1. Lending money to a related company is a no-no
Good news regarding Aeon Credit Service, they did cancel their proposed loan facility to its parent company, a nice victory for shareholder activism in Hong Kong.
Panasonic was mentioned as one of the Malaysian companies with a very high amount of funds parked in a related company. Shareholders voted in favour of the related part transaction. According to the latest quarterly result, it looks like there is some improvement in the size though, let's hope it will continue that way:
2. Protasco's Puzzling Purchase
The corporate exercise was announced more than one year ago, RM 50 million cash was parked in an account in Indonesia, a huge amount of red flags surround the proposed deal. There is still no end in sight if this controversial deal will go through or not, and if so under which conditions.
3. YTL Power, why was it listed?
Many companies are delisted in Malaysia, often at (very) low valuations, The Edge (based on research from RHB) expected that might happen to YTL Power: "A languishing stock price could potentially turn YTLP into a privatisation target.".
The good news for its shareholders is that the share price went up, quite a bit even from its lows at RM 1.40, making a possible delisting less likely:
4. 10 Worst Corporate Accounting Scandals
Unfortunately very US centric article, who will write a similar article about the 10 Worst Malaysian Accounting Scandals?
5. China Stationery: too many red flags and what does "demised" mean?
I still don't know what "demised" means in the announcement, I guess we have to wait for the year report. The auditors have intended to resign, another red flag to add to an already long list.
6. Marc Faber: China could spark a bigger crisis than in 2008
Marc Faber is a great analyst who has been proven right many times. His nickname is Dr. Doom, and he is rather gloomy at the moment, investors should take heed.
7. SPAC's: Boon or Bane?
I have been very critical about SPAC's from the start, this was my first article about the matter, many more followed. One snippet from the first article:
- SPAC's are very good for the managers, they have almost nothing to lose and still earn good wages
- The verb is "you can't have your cake and eat it", but SPAC's managers prove the verb is wrong
- Minority shareholders pay for the dilution by and fees for the managers, and carry almost all of the risk
These issues have been correctly changed by the Securities Commission, details can be found here. Founders and initial investor now have to put their money where their mouth is, and wages for managers are reduced. Good steps in the right direction, although I would still simply prefer to abolish SPACs altogether.
8. Fed up about the Fed
I am not an economist (nor will I ever be one), but I do like the Austrian school (Carl Menger, Friedrich Hayek, Ludwig von Mises, Marc Faber). Basically they don't like any interference with the economy whatsoever. Entrepreneurs must know that if things turn sour, there will be no safety net, there needs to be clear feedback from the real world to them to correctly assess the risks involved.
Greenspan however introduced the "Greenspan put" which later turned into the Bernanke put. There is the important issue of moral hazard. While the middleclass in the US is struggling and real wages have fallen, the top 1% is doing extremely well. The extremely rich should raise a statue for Greenspan, Bernanke and (in the future) Yellen, they owe a lot to them.
9. Protons marketshare slipped from 80% to 18%
Not being a listed company it is less in the limelight than before. A pity, since a healthy dose of sunlight (in the form of transparency) is often helpful.
10. Masterskill in timing the IPO & Goldman Sachs
Not long after this post Masterskill posted a shocking loss. Many Malaysian companies have failed from the moment they were listed, and unfortunately the authorities have hardly ever taken any action. I hope they will do a thorough, investigative research in this case, since there are (too) many red flags.
One posting just didn't make it in the Top 10, but it is my favourite over the year so I still like to mention it:
Maemode: accurate predictions by Ze Moola, but why did nobody notice?
Ze Moola has blogged in "Where is Ze Moola" since 2005 more than 3,000 articles! That in a time when Corporate Governance was not yet very common or popular. He has unfortunately stopped, not sure for what reason. But these days others have stepped up, The Edge was the first in this area, MSWG is doing its work (a larger part probably behind the scenes), the business section of The Star (Errol Oh) has improved, there is Focus Malaysia and KiniBiz, also newer bloggers like Serious Investing have joined.
Ze Moola was many times right and will be proven more often right in the future. Some cases just need years to pan out, like in the Maemode case.
One week ago it was announced that Maemode still can't issue its audited annual accounts nor its quarterly accounts. Enough reason for Bursa to suspend trading in Maemode's shares, if not for the reason that the shares were already suspended.
I hope that the authorities will thoroughly investigate Maemode, especially its long history of large receivables which "were not able to receive".
Seth Klarman (from Baupost fame) said recently:
"It is almost embarrassing that five years after a crisis - a crisis that clearly can happen again - we're back th those levels of speculative behaviour. It's really astonishing."
Below the fireworks of Dubai 2014, which went down in the 2008 global crisis, but looks to be back again in the limelight.
Wishing all readers a Happy New Year!
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