Tuesday, 28 February 2012

YTL Cement, Padini, Maybulk, China Sky/SGX

YTL Cement's shares will be suspended from tomorrow onwards. YTL Group owns more than 90% of the shares, enough to delist, but not enough for a mandatory acquisition. Minority investors who held out for a better offer have had some success in the past, like in Metrojaya's case, or Tang's (in Singapore).

I just don't like the way these General Offers with "delisting threat" are done in Malaysia, minority investors have hardly any chance to fight them, fund managers have to accept the offer since they don't want to end up with shares in unlisted companies.

Padini announced its quarterly results: higher turnover, earnings and cash, but also a high inventory (RM 229 million). Interesting.

Maybulk announced its year end numbers: "the current depressed freight market if it continues will result in many bancruptcies. The Board is confident that it will weather through these turbulent times and be able to benefit from this challenging situation in the medium to long term".

Previous articles about Maybulk and its POSH acquisition can be found here.

Another very sharp letter from Mr. Yeap (former independent director of China Sky) in the Business Times (Singapore). Would The Star or The New Straits Times dare to publish such a negative letter about Bursa Malaysia?

Has S'pore Exchange shifted its stand?

I NOTE from the media that SGX has stated: 'SGX will not discuss the court proceedings or rehearse arguments in the public. We have not done so hitherto and intend to wait for the hearing in court.'
Again, I was surprised by such a statement made by SGX.

In its announcement dated Feb 22, after making reference to the hearing in the High Court on Feb 21, SGX stated that 'Mr Yeap has now made certain representations which had not previously been offered to the SGX-ST . . .'.

I have not communicated with SGX after the commencement of my judicial review hearing in the High Court, save for my communication with the counsel representing SGX during the judicial review proceedings on Feb 9, Feb 20 and Feb 21.

If SGX was not referring to the judicial review proceedings in its Feb 22 announcement, SGX may wish to enlighten the public as to the details of any form of communication between SGX and I, in addition to the judicial review proceedings.

If SGX is unable to do so, it will follow that the SGX's statement is misleading, in that contrary to the SGX's statement, SGX was the one that first referred to the judicial review proceedings and made selective and inaccurate quote of arguments exchanged during the judicial review proceedings in its Feb 22 announcement.

It is interesting to note that SGX has shifted its stand after I have stated that I have no objection in SGX releasing the full and accurate transcript of the hearing to the public.
No doubt all concerned will be able to judge whether the SGX's statement was misleading and to draw the correct inference from SGX's shift of its previous stand.

Yeap Wai Kong
Former China Sky
independent director


  1. Hey Mr Wind may I ask you a question? Do you feel fishy that Padini are cooking their book or you feel their high inventory level is unjustifiable and will hurt their business in long run?

  2. I don't think anything fishy is going on. They have had ways to clear inventory in the past (wharehouse sales etc), but the current inventory is indeed large, even adjusting for increased sales. Investors need more detail about the inventory, are these fashionable items (bad) or or are they "timeless" (ok)? What actions does the management take to reduce the inventory and how long will that take?

  3. Hi Mr Wind, I'm wondering how do you screen your stocks? Any stock screener for Bursa? And where do you get your stock universe in bursa? Bloomberg terminal? Reuters tele?

  4. Until a few years ago I subscribed to iCapital and Dynaquest (SPG is an easy way to quickly go through the whole Malaysian stock universe). I subscribed to The Edge and anything else I could find in English. Now mostly all free websites, by far most important BM announcements site (which is good!) and further The Edge, The Star and NST. I am getting from time to time tips regarding undervalued stocks from a very good fundmanager I know a long time already and I follow some other good fundmanagers (some I mentioned already in the blog), the top holdings that they have to announce.

  5. SPG? Please enlighten on that acronym.

  6. SPG = Stock Performance Guide, halfyearly book full with most of the 1,000 listed companies, very simple format, 1 page per company, ideal for rough filtering and ideas.

  7. In a joint statement last week, the Monetary Authority of Singapore (MAS) and the Singapore Police Force said MAS had received a report from SGX on 'potential breaches of the Securities and Futures Act, Cap. 289 (SFA)' by China Sky and its directors.

    The S-chip company, in a statement yesterday, said it is not aware of any such investigation and that it has requested SGX for more information.

    But SGX declined to furnish the information on the basis that the matter is now under investigation, China Sky said.

  8. Thanks for the information, interesting developments.