Monday, November 29, 2010

C and O : Trading Halt. WTH!?

I think this is a bit too much for me. First it was GMG Global that declared a trading halt on a Monday morning. Now is it C&O Pharma turn to announce a trading halt in the evening. The company says it will make an announcement on Tuesday morning.

Given the lack of price-volume action but a substantial paring in stake in recent months by a Lee Chong Min who linked to a PE firm, I can only think of three possibilities what will happen tomorrow:

  1. C&O is affected by some new regulation or price cuts.
  2. Insignificant acquisition of a smaller company (Most likely)
  3. Placement of shares.
Good luck to all those vested.


Removed profit warning.

GMG Global : Trading Halt

GMG Global announced early on Monday morning that it would be halted pending an announcement. Given that it had a rights issue last year and that in terms of price movement before trading was halted, there was nothing spectacular, my guess is that the trading halt has got to do with developments in Africa. We will only know probably after the trading day has ended. BB.


Looks like I got it wrong. GMG intends to acquire a Thai rubber processor, which is in negative equity. GMG intends to turnaround this target by 2011. read more here$file/Announcement_Acquisition_TBH.pdf?openelement

Added (29 November 2010 11.30pm Singapore)

here are some little known facts:

1. the target is part of the Tan Kah Kee group of businesses
2. it once monopolized the Thai rubber market in the very early days till political reforms set in
3. based on 2008 figures, TBH is the 9th largest rubber exporter.

Saturday, November 27, 2010

Sheer Arrogance

Taken from a blog's comment section, posted somewhere in May 2008:

"I do not base my picks on just NAV.

If you bother reading my blog from the start, you will find that a good portion of my portfolio was bought at prices that have since doubled or trebled.

Any old fogey can tell you to buy blue chips when they are distressed. In theory that sounds good, but it is not as simple to apply.

And the last I checked, most old fogies have less money than me in their bank."

For those who do not know, the person who made that comment has definitely a tidy sum of money in his bank account, probably around $300,000.
For clarity, this was what the blog owner was responding to:

"undervalued never works, buying blue chips in distressed markets works eventually they all shine

if u base your picks on NAV, the question is that how the market ignores them in the first place?"

The commenter did make a fair comment although I would hesitate to say buying undervalued stocks never work. Never say never.

But that is not the point. The blog owner's reply was sheer arrogance because the fact that he has more money in his bank account is not proof that his stock picking methods are successful to a large extent. Rather, the performance of his stock portfolio over a long period of time, would suffice in demonstrating to the commenter that his NAV-centric stock picking methods works.

I can link you to the blog to read the full extent of his hubris if you email me. But to summarize, he did turn the money that was in his bank account into a lot of money, doubling it to more than half a million in stocks at the height of the stock market in 2007-8. He was at ease dispensing advice to those who frequented his blog seeking an opinion. I believe he even tried to use his blog as a testimonial of his equity market acumen so as to land an investment banker job.

However the tide turned, something we knew after the fact. The portfolio shriveled and the blog owner disappeared. Despite people calling out for him on his blog, he has not replied aver since.

The point here is not to castigate him for his arrogance. Rather, it is meant as a cautionary tale for all retail investors, especially the new. There is nothing wrong with being confident. You have to be confident, if not why should you put money in the stock. However, as so many have pointed out, just because you happened to ride the wave up, does not make you a stock market genius. It is this over confidence and hubris that will be fatal for your wealth creation plans when a bear market strikes. Always have an open mind and be prepared.

Week 47: Portfolio Trends Downwards

For a moment, I thought the portfolio covered! I was wrong of course, if we compared to the previous week. FJ Benjamin moved below the 40 cents mark. I have reasons to believe that this is due mainly to Peter Lim making an offer for Thomson Medical Center. If he has made a bid for the pregnancy-centric medical center and at such a premium, he must definitely find some way to cough up the cash as well. Unless he already had earmarked the money for his latest acquisition, after his failed attempt to take over Liverpool FC.

During the week, I purchased a few more lots of C&O Pharmaceutical. That makes the amount of capital from my salaries injected to the stock market, to the $20,000 mark. However, I took too much a time to consider my purchase as I was deliberating whether to sell Asiatic or Stratech to make my holdings leaner. I was looking at either OSIM or NOL the day that the market correct on Wednesday but I did not have the courage the key the buy order. Fortune favors the brave.

Macro Economic Issues And War
For those who have been catching up with the news, two significant headlines were the Irish government seeking a bailout from the IMF as well as North Korea lobbing a few artillery shells at an isolated South Korean island. In my opinion, both headlines have almost no impact on the stock market. For Ireland, they do have enough money to keep itself running at least next year. That its finance minister announce a requirement for bailout, is more pre-emptive than indicative of the troubles that ails the once booming economy. It should be noted that there are many options available to Ireland but some of the IMF sponsored ones need Ireland to increase its corporate tax rate. This will cause a flight of corporations from the island country and seems to me a evil plot by the IMF.
As for North Korea's histrionics, they distract most of us who are already bothered by how QE2 will affect the stock market or by slasher teen gangs in Singapore. The STI is on course for slight gains from the start of the year as I had hope. We should see more action in the month of December as more investors, especially the larger ones, gear up for 2011.

Friday, November 26, 2010

Bought C and O

I bought 4 lots of C&O Pharma at $0.48. Could not make up my mind what other stocks to buy when the market fell badly on Wednesday.

Monday, November 22, 2010

Beware The Amtek IPO?

For those who are looking for a heads up for the Amtek IPO, you can click on the above link. I generally have a disliking for IPOs so I have nothing much to value add.

Sunday, November 21, 2010

Doing Business With China

Good stuff from The Economist about Chinese takeovers and doing business with Chinese partners. The articles are also useful to help you understand what happens behind the scenes for most S-Chips.

Saturday, November 20, 2010

Looking For Investing Ideas Between S$2,000 - S$3,000

About $500 worth of dividends over the past and coming few days. While I am about $1,500 short before reaching the $20,000 mark of capital invested (money from my salary, not from gains and dividends). If I were to divest some of my smaller loss-making positions, namely Asiatic Group (break even) and Stratech, (down 2 cents from purchase price) it will top the amount to $3,000.

A slight deviation. I have been holding on to Asiatic and Stratech since the middle of last year. Although the power making Asiatic has seen a run up in share price, it was all down hill for motion sensor company Stratech. After a brief turnaround, which saw it being taken out of the SGX Watchlist, Stratech slumped back into the red with a loss-making 6 months.

What will I do with the $2,000 - $3,000? Since the end of the month is coming, I am feeling trigger happy but there a lack of good investing ideas. I flipped through my dad's past edition of Shares Investment and struggled to find any leads. I would like to average up on my existing holdings, namely Etika International or C&O Pharmaceutical but it would dilute any sense of "multi-bagger-ness". I did also consider China Animal Healthcare, but the stock has had its dual-listing almost priced in. I can of course keep the money as a cash buffer in my portfolio.

Here is a list of companies other than I am holding that I may research and take action on, if you have other good SGX-listed investing ideas, do post your comments!

1. Del Monte Holdings. Very illiquid stock doing FMCG which is an industry I love most.
2. Ezra Holdings. Very geared company but it is making its move to cement its market share through latest acquisition of Akers. But I can only buy one lot.
3. AusGroup. Exposure to the Australian mining sector but as a contractor, it is prone to margin pressures as well as competition from outside Australia.

Wednesday, November 17, 2010

Write On Your Favourite Stock And Win S$50!!!

The contest is now open and the rules and format can be found here. Briefly, produce a short writeup of 200-250 words on a SGX Mainboard or Catalist company. No ADRs. On the header, state your target price for that stock as well as your prediction for the STI closing for end-2011.

Email me (found in "my profile") by Singapore Time 6.00pm, Friday 17 December 2010 your entry with the necessary details as spelled out. The winning entry will be announced 7 days after closing of competition, and payment will proceed shortly. You do not have to reveal your real name, just the one you wish to be identified. Real address and email to be contacted at though.

This should not take long, so what are you waiting for! Write and stand a chance to win.

Quantitative Easing Explained

See this video. If you think you are having it bad in Singapore, imagine you are mainstream American!

GDP Growth and Stock Market Performance: Any Links?

Speaking to reporters after the two-day Asia-Pacific Economic Cooperation meeting held in Japan over the weekend, Prime Minister Lee Hsien Loong said it would be more realistic to expect the Singapore economy to grow three to five per cent in the medium term.

PM Lee added that, “Even if the external conditions are strong, we are not able to expand so quickly, unless you are prepared to take in more foreign workers and take the risk of overheating.”

Singapore is expected to achieve growth of between 13 and 15 per cent for the whole of 2010.

Earlier in July, Singapore gross domestic product (GDP) for the second quarter grew per cent driven by a surge in the output of biomedical manufacturing, as well as a strong expansion in electronics underpinned by healthy worldwide demand. Advanced GDP estimates for the third quarter will be announced early 18 November by the Singapore Department of Statistics.

Does the PM’s Lee guidance for moderate economic growth the coming year spell poor returns? 

Sunday, November 14, 2010

POSB everyday Card: The Only Credit Card I Have (At The Moment)

Here are the banking facilities that I have in my wallet everyday. There is the gray POSB Cash. It is almost unusable as there are cracks that run three quarters' way into the plastic. I do not intend to swap it for the new-ish looking DBS card because I am a sentimentalist.

I also have a United Overseas Bank Unicard. This is the newest ATM card I got, because I setup an account with UOB to help facilitate monthly salary crediting. I also use the UOB account as my daily expenses card.

A card that most Singaporeans do not have is the Malayan Banking (MayBank) card. This savings account goes back a long way and was setup when I was a kid, by my mother. One of the good or bad things is that you can withdraw cash when you are in Malaysia. If you happen to be in Genting Highlands, it can be a source of reserves should you happen to lose all the money at the tables.

The only credit card I have is the POSB everyday, which is a supplementary card courtesy of my mother. You can read more about what it has here, but what I want to say is that I am sort of proud that I have not succumb to peer pressure and apply for more cards. You may have received numerous calls by the banks touting their credit facilities, flashing "promotions" and how "you are invited" to tempt you into signing up for one more plastic.

Buying An Apple iPhone

I thought of buying an Apple iPhone. After all, almost everyone has it and it can help me relieve boredom on those long train rides. However, I have been going to some major telcos' shops and they seem to be sold out. I did give it another thought and it did occur to me that the iPhone is only good if you have a data plan. From casual asking, this would costs about $60 per month and it excludes SMS. An iPhone without data plan means that one cannot readily access facebook or other time wasting website. It would be no different from a iPod Touch, a conclusion that my girlfriend reached. Given these considerations, I think I will wait until iPhone is so commoditized or that data download plans become very competitive, before getting one. Isn't it strange that with more competition on a small island, it is so costly to get an internet data plan on the cheap. Good night everyone.

Saturday, November 13, 2010

Something About Top Global

This link from Friday's Business Times, extracted below, is worth a read. My opinion is that there are good and bad stocks that are run by Indonesian families. L&M is a good example. The latter was a contruction company that was part of the STI for a while before the stock tumbled and enter Judicial Management. It has since been reborn as Seroja Investment, but after much grief to those shareholders who had to endure a stock consolidation. Nonetheless, Top Global can give gains to those who are prone to gambling as it has all the characteristics of a punting penny play. Buy beware.

Can Top Global live up to its name?

AS Top Global, the Catalist-listed company that has transformed itself into a property group, continues to hog the trading limelight, a question uppermost in investors' mind is whether it is capable of launching a meteoric rise to the top, living up to its ambitious tag.
Top Global, which is now run by Sukmawati Widjaja of the famous Widjaja lineage, recently caught the attention with its triumphant $250 million bid to develop an iconic site that includes Capitol Theatre, Capitol Building and Stamford House through a consortium.

The partners - including Pontiac Land's Kwee Liong Seen and Pua Seck Guan, founder of Perennial Real Estate Group and former chief executive of CapitaMall Trust Management - plan to invest about $700 million in total to develop the site into a hotel, theatre, and retail and residential area, with half the 542,382 square feet of maximum gross floor area for retail and entertainment use, and 25 per cent each for hotel and residential purposes.

This is quite a coup, considering that the consortium beat out 13 other bids, many of which came from the heavyweights of the property scene. The tenders included three bids from Far East Organization alone, one from CapitaMalls Asia and CapitaLand, GuocoLand as well as YTL Corporation.

C&O Pharmaceutical: 1QFY11 Results Review

While doing research on Sinotel, I chance upon an old post by MusicWhiz on C&O Pharma (link). I f I had read his bit first, I would probably not buy the stock at all. But since I suffer from confirmation bias, I will do a review of C&O Pharmaceutical's recently released first quarter results, for their financial year ending 30 June 2011. Take note that I bought 5 lots at $0.505 a few months back and its current price is $0.475 (slight ouch).

Sinotel Technologies : A Dying Or Dead Stock?

In my earlier post, I talked about how Sinotel Technologies' time has  come to past. There was definitely money to be made if you had bought into the S-Chip at prices below the current price of $0.345. More upside had you bought it during March 2009 bottom of around 10 to 12 cents. But I dare say that more investors bought into the stock when it was 50 - 70 cents during the euphoria over its ADRs and have been sitting on hefty paper loss.

Despite the recent slate of announcements and a revived PR campaign, from a long term investors perspective, I think the hey days for this company are over, consigned to the rubbish bin of history. Of course some people would point out that the stock is currently trading at about 4 times price-to-earnings. But I reiterate the point that the company has a very strong balance sheet even before the rights issue and the cash call was totally unnecessary from my point of view. Furthermore, I would really like to see the company payout some dividends. It has not done so in its listed history.

Defenders of Sinotel would say that the company has a recurring cash flow and that it is poised to benefit from China's growing wireless infrastructure. If that really is the case, why are there no dividends? Sinotel's management by declaring even a 0.1 cents dividend, will help bolster investors' confidence and interest. Too many an S-Chip show a huge cash pile but many have went belly up - ChinaMilk Products is a good example.

My conclusion is that there are other better companies with better fundamentals that have received lesser media coverage exactly because they are out to improve their returns to shareholders. Stay away.

Friday, November 12, 2010

Portfolio Remains Stable, Monthly Updates For 2011 Planned

It has been a roller coaster week for the local stock market. After breaching the 3,300 mark earlier the week, the STI retreated by 41 points on Friday to settle at 3,252.

The portfolio managed to stay firm, with GMG Global and Etika International providing buffer for losses elsewhere. Strangely, Etika International recovered to $0.50, which is close to the adjusted price before XB.

Going forward, portfolio updates will be once a month. I am finding it a bit tedious. But write ups will still be in the pipeline. Have a good weekend!

Wednesday, November 10, 2010

Biosensors International Group Transforms Into An S-Chip$file/Q2FY2011_Presentation_Slides.pdf?openelement

Well, my list of S-Chips has just grown to 4 - GMG Global, C&O, China Animal Healthcare and now Biosensors. In brief, the group that was involved in buying a significant stake in the stent-maker, has recently brought its own people to the board. Keep a look out of things over the next 1-2 years. If things do work out, that is, the new board can wholly control JWMS, there is a potential for upside in excess of the market. Nonetheless, at this point in time, it is still too highly valued for investors looking for gains in excess of the market, within the next three months.

Edited in bold

Sunday, November 7, 2010

Write On Your Favourite Stock And Win $50!!!

  1. Write 200-250 words about your favorite Singapore-listed (Mainboard and Catalist) stock, which you think will provide the greatest total returns in percentage terms. No ADRs will be considered. State your target price as well as STI closing for the end of 2011. (See Below)
  2. The contest will use the closing price on 31 December 2010 and 31 December 2011 as the reference points to determine the winner. If there are bonus issues and stock splits, prices will be adjusted. Dividends will be added to total returns but not re-invested.
  3. By joining the contest you agree that the submission can be reproduced in full or in part on
  4. The best writeup - to be determined by me - will be awarded a cash prize of Singapore dollar Fifty only.
  5. The entry that showed the greatest total returns from 31 December 2010 to 31 December 2011 will be awarded a cash prize of Singapore dollar Fifty only.
  6. Each contestant is limited to ONE ENTRY ONLY. Those found with multiple entries will be disqualified. We will operate on an honour system.
  7. To join the contest, email me (find the email in my profile) and include your name you wish to be identified, Email, Home Address. Mobile phone number is optional.
You email should follow the format below:

Your e-mail
Re: Write Up Competition - SP Ausnet TP $X.XX STI 5,000

Your name you wish to be identified, Email, Home Address
 SP Ausnet TP $X.XX STI 5,000
Your 200-250 begins now. I am essentially looking at why should I invest in the company from your write up.


How To Be Richer In At Least 30 Years Time

Read this article by Kenneth Fisher, Make Yourself Self-Made . Do note that he is a fund manager that espouses a portfolio comprising all stock.

Side note, I am thinking of having a small competition for those visiting my blog. Stay tuned.

Friday, November 5, 2010

STX OSV To IPO at $0.79 per share

It is always funny how an European shipbuilder comes here to raise cash. I am guessing that Oslo may have too many people aware of the situation that is going on, given there proximity to the North Sea vessel market.

As you can read from the newspapers, the shipbuilder intends to raise $257.3 million by selling and placing out shares at $0.79 a piece. I always look at IPOs with disdain. STX OSV is no exception because it is priced at slight more than 2 times its NAV (even after IPO). Moreover, the vessel market really peaked last 2 years. So what we can see here is that earnings that have come in may be exceptional, and that there still is a supply glut. The latter means that newbuild orders will be fewer or postponed, until the excess vessels can be taken off the market.

About STX OSV (More here)
We are one of the major global designers and shipbuilders of offshore and specialized vessels used in the offshore oil and gas exploration and production and oil services industries. Headquartered in Norway with approximately 9,000 employees worldwide as at June 30, 2010, we operate nine strategically located shipbuilding facilities,including fi ve in Norway, two in Romania, one in Brazil and one in Vietnam. Our technological know-how and innovation coupled with our global operations ensure access to the fastest growing oil exploration markets. Our core business is the design and construction of complex and highly customized offshore and specialized vessels including platform supply vessels (“PSV”), anchor handling tug supply vessels (“AHTS”) and advanced offshore subsea construction vessels (“OSCV”). In addition, we operate a design subsidiary which develops commercialized designs with high market acceptance by our customers, including the most commonly used design for PSVs of more than 4,500 deadweight tons (“DWT”)1. Our expertise and track record in constructing complex and highly customized offshore and specialized vessels have earned us recognition from industry players, including our customers. We have built strong relationships with our customers including companies that operate under the brand names of DOF, Farstad Shipping, AP Møller- Maersk, Island Offshore, Solstad Offshore, “K” Line Offshore, Petroleum Geo-Services, Aker Oilfi eld Services and Rem Offshore. According to RS Platou, as of August 31, 2010, we have approximately 30.8% market share of AHTSs of more than 20,000 brake horsepower (“BHP”), approximately 18.0% market share of PSVs above 4,500 DWT, and a market share of approximately 6.6% for selected types of OSCVs2.

Action Asia Declares 0.5 Cents Dividend For 3Q10

Happy Deepavali! The portfolio traced higher from the previous week as the markets anticipate the Fed's next round of quantitative easing (QE2). QE2 has had the effect of weakening the dollar against all currencies as the demand for dollars cannot keep pace with the rate of green backs printed.

Action Asia, declared a 0.5 cents dividend for the third quarter ended 30 September 2010. That is good news for me as the stock has been stuck, but is returning profits to shareholders.

Elsewhere, I may have overlooked it because of my work schedule, Etika and Templeton have not reached an agreement with regards to a proposed bond subscription by the fund. That is one less bullish factor about my favourite stock.

Meanwhile, I am looking at investing close to