Wednesday, June 29, 2011

FBM-KLCI Sets To Make All Time High?

The month of July is coming. How our FBM-KLCI fares right now? We can see most of the counters traded still at their low. Lately we seem to have an experience of a roller coaster ride in our share market with few counters like KNM, MAS, MUHIBAH, MAA, TIMEdotCOM tumbling to their lowest.

Basically it is not good for our share market as this kind of situation will dampen current share market sentiment even deeper. Looking at the charts of the FBM-KLCI, we can foresee that the FBM-KLCI still stand very strong and it is likely the FBM-KLCI will create a new high anytime from now. We are just having a different of about 5 to 10 points to break all time high of 1,576.95 set on 6th January 2011.

It seems that our Prime Minister Datuk Seri Najib Razak is doing a great job in handling the current Malaysian share market sentiments especially the FBM-KLCI index. Checking on some of the few counters movement and based on yesterday MSM Holdings Berhad listing, the market sentiment looks improving. Maybe next one or two weeks we might have some movement in our share market. So it would be better to look out for our favorite counters as well (going for speculations). We might have some opportunity to make some.

It seems that the Bulls are starting to make a come back with FBM-KLCI showing more signal to make a new high. Will it be a Big Bull coming back or just a small cow hanging around the farm? Time will tell (still hoping for the total turnover or volume done to achieve above 1 billion mark everyday).

Friday, June 24, 2011

The XOX Berhad Saga. What Has Gone Wrong - Part 2.

My previous post we were mentioning about the new listing IPO of XOX Berhad. Here are the latest development and information we have received. We went to meet our friends and try to get some information from them. How they end up in taking up such a huge quantity of shares in their hands.

The group of our friends that taking up the placement of XOX Berhad were paying RM0.75 per share. They were taking up a total of 3,000,000 millions ordinary shares of XOX Berhad. That was a huge amount of shares they have taken up. From the information we received, the shares were place out by one of the owner or one of the directors of the company (we don't know how true this information as we were just listen to their explanation).

The reason they taking up the shares so much because it was being offer at a discounted price of RM0.05 per share at the price of RM0.75 per share instead of paying up at RM0.80 per share. During that time they didn't expect they can incurred such a huge losses as they think the most worst scenario they can face at that time was; if the shares is list at the opening price of RM0.80 per share (Initial Public Offering), still they managed to survive because of the advantages of the discounted price.

Total initial placement was 6,000,000 millions shares with the 3,000,000 millions shares were place to my friends. All the 3,000,000 millions shares were divided among their friends. On the listing day they able to sold off their shares in losses (about 2,000,000 millions shares) with about another 1,000,000 shares still left in their hands. Total losses was nearly about RM350,000.00 to RM450,000.00.

Our friends also did argue before the listing exercise, they heard some of the shares were place out at RM0.70 per share and some even at RM0.68 per share. We were quite exciting listening to the story but we can't guarantee the other side of the story whether there is really a placement of RM0.68 per share or RM0.70 per share being place out.

As we can see from the story that we received, it seems there was a fault play being done or been arrange before the listing and after the listing. It seems that XOX Berhad listing exercise was just an exercise to teach us in future that we are having a very bad corporate image on our Bursa Malaysia and in future if we ever come across another discounted situation, we must be well alert.

Let us take this as a lesson to improve and to enhance our knowledge and to learn how our Malaysian share market is? We can't blame that some of the IPOs exercise sometimes didn't guarantee any return but the way the XOX Berhad listing exercise was arrange was totally a surprised for all of us. We are hoping that this matter would not happen again if our governments agencies that involves in preparing or approved the listing exercise and the Investment Bank who do the private placement do take care the public interest. Not just concentrating on making money all the times.

Monday, June 20, 2011

IPOs Recently Debut. What Has Went Wrong on XOX Berhad?

Lately we are seeing some few new IPO counters are facing some problem or difficulties when they went for listed recently. The demand or their performance was under performing especially the UOA Development Berhad. The public issue was offer at RM2.52 and the institutional prices were offer at RM2.60 but on the day it was listed, the share prices were opened at RM2.60 per share. This is something quiet shocking to many of the new investors who have just invested in this share through IPO and they are seeing some losses on their listing day until today.

That goes with XOX Berhad recently listing when we saw their share prices open at discounted IPO price on their first day opening and the prices tumble 35% until closing. The IPO prices were offer at RM0.80 to the public but was listed at the opening RM0.73 before it closed at RM0.52 on that day. It seems that the trends of new listings are not doing well on their debut. Maybe this is due to our recently Malaysian share market dull performance.

Basically we didn't blame if those two shares were listed and were traded below their IPO prices (willing buyer willing seller basis) but one thing for sure we have an issue to argue on the recently listing of XOX Berhad. Recently before the listing of XOX Berhad, one of the Investment Bank did offer us to take up the shares of this company.

Before the shares were being offer or open to the public to apply, we were being offer to take up the XOX Berhad at the price of RM0.80 per share. The offers come from one of our friends and we have decided to take a portion of it. During that time we were just waiting for the time to make the payment to the Investment Bank.

Few days before they asking for the payments, we were surprised that the shares that they were offer was below their offer price. We were told that the XOX Berhad share is offering at RM0.75 per share. A discount of RM0.05 per share from the issue price of RM0.80. Another Investment Bank (one of the remisier) also did the same thing; offer us at discounted price of RM0.05 per share. We were so surprised that this share was being offer at discounted prices. We were so curious and we even make a few survey and we were told that previously before the listing exercise the shares were being offer at RM0.70 with huge block being place out to certain identified investors.

How true the shares that being offer and place out at RM0.70 per share? We are not quite sure about it as we don't have any prove to show it but one thing for sure the shares were being offer to us at RM0.75 per share. During that time we are still considering whether to take up the shares or not, until we found out about XOX Berhad financial reports. We withdraw the deals because we were quite uncomfortable with their discounted price and XOX Berhad financial reports but a group of our friends are taking that offers. We heard that they incurred huge losses on the listing date and even some of them are still holding some of shares until today.

The question is?

1) Was it right for the Investment bank or anyone who have involved in this deal to make such an offer at discounted prices before being offer to the public to apply? It is unfair to the public.

2) Why the offer of the XOX Berhad was being offer at discounted price? Could it be a technique or some strategies from the Investment Bank to dispose the shares as soon as possible? By using this method, they would be able to unload all their shares for private placement even faster outside the market.

3) Could it be the existing major shareholders (who are laughing all the way now) given such a discounted price from the approval offer price of RM0.80 per share outside the share market before the listing exercise completed?

4) Why the Securities Commission (SC) able to approved such a listing in the first place? Was it because of their associated company or maybe their big supporter was Celcom Axiata Berhad?

Please refer to this website for more comments on XOX Berhad.

Because of such an unhealthy practice, the new IPO application are facing some new dilemma whether it would be a trend that such a new trend of new listing would not doing well when they were listed. From our point of views if these matters never really being taking care off or being watch closely in the future, it would be unfair to most of the investors who are looking for an opportunity instead they were being cheated for applying an irresponsible act from one of the listed company recently.

It is just like cheating public's money. Right now we have to monitor whether XOX Berhad have the abilities to perform based on their statement given by its CEO that stated the company WILL turn around and post a net profit of 19.8 million in 2011 after it had post a Loss of 13.1 million in 2009 and a HIGHER Loss of 16 million in 2010.

Thursday, June 16, 2011

Lousy Performance In The Month Of June. World Equities Market Unstable.

The world equities market seems to be going down lately. Our Malaysian share market performance (FBM-KLCI) still standing quite well but there are so many counters didn't perform quite well but some of the good counters are moving higher. Its kind of mixed market with more downside rather than upside.

Based on the chart wise the FBM-KLCI still look stable and are moving side way but overall we are having a lousy market momentum and sentiments. It seems that if we really invested our money right now we are facing more chances of losing rather than profiting. With the share market turnover still stand at low (below 1 billion shares), staying out from the share market would be the best option at these moments as we can't find any good fundamental or news to push the share market higher.

Here are some of the latest news that we can share together (Info from Jesper Lee-CIMB)

Paulson's Advantage Plus fund off 20 pct this year.

For John Paulson, June may be one for the record books -- in the most unwanted way -- as one his largest funds lost 13 percent in the first two weeks. The billionaire hedge fund manager, who made his fortune on a short bet against sub prime mortgages, ironically is being crushed after a short seller issued a critical report on a Chinese forest company he owns shares in.

Paulson's Advantage Plus fund, one of the $38 billion firm's largest, has tumbled nearly 20 percent this year after losing 13 percent in the first two weeks of June. Part of the decline is attributed to shares of Sino-Forest Corp (TRE.TO) which plunged 82.50 percent this month, an investor in the fund who is not permitted to discuss performance publicly said.

In early June Carson Block, founder of investment firm Muddy Waters Research, called Sino-Forest a "pump and dump" scheme and accused it of committing fraud. Paulson's spokesman could not be reached for comment.

In some respects, the sharp drop off in June, following a 6 percent drop in May, is not surprising given both the decline in Sino-Forest and an ongoing drop in the banking stocks Paulson also owns.

The bulk of Paulson's assets are in the Advantage and Advantage Plus funds but he also offers other portfolios, including a gold fund, which are performing better. But the 20 percent decline is stunning nonetheless for a manager who is widely revered for his calls on the economy.

But the timing of the drop comes at an especially awkward time, only days after Paulson met with hundreds of his investors in Paris at a festive mid-year review.

At workshops and during in-depth information sessions held amid cocktail parties and an elegant river cruise, the hedge fund manager told his clients that the economic recovery is not as strong as he would like to be, investors who attended the meeting said. The weakest spot -- the U.S. housing market, he said.

While Paulson's investors saw a drop in performance early in 2010 as well, they were later comforted when he rallied late in the year to pull out another winner.

This year, however, the eye-popping loss might be giving some investors reason to pause especially as deadlines to withdraw their money come up, people familiar with investors' thinking said. In fact, Paulson stayed on in Europe after a meeting in Paris to try and raise more money. He traveled to Geneva where he met with investors, a person familiar with his travels said.

Who Is John Paulson ?

John Paulson is the most successful hedge fund manager in history because he is pretty much always right in his predictions. He’s the world’s 45th richest man and is worth approximately $12 billion. His fund, Paulson and Co., is the third largest hedge fund in the world with $32 billion of assets under management.

He made some of the best trades of all time, shorting the sub prime credit markets in 2007 and 2008. Not only was he dead on with the prediction of the crisis, but he also made great execution of the trades. He and his partners constructed complex portfolios of the instruments they believed would be worst-hit, rather than just shorting an index.

Mr Paulson had a take home pay of $3.7 billion in 2007, considered the richest bounty in Wall Street history. Then, after he made all that money from the financial crisis, he started covering his short positions and started a “Recovery Fund” in early 2009, pretty much exactly the right time.

In August of 2009 he began buying financial stocks including Goldman Sachs and Bank of America. Because of his recent successes, a flood of investing capital has been added to his fund in the last two years. Since early 2010, Paulson has had over 100% of his funds invested in the market. He’s oscillated between 150% and 107% fully invested. The market has done him well this year.

On November 2009, he started a gold fund. This is because he believes the US and other countries are devaluing their currency and with all the money being put into the economy, inflation is bound to happen. Although it went down 14% in January, 2010, its first month of operations, it has rallied back and is up double digits this year.

Thursday, June 2, 2011

Not A Good Time To Play In The Month Of June ?

The month of June has started. As we can see until today our share market still didn't show any sign of improvement especially the the second liners and the third liners counters. No doubt we can enjoy the rally on the FBM-KLCI index movement (just by looking at it) still we can see there lots of counters moving down bit by bit and even created new low.

The blue chips still maintain very well with some of them even move higher to support the index. Basically if we dump or invest our money inside the current share market sentiment right now, we would be eventually inviting the GOD of LOSSES to look for us.

At these moments staying out from the share market would be the best option to take rather than we are too greedy to play or to invest it everyday because the bandwagons are heading downward. It is not easy to strike or to invest on the right counters unless we are really sure there is something going on or there is a news on that counter.

The turnover done for the Malaysian share market still consider very low at these moments and the sentiment still looks very dull with MAS and KNM having a big fall recently. The world equities market started to show some weakening sign. We need to have more positive news in order to push the sentiments moving upwards but basically based on previous historical data, the month of June never really bring any excitement things to the share market.