Archive for March, 2011|Monthly archive page

Will MAS ever say this?

In China on 31/03/2011 at 6:39 am

Martin Wheatley, the outgoing head of Hong Kong’s securities market regulator, said today that sponsors’ due diligence of initial public offerings has been “inadequate” at times.

“In many cases, sponsors are spread too thinly in terms of the number of deals they’re bringing to the market at any one time”.

Hong Kong’s regulator may make sponsors of IPOs in the city liable for statements in their clients’ prospectuses to prevent fraud of locally listed Chinese companies.

Bloomberg story

Never ever heard any MAS official say there was anything wrong with sponsors’ due diligence despite some new listcos coming out with profit warnings shortly after being listed.

I’ve been told that MAS does not inspect sponsors to ensure that they are following “best practices”.  It is left to SGX. A few years ago, a then prominent IPO sponsor was “suspended” from bringing new listings to market.

The HK proposal to make sponsors of IPOs in the city liable for statements in their clients’ prospectuses is a gd one, and should be adopted to prevent fraud in listing S-Chips.


The disconnect that matters

In Political economy on 31/03/2011 at 6:36 am

The disconnect that matters is not the one that exists between what the government does and what the media says. It is the one between what the media says and what people actually think about their lives, blogged Alistar Campbell, once Tony Blair’s spin doctor.

In S’pore, the disconnect is even worse. The disconnect is between what SPH, MediaCorp and government say and the facts on the ground as perceived by reasonable people.

Anyone relying on SPH, MediaCorp and government statements for their understanding of Singapore would have believed that there was no poverty here; that social workers would deliver delicious cooked meals to welfare receipients; that all FTs were talented people that S’pore needed; that FTs did not put a cap or drive down on the salaries of S;porean PMETS; that the liberal immigration policies did not strain the public transport and housing, and social infrastructures; that public security was good; and that ministers were all worth a lot more than they were being paid. Read the rest of this entry »

Another dangerous year

In Investments on 30/03/2011 at 7:48 am

As the Economist said, This was supposed to be a stress-free year for the global economy. By January the financial crisis had faded and Europe’s sovereign-debt crisis seemed less acute. America’s economy was resurgent. Investors piled into equities and sold some of the government bonds they’d bought for troubled times. If there was a worry, it was that emerging economies would grow too quickly, inflating commodity prices.

The year without crisis is not to be. First, Arabian upheaval put oil markets on edge. Then earthquake, tsunami and a nuclear accident clobbered the world’s third-largest economy.

The flight to Western stock markets from developing markets is not looking so smart because higher oil prices could lead to a recession in the West. Investing in developing markets remains problemtic because higher inoil prices will make it more imperative for the governments in the developing countries to fight inflation,

Bonds don’t look the safe havens because there is the belief that whether they like it or not, developed countries have to raise interest rates.

Time to go go into cash? Err what currency? S$ is a safe currency but interest rates are “peanuts”.

Heck, I’ll leave with the CPF the funds I can withdraw (I’m past 55). Juz hope that the rules don’t change, and these funds become “frozen” to provide me with more old-age protection.

Whoever said investing is easy?

Waz so special abt July?

In Wit on 29/03/2011 at 10:27 am

This year July has 5 Fridays 5 Saturdays and 5 Sundays.  This happens once every 823 years.  Based on Chinese feng shui, this is called money bags.

And is a very auspicious period.

How can independent director of troubled S-Chip resign?

In China, Corporate governance on 28/03/2011 at 1:35 pm

Hongwei’s independent director Ji Yicheng has resigned saying,”personal reasons, heavy workload”.  If the director of a troubled listco can quit when the listco gets into trouble,  then what is corporate governance all abt? Such an action is making a mockery of the responsibilities of being an independent director

The SGX must do something to prevent an independent director of a troubled S-Chip, indeed any troubled listco, from resigning. Such a resignation must have the approval of SGX.

The directores at the time the company got into into trouble must sort out the mess.  They cannot be allowed to “move on”.


Suicide squads needed

In Uncategorized on 28/03/2011 at 9:06 am

Sigh. The NSP and SDP have denied that they would. field teams in Marine Parade and Tanjong Pagar. All indications are that the DPP will not be able to deliver on its promise to contest these GRCs. It was just after some cheap publicity.

It is understandable why none of the serious opposition parties want to contest AMK, Marine Parade and Tanjong Pagar. They have limited resources that can be better deployed elsewhere, and the probability of success is nil: hence the use of the term “suicide squads” when referring to the possible presence opposition teams in these GRCs

Still as the 2006 GE in AMK showed, these suicide squads can strike telling blows. The PM’s team only had a winning majority of 67%, showing S’poreans that people were unhappy with the PAP even in the PM’s GRC.  It also showed S’poreans that the PAP’s grassroots intelligence team was useless. The then NTUC minister had talked of an over 80% majority. for the PM’s team.

The PAP must have been stunned to learn these Hard Truths.

If the opposition parties could field teams in these three GRCs, the teams might again show (as the AMK team showed in 2006) that the PAP colossus has feet of clay, and land more psychological blows on the PAP. Imagine how MM and SM would feel if they learnt that only 60% of the voters in their GRCs supported the PAP.

This despite their presence and the goodies lavished on the residents.

Protection against Black Swan events

In Insurance, Investments on 28/03/2011 at 7:07 am

Financial institutions that were peddling subprime loans and derivatives thereof have moved on. They are now peddling products that will lose you money each yr (say 15%), but which they claim will make it up and more when a Black Swan happens.  And BTW, they use derivatives.

But there are people in this business that have gd track records. Nassim Taleb, author of “The Black Swan”, has a fund which has grown from uS$300m in 2007 to around US$6 billion today.

And, bond funds, PIMCO and BlackRock (who largely avoided subprimes) have similar funds. They also advise clients on this issue.

NSP: An irresponsible party?

In Uncategorized on 27/03/2011 at 5:45 am

Here is the evidence for the proposition, you decide.

NSP is willing to concede the Moulmein-Kallang GRC to the WP if the WP fields either its Sec-Gen or its chairman. If the WP agrees, this condition could lead to the WP losing its only SMC or making it more difficult to win the Aljunied GRC which it narrowly lost in 2006.

Is this what any responsible party that opposes the PAP wants?

Putting aside this issue, one would have tot, based on this condition, that NSP was deploying its Chairman or Sec-Gen in the GRC. No, it isn’t. It is fielding in the four-MP GRC, three people who had just joined the NSP. They were part of a group of 20 who had left the RP, citing differences over how the RP should be run. Two of them were govmin scholarship holders and held mid-ranking posts in the SAF and the admin service.

Is it responsible to equate the Sec-Gen or Chairman of the leading opposition party with two newbies, albeit ones that could qualify to be possible PAP candidates?

Next, isn’t it one of the grouses against the PAP is that  it forces down voters’ throats, via GRCs,  ex-high flying civil servants and SAF officers. And isn’t it another grouse that many of these high flyers turn out to be duds?

And yet despite the concerns among voters of the PAP’s elitist  habits, the  NSP expects to contest the GRC because it has scholars in its team.

Is this responsible behaviour towards voters?

Onto a wider point. The WP has been getting a lot of stick on the Internet for being unwilling to compromise with the smaller opposition parties on sharing constituencies.

I calculated that there are 10 constituencies where the various parties have not settled their differences and where there is a chance of three-way fights. Of these the NSP is involved in five rows: with the WP over one GRC and two SMCs; with the SDP, one SMC; and with the RP, one SMC.

Given its track record as an opposition party, these are sure a lot constituencies to stake claims to.

I respected Goh Meng Seng for selling his flat and allocating $40,000 of the proceeds to campaign on behalf on the NSP. Hard to criticise anyone prepared to spend that amount of money for his principles.

But I now think that being prepared to spend that amount of money has made him willing to do anything to ensure that the NSP gets at least one NCMP seat. Taz the only rational reason I can think of of the NSP wanting to contest so many seats and in the process rowing with the other parties.

Not very responsible behaviour is it?

Wish you had friends like these?

In Japan on 26/03/2011 at 8:56 am

There are reports that The Tokyo Electric Power Company, whose nuclear plant was badly damaged by the earthquake and tsunami in Japan, is negotiating for loans of as much as 2 trillion yen, or about $25 billion. Sumitomo Mitsui Financial Group, the power company’s main bank, is trying to organise the syndicated loan, and said it planned to provide “the maximum support possible.”

The FT reports that in the 1998 financial crisis when Sumitomo Mitsui was facing difficulties, Tokyo Energy (triple A rating) borrowed cheaply US$2bn from Western banks and deposited the money with Sumitomo Mitsui.

CapitaLand: The peril of being a China play?

In China, Property on 25/03/2011 at 7:17 am

CapitaLand is trading below its FY2010 NAV per share of S$3.32. This has not been seen since September 2009 to May 2010. CapitaLand is currently in a position of balance sheet strength (FY2010: S$7.2 billion cash, 0.18 net gearing), and has balanced exposure to diversified property segments across different geographical regions. DBS Sec

Moreover, the market has assigned no value to any accretion from an expected S$6 billion in capital deployment this year. We update assumptions and maintain a ‘buy’ rating with a fair value of S$4.05 at parity to RNAV.

Me: Nothing to do with balance sheet strength or profitability. Investors are concerned with its large China exposure. And I hear hedgies are shorting it as a proxy bet against Chinese property.

Fast track this guy into cabinet?

In Uncategorized on 25/03/2011 at 7:07 am

The head of the Japanese power company at the centre of one of the world’s worst nuclear disasters has all but vanished from the public eye … Since the crisis, he has largely left it to TEPCO spokespeople in Tokyo to be the public face of the company and answer increasingly aggressive questions, and criticism, from reporters frustrated at the lack of information.  Article

He would seem a gd fit with Goh Chok Tong, Wong Kan Seng, Mah Bow Tan, Yaccob?

Or given the behaviour of the CEOs of Temasek and SMRT, he could be a gd GLC CEO.

Strange behaviour for a Japanese. The chairman of Toyota exemplifies the behaviour of a traditional Japanese leader accepting responsibility for the organisation he leads. He bowed deeply and apologised in public when defects were uncovered in Toyota cars.

Related posting

Apple and the Japanese earthquake

In Japan on 24/03/2011 at 6:07 am

Critical parts of iPhones, iPAds and iPad2s made in the area where the earthquake and tidal wave struck.


How to resolve NSP’s row with WP

In Uncategorized on 24/03/2011 at 5:53 am

To me, in its row with WP on which party should stand in a  GRC and two SMCs, NSP is playing a dangerous game of chicken. By publicly announcing strong candidates for the GRC and one SMC, it hopes to the WP will back down. It does not realise (or maybe doesn’t care?) that the WP may refuse to conceded because it doesn’t want to set a precedent of giving in in the face of intimidation. The SDA who has a dispute with the WP is now also planning to announce its candidates.

I and other bloggers have suggested flipping a coin.

Here’s a more sophisticated version of flipping a coin. The winner of the toss gets to choose between the GRC and the two SMCs. If the winner chooses to contest the GRC, the other party gets the two SMCs. If the winner prefers the two SMCs, the loser gets the GRC.

Doing this forces the winner of the toss to state his preference.  A GRC or two SMCs. Me? I’d prefer the latter. I’m sure the NSP and WP would prefer the two SMCs in preference to the GRC.

As to whether the parties will agree to this proposal, I don’t know about the WP. But I’m sure the NSP would say “No”. It has made a “song and dance” about the importance of standing in the GRC, and it would be look bad if in the end it preferred the SMCs.

High Oil Prices: India in trouble

In Energy, India, Uncategorized on 23/03/2011 at 9:15 am

On all four counts* … India scores badly. New Delhi has already seen street rallies protesting rising food prices. And if India needs higher subsidies, its weak and cash-strapped coalition government – dented anew by last week’s WikiLeaks claims – seems powerless to deliver them. The sovereign most exposed to an oil shock could be the least well prepared to deal with it.

*a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies.

FT’s Lex

High Oil Prices: M’sia Boleh

In Energy, Malaysia on 22/03/2011 at 11:21 am

Consider four metrics: a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies. By that reckoning, Malaysia may come out best. Its oil intensity is just the wrong side of the Asian average, on BP data. But as one of only two net exporters of oil and gas in Asia, its terms of trade should benefit. Aggressive monetary tightening, moreover, has so far helped to keep inflation tamed. The fiscal picture could be prettier: this chronic over-spender has run five budget surpluses in the past 40 years. But while subsidies remain a big burden – second only to Indonesia, as a percentage of gross domestic product – they are cushioned by oil revenues.

FT Lex

NSP: Playing hard ball

In Uncategorized on 22/03/2011 at 7:39 am

The smaller Opposition parties face a problem when “pushing” for their slice of seats in the coming GE against the WP and SDP.  The big two rightly ask, among other things, “Can you deliver credible candidates on nomination day?”

Well the NSP has answered this question in a high-profile, hard ball manner in a GRC and SMC that it is rowing with the WP about which party should field candidates. It has publicly put forward its candidates for a GRC and SMC, thereby telling the WP to concede or force a three-way fight. There are some very credible people in its line-up.

It has further raised the stakes by offering to concede the GRC if the WP fielded its “top  guns”.

These actions on top of its Sec-Gen’s rants shows that the NSP is taking a “take no prisoners” and “burn bridges” attitude in its dealings with the WP.  One must ask, “Why?”

To my mind it is going for broke to get NCMPs by wanting to contest two GRCS. Even the bigger and better organised SDP is only fighting one GRC.

These hard ball tactics could force the WP into three-way fights, as a way of showing that the WP cannot be pushed around by a tiny tot. If that happens, I suspect the NSP would lose more credibility than the WP.  It may have more credible candidates but the NSP may come across as a clone of the PAP, parachuting technocrats in at the last minute.

NSP might do well to remember that while S’poreans vote for the PAP, they often have very little empathy with the PAP MPs.

Oil at US$120: Property prices

In Economy, Property on 22/03/2011 at 5:42 am

Well if oil goes to and remains at US$120, we could have a recession in the West and a recession here will follow.

We are told that there is plenty of private property coming on stream in the next few years, and that Mah Bow Tan is building HDB flats like crazy to compensate for his goof-up in not ramping up supply when the government was allowing FTs in.

We could be in for some sharp falls if there isn’t unrest in Malaysia and we see another influx of M’sian Chinese into S’pore as we saw in 2008.

SGX: This is Plan B

In S'pore Inc, Temasek on 21/03/2011 at 1:54 pm

The SGX’s CEO is reported by the FT to have said that the SGX’s planned takeover of ASX is its Plan B. He clarified that Plan A was organic growth by introducing new products. A few months ago he said if the ASX bid failed, SGX “had other fish to fry”. This implied to people like me that Plan A was the SGX takeover and Plan B was some other takeover.

The fact that he has “clarified” his earlier comments shows that he is panicking. See the previous post for the reason.

S’pore Inc: SGX misread Oz

In S'pore Inc, Temasek on 20/03/2011 at 10:31 am

A A$7.3 billion ($7.1 billion) bid by the Singapore Exchange (SGXL.SI) to take over its Australian rival is faltering as the Australian government, the regulator and a key opposition party are all set to reject it, the Sydney Morning Herald said.  Reuters article

The SMH story is extremely credible was it was written by the paper’s chief political correspondent. 

This shows that SGX did not do its homework. Everyone who has a say in approving the bid seems against it. Reminder: the takeover needs the approval of the Foreign Investment Review Board, then the Treasurer (finance minister) and then Parliament (where the governing party does not a majority).

The only people in favour are the ASX board and the shareholders. They would wouldn’t they? The shareholders are being offered a huge premium.

SGX should cut its losses and move on. And sack is FT CEO who, I’ve been assured, is the moving force, behind the deal. It’;s not the first time an FT CEO has messed up SGX. It had a previous FT CEO. But the in-between local-born CEO (now president at Temasek) doesn’t have a gd record too, S-Chips continued to be the primary source of new listings (numberswise) when he was CEO, even though evidence that there were problems with S-Chips was growing.

Citi’s a US bank in name only

In Banks, Emerging markets, GIC, Temasek on 19/03/2011 at 6:04 am

More than 50% of its profits come from emerging markets juz when emerging markets are losing their attractiveness to global investors.

Given Cit’s record of losing serious money by jumping into markets late (think sub-prime, and lending to finance LBOs, US property (in the 80s) and Latin America (in the 80s too), S,poreans should be concerned., given GIC’s 5%(?) odd stake in Citi,


The Fed notified financial institutions that passed a second round of stress tests that they can begin returning money to their shareholders, The results are confidential but already some US banks are saying they will raise dividends this year. Among them are Citi rivals JPMorgan and Wells Fargo. Citi says that only in 2012, will it consider raising its dividends, It got a lousy rating?

And I now know why the executive director of GIC is looking to increase US exposure. Read the rest of this entry »

It sounded like a gd idea at the time

In Uncategorized on 18/03/2011 at 6:32 am

Borrowing in yen (almost free) and investing the money in A$ and other higher yielding assets.

Well with the yen at a historical high against US$

Why share prices of luxury brands fell

In Japan on 18/03/2011 at 5:53 am

Japanese buyers make up 11% of the global luxury goods market, dominated by firms such as Hermes, Burberry, LVHM, Richemont, Tiffany and Coach. Japan’s rich and well-off would be cautious about treating themselves at a time when others are suffering.

How many houses David Marshall could buy on his salary?

In Political governance, Property on 18/03/2011 at 5:46 am

Someone in TR wrote that David Marshall in an interview said he was paid $8000 a month in the 1950s as Chief Minister and went on like Marshall to rant against the PAP.

Based on $8000 a month, Marshall was paid $96,000 a year. From what I understand that could buy 3 bungalow properties in a then non-fashionable area in the East, say Frankel or Opera estate. He could have some change leftover.

Today, a minister earning $3m a yr, may juz be able to buy a bungalow in these areas with his annual salary.

Want to beat up PAP, join in the bashing, But don’t talk rubbish. Only helps PAP.

Why you may want to buy NOL

In Shipping on 17/03/2011 at 5:48 am

A leading global private equity firm has a venture with a leading owner of container ships  to buy container ships. They must believe that rates will rise. The brave hearts may want to try their luck with Samudera and those shipping trusts that have fleets of container vessels.

Carlyle Group formed a joint venture with Seaspan Corp, the Washington Family and the Tiger Group to buy more than US$5 billion worth of vessels with. Seaspan and Washingtonwould invest solely in container vessels purchased by the newly formed firm. Seaspan charters container ships to shipping lines and is one of the biggest players in this market segment.

We believe there is a compelling opportunity to serve Asia’s continuing growth in demand for shipping capacity.” The joint venture will invest equity capital of US$900 mill ion in the next five years, buying container, dry bulk, tanker vessels and other shipping assets.

An unnoticed election rule change

In Uncategorized on 17/03/2011 at 5:44 am

Wicked tots flashed thru my mind when I read this change in the law: “workers who are Singapore PRs or work pass holders can now carry out manual work such as putting up election posters and setting up physical facilities such as rally sites”.

Does it mean that the PAP cannot get S’porean volunteers to do this work for free? Or for wages that the PAP thinks are reasonable? Not even the “instant” citizens that the govmin created?  And so have to resort to FTs, because they cost less?

If I were in a Opposition party that plans to use volunteers to do these tasks, I’d publicise the fact, and ask the PAP why they can’t get volunteers or pay S’poreans to do these things.

But maybe the Opposition too cannot get volunteers or afford S’poreans? Hence the silence.

Seriously, the fact that this change in the law goes unremarked shows that the chatters are taking as a given the need here for the low-cost muscle power of the FTs. Bit like the PAP.

A bull on Japan

In Japan on 16/03/2011 at 6:21 am

Antidote to the doom and gloom.

The markets tend to over-react when there are natural disasters.. There is a loss of  economic activity is followed by a recovery in later quarters as reconstruction takes place. The problem here is that steady drip of bad news about the nuclear reactors.

Only after we know what happens there, can we assess the damage.

DBS Sec remains bullish on offshore & marine sector

In Energy on 16/03/2011 at 6:17 am

(Issued juz before earthquake)

We reiterate our preference for offshore shipyards with strong order flows for 2011. Our top picks are Keppel Corp (‘buy’; TP S$14.63) and Sembcorp Marine (‘buy’; TP S$6.63) as the key beneficiaries of resurgence in premium jack-ups; and Cosco Corp (‘buy’; TP S$3.16) being the leader among Chinese yards for offshore projects. We view a prolonged spike in oil prices as a key risk, as it poses a significant threat to global economic growth.

Side-effect of Japanese reconstruction

In Economy, Japan on 15/03/2011 at 6:40 am

Higher US (and global) interest rates are in the offing as Japanese govt and investors sell US treasuries to raise funds for reconstruction. Remember Japan is the second largest investor in US government paper. China is the largest.


If so, S’pore’s interest rates could go up. What with Mah Bow Tan building more HDB flats and plenty of private supply coming on-stream, we could be in for some interesting times. And all these before factoring-in a possibility of a US recession as interest rates rise,

PAP: Pls do not use tragedy to push yr agenda

In Uncategorized on 15/03/2011 at 6:24 am

First it was SM who used the Japanese earthquake tragedy to try to make a political point. (My take on his comments)

But now we have a minister I like, and usually respect, BG Yeo doing the same

PAP, don’t try to use a human tragedy to push the PAP agenda for S’pore. It is so fourth world and insulting to the Japanese, dead and living. We are a first world society, so PAP leaders should aspire to the gravitas, decorum and manners of the  Queen of England, a US president or British prime minister, not a Mahathir.

And if you think there is nothing wrong in using tragedy to push the PAP line, why don’t you use the death of Mrs Lee Kuan Yew to push the PAP agenda? I could write on the themes you could use, but I won’t because it would be disrespectful of her, her memory and her family.

“Events, dear boy, events”

In Japan on 14/03/2011 at 10:43 am

This was what a British prime said when he was asked why sumething went wrong.

Applies to investing. I recently blogged that value fund managers were buying Japanese stocks because the stocks were looking undervalued.

Well with this earthquake, share prices have fallen and it will take some time to assess whether there is still value in the undervalued stocks.

Take thy good fortune, and thy bad withal;

Know for a surety each must play his game,

As from heaven’s dice-box fate’s dice chance to fall.

Grieve not at coming ill, you can’t defeat it,

And what far-sighted person goes to meet it?

Cheer up! bear not about a world of grief,

Your fate is fixed, and grieving will not cheat it.

Learn from Japanese — set example leh elites

In Uncategorized on 14/03/2011 at 9:55 am

Well even though SM Goh was comparing durians to rambutans, he has a point about learning from the Japanese. But why doesn’t he tell this to the elites rather than us peasants?

The following would have resigned or, bowed deeply asking for forgiveness, if they had had the Japanese spirit

— Wong Kan Seng over escape  of and failure to captiure “terrorist”

— senior police officers for above especially over failure to watch his brother’s flat

— SMRT CEO for failing to set up a system to secure train depot

— his wife for calling $600,000 salary “peanuts”

— PM’s wife for being in charge of Temasek after it lost billions on Merrill Lynch, Barclays, Shin and ABC Learning

— other high ranking Temasek managers for the same

— whoever was responsible for Lions not reaching the 2010 footie world cup

— Mah Bow Tan for failing to anticpate that FTs will live in HDB flats

— transport minister for failing to anticipate that FTs will use public transport

— Water miniter for failing to prevent several consecutive “once in a century” floods.

— Malay minister for failing to keep MM abreast of developments in the Malay cummunity

— Malay minister’s sis for failing to correct MM on Malay integration when she had the opportunity to do so (she was part of team that supposedly challenged MM)

— VivienB for overspending on Kiddie Games

— whoever in MoF who consistently underestimates Budget revenues

— MM for being wrong on Malays, investment in banks etc .

This is not a comprehensive list and I may add to it.

My point is that SM is lecturing the wrong people. Us peasants only grumble. Those who do damage are allowed to “move on” without having to even admit they goofed.

The worth of a financial adviser

In Investments on 14/03/2011 at 7:00 am

The study … found that the value of investment advisers was not in the stocks or mutual funds they recommended but in their ability to restrain investors from impulsively trading at the wrong time … data showing that aggressive orders by individuals can cost them about four percentage points a year.

“Enlightened behavioral investors ought to be more willing to pay on the order of one percentage point to an investment manager who will prohibit or at least impede aggressive orders than to pay nearly four times as much for the privilege of excessively and detrimentally trading their own account,” …


… advisers can be subject to the same myopia as the investors they advise. … an article called “The Third Rail” … that questioned the whole notion of advisers being the rational counterweight to investors’ more irrational behavioral tendencies.

NYT article

Watch this blog. I intend to explore this issue further.

Hard Truths: Got refund mah?

In Uncategorized on 13/03/2011 at 7:14 am

Many bought the book because of the spin that the book is a distillation of MM’s wisdom. Now six weeks after its publication, MM has said “I stand corrected” on one Hard Truth: how the Malays have integrated better than he said they had.

SPH, can get refund?

MM now seems dismissive of the book, what with his statement to the media that the book was based on 32 interviews over a period of two years and that the comment on Muslims integrating with other communities was made probably two or three years ago.

What other Hard Truths he will “stand corrected on”? Genetics? FT policy? Defence?  High ministerial salaries? How can S’poreans be assured that facts on the ground have not changed on other Hard Truths for MM to “stand corrected”?

There was misrepresentation when it was spun that the book represented MM’s “Summing Up” of his experiences. So a refund is only fair.

Seriously, the problem with the book was that it was edited in such a way that the Hard Truths come across as a package. One has to accept them as a package, not pick and choose among them. So if one Hard Truth is wrong, it follows that the entire structure totters,if not, collapses.  Bit like the holy scripture of any religion. One error and the sacred text is rubbish.

It’s sad because there are pearls of wisdom in the book, like the tolerance of gays, why S’pore should not be too trusting of its neighbours, the importance of honest government, and the acceptance that S’pore, the nation, is a work-in-progress. 

Time for a new revised edition? An edition that will correct MM’s  view of Malays, confirm that he hasn’t recanted on other Hard Truths, and make clear that one can accept some HTs without buying into the entire package, or vice versa. I’m sure that this would be more in-line with MM’s tots on the matter. A Malay MP from NTUC assures us of “his humility”.

And rather than a refund for HT, the original, buyers can trade in their copies for the revised version. The less copies circulating of HT, the original, the better for everyone, especially that Malay lady who, it seems did not correct MM when she had the opportunity to do so.  Wonder what her bruddder, the Malay and Water minister thinks of his sis?

I guess the editor excluded her, the deputy editor, when he said the ST team was fearless in challenging MM.

Man who gave advice to founders of Yahoo and Google

In Internet on 12/03/2011 at 6:09 am

I went to graduate school here in Silicon Valley at Stanford. It’s renowned for churning out a lot of interesting companies. My first office mates were the founders of Yahoo, and I distinctly remember telling them to stop wasting their time and focus on their school work before they went off and started that.

And then not learning from my mistake, I then went on to share the hallway with the founders of Google and had a pretty similar conversation with them.

VMware CTO talks to BBC.


Roxy-Pacific: Decent discount to RNAV even after 25% discount

In Property on 11/03/2011 at 9:20 am

But company is leveraged over its eyeballs — 128%. I’ll give it a miss but OCBC’s analysis is worth a read in giving one the facts on which it bases its call.

OCBC Investment Research, March 9

ROXY-PACIFIC Holdings is a specialty property and hospitality group in Singapore. It primarily develops domestic residential projects, and also owns two investment properties and a hotel, Grand Mercure Roxy Hotel (GMRH). In FY10, 77 per cent of revenues and 59 per cent of earnings were derived from the property development segment. The investment properties segment and GMRH constituted 1.5 per cent and 20.5 per cent of revenues respectively. We expect future earnings in FY11 and FY12 to be underpinned by recognition of revenue at 12 projects that are mostly sold out.

We believe Roxy enjoys a strong reputation for quality small to mid-sized projects in the East; and in recent years, it has expanded successfully to other regions and larger projects, ie, Spottiswoode 18 at Tanjong Pagar. Management has indicated a soft target of $300 million in acquisitions this year and would also look closely at commercial and retail deals. The current balance sheet shows a high net gearing of 128 per cent. If we revalue GMRH to $188 million (currently held at $71 million book value), net gearing falls to 61 per cent..

We have valued Roxy at $0.55 per share – a 25 per cent discount to its RNAV sum-of-the-parts value of $0.73. Read the rest of this entry »

NSP: Marriage in heaven or hell?

In Uncategorized on 11/03/2011 at 9:02 am

So Tony Tan and Hazel Poa and friends have resurfaced in NSP. CNA report

A marriage in heaven because the as Ms Poa said, “Our group and NSP are rather complementary. NSP is strong in areas we are weak and we are strong in areas that NSP is weak. We feel that it will be a very good fit”.

The NSP provides the organisational framework, money* and feet on the ground that every candidate needs. I was never confident that RP had the framework and grassroot activists to support other than one candidate.

In return, Tony, Hazel and the others can provide the intellectual firepower and PR saviness that, in my opinion, the NSP lacked.

And both sides bring passion, and emotional IQ and maturity to the marriage.

As to a marriage in hell:  Although Ms Poa said there is”willingness on both parties to give and take to work towards a common goal”, this has yet to proven. It’s an aspiration. Both sides have shown in their dealing with others that they can be uncompromising. Witness Goh Meng Seng’s rant against the WP, and the willingness of the ex-RP members to cut their losses, even though it meant castrating someone whom they respected.

In the meantime, let’s wish the marriage partners well. Let’s hope the whirlwind romance does not turn into a one-night stand, or worse** once the GE is over.


*Remember Goh Meng Seng sold his flat and is spending $40,000 of the proceeds on the campaign

**”Marry in haste, repent at leisure”

Best investment a married couple can make?

In Uncategorized on 11/03/2011 at 6:27 am

Err actually I meant what is the best investment a  S’porean Chinese couple can make. No, not property or working hard.

It’s in making gals. I kid you not  China adopted the one child law in the early 1980s. It resulted in a skewed sex ratio because many couples preferred a male baby and aborted female fetuses. In 1980, 106 boys were born were born for every 100 girls. By 1997, it was 122 boys for every 100 girls. This means that today one in nine Chinese men will probably never marry and the situation is expected to get worse as time goes on. (Economist blog)

So those S’porean Chinese couples who have good-looking, sassy daughters in their early or late teens should not bother about their grades in school. Focus on making them attractive to Chinese men: send them to charm schools, give them tuition in lap dancing, make sure they can converse in Mandarin, and send them to places in China or elsewhere where they can meet the sons of Chinese billionaires.

And very pushy parents should teach their daughters advanced sexual techniques. Or, if as its likely, the parents are prudes, find good tutors. Don’t worry abt them losing their virginity, waz plastic surgery for?  

And if yr daughters are short and fat? They got to study hard.

Time to be super wary?

In Uncategorized on 10/03/2011 at 9:17 am

In 2009, markets were saved by governments’ from US to China spending money. Those who didn’t have juz printed it, like US and EU nations.

This worked but two years on, the trick may not be repeatable for those without the cash. Article

And China, although rolling with money, has to fight inflation.

Election goodies: proves the point that PAP needs to be spurred?

In Uncategorized on 10/03/2011 at 7:55 am

With a GE looming, it seems the government is working overtime and extra hard to meet the people’s grouses

— HDB flats: no worries plenty being built

— crowded public tpt: improved services

— too many non-FTs: raise entry point salaries

— PMETs being screwed: throwing more money at retraining

(Note the last three were annced in the last two days)

All well and gd in one sense. S’poreans’ legitimate grievances are being addressed, albeit a bit late.

But does it not also show that after denying for so many years that there were problems (HDB: “market forces leh”; crowded public tpt: “not as bad as Tokyo”;non-FTS: “they all FTs vital to the economy”; PMETS: “plenty of jobs leh”) the ruling party only acts when there is pressure (in this case, losing seats and a lower share of the popular vote in the coming GE) and not because something is wrong, and needs fixing?

Does this not undermine the governing party’s argument that they are benevolent, always trying to do the best for S’poreans, and hence we should give it all the parly seats and, if we don’t give them all the seats, the mandate to rule us forever and a day? 

Yup, being responsive only when spurred, has its consequences.

Proving cheating not so easy leh

In Uncategorized on 09/03/2011 at 5:29 pm

This report on the status of the police investigation into whether Profitable Plots cheated investors shows how difficult it is to prove cheating. The police want another six months, the judge only allowed another four months. The police have been on the case since the middle of last year.

The 229 complainants should have asked questions before they invested, not shout they were cheated when they didn’t make the profits they alleged they were promised.

If the police fail to find sufficient evidence to prosecute, I hope that the 229 complainants will be liable to pay some of the investigation costs. This would deter  other investors from shouting “cheating” everytime they lose money.

Facebook worth US$76.4bn: Russian bank

In Internet on 09/03/2011 at 9:36 am

Just a few months ago, an investment led by Goldman Sachs valued the social network at $50bn. Now, a group of analysts at an investment bank has looked at how the business is growing and come up with something 50% higher.

A study in BS analysis.

Hutch Port listing: I goofed

In Infrastructure on 08/03/2011 at 10:15 am

I blogged that I doubted it could happen because HK would change its rules and allow the listing there.

Funny HK allows a highly leveraged Russian co to list, but doesn’t allow “Superman” to list this trust. Buyer beware.

ST and MM’s “I stand corrected”

In Uncategorized on 08/03/2011 at 10:05 am

So MM admits to getting it wrong abt Malay integration. But cynics could say it is the importance of the Malay vote that made him admit he goofed. Remember in 2006 the Malays saved the PAP from a GRC defeat,

Whatever the sincerity of his recant, it shows up the spin that the ST team challenged and probed him heroically. I mean one of team was ST’s editor and another was the deputy editor. The latter was a Malay lady. If anyone could put MM right, it would have been her.

GCT, was right for once, when he said a balls-carrying, backside licking press did the government no favours. Actually he said sumething less colourful.

BRICs are the the top four EPL clubs

In Emerging markets on 08/03/2011 at 9:44 am

The boss of PR, advertising and market research conglomerate, WPP, Martin Sorell has an interesting take on how the world economy can be compared to English footie.

“The world continues to move at very different speeds, both geographically and functionally. By means of explanation, perhaps an English football analogy is helpful.

“First, The Premier League consists of the BRICs (Brazil, Russia, India and China) and the Next 11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, South Korea, Turkey, Vietnam) or CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa), along with new media (personal computer driven, mobile, video content, social networks).

“Second, The Championship, the United States, because of its size, immigrant, entrepreneurial culture and human and natural resources, along with an economically well-run and high value-added manufacturing export-led Germany and free-to-air television; third, League One, Western Europe, primarily the United Kingdom, France, Italy and Spain, along with newspapers and magazines; last, League Two, Japan, which has been stagnant for almost twenty years. Perhaps the United Kingdom, with its Coalition Government’s emphasis on deficit reduction and long-term growth will gain promotion to The Championship?”

SDA: Don’t get emotional, don’t have blood on yr hands

In Uncategorized on 04/03/2011 at 6:32 am

We are told that a three-cornered fight might occur in Potong Pasir because SDA wants to contest the seat if Chiam decides to fight in a GRC, the SPP now having left the SDA.

SDA is right to be upset with Chiam. Firstly because he once treated the SDA as his personal property. He saw it fit to agree with the RP Sec-Gen for the latter to take over SDA without consulting the other SDA committee members.

You are also right to be upset that Chiam is treating Potong Pasir as his to gift away, wanting his wife to stand there.

Finally, his appalling behaviour in refusing to attend meetings after being thwarted over the take-over of SDA, is astounding.

You are right to sack him as chairman.

But leave it at that, don’t contest Potong Pasir, if he decides to fight in a GRC.

Look at it this way. Taking account his health and age, no one can fault him if he decides to fight in Potong Pasir.

But he wants to try to win a GRC, while retaining “Potong Pasir”. Let him try. Indulge him on the latter issue as you would your grandfather.

What is the alternative? Force him to fight Potong Pasir himself or force a three-cornered fight there? The first would deprive a GRC team of someone voters could relate to. The latter would gift the seat to the PAP.

Either alternative, and the SDA would look as petulant and irresponsible as Chiam or KennethJ. Many S’poreans would remember the SDA’s pettiness, and “mark” those responsible.

So SDA, swallow your anger, and let him fight for a GRC, while “retaining” Potong Pasir. It ain’t easy swallowing your anger especially when you have been unjustly provoked, but do it for the possibility of winning a GRC from the PAP while retaining Potong Pasir. Do it also to avoid looking like the jackals and hyenas who attack a lion pass his prime, or as trouble makers out to “sabo” the ant-PAP struggle.

And if he fails in both, yr hands are clean. And you can snigger. If he succeeds you can say yr forebearance helped him.

Update on 8th March 2011: SDA is not fighting in PP. Thanks.

Let’s make the best of a bad situation.

Go buy an island

In China on 03/03/2011 at 8:32 am

What with the uncertainty in Libya and the coming GE, time to take a break from trying to find gd investments, here and overseas.

Go do sumething more productive? Like fishing? Or buy a Chinese island?

The reason for the electoral boundary changes?

In Uncategorized on 03/03/2011 at 7:07 am

Only the WP has made a gd case that the changes will cost it votes. Otherwise, I cannot disagree with the PM that the changes,”should lower the hurdle for parties intending to contest the elections”.

But what the PM does not say is that these changes make it less likely that the PAP would suffer a GRC loss, as it almost did in 2006, where only the Malay vote saved George Yeo and his team of four from defeat. And this after a “safe” area had been added. Turned out that the area was “toxic:. You never can tell.

Pre the 2006 election, the PAP’s aim was to win back the two SMCs. It was confident of its ability to win any other fight. 

But after 2006 GE, I suspect its aim is to minimise possible losses. Hence the average size of GRCs was decreased to five, with a reduction in the number of six-member GRCs. And the number of Single Member Constituencies increased to 12.

Knowing human nature, the Opposition parties would focus theie efforts on SMCs, in the belief that it would be easier to win. Losses in a few SMCs would be preferable  (for the PAP) to a “freak” loss a GRC of five or six MPs, including a cabinet minister.

And the increase in SMCs may tempt wannabes to stand, splitting the anti-PAP vote, all to the benefit of the PAP. In Joo Chiat, one Andrew Kuan is planning to stand in this usually WP -contested seat. The last I heard, he was the VP of Financial Services Consumers Association, where another wannabe presidential candidate, Tan Kin Lian, is president.

Final tot. Life is full of unintended consequences. By introducing GRCS and reducing SMCs, the PAP forced the Opposition to get better organised, “They sow the wind and reap the whirlwind”.

When buying distressed reits or shipping trusts

In Property, Reits, Shipping on 03/03/2011 at 7:03 am

Don’t focus on rising NAVs.

Focus on their ability to service their debts and the options they have to refinance. The improvement in NAVs is a subset of these issues.

Lessons from Susan Lim’s case

In Uncategorized on 02/03/2011 at 2:52 pm

The lessons I take away from the ongoing court case between surgeon Susan Lim and the S’pore Medical Council

— don’t offer a massive discount when queried abt yr bill

— got contract, assert it

— top medical billers are like brokers and investmant bankers when it comes to billing.

HSBC: Asia flying

In Banks on 02/03/2011 at 7:41 am

HSBC said its Asian operations can sustain return on equity of as much as five percentage points above the lender’s global target as growth outpaces other regions. It’s global target is 15%.

Bloomberg report.

BTW the 2008 financial crisis enabled me to double my holdings in HSBC via its rights issue. But there were times when my balls shrunk.

Two more reasons to avoid S-Chips

In China on 01/03/2011 at 7:04 am

Two S-Chips have been suspended because of audit problems.

What more dangers lurk in the S-Chip swamp? Whatever the case, those Ozzies who don’t want ASX to be taken over by SGX have two more reasons.