Sunway Bhd - Selldown Overdone; Upgrade to BUY

By Maybank IB Research
29 Aug 2012

An overdone hammering. 1H12  results  were below expectations. However,  earnings should pick up in  2H on stronger work progress (construction) and  investment properties performance. We  lower our earnings forecasts by 2-6% p.a. but raise TP to MYR2.68 (+6sen; 40% discount to MYR4.46 RNAV).  Sunway currently trades at 7.1x  FY13 PER and  a  50% discount to RNAV. We believe the  stock selldown brought about by slower property sales is overdone. Upgrade to BUY.

Carlsberg - Time For a Carlsberg; Raising TP

By Maybank IB Research
29 Aug 2012


Maintain BUY.  Carlsberg’s 2Q12 net profit of  MYR37.7m  made up 50.9% of our and consensus FY12 forecasts. We are, however, raising our FY12-14 earnings estimates by 4-8%, to reflect margin expansion from increasing Singapore  contributions and an  improving local production mix tilted towards premium beers. We raise our DCF-based TP to MYR13.50 (from MYR12.00; +13%), which implies a still-decent
FY13 net dividend yield of 4.8%.

Hong Leong Bank - Solid Asset Quality

By OSK Research
29 Aug 2012

FY12 Results Review

The group reported FY12 results that were largely in line with both consensus and our full-year forecasts. The group is poised to capitalize on  longer-term growth opportunities, thanks to its larger post-merger organizational footprint. However, the slowing economic environment in the medium term and HLBank’s relatively conservative culture could cap any immediate-term revenue upside synergies, which is already reflected in its lower-than-expected loans and transactional fee income growth. Rolling forward our valuation to FY13, we raise our FV from RM12.54 to RM14.57 (2.1x FY13 PBV, ROE: 15.8%).

Saft on wealth - Buffet and the rest of us

From The Edge Malaysia
Written by Reuters
27 Aug 2012

Aug 23 (Reuters): I don't know how to put this but ... Warren Buffett is awesome, and you and me, we almost certainly are not.

A new study aiming to get at the source of the legendary investor's outperformance demonstrates that his approach, which turned a dollar in 1976 into $1,500 today, is relatively simple: Use modest, cheap leverage to buy high-quality, cheap and safe shares.

The future is in our palm

By Star Online: Business
25 Aug 2012

THE STAR recently held its first roundtable talk on palm oil with four prominent captains of the industry Malaysian Palm Oil Council (MPOC) chief executive officer Tan Sri Dr Yusof Basiron, IOI Group executive director Datuk Lee Yeow Chor, Felda Global Ventures Holdings Bhd group president/CEO Datuk Sabri Ahmad and United Plantations Bhd vice-chairman Datuk Carl Bek-Nielsen.

The Star's executive editor Errol Oh was the moderator at the talk which covered the economic importance of the industry; its sustainability, production, demand and supply patterns; and the acute labour shortage it faces.

Key players: The Star’s Errol Oh (middle) with leaders of the Malaysian palm oil industry (from left) United Plantations Bhd’s Datuk Carl Bek-Nielsen, Malaysian Palm Oil Council’s Tan Sri Dr Yusof Basiron, IOI Group’s Datuk Lee Yeow Chor and Felda Global Ventures Holdings Bhd’s Datuk Sabri Ahmad.

The following are excerpts from the roundtable talk held at Menara Star in Petaling Jaya:

Mah Sing targets to become proxy leader

By Star Online: Business
25 Aug 2012

MAH Sing Group Bhd managing director Tan Sri Leong Hoy Kum has big ambitions, and he's ready to articulate his aspiration for all who want to hear.

First of all, he has a vision of making Mah Sing the next Cheung Kong Holdings of Malaysia. For the uninitiated, Cheung Kong belongs to Hong Kong tycoon Li Ka-shing, and is one of the largest property developers in Hong Kong.

Two of gold price's three legs looks wobbly

From The Edge Malaysia
By Clyde Russell, Reuters
22 Aug 2012

IF you want to know why the gold price has stagnated in the past few months, look no further than the World Gold Council's latest report that shows demand is at its lowest in more than two years.

In fact, so rapid has been the decline in gold demand since last year's record price in September that if there is a surprise, it's that the price has held up as well as it has.

Since the start of the second quarter, gold hasn't been above US$1,680 (RM5,260.92) an ounce, but it also hasn't dropped any lower than US$1,527 and the current price around US$1,603 is around the mid-point of its recent range.

Value Growth Investing

By KCLAU (kclau.com)
15 Aug 2012

A friend asked why I am still in the stock market when there are so much of uncertainties. Both the United States and Europe have so much of financial difficulties and unemployment, India’s Rupee is at historical low and China has lower GDP growth. Under such conditions, how can you still expect to make money from the stock market?

In fact, this is the best buying opportunity to pick up undervalued growth stocks when most fund managers and investors would reduce their holdings -be a contrarian investor.

The Lost Decade: Lessons From Japan's Real Estate Crisis

By Investopedia
23 July 2008

Free markets economies are subject to cycles. Economic cycles consist of fluctuating periods of economic expansion and contraction as measured by a nation's gross domestic product (GDP). The length of economic cycles (periods of expansion vs. contraction) can vary greatly. The traditional measure of an economic recession is two or more consecutive quarters of falling gross domestic product. There are also economic depressions, which are extended periods of economic contraction such as the Great Depression of the 1930s.

From 1991 through 2001, Japan experienced a period of economic stagnation and price deflation known as "Japan's Lost Decade." While the Japanese economy outgrew this period, it did so at a pace that was much slower than other industrialized nations. During this period, the Japanese economy suffered from both a credit crunch and a liquidity trap. In this article we'll define and discuss the meanings of these terms, and draw upon "Japan's Lost Decade" for examples.

Find Fortune In Commercial Real Estate

By Investopedia
29 Aug 2007

Real estate investment, like any other type of investing, comes in a variety of flavors. When people consider becoming a landlord, they are usually thinking of renting out a single family home or another type of residential property (condo, townhouse, etc.). Although rentals of this nature make up the vast majority of investment properties owned by independent investors, the flashiest real estate investors in the world (think Donald Trump) cash in on commercial properties. Read on for a look at the pros and cons of investing in commercial properties. 
What are commercial properties?Loosely speaking, commercial properties are properties that are leased out to provide a workspace rather than a living space. Commercial real estate includes office buildings, strip malls, restaurants and shops (both in the shopping and industrial sense).

In most cases, properties are sold by the building - one office building, one restaurant, one factory, etc. However, if a developer wants more capital to expand a project or wishes to see the returns more quickly, the project will be broken down into smaller units rather than sold as a whole. 

Advantages to Commercial Real EstateOne of the biggest advantages of commercial real estate is the attractive leasing rates. In areas where the amount of new construction is either limited by land or law, commercial real estate can have impressive returns and considerable monthly cash flow.

Economic Moats: A Successful Company's Best Defense

By Investopedia
4 Oct 2009

Cash flow generation, debt-free balance sheets and a significant and sustainable competitive advantage in the marketplace are some of the reasons great companies stand out from the pack.

What is it that separates companies that thrive for decades from the ones that flounder for years?

The answer may lie in what is referred to as a company's economic moat, a phrase popularized by investing legend Warren Buffett. In this article, we'll introduce you to the concept and explain why it is so important to consider as a long-term investor.

Are developers really making too much?

By Star Online: Business
11 Aug 2012

LATELY, there have been many ongoing discussions on the topic of high property prices. It made me ponder on the various causes that might have contributed to the situation, including the question of whether developers are making too much.

As I took a sip of tea, many thoughts came to mind which I found interesting and worth sharing before we dwell further into the real factors of rising property prices.

Based on annual reports (see chart) of three major property developers in Malaysia, namely SP Setia, UEM Land Holdings and Mah Sing Group, they are generating an average of 18% profit margin from their projects, and at the same time incurring a staff cost of about 7% of their total revenue.

Bond funds are guaranteed losers

By MarketWatch
10 Aug 2012

"Currently a level of unemployment of 7% or more seems to be required to keep inflation from accelerating, a level quite unacceptable as a permanent situation."

Before Bill Gross proclaimed that "the cult of inflation may only have just begun," I discussed here a few months ago that we were likely already “ Passing from deflation to inflation .”

I was not alone of course. A quick search shows that many people have been talking about inflation for a few years now. Most, however, have just been making knee-jerk reactions to their not-terribly-well-informed observations of the Fed.

What good mathematicians know however, is that the Fed hasn't quite printed us into inflation just yet. We are at an important juncture, however. In the next year, the world will have to decide between a deeper depression or moving back to growing the global economy.

IGB REIT to raise RM838m

By Star Online: Business
10 August 2012

PETALING JAYA: IGB real estate investment trust (IGB REIT) expects to raise RM837.5mil from the initial public offering (IPO) of 670 million units on Bursa Malaysia's Main Market.

The IPO represents 19.7% of the REIT's total listing of 3.4 billion units. Based on a retail price of RM1.25 per unit, the total market capitalisation of IGB REIT upon listing will be approximately RM4.25bil.

IGB REIT, a unit of property developer IGB Corp Bhd, said in its prospectus exposure issued to the Securities Commission that it intended to distribute up to 100% of its distributable income for the period commencing from the date of establishment until Dec 31, 2014, and subsequently at least 90% on a half-yearly basis.

Genting Bhd - 1MDB buying Genting Sanyen?

By Kenanga Research
10 August 2012

Outperform
Price: RM9.02
Target Price: RM11.69

News:
- It was reported in the Business Times today that 1 Malaysia Development Bhd (1MDB) is buying
Genting Sanyen from Genting group for RM3.0b-RM3.5b.
- The source quoted said the deal is reaching its final stage and will be announced soon.

Ignore ‘fiscal cliff’ at your own peril

By MarketWatch
9 Aug 2012

The markets are in a party mode and have forgotten the approaching dark cloud of the “fiscal cliff.”

The fiscal cliff refers to the expiration of Bush tax cuts and simultaneous significant reduction in government spending in the United States at the end of the year.