Cinema-Blend-whereiszemoola

Seriously.

Do you call this financial news?

Have a look at this headline financial news published on Business Times:

• KYM set to return to limelight?
  
  Francis Fernandez Published: 2013/01/25
  
  IN NEGOTIATIONS: Datuk K.Y. Lim, who has significant business interests in Perak, is said to be working closely with the state government for a dry bulk port concession
  
  DATUK K.Y. Lim, one of the country's top backroom deal maker in the 1990s, is believed to be engineering a deal that would help push his listed company KYM Holdings Bhd back into the limelight.
  
  Business Times understands that the tycoon, who has significant business interest in Perak, is working closely with the state government for a dry bulk port concession.
  
  In the 1990's, Lim held key positions in Technology Resources Bhd (Celcom (M) Bhd), Naluri Bhd and Malaysia Airlines.
  
  The tycoon has been low profile ever since, only to emerge in the limelight briefly in 2010, when he managed to convince Brazil's Vale SA, the world's second largest diversified metals and mining company to build a distribution centre and a port in Telok Rubiah, Perak.
  
  As part of the deal, Lim also managed to sell off some 166ha of land in the area for almost RM102 million cash to the Brazilian company.
  
  Lim's listed company, KYM Holdings Bhd, had a 54 per cent stake in Harta Makmur Sdn Bhd, the company which sold the land to the Brazilian firm.
  
  At the time of the sale, there was talk that KYM would also actively participate in helping build and manage the port for the Brazilian company.
  
  Such talks helped push KYM shares to RM3 a share by December 13 2010, but since the deals with Vale on helping build the port did not take off, the shares have since retreated.
  
  KYM shares were last traded at 68 sen a piece, and market talk is the tycoon is finally ready to pull the rabbit out of the hat.
  
  "This is the big one, as far as KYM is concerned," said a person close to the tycoon.
  Business Times was told that KYM has shifted its focus to now ride on the Vale's RM9 billion distribution centre.
  
  As such, the company is already involved now in helping reclaim 1,376ha of land in Bagan Datoh, Perak, which will be used for industrial purpose and the construction of a jetty.
  
  In 2010, KYM's unit KYM Development Sdn Bhd inked an agreement with the Perak State Government State Economic Development Corp to help reclaim and develop the industrial park.
  
  "Within the next few weeks, they will sign an agreement to build the jetty/port, with the state authorities," said the source.
  
  Business Times was told in the first stage, the port will have two berths, and it will cost KYM somewhere between RM300 million and RM400 million to build the port.
  
  "They will also manage the port, which will act as a feeder port for Vale," said the source, adding if the deal goes through, Perak will be home to the country's biggest dry bulk port.

What do you think?

Tell me if this is financial news or pure rumours/speculation made by 'a person close to the tycoon'?

And if the stock, KYM, moves just because of this news, what then do you think of our financial news? (Yes KYM is now up 2.2% at 9.05am!)

Isn't our financial news used as a tool by UNKNOWN parties to drive the stock price for a profit???

And incredibly, do you note the reporter name?

Same reporter who wrote a wild story recently that Permaju Holdings would win a giant timber concession? Yeah, the timber concession that never even existed in the first place.

It's serious.

Think about it.

Recall the posting on Permaju ( see No Such Timber Concession! )  made on 9th Jan 2013. Based on information on a so-called source, Permaju Holdings was said to be close to be awarded a GIANT timber concession. The stock upon being 'gifted' with such good news surged much higher. Later in the day, this so called news was denied by all parties involved. Stock of course went down.

What's the first thing that came to mind?

Would it be wrong to conclude that someone lied about the existence of the giant timber concession. Someone had cheated and profited by the surge in the stock price. Someone had invented the giant timber concession to make the stock surge.

Would these be a wrong set of assumptions?

But what about the role of the financial press itself?

Do they just publish the news without even checking the validity of its so-called sources?

And when the story is denied, doesn't the financial news and its reporter and editor have any remorse to see the stock go up but only to come crashing down once the story is denied?

Does the reporter feel even stupid for writing such an article?

And what about the role of the editor?

If such events keep happening, aren't they even ashamed about it?

Don't they understand that as an editor, they need to preserve the integrity of the financial press?

Surely, they can't allow these cheating and lying sources to keep feeding their reporters with baseless pieces of information. Surely they cannot allow the financial press be used as a tool for these cheater and liars to push their stock prices.

Think about the No Such Timber Concession! posting again. The next morning, after Business Times published the Giant timber concession story, Business Times published Sabah Forestry: No timber concession issued. Do we see Business Times publish an apology for publishing the erroneous Giant timber concession story?

The next day, Business Times published another story based on un-known sources suggesting that DRB will be privatised. ( See Why 'According To Sources' Financial News Should Be Stopped ).

Same style.

Based on sources, this and that is going to happen.

Stock naturally moves higher.

And needless to say, the news is denied.

What's the obvious question?

Did someone cheated by cooking the DRB privatisation story up so that they can profit from the moving stock price?

If the answer is a clear yes, then why is our financial press being used as a tool for others to cheat?

And someone would even question the role of the financial press involved. What if someone within the financial press is in cahoots with these sources?

How?

On today's so-called financial news.

• Ng set to make further moves on Inch Kenneth
  
  By Francis Fernandez Published: 2013/01/21
  
  SYF Resources Bhd chairman Ng Ah Chai plans to boost his interest in Inch Kenneth Kajang Rubber Public Ltd Co by as early as this week.
  
  Last week, Business Times reported that the tycoon was going to raise his personal stake in Inch Kenneth to about 10 per cent.
  
  Subsequently, on January 17, Inch Kenneth told the stock exchange that Ng had bought more of the company's shares from January 11 to January 17 this year.
  
  Against this backdrop, Inch Kenneth had started buying back its own shares in recent days. From December 27 last year until today, the company has bought back some 6.39 million of its shares to bring its treasury shareholding to 6.75 million shares.
  
  As a result of the purchase, Ng now controls 42.16 million Inch Kenneth shares, giving him ownership of 10.18 per cent of the company.
  
  Ng, a long-time shareholder of SYF, one of the largest rubberwood furniture manufacturers in the country, had emerged in Inch Kenneth some five months ago.
  
  Ng and parties alligned to him are expected to boost their stake in Inch Kenneth to about 15 per cent by the end of this week, said a person familiar with Ng's plans for the company.
  
  "Ng might tie up with another public-listed company to gain a firmer foothold in Inch Kenneth," said the source.
  
  The source said by the end of next week, they will request for a board seat.
  
  "Their desire for now is not to take control of Inch Kenneth, but to force the current Inch Kenneth board to either return the cash from the company's war chest or to provide a detailed plan on the company's future development plans."
  
  A check on its annual report for the year ended 31 December 2011 showed that Inch Kenneth had RM221.69 million as short-term deposits with banks.
  
  Inch Kenneth became cash rich after it sold two plots of land in Bangi, Selangor, to UEM Land Holdings Bhd for RM268.5 million.
  
  "Minority shareholders should be given a special dividend from the proceeds of the sale, or an executable plan should be given on how Inch Kenneth is going to develop its massive landbank," added the source.
  
  He did not discount the possibility of the Ng faction making an outright offer to take over the company.
  
  Currently, the dominant shareholders of Inch Kenneth are those who control Concrete Engineering Products Bhd (CEPCO). CEPCO controls about 13.5 per cent of Inch Kenneth.
  
  CEPCO disclosed last year that it was buying Inch Kenneth shares because Inch Kenneth was trading at below its net asset per share of RM1.71.
  
  "The current market price represents a good opportunity to average down the cost of the investment, backed by the net asset of Inch Kenneth at RM1.71," CEPCO said in its annual report last year.
  
  However, according to RHB Research, Inch Kenneth should be valued at between RM1.77 and RM1.88, based on the sum parts valuation method.
  
  The method values a company by determining what its divisions would be worth if they were broken up and spun off or acquired by another company.

And this is the very same reporter, who also based on unknown source wrote the Giant timber concession for Permaju.

Yes!!!!

Same reporter.

Same style.

Based on sources!!!!!

Makes you wonder. Did this reporter get censored for publishing the Permaju giant fimber concession story at all?

See, we can blame sources for cheating and lying to the financial press. They lied to the press in an attempt to profit from the stock price movement.

But let me ask once again.

What about the financial press?

Should they not show restrain from simply publishing news based on such sources?

Look once the parties involved denies the story published, the financial press is going to look mighty stupid from publishing such news.

But since it is happening constantly, I do wonder...

So I am asking "Do You Think There's  Honesty And Integrity In Our Financial News?'

Listen....

Finally, yes finally, someone is asking the price of honesty in our stock markets.

The last 4 lines of the article stood out.

• Cheating is synonymous with lying. Like it or not, it is a frequent occurrence, even in the local stock market.
  
  In Bursa Malaysia, lies and cheating are generally in the guise of "rumours" and "speculation", invented by the so-called market perpetrators.
  
  It is not uncommon when companies repeatedly have to deny knowledge of any activity that has caused sharp price movements or active trading of their shares.
  
  The local stock market, like other bourses in the world, partially thrives on rumours and specula-tion. But to be frank, it is tough to apprehend "cheats, liars or perpetrators" in a market culture that thrives on rumours and speculation.

Mixed feelings here.

I am glad that someone else is taking note about the 'rumours' and 'speculations' INVENTED.

Yeah, INVENTED.

But the article is  lacking.

Problem is this.

The one and biggest issue, at least for me, is that these invented rumours and speculations itself are being published by our financial press constantly.

That is so badly wrong.

It cannot be this way.

Listen...

Do I want to buy a copy of our financial news only to be constantly asking myself if the news I am reading is really news or is the news invented to drive a stock price higher or lower?

Well do you?

You pick up a piece of headline financial news and do you want to be questioning yourself if the news is true or utter cow dung?

How now brown cow?

It cannot be right, yes?

Our financial news cannot be used as a tool for these 'cheats, liars or perpetrators' to pass on their INVENTED news to the unsuspecting public!!!!!

Our financial press cannot simply publish a news based on unknown sources.

Our financial press cannot simply publish a financial news by quoting 'we are told. it is believed'.

It's all cow dung.

And it reflects so badly on the financial newspaper itself.

For one will ask if our financial press is in cahoots with these 'cheats, liars or perpetrators'.

Or is the so-called journalist publishing the news for own vested interest?

Or is the news editor involved?

Are these questions not valid if we see our financial press continuing to publish news based on 'according to sources'?

Sources invent their stories, press publishes them, stock moves....

Is that what we want?

Lastly, the article mentions..

• The local stock market, like other bourses in the world, partially thrives on rumours and specula-tion. But to be frank, it is tough to apprehend "cheats, liars or perpetrators" in a market culture that thrives on rumours and speculation.

I don't quite agree.

Listen...

It's not that tough really.

First and most obvoius step that needs to be taken is to stop these invented news flow on our financial news.

That's the first small step....

Listen one last time...

If no one is willing to make sure this small step is being taken, well, we might as well start giving our 'financial news' a new name.

Ya, how about 'According to sources news'...

or how about 'Our Daily Financial Rumours'...

or how about 'News That Will Make Your Stock Fly'....

Credibility.

That's it.

That's the one word that says it all.

Think about it.

Seriously think about it......

The headline financial news turns that we just read yesterdat turned out to be false (denied).

Why?.

Just because our financial press continued its merry ways of publishing baselss news based on unknown sources. Yeah, the stock price of the company mentioned soars upon the publication of such news.

How?

Do we have financial news anymore?

Or do we have cooked up financial news designed just to move stock prices?

Utterly ludicrous.

The frequency of the newspapers publishing a multi-million/multi billion 'news' based on un-named sources only to have the parties involved denying the whole story.

And what do we have here?

Isn't it so clear?

Print a story, stock goes up, then the story is deemed as false.

And the dumb money will ask what if the story is fabricated for monetary purpose???

How?

Not possible?

Think about it.....

And look ahead the beautiful scenario if this keeps happening, ie nothing is done to stop such un-named source based news.

What do you see?

What do I see?

Well I see more story will be fabricated so that a monetary can be derived once the stock mentioned goes up upon the publication of the fabricated news.

Which means our financial press is now nothing but a tool so that stocks can be manipulated.

Like this scenario?

I think it is ludicrous, it's appalling, it's sickening.

It's 2013 for heaven sake.

Do you want our financial news be financial news or not?

Or do you want our financial news be nothing but fabricated news?

Don't we all want to see improvement???

From yesterday's posting Why 'According To Sources' Financial News Should Be Stopped

Published on Business Times:

• DRB-HICOM to go private?
  
  Published: 2013/01/10
  
  FIRST QUARTER TARGET: Tycoon Syed Mokhtar may make standalone offer, says source
  
  KUALA LUMPUR: Tan Sri Syed Mokhtar AlBukhary may make a standalone offer to privatise DRB-HICOM Bhd, the country's biggest automotive company, people working on the plan said yesterday.
  
  Business Times understands that the plan is being helmed by privately-held Meridian Solutions Sdn Bhd. Meridian is a unit controlled by Syed Mokhtar's top financial aide, Ooi Teik Huat.
  
  The low-profile 53-year-old Ooi is one of the Syed Mokhtar's top backroom boys, who sits on the board of many companies in which the Kedah-born businessman has a controlling stake.
  
  Ooi currently sits on the board of Malakoff and MMC Corp Bhd.
  It is further understood that Hong Leong Bank Bhd and Public Bank Bhd are the two top banks working with Ooi on the privatisation.
  
  "Hong Leong and Public Bank will help provide the financing for the exercise. It is scheduled to take place in the first quarter of this year," said the source.
  
  Business Times was also told that DRB-HICOM could be taken private for between RM3.50 and RM4 a share, and that the exercise will be solely driven by Syed Mokhtar, who controls some 55 per cent of the company.
  
  Syed Mokhtar, 61, could fork out as much as RM7.73 billion to take DRB-HICOM private.
  
  The exercise comes barely a year after he bought Proton Holdings Bhd at RM5.50 a share or 24 times estimated earnings.
  At RM4 a share, DRB-HICOM is valued at RM7.73 billion.
  
  The stock closed at RM2.63 a share yesterday, giving it a market capitalisation of RM5.08 billion.
  
  "None of the other shareholders are involved. It is a standalone bid as DRB-HICOM is severely undervalued. Its landbank itself has a net worth of RM10 billion," said the source.
  
  Neither Syed Mokthar nor his representatives on the board of DRB-HICOM have briefed the board on the planned exercise.
  
  "When they are ready with the money and the numbers tally, they will file in straight the offer to take DRB-HICOM private to the company secretary," said the source.

On today's Business Times again.

• DRB-HICOM: We've not received any privatisation proposals
  
  Published: 2013/01/11
  
  KUALA LUMPUR: DRB-HICOM Bhd is unaware of and has not received any proposals to privatise the country's largest automotive group.
  
  DRB-HICOM managing director Datuk Seri Mohd Khamil Jamil said the group was surprised by the news like everyone else.
  
  "Let me clarify that there has been no indication on the group being privatised as alleged in the papers. For the time being, DRB-HICOM is in a state of rationalising Proton (Proton Holdings Bhd) as well as its operations," Mohd Khamil told reporters here yesterday after launching the all-new Suzuki Swift.
  
  Mohd Khamil was responding to a Business Times report that Tan Sri Syed Mokthar Al Bukhary, who controls some 55 per cent of DRB-HICOM, may make a standalone offer to take the group private.
  
  The low profile businessman had not notified the DRB-HICOM board about his intention, but would only do so once he has secured the financing to make the offer.
  
  It was reported that the plan is being helmed by privately-held Meridian Solutions Sdn Bhd. Meridian is a unit controlled by Syed Mokhtar's top financial aide Ooi Teik Huat.
  
  Ooi currently sits on the board of Malakoff and MMC Corp Bhd.
  
  DRB-HICOM reportedly could be taken private for between RM3.50 and RM4 a share, meaning that Syed Mokhtar, 61, could fork out as much as RM7.73 billion. The exercise would come barely a year after he bought Proton Holdings Bhd at RM5.50 a share or 24 times estimated earnings.
  
  At RM4 a share, DRB-HICOM is valued at RM7.73 billion. The stock closed seven sen higher at RM2.70 yesterday.

Over the past years, we have seen it over and over and over again. The financial press highlights an extremely juicy piece of financial news based on an unknown source. (Do refer According To Sources ). It's a million dollar deal and the stock mentioned then jumps higher upon the publication of the news, only to come crashing down once the parties involved denies the news.

Recent case? No Such Timber Concession!

Easy way out for the publishing newspaper is claiming a bad source or a bad mistake from their financial reporter.
Which makes me wonder. What good is the financial reporter if he/she is incapable of verifying the facts?

But the most damning would be the public questioning if the news was cooked up by the source or syndicates in an attempt to derive profits from creating such news.

It gets messier once the public questions if our financial news has now become a tool for the syndicates to broadcast their cooked up financial news.

Or what if the public asks if the financial news paper is in cahoots with the syndicates?

Whatever the reasoning, once the financial news based on unknown quoted sources, is refuted by all parties involved,  the financial news becomes a laughing stock.

Some might even asks why bother buying the newspaper at all, if the news published is based on such shady sources?

Best solution?
Well, if I may, I believe it's high time for our financial news editor to wake up and clean up this mess. Get the reporters to verify their source.

The public wants and deserves to read credible news and not news cooked up as a means to gain richness.

The authorities needs to look into this shenanigans.

Less we forget that it's also a waste of public money to have our corporate leaders of the corporations  mentioned in the news, take time off from their daily work to address such baselss news reporting.

And today, what do we have?

Business Times has published yet another source based financial news.

Sigh!

Yeah... sigh!

DRB, the stock mentioned, of course is currently moving higher SOARING HIGHER based on the news. Want to guess what happens once the news is denied?

• DRB-HICOM to go private?
  
  Published: 2013/01/10
  
  FIRST QUARTER TARGET: Tycoon Syed Mokhtar may make standalone offer, says source
  
  KUALA LUMPUR: Tan Sri Syed Mokhtar AlBukhary may make a standalone offer to privatise DRB-HICOM Bhd, the country's biggest automotive company, people working on the plan said yesterday.
  
  Business Times understands that the plan is being helmed by privately-held Meridian Solutions Sdn Bhd. Meridian is a unit controlled by Syed Mokhtar's top financial aide, Ooi Teik Huat.
  
  The low-profile 53-year-old Ooi is one of the Syed Mokhtar's top backroom boys, who sits on the board of many companies in which the Kedah-born businessman has a controlling stake.
  
  Ooi currently sits on the board of Malakoff and MMC Corp Bhd.
  It is further understood that Hong Leong Bank Bhd and Public Bank Bhd are the two top banks working with Ooi on the privatisation.
  
  "Hong Leong and Public Bank will help provide the financing for the exercise. It is scheduled to take place in the first quarter of this year," said the source.
  
  Business Times was also told that DRB-HICOM could be taken private for between RM3.50 and RM4 a share, and that the exercise will be solely driven by Syed Mokhtar, who controls some 55 per cent of the company.
  
  Syed Mokhtar, 61, could fork out as much as RM7.73 billion to take DRB-HICOM private.
  
  The exercise comes barely a year after he bought Proton Holdings Bhd at RM5.50 a share or 24 times estimated earnings.
  At RM4 a share, DRB-HICOM is valued at RM7.73 billion.
  
  The stock closed at RM2.63 a share yesterday, giving it a market capitalisation of RM5.08 billion.
  
  "None of the other shareholders are involved. It is a standalone bid as DRB-HICOM is severely undervalued. Its landbank itself has a net worth of RM10 billion," said the source.
  
  Neither Syed Mokthar nor his representatives on the board of DRB-HICOM have briefed the board on the planned exercise.
  
  "When they are ready with the money and the numbers tally, they will file in straight the offer to take DRB-HICOM private to the company secretary," said the source.

 Everything is based on the source.

The source throws in a seductive $4 per share privatisation and with DRB only trading at 2.63, isn't a no brainer the stock currently is flying much higher?

So once the story is denied, let me ask you, is it OK with you that our financial news is used to promote a stock so that certain parties can cook the stock much higher?

Monday morning. 7th Jan 2013.

Published on Business Times:

• Giant timber concession for Permaju
  
  By Francis Fernandez Published: 2013/01/07
  
  KUALA LUMPUR: Permaju Holdings Bhd, which is controlled by Tan Sri Chai Kin Kong, is close to securing some 809.37 hectares of timber concession land in Sabah and Sarawak.
  
  Business Times was told that an announcement on the matter will be made by as early as this month.
  
  "The bulk of the land is in Sabah, near the Keningau area," said a source close to Yayasan Sabah.
  
  State-controlled Yayasan Sabah is the one awarding the concession.
  
  The potential concession will make Permaju the single largest land concession owner in the "Land Below the Wind".
  
  Permaju, at its peak, had some 129ha of state-given land concession in Sabah.
  
  Some of the said land has now been converted for development projects, while the rest has been surrendered to the state.
  
  Business Times was told that the new award will eclipse Permaju's previous record holdings.
  
  The impending award will be for a period of between 30 years and 60 years.
  
  Under the terms of the contract, Permaju will help clear the land, said to be a virgin jungle area, and then plant oil palm.
  
  The virgin jungle is filled with valuable timber, and proceeds from timber will go directly to Permaju.
  
  It will, however, share with Yayasan Sabah any proceeds from the planned oil palm estate.
  
  "Gross proceeds from the timber is easily more than RM1 billion," said the source.

Here's the chart of Permaju on Monday morning before trading opened.


As can be seen on the chart, Permaju ended 2012 at 42 sen and started the new year strongly on very active volume. With such a news that Permaju 'may' win a 'giant' timber concession, the stock soared on Monday morning. The Edgemalaysia carried the following news in the morning..

•  Permaju shares ride on news it may win timber concession Business & Markets 2013
  Written by Shalini Kumar of theedgemalaysia.com 
  Monday, 07 January 2013 11:22
  
  KUALA LUMPUR (Jan 7): Permaju Holdings Bhd shares rose in active trades today after news that it may be awarded about 809 hectares of timber concession land in Sabah and Sarawak.
  
  “It’s speculative play that is driven by the news. People could have known about this earlier and bought shares and now that the news has broken, they are selling, while others continue to buy,” said Goh Kay Chong, a senior dealer from SJ Securities.
  
  “This could also be cyclical play, or even pre-election play….[Permaju] is the darling of the speculators.” he added.
  
  At 10:30am, Permaju was trading at 50 sen, up 1 sen or 2%, on volume of 14.36 million. Hitting a high of 52 sen earlier, it was the third most active counter on the exchange.
  According to a news report in a local paper, the outcome of the land concession award will be made known by this month.
  
  The potential concession will make Permaju the single largest land concession owner in Sabah, said the report.
  
  Under the terms of the contract, Permaju will clear the virgin jungle and then plant oil palm. Proceeds from the timber extracted will go directly to Permaju.
  
  Gross proceeds from the timber is expected to be more than RM1 billion, the news report.

But the stock turned sharply lower later in the day to close at 44.5 sen!

News soon filtered through in late afternoon that Permaju directors are denying any knowledge of such a concession.

• Permaju directors deny knowledge of timber concession Business & Markets 2013
  Written by Shalini Kumar of theedgemalaysia.com 
  Monday, 07 January 2013 18:02
  
  KUALA LUMPUR (Jan 7): PERMAJU INDUSTRIES BHD []'s board of directors said they were not aware of the timber concession the company was supposed to receive, as reported by a local newspaper not linked to The Edge group.
  
  The article stated that Permaju was close to securing huge timber concessions in Sabah and Sarawak, with the gross proceeds from the timber potentially totalling more than RM1 billion.
  
  The company's share price rose in active trade early on Monday, but fell before the market closed.

This morning, Business Times carried the following news.

• Sabah Forestry: No timber concession issued
  
  Published: 2013/01/09
  
  KUALA LUMPUR: The Sabah Forestry Department has denied reports that Permaju Industries Bhd was close to securing a 80,937-hectare timber concession in the state.
  
  The reports, quoting sources, alluded that state-controlled Yayasan Sabah was the one awarding the 30 to 60 years concession. Part of the terms of the deal will involve Permaju to help clear the land, said to be a virgin jungle area, and then plant oil palm.
  
  "There is no such concession issued or going to be issued. Yayasan Sabah has not awarded such a concession and also has no authority to issue concessions, which is strictly the purview of the Forestry Department and state government of Sabah," the department's director Datuk Sam Mannan said in a statement yesterday.
  Mannan said Sabah does not allow the conversion of virgin jungle forests into oil palm plantation, particularly in a forest reserve. Any virgin forests, if found in the state, will be turned into TPAs (totally protected areas) and protected against any form of development, including logging.
  
  He added that apart from pockets of virgin forests that may be found in scattered localities of insignificant sizes (50-100ha), all virgin forests in Sabah have been reserved for TPAs.
  
  Mannan's statement came a day after Permaju's board of directors, via a filing to Bursa Malaysia, did not confirm the news report.
  
  "The board of directors of the company, after having made due inquiries, wishes to advise that to the best of their knowledge and belief, they are not aware of such matter stated in the said article," the company noted in the filing.
  
  Mannan said the report and speculation had done "untold damage to Sabah's and Malaysia's conservation efforts painstakingly built up over the years".
  
  "Sabah's Deramakot Forest Reserve is the first and longest certified rainforest in the tropical world that obtained the gold standard of the FSC (Forest Stewardship Council), the most important certifying body in the world. This reserve is now a model for the world.
  
  "... Also, the state has phased out short-term logging licences and our commercial forest reserves are managed on the basis of sustainability, with a duration of 50-100 years for security of tenure, along the Deramakot model.
  
  "Logging under strict control (Reduced Impact Logging), is only a small part of the management," he explained.
  
  Mannan also said that the state has more orang utans (13,000) than the whole island of Sumatra, which is at least seven times bigger.
  
  "Sabah is the first in the world to embark on the GRASP (Great Apes Survival Project), recognised by Unesco as a world leader, at Ulu Segama-Malua Forest Reserves, an FSC-certified forest.
  
  "In 2007, logging over 300,000ha was completely stopped in the interest of conserving orang utans and other wildlife, despite the opportunity cost of billions in foregone revenue," he said.
  
  On Bursa Malaysia yesterday, Permaju shares closed one per cent or 0.5 sen, higher at 45 sen, with over five million units traded.

And there we have it once again.

Our local FINANCIAL news report, elected to publish a financial news based on 'sources'. Did the reporter bother even checking with the facts? Here we have the Sabah Foresty Department and Permaju Industries denying the possibility of such a 'GIANT' timber concession (as boldy headlined by Business Times on Monday morning).

Now given the possibility that such a news would have a massive impact on the stock price, why didn't Business Times check the validity of its sources?

Now with the denials, what's the implications?

Was the GIANT timber concession news cooked up by the source to drive the stock price higher?

On today's Star Biz: http://biz.thestar.com.my/news/story.asp?file=/2012/8/18/business/11877621&sec=business

• Saturday August 18, 2012
  The E&O price surge – and collapseA QUESTION OF BUSINESS
  P. GUNASEGARAM
  
  There can be no excuse for market manipulation and every instance needs to be investigated and the culprits brought to book
  
  THE recent limit-up in the shares of Eastern and Oriental (E&O) on the back of rumours that Sime Darby will be required to make a general offer (GO) is just one illustration of how share prices can be manipulated.
  
  That incident shows why regulatory authorities must stand at watch always to ensure the integrity of markets and be prepared to take action whenever there is indication that things are not quite right.
  
  The situation arose, when Sime Darby, in a controversial deal a year ago, paid RM766mil cash for a 30% fully diluted stake in E&O. It paid RM2.30 a share, which was a massive 60% premium to the market price at that time, raising eyebrows.
  
  Sime Darby had purchased its stake from three shareholders E&O managing director Datuk Terry Tham; Tan Sri Wan Azmi Wan Hamzah, a close associate of former finance minister Tun Daim Zainuddin and formerly involved in failed property company Land and General; and Singapore-listed GK Goh Holdings.
  
  Minority shareholders of E&O, predictably, were up in arms because they did not receive such a good offer for their own shares. Some of them lobbied strongly for the Securities Commission or SC to rule that Sime Darby should make a GO for the shares.
  
  The situation became more complicated because the E&O chairman, Datuk Azizan Abdul Rahman, the husband of the SC chairman then, Tan Sri Zarinah Anwar. Azizan was reported to have increased his stake in E&O ahead of the Sime Darby purchase but it was not established that he had prior knowledge of the deal.
  
  Such a tale, and true at that, resulted in much controversy and the public gaped open mouthed as it unfolded. In the end the SC, in a decision in which Zarinah did not participate, ruled that Sime Darby need not make a general offer because control of E&O had not changed hands.
  
  That was not surprising because the trigger for a GO under the Takeover Code is 33%. Also, Sime Darby did not make any move to change management.
  
  Further, there have been many cases of companies acquiring just short of a 33% stake in a listed company without making a GO even when there were significant changes in directorships and eventually management. Any other ruling would have meant that the SC was acting inconsistently.
  
  The SC ruling disappointed minority shareholders who could not look forward to their windfall, including those who had accumulated shares in anticipation of a GO. It also meant that Zarinah's husband too would not have got any gains, something overlooked by those who like to point out that he had E&O shares.
  
  That could have become the end of matter, notwithstanding the question of whether Sime Darby paid too much for the shares and whether it could have bought it by other means, but a minority shareholder decided to sue the SC over the issue.
  
  The Singapore Straits Times reported in December that Michael Chow Keat Chye was seeking to overturn the waiver from the GO granted to Sime Darby by the SC.
  
  “If obtaining control of the company (E&O) was not the basis, motive or reason for Sime Darby's acquisition, then it would have acquired the company's shares over a period of time in the open market at a considerably lower price,” the newspaper quoted Chow as saying in his pleadings to the High Court.
  
  One would have thought that everyone would have waited for the court ruling but that was not to be. News website The Malaysian Insider reported eight days ago that the SC would make an about turn and order Sime Darby to make a GO.
  
  It quoted a government source as having said that the decision was made after a review by the leadership under new SC chairman Datuk Ranjit Singh. The E&O share price galloped, hitting limit up at RM1.92, up 30%, on Friday Aug 10.
  
  The SC promptly not only denied the report but said that it was starting an investigation into trading of the shares. Market observers called for an investigation into possible market manipulation of E&O shares. On Monday, E&O shares fell back, giving up its gains, losing over RM400mil in market value.
  
  Here's what is very interesting. On that fateful Friday, 447 million E&O shares, yes 447 million I checked twice, were traded compared to just 29 million shares the previous day. And they amounted to some 40% of the paid-up capital of the company!
  
  In just that one day, fortunes of up to about RM190mil (447x0.42) could have been made or lost, given the share price increase of 42 sen and the subsequent fall.
  
  It may not be as good as if Sime Darby had made a GO at RM2.30 but quite a number of minority shareholders could have made quite a killing, especially if they knew that the story about the SC reversing its story was untrue.
  Most certainly this sorry state of affairs needs to be investigated thoroughly and the question of how such a story could have been carried has to be answered. Those who profited illegally from such trades should be brought to book.
  
  Nothing less than the integrity of our markets is at stake here. For too long, market manipulation and insider trading have been excused on the grounds that it makes the market, that it provides excitement and that it provides opportunities to make money for both traders and brokers.
  
  But really, that's not the purpose of the market. The purpose is to provide a place where investors and others can seek a fair value for the assets they buy and sell through a fair, transparent and straightforward process that provides equal information and opportunity to all.
  
  The economic aim for all that is to provide investors with a place to raise capital efficiently so that business can flourish.
  
  It is lamentable that this basic aim of capital markets seems to be lost and it has become a place for wheelers, dealers and plain crooks to make money in less than honourable, and even illegal, ways. What a shame! And will it ever change?
  
  ■ P Gunasegaram believes that the dog should wag its tail always. And capital markets should serve the economy.
  

Well, I do agree with what's being said. Someone obviously made a killing.

Here's how E&O surge on that day after the said rumours were published.


Here's  how E&O performed the next day, the day after S&C denied everything.


As Mr.Gunasegaram puts it:

• It may not be as good as if Sime Darby had made a GO at RM2.30 but quite a number of minority shareholders could have made quite a killing, especially if they knew that the story about the SC reversing its story was untrue.

That's the whole issue isn't it?

What if someone had released those false rumours knowing very well that SC will NOT be reversing the GO decision? What if someone released those rumours hoping to profit from it?

Not possible?

Now if that case, what kind of investigation are done on the reporter and are investigation being made to uncover who that government source is? Is the source even real?

How?

I, for one, would dearly like to know what happened exactly.

The integrity of the market is under serious threat here. How could the market allow wild rampant rumours dictate the market?

And the integrity of our financial press is under serious threat also.

What good is our financial news when news reports are based on 'unknown' and 'unrelaible' sources who are only leaking unfounded news so that great monetary profit can be made based on these wild rumours?

Will we ever see the culprits be brought to justice?

Please don't let us forget that this shambolic event did take place in 2012........


previous postings:

• And The Sources Strikes Big At E&O
• And E&O Plunges After SC Denies MGO Rumours

 

The day after And The Sources Strikes Big At E&O

• Published: Monday August 13, 2012 MYT 9:17:00 AM
  E&O slides after SC refutes MGO report
  KUALA LUMPUR: The securities of Eastern & Oriental Bhd (E&O) fell after the Securities Commission refuted a portal news report that it would force Sime Darby Bhd to undertake a mandatory general offer for the remaining E&O shares.
  
  At 9.01am, E&O fell 30 sen to RM1.60 with 2.57 million shares done, the call warrants, E&O-CA fell 10.5 sen to six sen, E&O-CE tumbled nine sen to 10.5 sen and E&O-CG lost 6.5 sen to 20.5 sen.
  
  The FBM KLCI rose 2.74 points to 1,648.10. Turnover was 29.13 million shares valued at RM25.05mil. There were 81 gainers, 45 losers and 94 counters unchanged.
  
  Last Friday, the SC said its position on the MGO requirement in the Sime Darby E&O share acquisition remained unchanged as per the SC statement issued on Oct 11, 2011.
  
  "The decision is now subject to judicial review which is pending in court," it said in a statement.

Here's how the stock traded today.


The daily chart tells a better picture.


But none tells a better than the following chart.

Note how the stock shot up after the 'according to sources' news was posted after 4 pm.



Shall we say thanks to the 'sources' now....

Far too long I have been highlighting the According To Sources issue on this blog. After a while this blog gets caught in a repetitious cycle of repeating and repeating and repeating itself. Is like, do you guys and gals really care? Or perhaps it only matters if it happens to us ( I do hope not). I just don't know.

As mentioned before:

• Yeah, our financial news can be really incredible at times. Many a times, a story will be spun by our financial news wizard reporters. The way they write, the way they spin the story around and around, they can really make any given stock sounds soooooo sexy.

And sexy stocks do sexy stuff. The stock prices soar.

Think about it.

I write an article, I throw in the 'according to sources' this and that and that is going to happen. It's going to make Fly Kacang Fly Bhd fly!

Punters read the story, they treat those words as gold.

They get on the phone, they call their remisers and orders truckloads of the Fly Kacang Fly stock. Or they just let their fingers walk the talk by keying their truckloads of the stock via on-line trading.

And as long as they make their money, they don't care whether the story is really true or whether the story just cooked up to seduce them to punt the stock 

Take for example, the last posting made on this According To Sources issue: And According To Sources .... . Did that sexy story came out exactly as what the so-called sources clam??

And I said many times, anyone could a source of imformation. The Fly Kacang Fly's mak cik who brings the tea for the Boss could be a source of information, yes? The toilet cleaner also could be one. Anyone in Fly Kacang Fly could be a source. Whether they are reliable source is another issue.

Or what if the source does not even exist? What if the 'according to source' is used just to lend some form of credibility to the said rumours?

Not possible?

Anyway, yesterday, the SOURCES hit big time. Really big time. Center stage. It's showtime!

On MalaysiaInsider: http://www.themalaysianinsider.com/malaysia/article/sc-to-order-sime-general-offer-for-eo-say-sources/

• SC to order Sime general offer for E&O, say sources August 10, 2012
  
  KUALA LUMPUR, Aug 10 — In a volte face, the Securities Commission (SC) will now order Sime Darby Bhd to make a general offer for Eastern & Oriental Bhd (E&O) shares after buying a 30-per cent stake last year, say government sources.
  
  The Malaysian Insider understands the decision was made after a review by the leadership under new SC chairman Datuk Ranjit Ajit Singh.
  
  “The SC has reviewed the matter and decided to overturn the earlier decision made when Tan Sri Zarinah Anwar was the chairman,” a government source told The Malaysian Insider.
  
  Ranjit, who was the SC managing director, took over as chairman after Zarinah ended her term last March 31.
  
  Another source confirmed the review and said the decision will be made public soon.
  
  Sime Darby purchased its controlling 30 per cent interest in the property developer from three major shareholders — managing director Datuk Terry Tham, Singapore’s GK Goh Holdings and a group of investors led by businessman Tan Sri Wan Azmi Wan Hamzah — at the end of August last year in a deal that valued E&O shares at RM2.30 a piece.
  
  The purchase price represented a 60 per cent premium over the value of the shares in the company on the open market when the deal was announced.
  
  The RM776 million deal triggered unease over the widely-perceived coddling by the agency of large state-controlled companies at the expense of minority shareholders when exercising its authority on corporate takeovers.
  
  The SC ruled six weeks after Sime Darby’s purchase of the three blocks that the plantation-based conglomerate need not make a general offer, prompting E&O minority shareholder Michael Chow to sue the SC for failing to compel Sime Darby to make a general offer for the rest of the shares.
  
  The legal suit has renewed debate over the SC’s handling of alleged irregular trading activities and had put pressure on Zarinah, whose husband — the E&O chairman — had raised his personal stock holdings in the company just weeks before Sime Darby announced the acquisition.
  
  The SC has also filed an application to recuse the judge hearing the suit as he used to be with the regulator. But the judge dismissed the application, only for the SC to file an appeal with the Court of Appeal, which heard the case yesterday.
  
  Singapore’s Straits Times reported last January that a SC task force found that Sime Darby was obliged to make a general offer for E&O shares after acquiring a 30 per but was superseded by the regulator’s top ruling authority.
  
  The daily reported that the task force was of the view that a general offer obligation had been triggered as a new “concert party” was created between Sime Darby and Tham, who jointly controlled more than 33 per cent in the property concern after the deal.
  
  Malaysia’s takeover rules stipulate that any party that acquires more than a 33 per cent interest in a publicly-listed entity must carry out a general offer for the remaining shares.
  
  A general offer can also be triggered if a new party buys less than 33 per cent but secures management control of the target company.
  
  But the SC’s final ruling three-member committee adjudged “in a majority decision” that there was no general offer obligation as Sime Darby and Tham were not acting in concert, according to an affidavit by the agency’s second-most senior commissioner Datuk Francis Tan, which was sighted by the Singapore daily.
  
  The committee also accepted the task force’s recommendation that the three groups that sold the blocks of E&O shares to Sime Darby did not collectively control the company and that the disposal did not trigger a general offer.

That news came late in the afternoon.

This sexy piece of stock started a buying frenzy. It was incredible. Some were screaming for the stock to go limit up. This piece of news whose sole credibility was based on  sources, un-named sources. ( Ever wonder who these sources are?)


Notice how E&O took off for the moon at around 4 pm.

And then came the news at 5.50pm.

http://biz.thestar.com.my/news/story.asp?file=/2012/8/10/business/20120810174923&sec=business

• Published: Friday August 10, 2012 MYT 5:50:00 PM
  SC's position on GO in Sime-E&O remains unchanged By Joseph Chin
  
  KUALA LUMPUR: Sime Darby Bhd does not have to make a general offer for the remaining shares in Eastern and Oriental Holdings (E&O) after it acquired a 30% stake, according to the Securities Commission.
  
  The SC said in a statement on Friday that its position on the GO requirement in the Sime Darby-E&O acquisition remained unchanged as per the statement issued on Oct 11, last year.
  
  "The decision is now subject to judicial review which is pending in court," the SC said.
  
  Securities of E&O surged in active trade late Friday on a news portal report that the SC would now order Sime Darby to make a GO for the remaining E&O shares.
  
  E&O surged 42 sen to close at RM1.90 with 44.74 million shares done while its call warrants E&O-CA jumped 16c to 16.5 sen.
  
  In the Oct 11 statement, the SC had stated it concluded the review of the circumstances surrounding the acquisition of 30% equity interest in E&O by Sime Darby for any Take-Over Code implication.
  
  The SC had then stated in the course of the review, parties involved in the transaction were interviewed and relevant documents procured.
  
  It said the review included an assessment of possible concert party relationships between and amongst the parties involved. Precedents in Malaysia and practices and rulings in other jurisdictions on similar issues were also examined.
  
  "Having analysed all the evidence gathered, it is the SC's finding that the acquisition of the 30% equity interest in E&O by SDB had not given rise to a mandatory offer obligation under the Malaysian Code on Take-Overs and Mergers 2010," according to the statement.

Oh oh!

How now brown cow?

SC is now denying the news published on Malaysia Insider.

And this is a delima. A massive delima for punters who punted based on the news released by Malaysia Insider.

All thanks to Malaysia Insider's un-named government sources, these punters will be worried about the fate of their punt made yesterday afternoon.

Will the denial send the stock plunging?

How now brown cow?

Would you continue to punt on stocks based on news sources who quotes un-named sources?


( see also: http://cgmalaysia.blogspot.com/2012/08/sc-to-order-sime-general-offer-for-e.html )

( ps: if this blog posting was published at 4:30 pm, I wonder what would be the reaction?  Would I get 'Here we go again... pouring cold water again... Ah Chi Ah CHor so much ..... )

Yeah, our financial news can be really incredible at times. Many a times, a story will be spun by our financial news wizard reporters. The way they write, the way they spin the story around and around, they can really make any given stock sounds soooooo sexy.

Let me highlight one OLD sexy told back in 2007.

Here's the article in full.

• Saturday May 19, 2007
  DiGi and Green Packet may join forces
  By JOSE BARROCK
  
  RELENTLESS best describes the speculative hype over DiGi.Com Bhd's rumoured tie-up with Time dotCom Bhd. Yet, both companies have consistently denied such a possibility when queried by Bursa Malaysia.
  
  It appears now that there may be another tie-up being thrashed out by DiGi, but only this time it involves Mesdaq favourite Green Packet Bhd. A source says DiGi is in talks to take over Green Packet in an exercise that may involve share swaps. The planned merger will result in existing Green Packet shareholders owning an interest in an enlarged entity instead.
  
  It is understood that talks are ongoing and the issue of pricing is being thrashed out. As at end-March this year, Green Packet's net asset per share stood at some 96 sen. The counter finished on Thursday at RM4.20 while DiGi ended the same day at RM20.40.
  
  Green Packet has proposed a transfer to the main board of Bursa Malaysia upon the completion of a proposed bonus issue and share consolidation, which got the nod from shareholders at its recent EGM.
  
  An analyst from a local brokerage says, “For tech companies such as Green Packet, the net asset per share is of little significance as the share price actually reflects the potential in the company's business. So the valuation will have to be based on that premise.”
  
  “There were talks between DiGi and Time dotCom, but that was a cash deal. This one (DiGi and Green Packet) may involve a share swap which DiGi may more inclined towards,” says the source.
  
  Company officials have stated that DiGi is looking to spend in the region of RM900mil this year to upgrade its network.
  
  The impetus for DiGi to stage such a corporate manoeuvre is quite clear, in fact it has been chronicled umpteen times and yet the company has remained resilient throughout. To recap, it was not awarded a 3G license and was unable to secure a WiMax license, which would have enabled it to roll out broadband initiatives. Yet, the need to move into broadband is compelling for the telco as it continues to drive its business and expand its revenue stream.
  
  On the other hand, Green Packet was one of the lucky four who clinched a WiMax licence earlier this year. The company via its unit Packet One International Sdn Bhd bought 55% equity in MIB Comm Sdn Bhd (a company awarded a WiMax licence recently) late last year for about RM6mil. With that, Green Packet's appeal to DiGi is easy to appreciate; it is eyeing the WiMax licence.
  
  DiGi’s chief executive officer Morten Lundal dropped some vague hints recently at the company’s annual general meeting: “We are not against any acquisitions, but we are not on an acquisition hunt either. We’re looking at a long-term situation and we would like to have a broadband platform. We’ll seek spectrums and we’ll look at partnerships. When it arrives in a positive way for us, we’ll go further.”
  
  Green Packet, presently the largest company by market capitalisation on the Mesdaq market, has already laid the groundwork to roll out its WiMax initiative, SONmetro solutions, which is both WiMax and Wi-Fi compatible, by year-end.
  
  The company has a presence in China, the Middle East and North Africa among others and has an associate stake in GMO Ltd a company listed on the London Stock Exchange’s Alternative Investment Market. For its first financial quarter ended March this year, Green Packet posted a net profit of RM10mil on the back of RM31.4mil in sales, which is a gain of about 26% and 173% respectively from a year ago.
  
  The company’s chief executive officer Puan Chan Cheong is the company's main driving force.

Since article is back in 2007, the Star Biz link is broken but the article can still be viewed at http://www.mobile88.com/news/read.asp?file=/2007/5/19/20070518222114

Here's my inteprtation of the article...

• Saturday May 19, 2007
  DiGi and Green Packet may join forces
  By JOSE BARROCK

Try to remember the wizard who wrote the article...

• RELENTLESS best describes the speculative hype over DiGi.Com Bhd's rumoured tie-up with Time dotCom Bhd. Yet, both companies have consistently denied such a possibility when queried by Bursa Malaysia.

So at first, the market speculation was the tie-up between Digi and Time dotCom. But both companies had strongly ruled out such possibility.

So what's next?

Worry not. There's still a story to be spun....

Here comes Green Packet. Notice how this particular wizard, Jose Barrock, spins the story.

• It appears now that there may be another tie-up being thrashed out by DiGi, but only this time it involves Mesdaq favourite Green Packet Bhd. A source says DiGi is in talks to take over Green Packet in an exercise that may involve share swaps. The planned merger will result in existing Green Packet shareholders owning an interest in an enlarged entity instead

It appears, may, according to a source.

Sounds familiar? Where have you hear such words before?

Compare it to financial articles written nowadays. Any different?

• It is understood that talks are ongoing and the issue of pricing is being thrashed out. As at end-March this year, Green Packet's net asset per share stood at some 96 sen. The counter finished on Thursday at RM4.20 while DiGi ended the same day at RM20.40. 

• “There were talks between DiGi and Time dotCom, but that was a cash deal. This one (DiGi and Green Packet) may involve a share swap which DiGi may more inclined towards,” says the source. 

So says the source.

Of course it's now 2012.

Look at DiGi and then look at Green Packet now.

How?

Don't you admire our financial wizard reporters who can spin out endless stories based on unknown sources?
Oh yeah... big wheels keep on spinning.....

On Star Biz: IOI mulls relisting of arm

• Monday February 13, 2012
  IOI mulls relisting of arm
  By RISEN JAYASEELEN and DANIEL KHOO
  
  PETALING JAYA: IOI Corp Bhd is mulling a relisting of its property arm that would see the group unlock values in that segment and enhance the attractiveness of the parent company to investors as a more plantation-focused company, according to reliable sources.
  
  “The group is in discussion with two investment banks on this to get feedback, especially on the right timing of the exercise,” said a source.
  
  Analysts said the relisting of its property division would increase the stature of IOI Corp as a pure plantation play which would likely have higher valuations.
  
  “It will reduce the conglomerate discount and transform IOI Corp into a pure plantation play, with a controlling stake in a valuable property company IOI Properties. Sole industry companies usually tend to fetch higher valuations,” an analyst with a local bank-backed research house said.
  
  IOI Corp may wish to also time the relisting of its property arm in line with a more bullish view on the property sector.
  
  In a sales note to its clients issued in January, Maybank IB said that potential downsides had already been priced into the property sector and that it did not discount the possibility of raising its call on the property sector from “neutral” to “overweight” in the medium to longer term as developers today were “backed by considerable unbilled sales, providing near-term earnings visibility.”
  
  IOI Corp had privatised its arm in 2009. Then known as IOI Properties Bhd, IOI Corp had on Februuary 2009 launched a takeover offer at RM2.60 per share.
  
  The takeover was successful and IOI Properties was subsequently delisted on April 28, 2009. It is today wholly-owned by IOI Corp. IOI Corp has been actively growing its property business since.
  
  In January it acquired six acres of land in Singapore for RM995.5mil to build high-end condominums and will have to settle the entire amount to the government of Singapore within 90 days from the date of the tender acceptance letter.
  
  Presently, it has seven projects which it is developing locally with estimated gross development values (GDVs) of almost RM20bil.
  
  Properties can testify to its track record in building property projects that have sold well. Excluding the latest land buy in Singapore, it is also presently developing high-end projects in the southern neighbouring island state with GDVs close to RM6bil.
  
  IOI Properties has completed property development projects in Puchong, Putrajaya, southern Johor and Singapore before.
  
  Meanwhile, banking sources also said that IOI Corp was in talks with banks to raise more funds.
  
  “It is in a good position to do so, considering its huge cash flows from its plantation side of the business,” said one banker.
  
  The funds raised should give IOI Corp sufficient funds to not only pay for the Singapore land acquisition but also ready funds in the event it chooses to buy more assets such as plantation land.
  
  Based on its results for the first quarter ended Sept 30, 2011, IOI Corp had total short and long-term borrowings of RM688.24mil and RM4.87bil respectively. Most of these debts are denominated in the US dollar, the Singapore dollar and the yen.
  
  IOI Corp had cash and cash equivalents of RM3.22bil as at Sept 30, 2011.

Seriously?

Seriously?

You seriously cannot be kidding!!!

For those who 'forgot', do read how IOI Corp treated their minority shareholders of IOI Properties when they took IOI Properties private at a shockingly low price and worst of all, the privatisation was made one year after IOI Properties had completed a rights issue!

( In my humble and flawed view, this was the WORST privatisation done in KLSE history! )

Do read past postings:

• Minority Shareholders Of IOI Properties Are Screwed!

• IOI Properties?

• IOI Properties Minority Shareholders: You Do NOT have to SELL!

• On IOI Properties Privatisation Again

On 28th Jan 2012, the following article was published on Star Biz.

• Saturday January 28, 2012
  Europlus’ RM7bil concession needs answers
  A QUESTION OF BUSINESS By P. GUNASEGARAM
  
  At a time when many concessions are near expiry, a 60-year toll-road one perplexes
  
  A CONCESSION for 60 years may well be a record for Malaysia and the only thing that comes to mind, which is longer than that is Malaysia's agreement to supply water to Singapore for hundred years signed in the sixties when the latter moved out of Malaysia.
  
  Even for the North-South Expressway, the original concession period was half of that at 30 years while its length was more than twice that of the proposed West Coast Expressway at over 770km.
  
  Not only is the concession extremely long, it is also very expensive with a development cost before land acquisition estimated at a whopping RM7.07bn for 316 kms from Banting, Selangor to Taiping, Perak out which 224km or some 70% will be tolled.
  
  Kumpulan Europlus Bhd (KEuro), a long-ailing public-listed company that had been involved in property projects especially housing, which had been mired in problems, announced that the concession was obtained by its 64.2% owned West Coast Expressway Sdn Bhd (WCE).
  
  The project, KEuro said, received an approval letter from the Public Private Partnership unit of the Prime Minister's Department but it does not appear that a government announcement has been made so far.
  
  KEuro, which is majority owned by entrepreneur Tan Sri Chan Ah Chye and another listed company IJM Corporation Bhd, said the project will be on a build, operate and transfer basis but it is clear that with a 60-year concession, many of us, including the project promulgators won't be around when the time for transfer arrives.
  
  Apart from the long concession period, there are other features which make it very attractive to WCE, including assistance from the government with a support loan of RM2.24bil starting from 2013 with an interest rate of 4% a year.
  
  Over and above this, there is an interest subsidy of up to 3% from commercial loans for 22 years. Both interest rate subsidies alone could be worth up to some RM4bil over the period, assuming a principal of RM6bil jand depending on how the principal is repaid.
  
  Meantime, the land acquisition cost of an estimated RM980 million will also be borne by the government. But any toll revenue over an agreed traffic volume will be shared 70:30 with the government getting the lion's share. However, on full settlement of the loan, WCE will get 70% instead.
  
  On almost every count, it looks like WCE has got itself a damn good deal. An examination of the deal based on earlier estimated construction costs and international costs again shows it to be favourable.
  
  Curiously, KEuro had announced in May 2007 that WCE had obtained approval for the same concession but on much less favourable terms, raising questions as to why the deal appears to be so much better now.
  
  At that time, it involved 216km and linked the same two towns, Banting in Selangor and Taiping in Perak, the main difference apparently being there was no construction of some 90-100km of non-tolled roads which there is now.
  
  But still, the overall development cost estimated then was substantially lower at RM3.02bil and the concession period was less by almost a half but still very long at 33 years.
  
  Comparing costs per km, it was substantially lower in the 2007 deal at RM13.9mil per km compared to RM22.3mil for the deal just announced. Over the last four years, WCE has been renegotiating the deal with the government and this seems to be the final outcome.
  
  While the cost of construction of expressways differs tremendously among different countries and terrain as well as the type and quality of expressway, a 60% increase in costs over four years for essentially the same area and terrain seems way too much.
  
  International comparisons are difficult because of different costs. India has a programme to build 1,000km of expressways for RS16,680 crores which works out to about RM10bil at current exchange rates. This translates to about RM10mil per km, less than half the figure for the West Coast Expressway.
  
  Considering that roads are expensive and the public is already burdened by an extensive system of tolls, the government should be rather circumspect about granting toll road concessions, especially one for the hitherto unheard period of 60 years.
  
  Before one can make a final judgement of whether this deal is fair, more details need to be released. The current and expected traffic on the highway has to be projected, the cost of construction established and a proper rate of return established so that a net value can be ascribed to the project.
  
  To get the best deal for itself and for the rakyat, the government should have been transparent over the process and invited all qualified parties to bid to keep project cost, tolls and the concession period as low as possible.
  
  It is still not too late to do that.
  
  Independent consultant and writer P Gunasegaram (t.p.guna@gmail.com) hopes against hope for transparency, open tenders and proper evaluation to save public money.

The issues raised were serious and TI-M was quick to express its concerns over the lack of transparency. The following was posted on the EdgeMalaysia on 30th Jan 2012.

• TI-Malaysia: Explain awarding of RM7.07 bn West Coast Expressway project Written by Joseph Chin of theedgemalaysia.com
  Monday, 30 January 2012 18:36
  
  KUALA LUMPUR (Jan 30): Transparency International Malaysia (TI-M) has expressed concern over the apparent lack of transparency and proper procedure in the awarding of the RM7.07 billion West Coast Expressway concession project.
  
  Its president, Datuk Paul Low said this mega project would involve massive public financing of a soft loan of RM2.24 billion and payment of RM980 million for land acquisition, and an unprecedented 60-year toll concession.
  
  “TI-M views with concern the apparent lack of transparency and proper procedure in the award. Given the public funding and long concession period, there could have been proper governance and transparency in the award through an open, transparent and competitive procurement process and public disclosure of the terms and conditions of the contract,” he said in a statement.
  
  To recap, on Jan 26, KUMPULAN EUROPLUS BHD [] announced to Bursa Malaysia that its 64.2% owned West Coast Expressway Sdn Bhd (WCE) has received the government’s approval to build the 316-km west coast project costing RM7.07 billion.
  
  The 316-km Banting to Taiping expressway would be on a build-operate-transfer (BOT) with a concession period of 60 years.
  
  KEuro also said the land acquisition cost of up to RM980 million for the project would be borne by the government.
  
  The company had also said a government support loan of RM2.24 billion, starting from 2013 at an interest rate of 4% per annum, and an interest subsidy, of up to 3% from commercial loans for a period of 22 years, would be granted to WCE,” it said.
  
  KEuro had then said toll revenue in excess of an agreed traffic volume would be shared on the basis of 70:30 between the government of Malaysia and WCE till full settlement of the government support loan and subsequently 30:70 after the loan is settled.
  
  However, on Monday, Low pointed out that such a mega project and also its impact on the public was an ideal candidate for implementing the Integrity Pact (IP), a tool for curbing corruption risks in public contracting projects.
  
  “The government has recognised the potential benefits of IPs by a Treasury circular dated Dec 16, 2010 outlining guidelines for implementing IPs in government procurement.
  
  “Further, MRT Corp., the GLC tasked with implementing the MRT project, has agreed to incorporate the IP in its procurement exercises,” he said.

Today, we have an article on BTimes.

I was shocked to read how BTimes would allow an UN-NAMED SOURCE to feature in the write-up. I thought the issues raised were dead serious and to have an un-named source making a lot of statements on the issue were rather disturbing.

Sigh.

Why can't the source be named?

Don't they know there's not much value and credibility in the article when everything is based on an unknown source?

Sigh!

What an insult!

• 'Incentives not sweetheart deal’
  
  By ADELINE PAUL RAJ Published: 2012/02/02
  
  LONG-TERM PLAN: Soft loan, perks for Kumpulan Europlus are to jumpstart expressway project, says source
  THE RM7.07 billion West Coast Expressway (WCE) project awarded by the government to Kumpulan Europlus Bhd (K-Euro) is no “sweetheart deal”, says a source close to the project.
  
  The deal, which involves the government providing KEuro a soft loan of RM2.24 billion at four per cent interest, among other supportive moves, as well as a 60-year toll concession, has drawn criticism that it favours the public-listed company at the government’s expense.
  
  The source, however, argued that the deal was structured with government support in order to get banks comfortable enough to help fund the deal.
  
  Without the soft loan, no bank would have come forward and the project would never take off, he said.
  
  The 316km WCE, which will link Banting, Selangor to Taiping, Perak, is meant to be an alternative to the increasingly congested North-South Expressway (NSE).
  
  It will take five years to complete the project, with work expected to start by yearend, the source said.
  
  “Traffics in this corridor is generally quite low except for the Klang Valley area, but the government sees huge long-term potential in the project in reducing traffic pressure on the NSE,” the source told Business Times yesterday.
  
  With low traffic projections and high costs, the government’s support loan provides “enough comfort for bankers to support the deal from the beginning”, he added.
  
  The project now would cost more thandouble to build than it would have in mid- 2007, which was when the project wasoriginally planned, due to several reasons, including that building material costs were now substantially higher, the source said.
  
  He said the estimated RM7.07 billion cost took into account the fact that the highway stretch was 100km longer than originally planned, and would include 5km of elevated sections (in the Klang Valley) that cost “four to five times more”, extra structures, and “fairly large” bridge crossings over four rivers.
  
  On rising material costs, he said stones and sand as well as bitumen, for example, now cost about three times more than in 2007, while the price of steel has shot up by more than 150 per cent.
  
  “All of these have contributed to the added cost,” he said.
  
  It will take time to build up traffic volume on the WCE, which is why a longer concession period is needed, he said, adding that it could take 10 years before “decent” traffic builds up.
  
  KEuro’s proposed 60-year concession is the longest known so far in the country.
  
  By comparison, it was offered a concession of 33 years in 2007.
  
  The traffic volume forecast in the current deal is about “20-odd per cent” lower than in 2007 and deemed more “realistic”, the source said.
  
  This was why, he said, the company was prepared to share toll revenue in excess of agreed traffic volume with the government on a 70:30 basis, in favour of the government, for as long as it’s paying off its soft loan.
  
  Under the current deal, the government is also providing KEuro subsidy of up to three per cent for commercial loan interest payments. Land acquisition costs of RM980 million is also to be borne by the government.

And here is my question. With this unknown source admitting that traffic is generally low, why this highway project????

Why?

Can the projected traffic justify that 7 Billion price tag?

****************************

ps: Oh yeah, I deeply deplore the usage of 'according to sources' in our financial news and reports. When the source is un-named, how does the reader know the credibility of the said article. And seriously, shouldn't financial news based on facts and quotable sources?

When the financial news is based on un-known source, the financial news becomes nothing more than a gossip tabloid!

I pray that such practise ends!

On the 4th Jan, the EdgeMalaysia highlighted the following article: Xidelang hits six-month high

• ... There were no new filings for substantial shareholding changes at press time.
  
  Ding Peng Peng, its co-founder, managing director and CEO, owned 54.55% of the company as at May 3, 2011.
  
  At yesterday's close of 37.5 sen, there is a 14.7% upside potential to the 43 sen apiece that Mercury Securities said the stock was worth in a note dated Nov 25, 2011.
  
  Notably, Xidelang's unaudited net asset per share stood at 72.72 sen as at Sept 30, 2011, up from 56.14 sen as at Sept 30, 2010.
  
  Xidelang, which recently got shareholders' mandate to buy back its shares from the open market, sold its shares for 63 sen apiece at its IPO on Nov 11, 2009.
  The low valuations accorded by the market had sparked rumours that its major shareholder may take the company private, one source said. This could not be immediately confirmed at press time....

One source... said major shareholder MAY TAKE THE COMPANY PRIVATE!

All it takes is just one source.... and the stock flew up, up and awayyyyyy!!!


Nice eh?

Just one source. Don't care who the source is lah. It could be tea lady. The toilet cleaner. The car jockey. It's just one source and don't bother about finding out who that one source is lah. The EdgeMalaysia would not reveal their source.

So who cares, yes?

The stock flew!

The next day on BusinessTimes: Decisive year for Xidelang

• His company’s profit has been soaring over the past three financial years only for the shares to keep heading south.
  
  “It is a bit frustrating ... the investment community tells me that this has a lot to do with perception of being a mainland China company,” Ding, who is also the managing director of the company, told Business Times in an interview.
• “Ever since then, mainland companies have been painted in one brush. Look, Xidelang is not a fly by night company. We have been here three years, been profitable and have been building on a dividend track record,” said Ding.

Then in mid afternoon, the EdgeMalaysia came out with this piece: Navis Cap keen to buy Hong Peng's stake in Xidelang

• Navis Cap keen to buy Hong Peng's stake in Xidelang Written by Joseph Chin of theedgemalaysia.com
  Thursday, 05 January 2012 15:10
  
  KUALA LUMPUR (Jan 5): XiDeLang Holdings Ltd (XDL) says Navis Capital has approached the former's major shareholder Hong Peng International Holdings Ltd to acquire its stake.
  It said on Thursday that 'Navis Capital had indicated their intention to acquire the entire shareholdings of Hong Peng in XDL during an informal discussion'.
  
  Trading in the shares of XDL was voluntarily suspended from 2.30pm to 3.30pm following the announcement.
  According to filings to Bursa Malaysia, the British Virgin Islands' registered Hong Peng owns 240 million XDL shares or 60% as at Nov 11, 2009.
  
  XDL share price was up one sen to 37.5 sen before trading was suspended

And the next morning, BTimes followed it up: Navis makes offer for major stake in Xidelang - Business Times

• Xidelang, China’s second second largest maker of running and skateboard shoes, is some 54.6 per cent owned by HongPeng International Holdings Ltd.
  
  HongPeng in turn is controlled by Mark Ding Peng Peng, who is also the managing director of Xidelang.
  
  Analysts said Navis’ plan to buy out HongPeng’s entire shareholding in XDL would trigger a mandatory general offer as its shareholding would breach the 33 per cent level.
  
  “The likely outcome will be the new owners taking the company private,” Mercury Securities Sdn Bhd head of research, Edmund Tham, told Business Times.
  
  Tham believed that Navis might offer between 60 sen and 90 sen apiece for the shares it did not already own in the company.
  
  “It is obvious that Ding is looking to exit the company as he is disappointed with the performance on the local bourse but he may strike a deal with Navis to stay on the board,” Tham said.
  
  In a filing to Bursa Malaysia yesterday, XDL said Navis had indicated its intention during an informal discussion with HongPeng International....

Yeah.. it is so obvious that Ding is frustrated with the stock performance on Bursa Malaysia... but ... the announcement just mentioned Navis intention during an INFORMAL discussion with HongPeng International...

Just an informal discussion hor... err... correct me if I am wrong.... but this is like a coffee shop chit chat isn't it?

INFORMAL discussion hor...

But yet XDL decided that it was improtant to announce it ....

The SunDaily also carried this 'NEWS' ... XiDeLang confirms takeover interest

With such 'news', the stock had a WILD trading day!



It opened higher at 38 sen (previous day closing price was 36.5 sen). The stock soared to 44.5 sen but soon plummeted to close the day lower at 35.5 sen!!!

Did the market realise that all the hoo-ha was based on an INFORMAL discussion? And yeah, no price was even mentioned!

Star Biz wrote on XDL the next day: XiDeLang: Navis showed interest in 55% stake

• ... Its announcement was in response to a news article published in a local Chinese daily which stated that Navis Capital was interested to acquire XiDeLang shares.
  
  “There was no discussion on Navis Capital's offer price during the informal discussion,” it added.

The local Chinese daily mentioned was Nanyang Press.

Getting fuzzy?

Yeah, XDL had to make another announcement yesterday evening on Bursa website: OTHERS

Some 'interesting facts'  mentioned in that announcement. (Thanks TK for your comments! )

• XDL, after having made due and diligent enquiry with our major shareholder, namely HongPeng International Holdings Ltd (“HongPeng”) and the Board of Directors, wishes to inform that the discussions between Navis Capital and HongPeng held during October and November of last year were solely exploratory in nature and there was no offer being made or a price range indicated by Navis Capital.
  These exploratory discussions were discontinued in late November 2011.

The so called talks were made during Oct and Nov 2011!!!!!!!!!!!!!

What??? What??? What????

Them talks happened few months ago?????

Huh????

Like this also can?

So what's the idea to highlight this issue to the media?

To stir fry the stock???????

Gee!!!

And the next statement obviously blew everybody's mind!!!

• XIDELANG Holdings Limited's largest shareholder, Hong Peng International Holdings Ltd, has no intention of selling its stake in the shoe producer

WTH!!!!

HongPeng doesn't even have the intention to sell its stake in XDL!!!!

So what on earth were all the 'news' for?

Stir fry the stock, is it????

And then on Business Times this morning....

• Xidelang board to meet over Navis' buyout offer
  
  By Francis Fernandez Published: 2012/01/10
  
  XIDELANG Holdings Ltd's board is expected to meet tomorrow to discuss the approach made by private equity firm Navis Capital to buy out the company's major stakeholder.
  
  Xidelang, China's second largest maker of running and skateboard shoes, is 54.6-per cent owned by HongPeng International Holdings Ltd.
  
  HongPeng is in turn controlled by Mark Ding Peng Peng, who is also the managing director of Xidelang.
  
  Days before Xidelang had informed the stock exchange of the offer from Navis, Ding had told Business Times that he was frustrated with the lacklustre performance of the company on the stock exchange.
  Xidelang is the third China-based company to be listed on Bursa Malaysia. Its share price had fallen by as much as 35 per cent last year.
  
  Up to the nine months ended September 30, 2011, Xidelang's pre-tax profit stood at RM84.52 million, while for the 12 months of 2010, Xidelang's pre-tax profit stood at RM106.78 million.
  
  Additinally, Xidelang also has about RM134 million in cash while its book value per share comes in at just under 60 sen.
  "Ding will reject the offer from Navis, and instead put in a rival proposal to create liquidity in the market place," a person familiar with the company said yesterday.
  
  The proposal, which Ding plans to table to the board, calls for the company to reward its shareholders.
  
  "It will be a script-based reward exercise," said the source.
  
  As such, Ding will likely propose that Xidelang understake a bonus issue and a warrant exercise so that shareholders who did not directly benefit from Xidelang's growing business will be rewarded in the market place.
  
  As it stands, Xidelang is the only mainland-based company which has a consistent dividend policy in place.
  
  Xidelang paid out a 1.5 sen dividend in 2010 and a one sen dividend the following year, giving shareholders a 12-month dividend yield of 2.63 per cent a year.
  
  Navis, run by former executives of Boston Consulting Group, manages about US$3 billion(RM9.3 billion) in equity capital and is believed to want to take Xidelang private.
  
  It also plans to group Xidelang with other shoe makers from China and list them as one entity on the Hong Kong Stock Exchange.

Sigh!

And so Mr. Ding feels so frustrated about the lousy stock performance from XDL.

I wonder why.

Yeah, if you open the announcement: Quarterly rpt on consolidated results for the financial period ended 30/9/2011, you would see that XDL have 136.5 million cash but its borrowing now totals 47.170 million!

Compare these figures to that posting I made on XDL last July 2011: Regarding XDL. Back then XDL had 98.3 million cash and loans of 19.3 million.

XDL's financial has weakened despite the strong earnings it announced.

And the issue mentioned in the posting Regarding XDL remains.

So XDL said it has so much money.

But yet despite having so much money, I CANNOT UNDERSTAND why XDL's cost of financing is more than its interest it gets for its cash deposits! Cash 136.5 million woh. Borrowings 47.1 million woh! So why XDL has financial costs of 905 thousand for the that quarter, while its interests received is only 315 thousand?