austerity measures will be double hit by huge interest servicing c) there is an estimated $230bn of troubled loans in real e...

Investment professionals love complicating things. Trust me on that. I was once like that. You don’t believe me? The next time you meet people from the investment industry, try asking them to give you a definition of the word “risk”. Investopedia defines “risk” as “the chance that an investment’s actual return will be different than expected...risk is usually measured by the standard deviation of the historical/average return of a specific investment.”   Don’t get me wrong. This is actually a pretty good definition of "risk”... that is if you speak finance. But most people don’t, and if you are like most people, you probably struggled to understand even the first sentence (actual return vs expected return...huh?). Good luck attempting to measure risk! Then, what does RISK mean? Complicated definitions aside, many investment professionals define “risks” consistent with the above definition i.e. in terms of “ uncertainty ” (or “volatility...

Now that the UVA crisis has passed it is easy to see that the ultimate outcome created winning positions for mostly everyone involved.  Even Rector Helen Dragas emerged with strength and character in bowing to the inevitable return of President Teresa Sullivan.  It is unfortunate that Mark Kington and Peter Kiernan remain on the outside looking in.  Both Kington and Kiernan are outstanding alums and their contributions to the University in the past merit returning these two to positions of respect at their alma mater.  I for one hope to see both Kington and Kiernan playing a major role at the University in the years ahead, as they have in the past. There are a lot of messages in what has transpired in the past two weeks, but reflect for a moment on why the groundswell of support for Sullivan was so overwhelming.  Sullivan did the little things well.  She was kind and friendly.  She sought out all parts of the University community.  She expressed i...

p/s: it should read "upsize" instead of "size up", plus deutsche and jp morgan cannot be termed as lead underwriters together, while we are talking about errors, you probably cannot locate 3 bottles of 98 Chateau Le Pin in Malaysia ...

The UVA Board of Visitors voted today 15-0 to return Teresa Sullivan to her post as President of the University.  In a gesture of unity, the Board conducted a 15-0 vote of confidence for the Rector, Helen Dragas.  Truly! These are welcome actions and hopefully now the University can address the real issues that seemed to divide the President and the Board that, heretofore, had never surfaced at a Board meeting.  It is time to talk about these things in the open and begin a much needed move to reform an ossified, bureaucratic institution, that is in much need of reform. UVA, like other major American Universities, faces an uncertain future because, while costs have gone through the roof, the quality of education provided has stagnated.  It is time to face these problems squarely and not pretend that all is well in academia.  All is not well. The UVA Board has corrected an egregious error and should be commended.  Removing a sitting President, without so much...

The American economy isn't going anywhere.  Even a Supreme Court decision against the Obamacare mandate can't fix the absence of commercial and residential lending mandated by Dodd-Frank.  American business is strangling under the heavy boot of government.  Hiring is simply irrational given the political and regulatory environment. The energy industry will do well and there will be technology shows of strength, but the broader economy is weighted down by regulatory red tape and bureaucratic mistrust of free enterprise.  All of this bodes ill for the prospects of those seeking employment.  All the rhetoric about inequality and taxing the rich simply reinforce all of the reasons why business has no interest in adding jobs. Unless and until the political environment changes in the direction of free enterprise, the American economy will remain on its present course, sputtering along with no real sense of direction.

Normally, each morning I can't wait to read the Wall Street Journal's opinion pieces, hoping to learn more about news events that may not be captured in the regular news sources.  Or, to get a point of view that you rarely see in mainstream media.  This morning, I simply passed it by. Somehow after the lies and misrepresentations in yesterday's WSJ editorial entitled "Virginia Fracas," I don't trust the WSJ any more.  Virtually, every paragraph of the "VF" article was an apparently deliberate attempt to distort what is really happening at UVA to fit a narrow political agenda.  Shame on WSJ.  I doubt that I will have any interest in perusing the WSJ editorial page in the future.  I simply don't think the WSJ can be trusted to be truthful when they have a political point to make. You live and learn.

I may not agree with the way this issue got itself listed, still from a trading perspective, there is a decent opportunity in the first few days. My assessment from the overall demand patterns, it has a very good chance of hitting RM5.40, a good chance of RM5.60, and if the market is crazy even RM6.00. That is not the real market price for FGV, the real price will be after the lockup period is over. IPO Stock exchange Bursa Malaysia Listing date 28 June 2012 Shares for sale 2,189 million Proposed price  RM 4.55 (€ 1.14) Issuing syndicate CIMB, Maybank,  Deutsche Bank,  JP Morgan, Morgan Stanley Company Land bank 424,995 ha FFB production 5.2 million MT/yr CPO sales 3.0 million MT/yr Annual sales € 1.8 billion Social risks Settlers 112,635 Land bank 522,000 ha Compensation for land - Insufficient Payment for fruit - Below market Environmental risks Deforestation - Indonesia,  Africa Political risks Ruling party in Malaysia - UMNO FGVH management control - UMNO IPO pro...

The McDonnell forces, not content with a furious effort to control the upcoming board vote on Tuesday, to maintain the ouster of Sullivan, have now enticed the Wall Street Journal into one of the most astounding editorials in the paper's history.  This editorial is so full of factual inaccuracies and outright distortions as to make you wonder about the facts cited in other editorials that the Journal runs.  Read it in today's WSJ. The conservative right is apparently vying to support Governor McDonnell's effort to claim credit for Sullivan's ouster.  They are turning this into a right versus left controversy, even though the entire episode seemed to have been originally engineered by the left.  But, maybe not.  It is becoming increasingly clear that Governor McDonnell was in on this from the very beginning as the now-famous Darden email stated. The McDonnell forces are pulling out all of the stops to control the vote to oust Sullivan and to keep the University i...

If you have a medium risk appetite and are seeking for an investment opportunity in the Asian region, you may want to take a close look at OSK-UOB Asian Income Fund , a balanced fund which was newly launched by OSK-UOB Investment Management Berhad on 5 June 2012. The fund is a feeder fund that aims to provide income and capital growth over the medium to long term by investing in one target fund, i.e, the Schroder Asian Income (fund's inception date: 24 October 2011 and is denominated in Singapore Dollar), which primarily invests in Asian equities and Asian fixed income securities. More about Schroder Asian Income The Schroder Asian Income can invests in Asian high yield bonds (30% - 70%), Asian high dividend yielding equities (30% - 70%), cash (0% - 30%) or other asset classes (0% - 10%). Cash will be used if necessary to limit downside risk during adverse market conditions. Financial derivatives are also used to stabilize the portfolio of the fund by hedging the fund's exposur...

There are new rules coming out from the Government Accounting Standards Board (GASB) that will require public pension funds to recalculate their unfunded liability.  The new rules still retain a "wishful thinking" component, but the new rules definitely move the calculations more toward reality and away from the current fantasy rules that public pension funds now use. The bottom line issue is how to "value" the future payments that pension beneficiaries are expecting to receive.  Current methods have absurdly low valuations on these future payments and, as a result, the employer contributions to these funds have always been absurdly inadequate.  It has long been in the interest of politicians and board members to downplay the miserable funding status of these pension funds and to hope and pray that their inevitable blow-up will occur on someone else's watch. Some states, Utah in particular, have dealt with these obligations in a straight forward fashion and enac...

In a close vote on a state governing board, all eyes look to the Governor's mansion.  If Sullivan is not reappointed, then it should be obvious to everyone what really happened here and who is responsible.  Politicians change after they get elected.  Their inner circle quickly descends to a small group of political hacks and the super rich.   These folks usually have a very different agenda than the voters who elected the politicians and often are diametrically opposed to the views of the political party that the politician represents.  Members of governing boards, both governmental and corporate, usually have only one agenda -- to stay on the boards.  Thus, they look to those who control reappointment in times of crisis.  Not all, but most.  Check the political contributions that board members make in the months leading up to a reappointment decision and you will find a clear pattern.  This is human nature, not some evil conspiracy....

While noting that the ouster of President Sullivan was done without transparency and proper procedure, Virginia Governor McDonnell has decided to make up his own rules.  He says that if no decision is reached by Wednesday, he will replace the entire Board of Visitors: "If you fail to do so, I will ask for the resignation of the entire Board on Wednesday." What is the statutory requirement for the Governor to remove a Board member?  The only grounds permitting the Governor to legally remove a Board member are "malfeasance, misfeasance, incompetence, or gross neglect of duty."  There is nothing in the code of Virginia that says that disagreeing with the Governor constitutes grounds for dismissal.  The Governor's threat, if carried out, changes the clear intention of the Virginia Code.  It would permit any sitting Governor, any time they disagreed with a Board action, to simply remove the entire Board. The Governor's behavior in all of this comes as no surprise...

The Governor of Virginia has finally said something of substance about the ongoing tragedy at the University of Virginia. Apparently, the Governor finds fault with all parties and demands quick action. He will, he says, remove the entire Board of Visitors if they do not emerge from next Tuesday's Board meeting with a decision and an explanation and, interestingly, "unity." One suspects that the Governor is not happy about the very fact of a called meeting to "reconsider" President Sullivan's employment. He would have preferred to "move on" with the new leadership. Never mind that nearly 100 percent of faculty, student and alums seem uncomfortable with the manner of Sullivan's ouster. The Governor seems to think that speed and decisiveness are the answer as opposed to due process and sound judgment. The Board needs to make a decision one way or another. The Governor should have called upon the Board to meet and make a decision last week no...

A meeting of the Board of Visitors of the University of Virginia has been scheduled for next Tuesday at 3PM for the express purpose of revisiting the ouster of Teresa Sullivan.  BOV members Hunter Craig and Heywood Fralin spent the better part of the week lining up what they think are a majority of the BOV in support of returning Sullivan to her post.  This is truly good news for the University and could spark a renewal of the sense of community that UVA has made its trademark. While tempers have flared and some things have been said and done that one might wish had not, by and large, discourse between those who disagree has been remarkably civil.  One hopes that if Sullivan is returned, then a process of healing can begin that would include olive branches to Helen Dragas, Marc Kington, and others who are seen as central figures in this drama.  The University needs all of its alumni, not just those who might end up the winners in this tragedy.  Forgiveness, reco...

Another new fund for the month of June, Public Mutual launched PB Dynamic Allocation Fund which allows the investor the opportunity to participate in tactical asset allocation strategy where instruments are allocated between the difference asset classes of equities, fixed income securities and money market instruments based on a flexible investment mandate. The fund may capitalize on potential investment opportunities if the market outlook is positive while reducing its equity exposure when weakness in the equity markets is expected. As such, its equity content may range between 30% to 98% of the NAV of the fund. The balance of the fund's NAV may be invested in fixed income securities and liquid assets which include money market instruments and deposits. Investment Strategy Although the fund is actively managed , the frequency of its trading strategy will very much depend on market opportunities. The fund employs both the top-down and bottom-up approach to evaluate its investments...

When Liu Chia Chiang meets Li Zhong Shen. I was not brought up on Mandarin popular music, if anything, I am more a Canto-pop kind of guy. However, if you examine the musical landscape of Mandarin music, no greater giants can you find other than the two names mentioned, from the 70s right up to the 90s. Naturally I prefer Li Zhong Shen, his lyrics already kills me most of the time and the melodies are superb as well. Leslie Loh the producer has this to say when I asked him to elaborate why this concert is unmissable: 1） this is winnie ho's latest concert, and her only major concert in 2012, fresh from her sensational solo album! like her or not, you can't deny she can sing and very well at that!  2) it has two fantastic guest male singers in ah worm and ah fei 3) it has tay cher siang yet again. who doesn't know TAY CHER SIANG by now?  4)  we are singing songs from the two most respected and legendary composers in the chinese pop history: jonathan lee and liu jia chang. to...

Buffett has said before that the total market cap vs. GNP is one of his preferred valuation metrics. The current reading of 89% is still above his preferred buying range (70-80%), but well off the highs we've seen in the last 15 years. Buffett has previously explained his thinking behind the indicator: "For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you. If the ratio approaches 200%-as it did in 1999 and a part of 2000- you are playing with fire." So stocks aren't cheap, but they're also not terribly expensive based on this measure. If the recent trend holds we could be nearing Buffett's preferred buying range in the coming years…. (click to enlarge) Yes, its a good indicator, but a very basic indicator akin to above or below NTA. If you are buying below 100%, you are "safer", its not rocket science. This indicator ranges from 60%-140% of GNP owing ...

The University of Virginia Board of Visitors laid down the gauntlet by naming McIntire Business School Dean Zeithaml as the "interim President."  It is hard to see this appointment as anything but a thumb in the eye to the University faculty and student body, concerned that outside financial interests have taken over University governance.  There was no vote taken on the resignation and/or termination of President Teresa Sullivan, avoiding the hard question of who does or does not support her removal, not to mention the haunting question of why.  As has become normal operating procedure for this Board of Visitors, all relevant activity took place in secret under the cloak of "executive sessions," further arousing the suspicions of those who view all of this as a massive conspiracy. This sets the stage for a protracted battle between virtually the entire University of Virginia community and the school's governing Board and raises serious questions about where fut...

Recently, Bursa Malaysia launched its Derivatives Local Participants Recruitment Drive to have more derivatives traders, so that a more vibrant and dynamic derivatives market can be seen in Malaysia. Anyway, what is it actually? I guess many of us, either yourself or investors or traders, also doesn't know the exact answer... Again, it's time for Finance Malaysia to do Bursa Malaysia a favor to educate the public. A Local Participant (Locals) is a professional derivatives trader who trades for his/her own account. In essence, a self-employed trader. With the recent easing of entry requirements, those who aspire to be a Local Participant are not required to pass the licensing examination, show the relevant academic qualification and industry experience. What is the benefits of being a Locals ? Locals have grown alongside the Exchange over the years, both in terms of numbers and trading participation in derivatives products. As a proprietary trader, they have unlimited trading...