Asiasons: Hero to Zero to …

I looked at it when it fell to 40cents. But decided to give it a miss as its financial statements didn’t help me understand the company. A few weeks ago, I tot of buying a few hundred thousand shares at 5 cents on the premise that nothing could go wrong given that chairman and one of the controlling shareholders  Mohammed Azlan Hashimwho is also a director of Malaysian sovereign wealth fund Khazanah. Mohammad Azlan is also the former executive chairman of the Kuala Lumpur Stock Exchange*.

I also had a lot of respect for the guys behind the co based on their actions: see above link.

But I was in no hurry: didn’t see the stock going anywhere. I’ll let yesterday’s BT take up the story:

Asiasons Capital shares have suffered much pain but, unlike many of its penny stock cohorts, the private-equity firm and its top executives are not being investigated by Singapore’s white-collar crime buster for possible breaches of securities laws.

After getting battered to a low of 3.8 cents on Monday, Asiasons shares gained some ground yesterday, ending the day some 5 per cent higher at four cents, still a far cry from the high of $2.83 it hit last October days before the stock came crashing down.

Amid the penny stock controversy surrounding trading in its shares and investigations into several firms linked to it by the Commercial Affairs Department (CAD), one of Asiasons’ founders and chairman, Mohammed Azlan Hashim, has called it a day at the firm.

On April 28, the firm said the 57-year-old, a prominent corporate figure in Malaysia, had volunteered to retire as non-independent and non-executive chairman, a post he had held for seven years.

He now only has a 3.8%  direct interest in Asiasons. Previous in addition to this he had deemed interests of 50% (along with others) via other vehicles. Ng Teck Wah,  one of the joint MDs too is resigning, though he retains his deemed interests.

This leaves only Datuk Jared Lim Chih Li is a co-founder and Joint Managing
Director of Asiasons Capital Limited and also a director of
Chaswood Resources Holdings Ltd. Datuk Jared was formerly
a Non-Executive Director of ISR Capital Limited and he
retired on 25 April 2013.
Datuk Jared is the visionary behind the setting up of an
Asian-owned and Locally-grown private equity fund and
conceptualized Asiasons’ investment model of combining
traditional value enhancing exercises with branding, design
and online strategies.
Prior to the formation of the Asiasons Group in 2007, Datuk
Jared was an investment banker with Avenue Securities and
was responsible for the setting up of the corporate finance
unit, eventually building it up to a 40 man strong unit with a
strong track record in Equity offerings, Restructurings, M&A
and Bond Issues. Datuk Jared built a niche in Malaysia in cross
border equity offerings involving PRC enterprises, which
eventually led to his conviction that it was timely to start an
Emerging East Asian private equity model.
Datuk Jared is also a successful entrepreneur and is the
Chairman of the privately owned Be Group in Malaysia. The
Be Group is a boutique style Property and Lifestyle Group
comprising award winning properties and award winning
lifestyle brands in food and beverages and Wellness.
Datuk Jared has a Bachelors degree in Economics and
Accounting from the University of Bristol and obtained a First
Class in Masters of Finance from the University of Hull and
the Chartered Financial Analyst (CFA) qualification.
(From 2013 annual report)

Is he worth a punt?

——

*Dato’ Mohammed Azlan is the co-founder and Chairman of
Asiasons Capital Limited and also the Chairman of Chaswood
Resources Holdings Ltd. He is the senior statesman in the
Asiasons Group and is an established corporate figure with
interests in Malaysia and Singapore. He is instrumental in
building Asiasons’ relationships with government authorities
and large corporates across the region and provides Asiasons
with strong governance credibility given his previous tenure
as Executive Chairman of Kuala Lumpur Stock Exchange and
current quasi governmental roles.
He has extensive experience in the corporate sector
especially in financial services and investment management.
Aside from his tenure as Chairman of the Stock Exchange
in Malaysia, he also served as Group Chief Executive of
Bumiputra Merchant Bankers, Group Managing Director of
Amanah Capital Malaysia Berhad.
Dato’ Azlan is currently a Board Member of various
government and government related organizations including,
Labuan Financial Services Authority, Khazanah Nasional
Berhad (the investment arm of the Government of Malaysia).
He also serves on the Investment Panels of Employees
Provident Fund of Malaysia and the Malaysian Government
Retirement Fund Incorporated. He is also currently Chairman
of various public listed entities in Singapore, Malaysia, and
United Kingdom, including D&O Green Technologies Berhad,
SILK Holdings Berhad, Aseana Properties Limited, Scomi
Group Bhd and Deputy Chairman, IHH Healthcare Berhad.
A Chartered Accountant by profession, Dato’ Azlan
graduated with a Bachelor of Economics from Monash
University, Australia. He is a Fellow Member of the Institute
of Chartered Accountants, Australia, Malaysian Institute
of Directors, Institute of Chartered Secretaries and
Administrators, Member of Malaysian Institute of Accountants,
and Honorary Member of Institute of Internal Auditors
Malaysia.

 

Unexpected bad April nos. for S’pore, Thailand: M’sia to follow

On Friday, the Economic Development Board (EDB) said April’s manufacturing output shrank 0.3%  from a year ago, after a revised 3.1% drop in March.

This poor showing surprised economists, whose consensus forecast was for manufacturing to grow 4.1%  and could not be blamed entirely on the 7.6%  fall in volatile pharmaceuticals output. The poor showing is because of falling demand from key markets such as Europe and the US especially for electronics.

Thailand has reported a surprise fall in its exports for April because of falling demand from key markets such as Europe and the US. Shipments fell 3.7% from a year earlier. Many analysts had forecast an increase of more than 3% http://www.bbc.co.uk/news/business-18203209. Remember that Thailand has replaced S’pore as the world’s manufacturing hub for hard disks.

Expect weak manufacturing numbers for M’sia.  It too is a big manufacturer of electronics for export. And Najib is planning an election later this yr.

M’sia: Juz wondering? cont’d

Ananda Krishnan is nearing a deal to sell his US$3 billion worth of power assets to a M’sian government company. It seems that it is paying top dollar. http://www.reuters.com/article/2012/03/05/malaysia-krishnan-power-idUSL4E8E510C20120305

So was his auction of his power assets all wayang?

(Related post:https://atans1.wordpress.com/2012/03/02/msia-juz-wondering/)

Anyway, strange things are always happening in M’sia. Juz last month, RHB is engulfed in a series of yet-to-be-resolved deals, some of them not of its own making. Aabar Investment group of Abu Dahi reportedly wants to sell its 25 per cent stake in RHB, just six months after buying it. RHB said it does not mind, nor does it make much sense.

Azlan Zainol, Chairman of the RHB Banking Group, said: “(Right now,) the price range in a Malaysian bank could be between 1.8 to two times the book (value). That’s the kind of range right now. If Aabar were to sell, I believe they may not be able to get the price of 10.80 ringgit at which they bought.” http://www.channelnewsasia.com/stories/corporatenews/view/1184226/1/.html

Note that stake was bought from a n Abu Dhabi bank at 2.25 timmes book value, way above the market price.

M’sia: Juz wondering?

Wonder if Malaysian tycoon Ananda Krishnan is selling assets (juz put his satellite firm on the market after getting bids for his power plants) because of the expectation of an early general election that could further weaken the governing coalition, or which it could even lose? He benefited over the years from government policies.

In its inaugral ISEAS Monitor, this is what ISEAS* says about M’sia especially the probability of an election soon:

Opposition leader Anwar Ibrahim’s recent acquittal on sodomy charges has dominated the media, and will be asignificant factor in Malaysia’s forthcoming 13th general election.

Barring unforeseen developments,Prime Minister Najib Razak will dissolve parliament and call the election no later than June. Both the Barisan Nasional (BN) government and opposition Pakatan Rakyat (PR) will accelerate preparations for the much anticipated poll.

Although Najib’s administration is saddled with several thorny problems and the election does not have to be held before March 2013, he may feel the need to go early for two reasons.

First, Najib has to consolidate his position within his United Malays National Organisation before UMNO’s own elections are held in the second half of 2012.

The second reason is that a weakening global economy in 2012 can adversely affect largely export dependent Malaysia. With inflation already hurting ordinary Malaysians, a slowing domestic economy will cost votes for the BN. The budget deficit is estimated at 5.4% of GDP in 2011, limiting the government’s ability to provide further stimulus spending in 2012. The government’s hand will be further constrained by the next round of reduction and rationalisation of subsidies, expected soon.

Since 2009, millions of dollars have been spent on public relations efforts to burnish the image of BN and of Najib in particular. The government has awarded bonuses and salary increments to the 1.4 million-strong civil service,and more handouts can be expected in the coming months. In January 2012, Najib toured Perak, Selangor, Penang, Perlis and Perak, as well as the Federal Territory of Kuala Lumpur, to rally support. He is scheduled to visit Terengganu and Johor in February.

UMNO, through the mainstream media,especially the party-owned Utusan Malaysia, and its NGO proxies,spearheaded by PERKASA, can be expected to ratchet up race and religion themes. The mainstream media predictably will publish more reports that detail or generate conflicts within the PR component parties.

For their part, the opposition parties will use the alternative and social media to highlight the government’s corrupt and crony practices. It will promise clean and transparent governance, using the example of members of the Executive Council of the Democratic Action Partyled Penang state government declaring their assets. It will also offer to revise the lucrative terms granted to highway toll operators and independent power plant companies, and pledge to retain if not expand subsidies to ease the plight of Malaysians in anticipation of the economic slowdown.

Key points: What impact will freshly acquitted Anwar have on the elections,especially in view of the prosecution’sdecision to appeal? How are the election results likely to affect relations between Singapore and Malaysia?

—————

*”The Institute of Southeast Asian Studies is a regional research centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment”. It is also a statutory board whose funding comes from the S’pore government.

High Oil Prices: M’sia Boleh

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

Oil at US$120: Buy M’sia

As Asia’s largest net energy exporter, only Malaysia will benefit significantly from higher energy prices. With crude oil, natural gas and palm oil making up almost 30% of total exports, the country is experiencing a significant positive terms-of-trade shock, says Barclays Capital.

It says US$120 oil would add 3.1 percentage points to  Malaysia’s current account balance as a percentage of GDP, and 0.9 percentage points to Indonesia’s.

Nomura: Bullish on M’sia

Malaysia is likely to benefit from a consumption boom says Nomura, “[T]he most powerful theme would be the consumption theme in Malaysia. We have added a lot of the middle class segment of the population. That really explains why we are seeing more demand for property, higher value property,”

Despite the KLCI having risen about 30% this year, Nomura analysts see 20% rise in 2011.

Nomura’s top picks in Malaysia are property, palm oil and bank stocks.Among the firm’s buy calls are CIMB, Maybank, AMMB, Media Prima, SP Setia, Sime Darby and Genting Malaysia.

Outlook for S’pore’s major export

The near-term outlook for the information, communication and technology (ICT) sector is stable. The North American semiconductor book-to-bill ratio stood at 1.12 in May 2010. This  indicates that orders are still stronger than shipments and point to an expansion in the months ahead.

This is continued good news for  Singapore, and Malaysia and Thailand, which also have sizeable ICT sectors.

DBS: What the new chairman should be looking at II

He should ensure that any acquisition in Indonesia, India, Malaysia and Thailand,  the countries where DBS says it would look for acquisition opportunities is disciplined in terms of valuation, strategic fit and execution.  Investors still remember the Dao Heng fiasco, overpaying and having to take billion dollar impairement charge. And the purchase of POSB was not such a gd deal as anti-government subversives like to imply that it is.

Better still he shld relook at the rationale for these M&A activities.

DBS is  Singapore and Hong Kong centric. But, in February, it said it was aiming to have 30 per cent of its revenue from South and South-east Asia, excluding Singapore, 30 per cent from Greater China and 40 per cent from Singapore within five years.

Morgan Stanley estimates that DBS would have to grow at a compounded annual growth rate of 40 per cent a year in South and South-east Asia to achieve its stated target in that region i.e. it would have to grow via acquisitions.

BTW last Friday BT reported that DBS’s CEO had said DBS had identified unnamed acquisition targets in Indonesia which shld worry investors.

Previous post on topic

https://atans1.wordpress.com/2010/03/24/dbs-what-the-new-chairman-shld-be-looking-at/

He shld be relooking at FT policy — both in principle and execution.