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

newspaper articles December 17, 2011

A few interesting articles today:

The pride of Padini

http://biz.thestar.com.my/news/story.asp?file=/2011/12/17/business/10113907&sec=business

An issue which has caught the attention of Padini's fund managers, analysts, shareholders, and bankers is its buildup of inventory. Chan reasons that they bought a lot on purpose to secure the supplies.
“We are not stuck with the stocks. Most are finished basic items, not the trendy stuff, so they will be saleable. In view of China's current situation, where the factories are shutting down and lowering their capacity, you will find it harder to buy the quantities you want.”

The next two quarters will be interesting to see if they can indeed reduce the inventory significantly.

 

Corruption and inflation – how they affect the economy

http://biz.thestar.com.my/news/story.asp?file=/2011/12/17/business/10108355&sec=business

It is obvious from the above that the economic impacts of grand corruption, systemic corruption, and syndicated corruption can be significant because of their scale. One would expect them to have a larger economic impact, e.g. inflationary pressures, when compared to petty corruption, individual corruption or non-syndicated corruption.

I always felt that inflation has been understated in Malaysia, hard to believe it is only a few percent per year while so many items have doubled in price over the last say ten years.

Bursa IPO pipeline to remain healthy

http://www.btimes.com.my/Current_News/BTIMES/articles/20111216233106/Article/index_html

Bursa chief executive officer (CEO) Datuk Tajuddin Atan said it was difficult to say if the exchange would be able to top this year’s number, even though the local market has been relatively resilient, in the face of stormy markets globally with the European debt crisis deepening.

“Hopefully (we can), but next year is challenging ... very, very challenging. You know for a fact that markets are soft. But I think, what we’ve seen here is that our market is resilient.

So, consistently above 20 is still good. Above 20 is a good number for an exchange of our size,” he told Business Times.

At the time of the interview, Bursa was in the midst of crunching out its listing target number for 2012.

Still, Tajuddin claimed he is not overly concerned about numbers, per se, and insists there continues to be “strong pipeline” of companies that could list when the time is right.

“I’m more interested in a consistent pipeline and in the quality of companies that come in,” he remarked.

To me the only thing that counts is quality. If there are ten not so great IPO candidates, then zero should be listed.

I get the impression that SC & BM are filtering IPO candidates (somewhat) better than before, but I am still very worried about letting Chinese companies in. I think Bursa Malaysia will get their fingers burned on them. Time will tell.