OTK is a man of no principles. He has said that he will resign as MCA head if the vote of no confidence against him is upheld. The delegates have done that. Now, he is reneging on his promise. He is trying very hard to cling on to power. He was even gone ahead and made a pack with his nemesis, CSL. He couldn’t stand the deputy from the day he was elected President. Now, he says that he can work with him to rebuild the party. What a hypocrite.
He has no more credibility. The people (voters) will not trust him anymore. They will not respect him as a leader of the Chinese community. Comes the next general election, they will again cast a vote of no confidence on him.
He is a lame duck President. UMNO will not respect him either. So, he will have no bargaining power with the government. In essence, he is a power crazy leader with no integrity and little respect. He might as well retire and go fly a kite.
Wednesday, October 28, 2009
Tuesday, October 13, 2009
From hero to zero
OTK is an arrogant man. From the start, he has decided not to work with his deputy. He tried to sideline his assistant. The critical mistake was when the CC decided to expel CSL. Then OTK tried to be a hero by allowing for a show of no confidence against him. Now, he has to go. He has learned his lessons the hard way.
So, the moral of the events is that when you are in power, do be nice to the people under you. Show some humility. People will be more willing and sincere in serving you. If you show arrogance and superiority, the best that you get is an uncommitted service. And when you fall, you will be standing all alone.
He may have done some good in the PKFZ case. But, in the process, he may have stepped on many people’s toes. He has done what is considered as unconventional by exposing the dealings of his predecessors. The former ministers are from the same party. Thus, he may have indirectly caused the washing of the community’s dirty linen in public. This may have angered many elders in the community.
So, the moral of the events is that when you are in power, do be nice to the people under you. Show some humility. People will be more willing and sincere in serving you. If you show arrogance and superiority, the best that you get is an uncommitted service. And when you fall, you will be standing all alone.
He may have done some good in the PKFZ case. But, in the process, he may have stepped on many people’s toes. He has done what is considered as unconventional by exposing the dealings of his predecessors. The former ministers are from the same party. Thus, he may have indirectly caused the washing of the community’s dirty linen in public. This may have angered many elders in the community.
Monday, October 5, 2009
What high income
Malaysia wants to be a high income nation. Jolly good. But at what currency exchange level are we talking about? It is good if the income is high and the denomination is in USD. What is the point if it is denominated in Indonesian Rupee or the Vietnamese Dong.
High income can only be sustained if the productivity is improved or we have advanced to a higher technological level. This would result in higher growth and increased GDP. But, we are not going along this line. We are trying to be competitive by manipulating the exchange rate. We lowered our exchange rate so that our products are cheaper to importers. Workers may get a raise on the take home pay, but their purchasing power is not better off.
Malaysia has not done well in terms of its currency exchange rate. It used to be 1 RM to 10 Baht in the 80s. In the Asian Financial Crisis of the 90s, Thailand’s currency was badly battered. They have recovered. Even with their political instability and turmoil, they have done better than us. Today, the exchange rate is less than 10 Baht to 1 RM.
High income can only be sustained if the productivity is improved or we have advanced to a higher technological level. This would result in higher growth and increased GDP. But, we are not going along this line. We are trying to be competitive by manipulating the exchange rate. We lowered our exchange rate so that our products are cheaper to importers. Workers may get a raise on the take home pay, but their purchasing power is not better off.
Malaysia has not done well in terms of its currency exchange rate. It used to be 1 RM to 10 Baht in the 80s. In the Asian Financial Crisis of the 90s, Thailand’s currency was badly battered. They have recovered. Even with their political instability and turmoil, they have done better than us. Today, the exchange rate is less than 10 Baht to 1 RM.
Thursday, June 4, 2009
Contrasting Forecasts
CIMB is very bullish on the Malaysian market. It is projecting a target of 1220 for the KLCI at year end. It cites the gradual reinvestment of institutional funds' spare cash and the "better than expected" 1Q results for the local companies as the reasons for its good feelings. Very well.
At about the same time, Maybank came out with a very bearish report. It is targeting the KLCI at 990 at year end. It cites the worse than expected 1Q GDP growth of -6.2% and the poor 1Q earnings (62% of its stock coverage of 72 companies reported lower profits) of the local companies as its reasons for the lousy feeling.
What a big contrast in the forecasts. I think I can be a stock market forcaster too. I bet that the KLCI will end the year at 1105 - the middle of the two forecasts. I am confident that I can beat at least one of the above investment banks. Just wait and see.
At about the same time, Maybank came out with a very bearish report. It is targeting the KLCI at 990 at year end. It cites the worse than expected 1Q GDP growth of -6.2% and the poor 1Q earnings (62% of its stock coverage of 72 companies reported lower profits) of the local companies as its reasons for the lousy feeling.
What a big contrast in the forecasts. I think I can be a stock market forcaster too. I bet that the KLCI will end the year at 1105 - the middle of the two forecasts. I am confident that I can beat at least one of the above investment banks. Just wait and see.
Tuesday, May 19, 2009
Talking Bull
The world's leading airlines are all buffeted by the double whammy of the economic recession and the influnza A flu. Singapore Airlines just reported a 92% plunge in its profit for the quarter ending March 2009. Cathay Pacific recorded a loss of more than a billion USD in 2008 and its revenue for the 1st quarter is down 22%. Japan Airlines reported a loss of 63.2 billion Yen for the year ended March 09 and is predicting negative results this year too. Qantas is forecasting its results for the year to June 09 will be less than half of that of last year.
Amidst all this gloom, there is one nascent airline that is very bullish. Air Asia X is talking about acquiring more planes and connecting to new destinations. It wants to increase its fleet from 4 to 8 planes and its destinations from 4 to 10. It is wishing for a revenue of 1 billion RM in 2010 and with a margin of 10 to 20% (very optimistic), is projecting itself to be among the top 100 companies on Bursa Malaysia. Its CEO is definitely very gung-ho and bullish. He is already counting the chickens even before the eggs are laid.
Amidst all this gloom, there is one nascent airline that is very bullish. Air Asia X is talking about acquiring more planes and connecting to new destinations. It wants to increase its fleet from 4 to 8 planes and its destinations from 4 to 10. It is wishing for a revenue of 1 billion RM in 2010 and with a margin of 10 to 20% (very optimistic), is projecting itself to be among the top 100 companies on Bursa Malaysia. Its CEO is definitely very gung-ho and bullish. He is already counting the chickens even before the eggs are laid.
Thursday, April 16, 2009
YTL Corp
This company is known for being very savvy with its funds. It builds up its war chest during good times. It and its CEO always claim that, in crisis times, they will emerge to buy up cut-price assets. They proclaim that to be the company's forte or signature.
Lets look at some of their recent investments in Singapore. First, they bought the Lake Front Collection in Sentosa Island for S$150 million. This consists of 18 bungalow lots and is done with a joint venture partner. Then, they bought the Sandy Island residential development consisting of 19 bungalow lots for S$135 million. The price for these purchases does not look dirt cheap.
Their foray into Singapore includes the en bloc purchase of Westwood Apartments for a record price of S$435 million. The land area is 62179 sq ft and at a plot ratio of 2.8, the land cost per gross development area is $2500/ft2. This price does not look cheap and with today's market condition, profits will hard to find.
They got a good deal in Macquarie Prime Reit. They paid S$285 for 26% of the reit company and also 50% of Prime Reit Management Holdings.
The big one came when its subsidiary, YTL Power, got hold of Power Seraya for S$3.8 billion. This was bought through and unsolicited bid after Temasek has called off its tender excercise. The offer price can, at best, only be described as fair. Temasak wouldn't have left off the power generator at a steal to YTL Power.
YTL Corp is purported to have a war chest of RM11 billlion. The above purchases more or less used up its available funds. They have little left for further acquisitions. So, did they moved too fast or has its CEO loss some of his Midas touch.
Wonder why they suddenly poured so much funds into Singapore. They did not really get fire sale prices. Safe haven?
Lets look at some of their recent investments in Singapore. First, they bought the Lake Front Collection in Sentosa Island for S$150 million. This consists of 18 bungalow lots and is done with a joint venture partner. Then, they bought the Sandy Island residential development consisting of 19 bungalow lots for S$135 million. The price for these purchases does not look dirt cheap.
Their foray into Singapore includes the en bloc purchase of Westwood Apartments for a record price of S$435 million. The land area is 62179 sq ft and at a plot ratio of 2.8, the land cost per gross development area is $2500/ft2. This price does not look cheap and with today's market condition, profits will hard to find.
They got a good deal in Macquarie Prime Reit. They paid S$285 for 26% of the reit company and also 50% of Prime Reit Management Holdings.
The big one came when its subsidiary, YTL Power, got hold of Power Seraya for S$3.8 billion. This was bought through and unsolicited bid after Temasek has called off its tender excercise. The offer price can, at best, only be described as fair. Temasak wouldn't have left off the power generator at a steal to YTL Power.
YTL Corp is purported to have a war chest of RM11 billlion. The above purchases more or less used up its available funds. They have little left for further acquisitions. So, did they moved too fast or has its CEO loss some of his Midas touch.
Wonder why they suddenly poured so much funds into Singapore. They did not really get fire sale prices. Safe haven?
Thursday, April 2, 2009
Why inflation now is good
Keynesian economics recommend that in an economic depression, the correct course of action should be to encourage spending and discourage saving. Governments should borrow money and boost demand by pushing the money into the economy. That's why countries like the US, UK, Japan, China, Malaysia and others are lauching huge stimulus packages for their conomies. Their aim is to stall any recessionary tendencies and hopefully set the economies on a growth path.
But what if the stimulus spendings don't work? Then, the country would go into recession, or worse, depression. The economy will slow down and jobs will be lost. In such a scenario, deflation may come into play. This means that price of goods and services will be lowered. Salaries too may drop.
However, debts such as home mortgages and business loans are in nominal trems (not adjusted for inflation). By this, it means that in a deflationary situation, your loans become more difficult to service. The instalment payment is a larger portion of your decreased salary. More people may default on their payments. This leads to more gloom in the economy.
But, if the extra injection of funds makes the economy sputter along and results in a modest inflation, then prices will move up. So too will your salary. Luckily, your loan remains the same. So, your instalment payment becomes slightly easier. This leaves you with more cash to spend which hopefully will boost the economy a bit. That's why it is important and good to have inflation in bad economic times.
But what if the stimulus spendings don't work? Then, the country would go into recession, or worse, depression. The economy will slow down and jobs will be lost. In such a scenario, deflation may come into play. This means that price of goods and services will be lowered. Salaries too may drop.
However, debts such as home mortgages and business loans are in nominal trems (not adjusted for inflation). By this, it means that in a deflationary situation, your loans become more difficult to service. The instalment payment is a larger portion of your decreased salary. More people may default on their payments. This leads to more gloom in the economy.
But, if the extra injection of funds makes the economy sputter along and results in a modest inflation, then prices will move up. So too will your salary. Luckily, your loan remains the same. So, your instalment payment becomes slightly easier. This leaves you with more cash to spend which hopefully will boost the economy a bit. That's why it is important and good to have inflation in bad economic times.
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