Thursday, July 30, 2015

TA Enterprise clear out rumours on Privatization

By Yimie Yong - The Edge

KUALA LUMPUR: TA Enterprise Bhd has no plans to sell its stockbroking business, its managing director and chief executive director Datin Alicia Tiah said, but it is open to merger and acquisition (M&A) opportunities to expand its business.

Tiah said the stockbroking business is still considered a "cash cow" for the group, although its profit contribution has fallen sharply to 20%, from 80% previously.

"It is profitable... We are quite comfortable to be able to earn over RM20 million per year from this business, which I feel is a cash cow for the group," she told reporters after the annual general meetings of TA Enterprise and its 63%-owned property arm, TA Global Bhd today.

She said the group had in April this year, sold its Hong Kong stockbroking unit, TA Securities (HK) Ltd, due to stiff competition from Chinese players, but the industry in Malaysia is "not as bad".

Indeed, Tiah said TA Securities Holding Bhd is diversifying its institutional customer base and expanding its fee-based and proprietary trading businesses.

She added that the group does not rule out any M&A possibilities to expand its stockbroking business, which complements its property development business that has a longer lag time in generating returns.

There has been speculation on and off for some years that TA Enterprise was talking to K&N Kenanga Holdings Bhd ( Financial Dashboard) to sell TA Securities. TA Securities is one of the few remaining family-owned stockbroking firms, following the merged entity of Affin Investment Bank Bhd and Hwang-DBS Investment Bank Bhd.

Commenting on the outlook of the stockbroking industry, Tiah said it is "challenging", given the weaker market condition with low crude oil and commodity prices and the lower commission of stockbrokers.

Meanwhile, TA Global executive director Kimmy Khoo Poh Kim said the property developer will have two launches worth a combined gross development value (GDV) of A$290 million, within its larger A$600 million Little Bay Cove residential development project in Sydney, Australia this year.

"There will be another two launches in Sydney next year," she added.

Khoo said the new launches are expected to contribute "quite substantially" to TA Global's financials for the financial year ending Jan 31, 2017.

TA Global (fundamental: 1.05; valuation: 1.1) currently contributes about 65% to TA Enterprise's profit.

* After so many years of rumour which makes the share fluctuate, TA Management had finally come public to state that Datuk Tony Tiah  is not privatizing TA and resell it. Instead, there are not ruling out opportunity for merger and acquisition (M&A). 

Sunday, July 26, 2015

Story of Kossan Rubber Industry in Malaysia

By Neerja Jetley (Forbes Magazine Asia)

Back in the 1950s and 1960s it wasn’t often that someone would find his way off the tiny island of Pulau Ketam and go on to make a name for himself on the Malaysian mainland, but Lim Kuang Sia did. He grew up as one of 11 brothers and sisters and remembers the stench of rotten fish perpetually hanging over the island. Every morning at the crack of dawn a horde of men would go out to sea and bring home the catch. When he finished primary school at age 13, he, too, was called upon to follow the family tradition. “There was no escaping,” he says. “My father did it and so did my grandfather. They had never stepped out of the village.” For Lim, however, the boats going the other way, to Port Klang on the mainland, looked more promising. “I wanted to explore and discover the world.”

Today Lim is one of the richest people in the country. His fortune totals more than a half-billion dollars, 34th highest in our annual count and up by $80 million in a year. His company, Kossan Rubber Industries, started making parts for boats in 1979 and then found the perfect fit with rubber gloves. Kossan is one of Malaysia’s Big Four manufacturers that dominate the world market for gloves; its products are sold in 160 countries. This year analysts expect net profits to jump by nearly 30%, to $55 million, on a 21% rise in revenue, to $483 million. Its market capitalization is now close to $1 billion; he owns more than half the shares.

Compared with its three rivals, Kossan doesn’t have the biggest capacity. Top Glove claims that distinction; it can churn out 42 billion gloves a year. And Kossan is not the largest in synthetic gloves; bragging rights there belong to Hartalega Holdings . In branded gloves Supermax rules with 69% of its products sold under its own brand names. Yet analysts agree that Kossan is set to emerge as the leader among the glovemakers, thanks to a business model that isn’t dependent on a small group of products or customers; its strength is in the technical aspects of making gloves and other rubber products, and in the smart way it manages risks. Indeed, its stock has far outpaced the others in the past two years, rising 219% while shares of the next biggest gainer, Hartalega, were up 67% (see table, p. 64).

Malaysian glovemaking is a fiercely competitive world. Corporate brochures sometimes have the feel of tout sheets, and hyperbole is common as companies try to stand out. Lim, 62, became a success without the swagger or bombast. “I am hardwired to be an engineer,” he says. “All I know is to roll up my sleeves, apply my technical skills and make things work better.”

It took three years for Lim to escape from Pulau Ketam, or “Crab Island,” before he found his way to high school in Kuala Lumpur. “At school I discovered my head for science and a love for learning that went beyond course work,” he says. “I was a self-starter, a voracious reader, bound by a sense of duty to excel in school. Sometimes a life of hardship fuels fire in the belly that those with excess can never know.”

That took him to Singapore’s Nanyang Technological University, where he immersed himself in polymers, resins and solvents as a chemistry major. “It fascinated me why certain chemicals are so volatile and others are [not], and how they can be combined to solve problems,” he says. A diploma in chemical engineering from the University of London followed and then a master’s from Imperial College London. That was enough college: “I wanted to solve real problems.”

So he returned to Malaysia in 1977 to be the research-and-development chemist at a small company making engineering blueprint paper. And he married his high school sweetheart, Chow Cheng Moey, also a chemical engineer.

In 1979 opportunity knocked. A friend was looking to make the rubber bearings used in boat propellers. Malaysia was a country of boats, yet nobody was making such a part; they were imported from Singapore. One look at the sample and Lim knew he could make it cheaper and better. As a fisherman he had used it in his own boat. As a chemist he could devise his own rubber formulation. As an engineer he could craft a superior product. In less than a month a prototype sat on his table, alongside a letter of resignation. Lim went on to make rubber rollers for the printing, steel-rolling, textile and other industries.

In the 1980s the AIDS epidemic hit, leading to a spike in the use of disposable latex gloves in health care. Malaysia had a natural advantage–it was the world’s biggest rubber producer–and Lim figured this was the perfect time to start producing gloves. He went to Taiwan, an Asian pioneer in the industry, for a firsthand study of the mechanics of glovemaking. He returned with equipment in hand and orders in pocket. In 1988 he shipped his first batch of gloves, 10 million to California.

But it was a false start. Small latex-glove factories were sprouting up everywhere. From 1987 to 1990 the Malaysian government issued 300 permits for glove factories. Demand slackened, however, and by 1991 only 30 plants survived. Kossan shut its glove division, moving workers back to making its high-precision rubber products for industrial use.

Then Lim took a second look. Demand was still robust, and disposable gloves were an irreversible trend in medical examinations, dentistry and operating rooms. He regrouped and returned to glovemaking: “1989 was a great learning experience. It taught me to keep an ear to the ground, diversify risk and prepare for tomorrow.”

As the use of rubber gloves increased, some patients and health care workers began having allergic reactions, creating another crisis. Once again Lim’s technical skills came in handy. He donned his chemist hat and came up with hypoallergenic latex gloves. He moved on to patent a new generation of synthetic gloves that are free of chemicals that cause allergies. “Lim’s biggest strength is that he is both a chemist and an engineer,” says QL Resources managing director Chia Song Kun, who has known him for more than 30 years (and ranks 29th on the list). “He is a master of the tools in his trade, and that sets him apart from his peers and makes him the industry leader.”

Kossan has been adding capacity and now can make 22 billion gloves a year; in three years that will be 32 billion. Visitors to the newest of its 15 factories can watch a conveyor system carrying thousands of glove molds through ovens, liquid tanks and cleaning brushes to yield 45,000 gloves an hour.

“Kossan is likely to be the least impacted by the inflow of new capacity because it has the most balanced rubber-glove product mix, with 55% [synthetic] and 45% in natural rubber,” says analyst Eing Kar Mei in a CIMB report. In comparison, Top Glove devotes 80% of its capacity to rubber gloves and Hartalega 90% to synthetic gloves, making them more vulnerable to higher raw material prices, demand shifts and competition.

To avoid the risk of depending on a small number of buyers, Kossan sells to some 300 distributors, and none account for more than 5% of sales. And while Lim’s rivals are overwhelmingly focused on the health care sector, Kossan not only makes other rubber products but also is increasingly supplying gloves for food, household and safety applications. In 2012 it acquired 51% of Cleanera HK for $3 million, giving it access to the company’s manufacturing plants in Dongguan, China, to make gloves, masks and wipes for the electronic and electrical industries.

The worldwide glove market will continue to boom, says Allied Market Research, driven by increasing health care spending, hygiene awareness, aging populations and new health threats. And the Asia-Pacific region will grow the fastest, propelled by trends such as medical tourism, wider insurance coverage and better distribution networks. But Lim is cautious, as always. “I have seen too many big businesses fail. One day they are on top, and the next day they get buried, only because they did not anticipate risk. I may be the glove king today. Tomorrow somebody will surpass me. That is the law of nature and the way of the world.”

* It was a great article written and made me understand Kossan Rubber Industry company is more than just a rubber gloves producing company. A boss with a diverse knowledge in boats, chemical, risk management, hybrid business model, etc.. 

Saturday, July 25, 2015

Maybank 2 card (Amex) revised 5% cashback to dining transaction

The rumour on Maybank 2 cards (American Express) to revise the 5% weekend cashback to allow only for dining transactions had come to an end, Maybank had confirmed. A quick check on their website confirmed they had revised the weekend 5% cashback effective 1st of August 2015.























Dining transaction with the following qualified Merchant Category Codes (“MCC”) captured in Maybank’s system are only able to enjoy the 5% cashback on weekends:






Hence, use your Maybank 2 cards (Amex card) wisely during your dining on weekends to be eligible for the 5% cashback.

Friday, July 24, 2015

Great Eastern Smart Extender Max

Well, you if have been reading newspaper lately, you may come across Great Eastern launched their new product called Smart Extender Max. They promoted heavily "RM 1 Million Medical Coverage Extension for RM100 a month!"

So what is Smart Extender Max?
Is an extended/stretch coverage for your medical expenses limit (Annual limit/Lifetime limit) on your existing medical card (regardless of any other insurance companies).

So how does it works? Let's give you an example











Mr.X had a existing medical card with annual limit of RM100K. He purchased Smart Extender Max (SEM) with RM100K deductible and was admitted into hospital in Aug, Sept and Oct with medical bill of RM40K each month totaling to RM120K. The first RM100K will be paid by Mr.X existing medical insurance and the remaining RM20k will be payable under SEM100K.

As a consumer standpoint, what is the catch?
Simple, if so happen you have max-ed out your existing medical card lifetime limit and you admitted again next year with a medical bill of RM50K, Smart Extender Max will not be payable because the deductible amount is RM100K. In short, Smart Extender Max is payable (on remaining amount) medical bill above RM100K.

Drop me an email if you're interested to know more:



Wednesday, July 22, 2015

How to sign up for Private Retirement Scheme (PRS)

How do i come across PRS?
I joined a bank recently and usually banks will payout 3-4% extra as employer contribution towards EPF for their employee, so happen this bank will take the extra 3-4% and put in into PRS instead of EPF employer contribution. Story short, so:

What is Private Retirement Scheme (PRS)?
Private Retirement Scheme (PRS) is a voluntary long-term investment scheme designed to help individuals accumulate savings for retirement. It complement the mandatory contribution:






















PRS provides - Investment Banks/House will use your contribution to invest in PRS unit trust and provide returns to you at the end of the day. You get to choose which PRS unit trust you would like to invest.

Private Pension Administrator (PPA) - acts as an administrator for PRS, something like Bursa malaysia who administrate the shares.

Suruhanjaya Sekuriiti/Security Commission (SC) - regulates and supervises all intermediaries in the PRS industry.

What are the Benefits?
1) Tax relief of up to RM3000 max for a period of 10 years
2) Youth incentive - Government will contribute RM500 into your PRS accounts if you have accumulated RM1,000 within a year AND you must age between 20 -30 yrs old. *From year 2014 to 2018


How to open account for Private Retirement Scheme (PRS)?
1) Open an account with Fundsupermart. - Doable online.
2) Open an PPA account here. - Photocopy ID and Reg form.
3) Choose your PRS funds you would like to invest in.
4) For step 2 and step 3, you need to provide original signed copy to fundsupermart. - mail or dropby their office.

DONE!

Things to note:
1) Withdrawal is allow only when:
    a) Reach the age of 55 - partial/full withdrawal.
    b) Permanent departure from M'sia.
    c) Death
2) EPF monies are not allow to withdraw and contribute to PRS.
3) PRS is the same concept like unit trust, there are sales charges incurred too!

Thursday, July 09, 2015

How to trade on Bursa Malaysia?

How do you trade on Bursa Malaysia? Simple! You need to have TWO accounts:
1) Open CDS account Central Depository System Account
2) Open Direct Trading Account or Nominees Account


1) CDS account which is the account maintained by Bursa Malaysia where they kept all the shares you owned/transacted. (Something like your saving account where it will keep your Credit/Debit transactions)



2) Direct Trading/ Nominees Account is maintained by the stock broker. Where you need this account to trade shares.



Direct Trading Account

* Able to apply for IPO
* Your name shall be register in the Share Registrar
* Transfer of share to another direct trading is viable
* Annual Report, divided, etc will be mail directly to you


While Nominees account shall be the opposite of the mentioned Direct Trading Account:

* Unable to apply IPO
* Your name shall not be register in the Share Registrar (Stock Broking Company shall represent you on behalf)
* Transfer of share to another direct trading is not viable (If necessary you can have it transfer to a direct trading)
* Annual Report, divided, etc will not be mail directly to you


Since Direct Trading Account has all the advantage, why there is a Nominees Account? Simple! Nominees account has a lower brokerage fees as it act as an intermediate house to represent you.


Monday, January 05, 2015

Malaysia share market in 2014

Wow, it been so long since i touch on this Malaysia billionaire blog. Well, time really flies and we begin in the Year of 2015 (goat year).

Recab some of happening of Malaysia sharemarket in 2014:

  1. MAS share dropped tremendously where MH 17 was shot down and Mh 370 went missing till now.
  2. Ebola still continue and send some glove share market up and down - Supermax, Kossan, Topglove, etc. Supermax's direction - Datuk Seri Stanley Thai and his wife Datin Seri Cheryl Tan were charged by the Securities Commission with insider trading.
  3. World Oil prices went down to USD 57 per barrel which sent Malaysia's Oil & Gas (O&G) counter drop like mad. - Perisai, Petgas, Petronas, Skpetro, etc
  4. Westport shares sore to RM 3.5 where IPO price was just RM 2.5. Sell too early.


What's install for 2015? Still start research soon...

Friday, October 04, 2013

Westports Holdings IPO in Malaysia

By P.R. VENKAT (The Wall Street Journal)

Westports Holdings Bhd., a Malaysian port operator partly owned by Hong Kong billionaire Li Ka-shing, started taking orders from institutional and retail investors for its nearly $700 million initial public offering, the biggest such share sale in Malaysia this year.

The port operator, which manages one of Asia's busiest shipping terminals at Port Klang on the west coast of peninsular Malaysia, timed its IPO for subscriptions on a day when markets across Asia are rallying after the U.S. Federal Reserve's surprise move to leave its stimulus measures intact.

Asian markets have been volatile since late May on expectations that the Fed could start tapering off its $85 billion bond-buying program as U.S. data showed the economy was recovering. But, with the Fed's statement late Wednesday that it will continue with its low interest-rate policy, investors are likely to put money back in the Asian markets that offer a higher return compared with the U.S., which is expected to keep its rates low.

Westports is seeking to sell a total of 813.2 million shares at an indicative price range of 2.30 ringgit to 2.50 ringgit ($0.72 to $0.79) a piece, a term sheet seen by The Wall Street Journal showed.

Hutchison Port Holdings—the Singapore-listed port operator owned by Mr. Li—has a 31.5% stake in Westports. Westports was founded by G. Gnanalingam, whose son Ruben is now chief executive. Both Mr. Li's company and Mr. Gnanalingam are selling a portion of their stakes in this offering.

The offering could help rekindle Malaysia's deals market, which was home to some of the world's largest IPOs last year, including state-run palm oil planter Felda Global Ventures Holdings Bhd.'s $3.2 billion offering. But this year companies held back on IPO plans ahead of elections in May, and since then deals have been few, partly due to market conditions. A successful offering by Westports that is looking to list on Bursa Malaysia on Oct. 18, will give other companies in the IPO pipeline the confidence to proceed. They include state-backed conglomerate UMW Holdings Bhd's oil and gas unit and property firm real Iskandar Waterfront Holdings Sdn. Combined, those two could raise more than $2 billion before the end of the year, according to people familiar with their plans.

More than half of the IPO has already been taken by nine cornerstone investors, including life insurer AIA Group, Bermuda-based Utilico Investments Ltd. and Malaysia's state-run Employees' Provident Fund, the term sheet showed.

Cornerstone investors commit to buying shares in an IPO before it has been formally launched and to holding them for a fixed time period, making the IPO more attractive to other potential investors. The cornerstone investors in the Westports IPO have a three-month lock up period.

This year, Malaysia has seen a handful of IPOs since the May election, but none larger than $500 million. The last big IPO in Malaysia was nearly a year ago, when pay-TV operator Astro Malaysia Holdings Bhd. made its $1.5 billion debut in October.

Separately, people with knowledge of UMW's Oil & Gas Corp. Bhd.'s up to $850 million IPO said last week that the deal has been mostly covered with as many as eight cornerstone investors agreeing to take up shares. UMW is also likely to start taking orders from institutional and retail investors next month and could see heavy demand on the success of Westports IPO, these people said.

Bank of America Merrill Lynch, Credit Suisse Group AG, Goldman Sachs and Maybank Investment Bank Bhd. are among the banks advising Westports on the IPO.