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Sunday 29 March 2009

Property Prices Is Likely Come Down


Property prices in Malaysia are expected to come down this year reflecting the softer market and oversupply as global economic and financial crises dampen demand, said president of International Real Estate Federation (FIABCI), Datuk Richard Fong.

"The transactions have came down. The extent to which the prices will fall will also depend on the availability of financing now when the buyers are faced with financial difficulties due to job losses and uncertainties in the job market," he said at the 8th FIABCI Asia Pacific Regional Secretariat Summit 2009 here today.



Fong said to support the property market, banks should be flexible in restructuring the duration of housing loans to meet the financial requirements of house buyers who were struggling with their commitments.

"While the Malaysian economy is heading towards a pronounced slowdown, the banking sector remains relatively strong as compared to the 1997/98 Asian financial crisis," he said.

He said the financial and property sector would be in better shape when the global economy recovered and the effects of stimulative government policies and spending kicked in in the second half of the year.

Fong said the property market in Malaysia, as compared to Singapore and the rest of the Asean region, was also more stable as most of the property transactions in Malaysia comprised locals.

"In Malaysia, foreigners comprised only a small portion in property purchases. In Singapore, the market experienced a sharp drop in property prices, when foreigners exited the market and sell off their properties when recession hits the country," Fong said.

Earlier, secretary-general of FIABCI Asia Pacific, Kumar Tharmalingam, said while Malaysia offered the most attractive property investment return within South-East Asia, there were not much publicity and promotion and as a result Malaysian properties were not well-recognised among foreigners.

"We offer less restrictions as compared to other countries. Foreigners are able to purchase landed freehold properties while this is not possible among many countries in Asean," he said.

Friday 27 March 2009

Tanjong Plc: Stock revisited to reflect downturn risks; still resilient


Abstract:

· FY09E results preview. FYE Jan-09E results to be announced next week. We expect a 6% Y/Y earnings growth to M$589MM versus consensus 4%. Focus will be on DPS, forecast at 104sen gross (9MFY09: 52.5sen), or net yield of 5.5%. Other areas of focus will be consistency in turnaround of Tropical Island (EBIT positive in 3QFY09), and resiliency of the gaming and power earnings. As at end-FY09E, the NFO business has yet to feel any slow down in normalised top line growth, while power generation profits are likely to show single digit Y/Y growth of 7% despite windfall taxes and major maintenance opex domestically due to full year consolidation of Globeleq profits.


· Forecast cut but earnings still resilient: We cut earnings by 3% for FY09E and 11% for FY10E to factor in a more gradual rather than swift recovery for Tropical Island with the global slow down. We also lowered NFO normalised sales growth (excluding special draws) to a drop of 5.5% in line with trends during the 1998/2001 economic slow down, but an estimated rise in special draws from 3 to 8 over FY09-10E will cushion the impact. The regulated power assets offer steady earnings with FY10E profits to also benefit from lower cost (i.e. absence of windfall tax, major maintenance opex and business development cost of over M$100MM incurred in FY09E), and higher US$ translated earnings from overseas power units due to the 12% ringgit depreciation.


· Maintain OW. Our new Dec-09 PT of M$18.00 (from M$24.00), factors in our earnings cut and a higher cost of equity for the emerging market overseas power assets. Tanjong remains one of the higher Malaysian yield plays offering earnings security and value. Net yield is 6% over FY09-10E, with CY09E PE of 8.6x (historical mean at 12x since 2000) and EV/EBITDA of 6.7x (developing market Asian peers at 4-10x). Key risk is regulatory changes for the Malaysian power assets.

Thursday 26 March 2009

Singapore's Boomtown Dream Gets Hazy



SINGAPORE -- On almost any major street of this affluent Southeast Asian city-state, cranes tower overhead -- a reminder of an incredible three-year building boom that now is turning into a bust.

Residential property prices rose 60% between 2005 and the middle of 2008, fueled by a massive influx of U.S., European and Asian expatriates drawn by Singapore's goal of reinventing itself as a financial and entertainment hub like Dubai or Monte Carlo.



The global financial crisis has shattered that vision. Many of those foreign bankers and lawyers -- now without work amid Singapore's sharpest economic contraction ever -- are returning home, weighing on demand just as a slew of new luxury properties are nearing completion.

Banks, meanwhile, are reining in loans to developers. Prices of high-end apartments are forecast to fall back to 2005 levels within a year, property analysts say.
"In 35 years of my career, I've never seen anything like this," says Jerry Tan, a Singaporean broker who sold $1.5 billion of property to high-end clients in 2007 but now has time to sip wine and brood in his office.

For Singapore's trade-dependent economy, officially forecast to contract as much as 5% this year, the house-price collapse is adding to a bleak economic picture of declining exports and shrinking foreign investment.




The property sector's woes also represent a major setback to Singapore's efforts to throw off its stodgy image as a wealthy but dull trading entrepôt. A few years ago, the Urban Redevelopment Authority, Singapore's national land-use planning body, drew up blueprints for world-class casinos, theaters and residential areas. It sold land to developers for the projects and gave them time limits for completion.

Some elements of the plan are moving ahead -- notably two massive casino-leisure developments set to open in 2009 and 2010 -- but many other pieces are in jeopardy.
Those pieces include "Sentosa Cove," a luxury residential development on Sentosa Island just off Singapore's mainland. The gated community of $8 million-plus glass-and-steel modernist mansions was envisioned to put Singapore on the map much like "Palm Jumeirah," Dubai's artificial residential island.

A Malaysian company is still on track to launch portions of a $4 billion resort in early 2010 on Sentosa Island, including a casino, hotels and a Universal Studios theme park. Another casino and theater complex, under construction on Singapore's mainland by Las Vegas Sands, also is planning to open at the end of 2009.

But other projects at Sentosa Cove that were to be ready this year are delayed. City Developments Ltd., Singapore's second-largest developer, has postponed until 2011 a $390 million marina complex of exclusive apartments, shops and a five-star, 320-room Westin Hotel that was due to open this year.

Many parts of the Sentosa Cove development remain an unfinished building site. Developers that paid the government top dollar to buy land there "will find it quite challenging to sell [homes] at a profit in today's market," says Nicholas Mak, head of Singapore research at Knight Frank, a property consultant.




Sentosa Leisure Group, a government entity that manages the resort island, is trying to be flexible with developers, says Mike Barclay, the group's chief executive, and is extending deadlines for construction. "We don't want there to be half-finished buildings around the community," he says.

The government received scant interest from private developers when it launched land sales at Sentosa Cove in 2003. Property prices were in the doldrums and the area was seen as too far away from Singapore's central shopping and financial districts.
But that changed as the economy picked up. Singapore, a major exporter of electronic goods and a global shipping hub, grew by more than 6% annually between 2004 and 2007. Eager to diversify its economy, the government offered generous tax breaks to international private banks and high-tech companies to set up shop.

Half a million foreigners moved to Singapore between 2003 and 2008, many of them wealthy. Boston Consulting Group found in a recent study that 10% of Singapore's residents have investible assets of $1 million or more, the densest concentration of millionaires in the world, and more than twice the ratio in the U.S.

Residential-property developers started a flurry of new construction. The government stoked the boom by allowing investors to make down payments of only 20%, paying the remainder upon a project's completion. In a soaring market, speculators with no intention of completing their purchases were able to sell for a profit without organizing any financing. Amid signs that a speculative bubble was building, the government banned these so-called deferred payments in late 2007. But by then, the market was already overheating.

As the only part of Singapore where foreign individuals can own land without special government clearance, Sentosa Cove became the target of bidding wars. By the market peak in mid-2007, property developers were paying 1,400 Singapore dollars (US$935) per square foot for land, more than four times prices in 2003.

Buyers who already secured property loans, like Bonnie Pun Da Roza, a Hong Kong citizen who lives with her British husband and children in one of two properties they bought in 2006, say they will sit tight and hope for an upturn. "Right now we're not too worried, but if it goes on for three years, then we will be," Ms. Da Roza says.

To be sure, the property sector is in better shape than it is in Dubai, where some half-finished construction projects have stopped. The Persian Gulf city developed 50,000 residential units in 2008, much more than the 10,000 private units completed that year in Singapore.

CapitaLand Ltd., Singapore's largest developer, which is 40%-owned by a Singapore government investment company, and large private companies like City Developments have adequate reserves to complete projects, analysts say. In March, CapitaLand raised S$1.84 billion through a rights issue.

But some smaller, private developers risk bankruptcy, analysts say. As prices crater, speculators are unable to get bank loans to cover what they owe, meaning a jump in distressed sales later is likely. Meanwhile, foreign investors who bought at the peak now face big losses if they have to sell, denting Singapore's reputation as one of the safest places in the world to park money.

Despite efforts by developers to choke new supply, there are still 35,000 private homes under construction, according to the Urban Redevelopment Authority, a potentially giant overhang. In 2008, there were 13,644 private residential-property deals in Singapore, down 64% from the previous year. About 15% of residential property could be vacant by 2010, worse than a 10% rate after the Asian financial crisis a decade ago, Credit Suisse estimates.

"I'm yet to see the light at the end of the tunnel," says Mr. Tan, the high-end broker.

Wednesday 25 March 2009

Bank Negara 2008 Annual Report Highlights


* GDP forecast for 2009: - 0.1 percent to 1 percent;

* Manufacturing sector to contract by 8 pct in 2009 (2008: 1.3 pct);

* Construction sector to grow by 3 pct in 2009 (2008: 2.1 pct);

* Services sector to grow by 4.5 pct in 2009 (2008:7.3 pct);

* Agriculture, forestry and fishery sectors to contract by 2 pct in 2009 (2008: 3.8 pct);

* Unemployment for 2009 forecast at 4.5 pct or 550,000 people (2008: 3.7 pct), an increase of 107,000 people;

* Inflation in 2009 to range between 1.5-2 pct (2008: 5.4 pct);

* Federal government's 2008 revenue projected at RM159.8 bln (2007: RM139.9 bln);

* 2009 operating expenditure projected at RM153.5 bln (2008: RM123.1 bln);

* Government's external debt for 2008 projected at RM235.6 bln (2007:187.4 bln);

* Bank Negara's 2008 net profit slightly lower at RM6.509 bln (2007:RM6.66 bln)

TM International - BUY


TM International – Right issue details finally (Company Update)

Price: RM2.61 (theoretical RM1.78)
Target Price: RM2.50 (ex-all)
Recommendation: BUY

Telekom International (TMI) much awaited details for the proposed cash call is as follows:
· Renounceable rights on a 5:4 basis with an issuance of 4.7 billion new shares. Post rights, total share outstanding to balloon to nearly 8.5 billion shares versus 3.8 billion earlier;

· Pricing of RM1.12 for the new shares which is 50.9% discount to the 5-day volume weighted average market price up to March 23 of RM2.28 and 31.7% to the theoretical ex-rights price of RM1.64;

· Total amount of RM5.25 billion will be raised from the cash call;

· No official guidance on the time line from the current announcement but based on recent telecon, management is looking for end 2Q09 for closure.

Our take on the above announcement:
· Share issue is larger than what we had anticipated as well as the street’s. Given the large discount to the current underlying, shareholders that elect not to participate will be diluted substantially to the tune of 40%; and

· Pricing with the huge discount is deliberate to encourage take-up and hence minimize the burden on the three large incumbents including Khazanah, EPF and ASB which together controls some 68% of the stock.

Recommendation
· We are tweaking our numbers slightly post announcement with FY09 net adjusted 0.3% higher while FY10 net is raised by 0.9%. Our forecast had been trimmed by 30% for FY09 and 14.7% for FY10 upon the release of the 4Q08 result recently, taking into account the proposed call call;

· Our new Sum-of-Parts is now RM2.50 taking into account the proposed cash call;

· Ex-price based on last done is RM1.78. We maintain our BUY on an ex-basis. Short term weakness could be expected given the recent 20% uptick from the low as well as the larger than expected share issue;

· While the market looks to digest the highly unfriendly cash-call, we are advising clients to focus on the post-right TMI which is on a much stronger footing with total debt / EBITDA dropping to less than 3x compare to 4.6x based on 2008 numbers;

· The RM21billion market capitalization loss since the demerger in April 2008 was excessive and unwarranted we believe. While certain key operational units had underperformed in 2008, the market had completely ignore the underlying worth of the group as well as the potential turnaround of those units especially Excelcomindo which had been impacted by adverse currency movements. With rupiah having been relatively more stable of late, it will definitely be a positive;

· Celcom, the jewel within the group remains to be force in the local scene. Recent strong performance cannot be ignored which had seen them improve their market share by a strong 15 basis points y-o-y. With capacity to generate RM2.5billion operational cashflow, the unit is a prized asset indeed. We have a RM19billion enterprise value for Celcom compare with the current market capitalization of RM16billion for the group;

· For the traders, we would be looking at the rights-to-the-rights for opportunities. Based on the theoretical ex-price of RM1.78 versus the rights at RM1.12, the rights –to-the-rights should be priced at circa RM0.66 maximum.

Tuesday 24 March 2009

Subprime master Paulson's Midas touch(GOLD)



By John Bowker, Reuters
Hedge fund managers may get a lot of stick in these troubled times, but there are some that more traditional investors may want to listen to.

John Paulson, for example.
The 53 year-old American, no relation of Hank, is having a good financial crisis. In 2007 he pulled off one of the most lucrative gambles in investment history — amassing a personal fortune of nearly $4 billion betting against the sub-prime mortgage sector.

We all know what happened next. Millions of small homeowners defaulted on their mortgages, and the world was plunged into financial near-meltdown. Paulson, on the other hand, has bought a $41 million 10 acre luxury estate in billionaires’ playground the Hamptons.

So what is the guru doing now? Well, earlier in the week it was announced that funds controlled by his company Paulson & Co had paid $1.3 billion for a stake in a firm called AngloGold Ashanti.

Ashanti sounds like a chart-topping R&B singer, but is actually a South African gold miner. This move speaks volumes for where we are in the current cycle, from someone who can legitimately stand up and say that he saw the crisis coming.

Gold is widely seen as an investment that will always have intrinsic value. When times are troubled, investors buy into it as a safe haven — a port in a storm. Unsurprisingly, gold hit all time highs of over $1000 an ounce last year, and could well reach four figure heights again soon.

Two days after Paulson’s interest in Ashanti was announced to the market, gold spiked to a near three week high after the U.S. Federal Reserve revealed plans to spend $300 billion on long-dated Treasuries — a sign there are still serious problems across the Atlantic.

If gold is rising in value, then it’s likely that everything else is struggling. And if John Paulson thinks the crisis still has some way to run, there’s a good chance it does.

Where John Paulson goes, others are likely to follow.

Monday 23 March 2009

‘Bull-Market’ Rally Has Begun, Templeton Asset’s Mobius Says


‘Bull-Market’ Rally Has Begun, Templeton Asset’s Mobius Says

By Chua Kong Ho and Paul Gordon
March 23 (Bloomberg) -- The next “bull-market” rally has begun, Templeton Asset Management Ltd.’s Mark Mobius said, refuting predictions that the equities meltdown will continue.

“Stocks are building a base for the next bull market,” said Mobius, 72, who helps oversee about $20 billion of emerging-market assets at San Mateo, California-based Templeton. The fund is finding “bargains” in every emerging market, which are in “better shape” than developed economies.

Templeton is looking for companies that are “cash-rich,” have low debt and higher dividend yields, Mobius said in a Bloomberg Television interview from Hong Kong. Mobius said he’s looking for companies that can invest for future growth yet have cash left to pay shareholders.

The MSCI Emerging Markets Index has gained 23 percent since reaching a four-year low on Oct. 27, outperforming the 2.5 percent drop in the MSCI World Index and 9.5 percent decline in the Standard & Poor’s 500 Index.

Emerging markets made up the 10 best-performing stock benchmark indexes this year, with China’s Shanghai Composite Index topping the list with a 26 percent gain.
Brazilian oil company Petroleo Brasileiro SA, Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, and Chinese oil producer PetroChina Co. are among the top holdings of Mobius’s Templeton Emerging Markets Trust.

Sunday 22 March 2009

Hong Kong’s Hang Seng Index – holding just above 50-day SMA



We have revised HSI’s preferred wave count and now hold the view that the index completed wave v in early Mar. The rebound since then looks “impulsive”, breaking out of its resistance trend line and even closing above its 50-day SMA (13,068) yesterday. The upturn is close to its end and we should see a pullback, probably at least testing the support trend line at 12,150pts sometime next week.

Saturday 21 March 2009

Singapore’s STI – pullback to test support line


We have revised STI’s preferred wave count under which the index completed wave v in early Mar. The rebound since then looks “impulsive”, breaking out of its resistance trend line. We see one more minor leg up before the wave i uptrend ends. After this, the index should pull back to at least test the support trend line at 1,510.

Friday 20 March 2009

Malaysia’s KLCI – one more leg down?


The KLCI completed its wave (iii) down leg and is in on its wave (iv) rebound. The key resistance is 864pts, the 38.2% FR of wave (iii). Once this rebound ends, the wave (v) down leg should kick in, possibly testing the recent 836 low or Oct 08’s 801pt low.

Wave “B” has begun?



Wave “A” down leg since Oct 07 has already ended? The DJIA’s rebound towards the 7,500 level on Wednesday, above the 7,392pt 50% Fibonacci retracement (FR) of wave iii, is telling us that our current preferred wave count is probably wrong. The wave 5 down leg may have already ended in early Mar, completing the major wave A downtrend since Oct 07.

Major wave “B” may have started early this month. This should be followed by the major wave “B” rebound, which is expected to take 5-8 months to complete and will peak anytime between July and Oct. The 38.2-50% FR of Wave A targets a rebound to 9,400-10,300pts while a more bullish 61.8% FR targets 11,245pts for the DJIA.



Revised wave count. We have revised our preferred wave count as shown in Figure 2. Our previous preferred wave count (Figure 1) becomes our alternative wave count. In Figure 2, the wave “a” uptrend started early this month but is on the verge of completing this rally. We expect a sharp pullback over the next few days for the US and regional equity markets, probably a 50-61.8% retracement to complete wave “b”. Usually, wave “b” corrects 50-61.8% of wave “a”, presenting investors a good opportunity to position themselves for wave B.



5-wave trend ending soon. The DJIA’s 30-minute chart shows that it has likely completed the 5-wave uptrend since 7 Mar. We expect a sharp pullback towards the 50-61.8% FR (6,900-7,000) before a near-term bottom. The MACD and RSI indicators are already showing negative divergence signals.



Could DJIA still fall below Mar lows? We do not dismiss the possibility that the DJIA will continue its medium-term downtrend below the Mar lows after this rebound. However, based on the recent behaviour of the US stockmarket, we believe the probability of this happening is low.

100% confirmation if… One of the rules of the Elliot Wave Principle (EWP) is wave iv cannot overlap the end of wave i. The end of the wave 5 down leg would be confirmed if the DJIA and S&P rallied above 7,909 and 804pts, respectively. These were the levels at the end of wave i based on our earlier preferred wave count. This has not happened yet. Only NASDAQ Index’s wave iv has overlapped wave i recently.



Wave count revised for Asia. In view of the upswing of Asian markets over the past fortnight, we have revised our wave count. Based on our preferred wave count, the MSCI Asia ex-Japan completed its wave 5 failed down leg in early Mar, like the DJIA. However, this was a failed or truncated wave v, ending above the Oct 08 low.

Minor wave i just started, wait for correction to accumulate. The first leg of the wave “B” kicked in a fortnight back but is in its final leg. We expect Asian markets to pull back, probably towards the 50-61.8% FR once the rebound ends to complete wave ii. This should offer investors an opportunity to accumulate stocks.

Global equity technicals - US



Major wave “B” has begun?

• Wave “A” down leg already over? The DJIA’s rebound towards the 7,500 level on Wednesday, above the 7,392pt 50% Fibonacci retracement (FR) of wave iii, is telling us that our current preferred wave count is probably wrong. The wave 5 down leg may have already ended in early Mar, completing the major wave A downtrend since Oct 07.

• Major wave “B” may have started early this month. This should be followed by the major wave “B” rebound, which is expected to take 5-8 months to complete and will peak anytime between July and Oct. The 38.2-50% FR of Wave A targets a rebound to 9,400-10,300pts while a more bullish 61.8% FR targets 11,245pts for the DJIA.

• Revised wave count. We have revised our preferred wave count. The first uptrend leg started early this month but is on the verge of completing this rally. We expect a sharp pullback over the next few days for the US and regional equity markets, likely a 50-61.8%retracement to complete wave minor “b”. Usually, wave “b” corrects 50-61.8%, presenting investors a good opportunity to position themselves for wave B.

• Wave count revised for Asia. In view of the strong rebound of Asian markets over the past fortnight, we have revised our wave count. Based on our preferred wave count, the MSCI Asia ex-Japan completed its wave 5 failed down leg in early Mar, like the DJIA. However, this was a failed or truncated wave, ending above the Oct 08 low.

• Wait for correction to accumulate… The first leg of the wave “B” kicked in a fortnight back but is in its final leg. We expect Asian markets to pull back towards the 50-61.8% FR once the rebound ends and completes wave ii. This should offer investors an opportunity to accumulate stocks.

Thursday 19 March 2009

Privatisation candidates from CIMB


Privatisations in vogue again?
Many privatisation exercises were mooted around the middle of last year after a sharp downturn in the market following the disastrous 8 Mar general elections. However, the flow of such proposals ebbed when global markets took a turn for the worse in Oct on mounting fears of a potential global economic recession. Privatisations are starting to make a comeback this year, with the ones drawing the most attention being IOI Corp’s proposed privatisation of IOI Prop and Tan Sri Halim Mohammad and Puan Sri Mazmin Noordin’s privatisation of the company that bears their names.

• Typical privatisation candidates. Companies that are being privatised typically have most, if not all, of the following features
1) share prices have fallen substantially,
2) they are deeply undervalued, and
3) they usually enjoy strong cashflows or have solid balance sheets.
The offer price for IOI Prop is at a 34% discount to NTA and 58% discount to RNAV. IOI Prop is one of the most profitable property companies on Bursa and its dividend yield of 6-8% is one of the highest in the sector. The offer price for Halim Mazmin is at a 29% discount to NTA and 39% below net cash per share. Its 2007 dividend yield was 6%.

• Screening turns up interesting candidates. Going through the list of companies under our coverage and screening for net cash levels, sustainable dividend yields, P/Es and P/BV, we came up with a list of 10 stocks that could be candidates for privatisation. Several of these stocks have attracted privatisation speculation in the past while others have become potential privatisation candidates because of a collapse in their share prices. Also on the list are stocks such as Bursa which are unlikely to be privatised though their strong balance sheets and tanking share prices make the odds less remote. Ironically, several of the stocks that pop up on our radar are those that we rate underperforms.

• Good hedge against weak market. Privatisation candidates could offer investors a good hedge against weak market conditions. Potential privatisation targets that we like, i.e. companies with decent fundamentals and have seen steep share price falls, for instance Resorts, Eksons and Wellcall, are trading closer to their floor price of cash per share and should be more resilient. For investors with a higher appetite for risks, we identify Proton, which is the only stock trading below its net cash per share because of fears that new model development costs will deplete its cash board. While AirAsia and Pelikan may not be in net cash positions, we believe their major shareholders could be tempted to take the companies private due to their depressed valuations. We maintain our NEUTRAL weighting on Malaysia and our end-09 KLCI target of 1,013 points.

Wednesday 18 March 2009

Citigroup up 200% in 7 days


Citigroup Chief Executive Vikram Pandit, whose company's share price fell below $1 last week, said it was profitable in the first two months of 2009.

Citigroup projects it will report $8.3billion in earnings for this year's first quarter, excluding taxes, credit losses and one-time charges.

After the announcement, it share price up from lowest US$0.97 to today US$ 3.08.

But, was it really profitable since it exclude all taxes, credit losses and one-time charges?

Tuesday 17 March 2009

LTAT give 16% dividend for year 08


Lembaga Tabung Angkatan Tentera (LTAT) will pay out a dividend of seven percent, three percent bonus and an additional six percent special bonus in the form of trust shares to active unitholders for the year 2008.

Prime Minister Datuk Seri Abdullah Ahmad Badawi today said the total dividends and bonus paid for the year will amount to 16 percent, which will be equivalent to the year before.

Abdullah, who is also Defence Minister said that the payment to be made will amount to RM597.9 million, or 8.3 percent higher than the RM552.2 million the year before.

For the year ended Dec 31, 2008, LTAT's gross profit was up 2.3 percent at RM631.4 million compared with RM616.9 million in 2007.

"This achievement is the highest since the Asian financial crisis in 1997 and the second highest since LTAT was set up with the earlier achievement of RM697.6 million seen in 1996," he said in a statement here today.

LTAT's total accumulated assets as at December 31 last year meanwhile increased by eight percent to RM7.2 billion and contributor funds stood at RM4.8 billion with a total of 116,000 contributors.

Abdullah said LTAT recorded a commendable performance despite an uncertain year due to the global economic downturn.

"This shows that the government's policies and actions to counter the economic downturn have had given some positive effects to the country's economy."

He said the performance was also due to LTAT's strategic and careful investments as well as its prudent management.

At group level, its pre-tax profit for the year ended Dec 31, 2008 was RM1.4 billion, similar to the previous year's achievement.

Apart from the profit from LTAT's own operations, the profit also came from its agencies and subsidiary companies.

Abdullah said LTAT has been able to provide various benefits and facilities to contributors.

These include the e-Kiosk for contributors to get their account details, a contribution of RM3.8 million to 4,476 children of the members of the Armed Forces of Malaysia and the repayment of contributions amounting to RM492.7 million to 4,609 contributors who had completed their services and housing withdrawals amounting to RM16.2 million to 2,984 contributors.

LTAT also paid out RM4.5 million under the Death and Loss of Ability Scheme, contributed RM395,950 as incentives for excellence in education for 562 children of members of the Armed Forces successful in their PMR and SPM, and also contributed RM270,000 to the Ex-Servicemen Association Malaysia as contribution for the Hari Pahlawan 2008 campaign fund.

Besides that, LTAT also gave a financial assistance of RM248,912 through the Yayasan Warisan Perajurit to 66 disabled ex-servicemen; offered low cost and medium cost housing to qualified members of the armed forces; and contributed RM75,000 to Tabung Kebajikan Angkatan Tentera for Hari Raya gift packages for armed force members on duty during the Hari Raya Aidilfitri celebrations.

-- BERNAMA

Monday 16 March 2009

Fitch upgrade Maybank’s ratings



Fitch removes Maybank’s ratings from Rating Watch Evolving
KUALA LUMPUR, March 12 — Fitch Ratings has today removed Malayan Banking Bhd’s Long-term local and foreign currency Issuer Default Ratings (IDRs) from Rating Watch Evolving and simultaneously affirmed them at ‘A-’ (A minus).

The outlook is stable, the rating agency said in a statement issued from Singapore.

At the same time, the agency has affirmed the bank’s individual rating at ‘B/C’, Support Rating at ‘2’, Support Floor at ‘BBB’, its USD subordinated debt issue at ‘BBB+’ and its SGD Innovative Tier 1 capital securities at ‘BBB’.

The restoration of the stable outlook on the ratings is based on the imminent capital replenishment measures being undertaken for core capital, in the form of a substantially underwritten rights issue which is expected to raise RM5-RM6 billion in new equity.

Existing substantial shareholders of the bank, which includes state-owned Permodalan Nasional Bhd (PNB) and Employees’ Provident Fund (EPF) have provided undertakings to subscribe for close to 90 percent of the rights issue with EPF’s portion (13.7 per cent of the rights issue) subject to a market price condition.

The remaining portion of the rights or 10.6 per cent of the proposed issue, will be underwritten by two external investment banks.

With core capital restored to a higher level, Fitch expects the bank to be better cushioned against the impact of very challenging economic conditions this year.

Based on estimates provided by Maybank, the proceeds from the rights should help to raise regulatory capital ratios to around 11 per cent Tier 1 and 16 per cent Total (capital adequacy ratio) CAR, from 8.1 per cent and 13.5 per cent respectively, at end-December 2008.

Core capital ratio, excluding the other Tier 1 hybrid securities issued in 2008 (amounting to RM6 billion), is expected to improve to around 8 per cent immediately post-rights compared with 5.2 per cent at end-December 2008, which brings the ratio slightly above the levels of a few of its large domestic banking peers at end-2008.

While the agency believes that the impairment write-downs on the value of acquisitions are likely to have a material impact on Maybank’s earnings in the current financial year, the bank’s management expects the bank to stay profitable barring unforeseen circumstances with the impact on capital ratios expected to be neutral.

However, given the uncertainties in the economic conditions and the possibility that core earnings could deteriorate more rapidly than expected, the combined effects of the write-downs and the performance of its core operations on reported earnings and capital will have to be monitored closely in the current financial year.

Fitch will undertake a review of the bank’s ratings if necessary, particularly if the bank’s core capital is affected due to unexpected losses in its underlying banking operations.

An added challenge for Maybank is the management of newly acquired banks in lowly-rated markets like Indonesia, Pakistan and Vietnam which could prove to be an added drag on its balance sheet amidst a tougher operating climate.

But given the moderate exposure to these markets currently, comprising around eight to nine percent of total loans, and in view of the bank’s enhanced capital cushion post-rights, the negative impact on the bank’s balance sheet is expected to be largely contained.

Established in 1960, Maybank is Malaysia’s largest domestic bank, accounting for 18 per cent of system assets.

State-controlled entities and funds own about 69 per cent of the banking group, the rating agency said. — Bernama

Sunday 15 March 2009

EPF may declare dividend 4.5% only


From reliable source, EPF soon will announce 4.5% divedend. If compare to last year 5.8%, this is much much lower.


(吉隆坡15日讯)据可靠消息透露,雇员公积金局2008年的派息率预料只有4.5%。

消息指出,职工会已通知了它们的会员有关这项消息。这将是自2002年派4.25%以来的最低股息。

据他们表示,根据公积金局公布的2008年第3季业绩显示,公积金局在去年首9个月的表现良好,因此这项派息率显得太低。

全国银行雇员职工会总秘书梭罗蒙说,公积金会员期望更高的派息率,因为公积金局声称在长期证券中作出了精明的投资。

他补充说:“由于经济不景气导致成千上万人失业,公积金局应该派更高的利息,与会员分享其盈利。”

大马职工总会执行理事会成员西华纳丹也说,他获知公积金局2008年的派息率为4.5%。

因此,他表示,公积金局应该撤换其投资顾问,因为此派息率只占国民投资有限公司(PNB)派息率的一半。

第二财长:未接报告

外间传闻公积金局将下调分红利息,第二财长丹斯里诺莫哈末说指出,他尚未接获任何的报告,然而却相信公积金局的派息,将比银行定期利息来得高。

他回答说,一般上公积金局会在三月间公布派息,然而,一切还是得待该董事局决定 。

诺莫哈末是在周日上午,出席槟州商贩及小贩公会常年大会主持开幕仪式后,在受询问时如此回答。

Saturday 14 March 2009

Maybank share price down longest in history

Maybank share price down 12 day continuous which was the longest in history. Total price down in this 12 day was RM -1.4. Maybank price start going down from price RM5.40 after announce right issue ON THE BASIS OF NINE (9) ORDINARY SHARES OF RM1.00 EACH IN MAYBANK FOR EVERY TWENTY (20) EXISTING ORDINARY SHARES OF RM1.00 EACH HELD IN MAYBANK.



25-Feb-09 5.40 5.40 5.30 5.35 -0.050 10,576
26-Feb-09 5.35 5.35 5.25 5.25 -0.100 13,287
27-Feb-09 5.30 5.30 5.10 5.10 -0.150 19,998
2-Mar-09 5.10 5.10 4.78 4.96 -0.140 84,252
3-Mar-09 4.82 4.90 4.78 4.86 -0.100 30,572
4-Mar-09 4.86 4.88 4.84 4.84 -0.020 17,345
5-Mar-09 4.86 4.88 4.80 4.82 -0.020 25,951
6-Mar-09 4.76 4.78 4.54 4.54 -0.280 74,685
10-Mar-09 4.50 4.50 4.28 4.42 -0.120 83,917
11-Mar-09 4.46 4.48 4.32 4.34 -0.080 37,186
12-Mar-09 4.34 4.34 4.04 4.06 -0.280 108,351
13-Mar-09 4.14 4.16 3.96 4.00 -0.060 107,898

Friday 13 March 2009

Maybank downgrade to RM 3.74

馬銀行老二地位拱手讓土聯

(吉隆坡13日訊)繼馬銀行(MAYBANK,1155,主板金融股)在兩週前公佈60億令吉的20配9附加股計劃後,其股價近兩週內下瀉逾20%,表現跑輸下跌3.8%的綜合指數。

同時,土著聯昌(COMMERZ,1023,主板金融股)市值已經超越馬銀行,成為市值第二大銀行股,僅次於大眾銀行(PBBANK,1295,主板金融股)。

盤中一度跌破4令吉

馬銀行已經連跌12個交易日,該股在今天盤中交易更一度跌破4令吉,去到3.96令吉全天最低水平。閉市時,該股稍微收窄跌幅,重回4令吉水平,全天跌6仙或1.48%。

由於股價跌跌不休,馬銀行失守銀行股市值第二大的地位,拱手讓給一直排名在第三的土著聯昌。

目前,馬銀行的市值為195億2459萬令吉,而土著聯昌的市值則為221億8408萬令吉。排名第一的依然是大眾銀行,它的市值為252億5327萬令吉。

大眾銀行在今天終於結束連跌8個交易日的窘境,以7.15令吉結束全天交易,起10仙或1.42%。至於土著聯昌則平盤收市,報6.20令吉。

無論如何,聯昌國際投行分析員維持馬銀行的盈利預測和目標價格。

他給予馬銀行的目標價格是5令吉,不過,附加股除權後的目標價格為3.74令吉。

他補充說,雖然馬銀行股價在過去兩週已經重挫超過20%,不過,他維持該股的投資評級為「落後大市」。

「該股目前的交易價低於我們5令吉的目標價,而且其附加股除權後的價格3.64令吉,也僅僅比我們除權後目標價3.74令吉低0.09令吉。」

假設綜指維持目前的水平,分析員在馬銀行股價跌至3.53令吉,或除權後價格跌至3.28令吉,才會將該股的投資評級調高至「中立」。

在有關價位,該股才能提供約20%的回酬,符合「中立」評級。

除此之外,分析員也謹慎看待馬銀行的國內外業務,因為目前經濟正處在放緩時期。

他預測該集團2010財政年的貸款成長將放緩6至7%,而其09財政年呆帳率料將增6.1%。

他認為馬銀行被調降評級的潛在因素,包括:第一、信貸成本提高;第二、較低的貸款成長;第三、海外業務貢獻低;第四、海外銀行潛在投資減值虧損;第五、附加股侵蝕盈利。

Thursday 12 March 2009

iGATE Corporation Files Formal Expression Of Interest In Satyam Computer

iGATE Corporation announced filing a formal expression of interest in Satyam Computer based on the process specified by the Board of Satyam Computer. iGATE Corporation is now expecting to receive from Satyam Computer the latest financial statements, including those for the quarter ended December 2008 and the months of January and February 2009, and updated position on liabilities and potential liabilities of the company. In the event of iGATE Corporation not receiving this information immediately, it has no option but to withdraw its expression of interest.

Larsen & Toubro Limited Puts In Interest For Satyam Computer Bidding

Larsen & Toubro Limited announced that it has registered interest to participate in the bidding process for Satyam Computer.

Hinduja Group Not To Bid For Satyam Computer-DJ

Dow Jones reported that, Hinduja Group won't bid for Satyam Computer.

Tech Mahindra Limited Registers Interest In Satyam Computer Bid

Tech Mahindra Limited announced that in line with the process set out by the Board of Satyam Computer, Tech Mahindra has registered its interest in participating in the bidding process. Once the Company have received the RFP and other information we will evaluate and conclude on next steps.

Spice Group Will Put In Satyam Computer Expression Of Interest-DJ

Dow Jones reported that Spice Group will submit its expression of interest to acquire Satyam Computer.

Satyam stake sale draws 3 suitors

MUMBAI: Larsen & Toubro Ltd, India's biggest engineering firm, and Tech Mahindra Ltd are competing for control of Satyam Computer Services Ltd in the first stage of the sale of the fraud-hit software exporter.

Larsen, Tech Mahindra and Spice Corp registered their interest in bidding for a 51 per cent stake in Satyam before the deadline yesterday, the companies said in separate announcements. India's government is pushing for the sale two months after Satyam founder Ramalinga Raju admitted he'd inflated more than US$1 billion (RM3.69 billion) of the company's assets.

Satyam's state-appointed board is hoping a sale will restore investor confidence and retain clients including Cisco Systems Inc and Sony Corp after Satyam lost US$1.7 billion in market value in two months. Raju's admission forced Satyam to restate its accounts and sparked lawsuits from shareholders in the US.

Due diligence "is the key factor if they want a successful bidder", said R.K. Gupta, managing director of Taurus Asset Management Co in New Delhi.

Satyam dropped 3.6 per cent to 47.05 rupees (100 rupees = RM7.50) in Mumbai trading, valuing the controlling stake at about 16.2 billion rupees.

"We have submitted our expression of interest," Mumbai-based Larsen spokesman Deepak Morada said by telephone yesterday. Tech Mahindra said it had registered its interest in a statement to the Bombay Stock Exchange.

Spice, which according to its website has interests in entertainment and communications technologies, has also registered its interest, chairman B.K. Modi said by telephone.

Under terms of the bid, qualified companies must prove they have at least 15 billion rupees available. The acquirer would buy a 31 percent stake through new shares and then make a mandatory open offer for at least 20 per cent of the company.

If the buyer fails to acquire 51 per cent of Satyam after the open offer, the suitor will have the right to acquire more new shares to make up the shortfall. The controlling investor won't be allowed to sell its stake in Satyam for three years. - Bloomberg

Maybank set for longest slump in 22 years

MALAYAN Banking Bhd, Malaysia’s biggest bank, is set for its longest slump in 22 years in Kuala Lumpur trading, leading lenders lower on speculation bad debts will increase and capital-raising plans will erode earnings.

Malayan Banking, which last month announced a RM6 billion rights offer to boost capital, slid for an 11th day, losing 6 per cent to RM4.08 at midday, headed for the longest losing streak since January 5, 1987.

Public Bank Bhd lost 3.4 per cent to RM7.05, set for the lowest close since November 24, 2006.

The Kuala Lumpur Finance Index declined 2.4 per cent to the lowest since October 6, 2003.

“Financial stocks are under a lot of pressure, there’s a lot of fear in the market on capital raisings; as long as that fear is around, you have to be mindful of it,” said Scott Lim, who oversees about US$800 million as chief executive officer of Amanah Asset Management Bhd in Kuala Lumpur. “Investors are fearful of coughing up more money.”

Malaysian Finance Minister Datuk Seri Najib Tun Razak this week announced a RM60 billion (US$16 billion) stimulus plan and warned that the Southeast Asian economy may contract this year for the first time in a decade as exports slide.

After the rights offer, Maybank stock “hasn’t found the bottom yet,” said Keith Wee, an analyst at OSK Research Sdn Bhd. In addition, the market has yet to “price in” the prospects of an increase in bad loans by banks in Malaysia, he said.

Maybank market cap wiped out RM6.54b in 11 days

Malayan Banking Bhd saw RM6.54 billion wiped out from its market capitalisation in the past 11 straight days of losses after announcing its rights issue.

Its share price fell from RM5.40 on Feb 24 and it closed 28 sen down on March 12 to RM4.06.

The market capitalisation was reduced from RM26.358 billion on Feb 24 to RM19.817 billion on March 12.

11 Days historical data
25-Feb-09 5.40 5.40 5.30 5.35 -0.050 10,576
26-Feb-09 5.35 5.35 5.25 5.25 -0.100 13,287
27-Feb-09 5.30 5.30 5.10 5.10 -0.150 19,998
2-Mar-09 5.10 5.10 4.78 4.96 -0.140 84,252
3-Mar-09 4.82 4.90 4.78 4.86 -0.100 30,572
4-Mar-09 4.86 4.88 4.84 4.84 -0.020 17,345
5-Mar-09 4.86 4.88 4.80 4.82 -0.020 25,951
6-Mar-09 4.76 4.78 4.54 4.54 -0.280 74,685
10-Mar-09 4.50 4.50 4.28 4.42 -0.120 83,917
11-Mar-09 4.46 4.48 4.32 4.34 -0.080 37,186
12-Mar-09 4.34 4.34 4.04 4.06 -0.280 108,351

IPI slumps 20.2% in Jan

Summary

The Industrial Production Index (IPI), which indicates industrial output, slumped -20.2% in January compared to a year ago due to decreases in all its component indices.

Month-on-month, the IPI was down -4.5%.

Manufacturing -26.7%
Mining -6.1%
Electricity -12.4%.

Petroleum, chemical, rubber and plastic products subsector -17.1%
Electrical and electronic products -45.3%
Food, beverages and tobacco -15.2% year-on-year
Non-metallic mineral products, basic metal and fabricated metal products -24.8%
Transport equipment and other manufactures -16.8% year-on-year
Wood products, furniture, paper products and printing -20.3%
Textiles, wearing apparel, leather products and footwear -23.3%

Comparision market value between Citigroup and M'sia Bank



Seem like pbbank more worth to buy. :)

Wednesday 11 March 2009

World in grip of the great recession, IMF warns

Britain's economy has already suffered a deeper peak-to-trough slump than in the early 1990s recession, estimates showed.
Output tumbled by 4.3 per cent between April 2008 and February 2009, according to the National Institute of Economic and Social Research.
That leaves us some way short of the 5.9 per cent decline recorded between the second quarter of 1979 and the first quarter of 1981, said Niesr director Martin Weale.
But with economic indicators continuing to worsen, few experts are expecting a rebound soon.
Yesterday International Monetary Fund chief Dominique Strauss-Kahn warned the world is in the grip of the 'great recession'.

Citigroup Inc. Shares Rise Sharply on CEO Comments

Reuters reported that Citigroup Inc.'s Chief Executive Officer (CEO) Commented, the Company was profitable in the first two months of 2009 and is confident about its capital strength. The Company said revenue in January and February was $19 billion, excluding various writedowns, versus a quarterly average of $21 billion as adjusted in 2008.

The coming ‘Great Recession’

Malaysia Government has thrown a RM60bil lifeline for the country to try and prevent it from slipping into a recession. But with the world economic climate looking more gloomy than ever, there are concerns that it may not be able to halt the downward trend.

IT was already 9.30pm when Datuk Seri Najib Tun Razak walked into his home.

He had missed dinner with the editors he had invited for the briefing on the RM60bil mini-budget to stimulate the economy.

The Deputy Prime Minister appeared drained. His wife, Datin Seri Rosmah Mansor, asked if he had eaten.

Just some noodles, he said, adding that he had been with Prime Minister Datuk Seri Abdullah Ahmad Badawi since 3pm to go through the economic package.

As he began giving the editors a scenario of the doom-laden global economy, some of his listeners looked stunned. As he picked on the keropok on the table, it became obvious that some of those at the table had failed to see the dark clouds before the financial tsunami that is now approaching Malaysian shores.

There is no escaping the storm in an inter-connected globalised economy.

With many countries going bankrupt and their financial institutions collapsed, American billionaire Warren Buffet gave the most appropriate description — the American economy has fallen off a cliff. The US economy will eventually recover although a rebound could rekindle inflation worse than that experienced in the late 70s, he said.

He regarded the US economy as close to the worst-case scenario and added that the economy can’t turn around on a dime.

In short, it is already in free-fall and no one is sure when it will hit the ground but the US has certainly dragged the rest of the world down with it.

The grim fact is that the Malaysian exports would slump drastically with lower prices for key commodities, including palm oil and crude oil and a sharp drop in demand for electronic and electrical products.

Our foreign direct investments would be reduced by at least 50% while our stock market has already taken a beating, even before the financial crisis.

Manufacturing, particularly in the electronics sector, has already been badly affected and retrenchments have begun.

As the World Bank revised the global growth rate to 0.5%, Malaysia, like the rest of the world, has made changes to its own forecasts, expecting growth this year, even with the stimulus package, to be between -1% and +1%.

The fall has become faster than what has been expected. If we avoid the recession this year, it will be only narrowly.

Now, the International Monetary Fund expects that the global economy will contract this year, with its managing director Dominique Strauss-Kahn calling the crisis a “Great Recession”.

The fact is that a recession would have been inevitable had this economic package not come into place. The RM60bil is to stop the slide but even with the money, many see the situation as touch and go.

Singapore, for example, has already declared itself in a recession with possibly a 10% contraction. That’s how bad it could be.

But unlike the Singaporeans, Thais, Japanese, Chinese and South Koreans, we have taken a rather complacent attitude towards the economic crisis. It has not helped that some leaders kept giving assurances that Malaysia would be spared, which only provided false hope.

This is not about politics. Many European leaders have come clean by declaring they have no idea how to respond to the problem because this is unprecedented, with Chinese Premier Wen Jiabao declaring that this is the most difficult year of the century.

Besides calling their people to be resilient and to face up to the challenges, many European leaders have said that their stimulus package would at best buy them time and ease the difficulties.

Najib must be saluted for being honest about the prospects ahead. It will be gloom and doom.

But the bright side, whatever little there is, in Malaysia is that liquidity is still strong in Malaysia with excess funds of over RM250bil in circulation.

The savings by Malaysians have been good and the prudent practices inculcated have helped. The highly regulated practices in our banking industry, which had been frowned upon in the past, have turned out to be of help.

The immediate concern will be on how fast the funds are disbursed to the relevant sectors so jobs can be created and the spillover effects felt by Malaysians.

There is no room for wastage and leakage. There will be little patience for any act of impropriety and incompetency with the financial tsunami fast approaching.

Monday 9 March 2009

Buffett: Shares are best long-term investment still

Warren Buffett, the US investor dubbed the Sage of Omaha, continues to be a cheerleader for equities despite recent spectacular misjudgments on the timing of his buy and hold philosophy.

In a wide ranging interview with the CNBC television todayhe insisted that over 10 years, "you will do considerably better owning a group of equities" than US treasury bonds. This echoed his comments to the New York Times in Oct­ober that he was buying US equities. Since then the Dow Jones industrial average has fallen by over 26% and more than 2,300 points as it tests lows which have not been seen for 12 years.

Yesterday Buffett defended his October assessment of the market. "I stand by the article," he said. "I just wish I had written it a few months later." He claimed he was not calling the bottom of the market in October and yesterday again refused to be drawn on the short term outlook for financial markets.

"I would never have a feeling that the Dow is going to go to 2,000 or 12,000 or 4,300 or 20,200. I don't – I know over time it will go higher," Buffett said. "But if you buy a cross section of good equities, generally well capitalised companies, you'll make money over 10 or 20 years. I haven't the faintest idea where you'll be in 10 months, but it really doesn't make any difference."

His comments come just over a week after Buffett had to tell investors in his Berkshire Hathaway investment group that 2008 had been the worst year since he took the helm 44 years ago. He reported then that the group's annual income had fallen by 59% and that $11.5bn (£8bn) had been wiped off its net worth.

In that annual letter to shareholders, he predicted that the economy would be a shambles throughout 2009 and yesterday he said: " It's fallen off a cliff, and not only has the economy slowed down a lot, people have really changed their behaviour like nothing I've ever seen."

He described the current crisis as "an economic Pearl Harbor", performing close to his worst case scenario, and he believed that in September last year the financial system came perilously close to a complete breakdown.

Although Buffett anticipates further economic pain, with unemployment rising and inflation returning, he is confident that the US economy will recover.

" Everything will be all right. We do have the greatest economic machine that man has ever created, I believe," Buffett said. "This machine is gummed up right now and it's gummed up by a lack of confidence, and that makes people scared and, I mean, it feeds back and forth and it's a vicious cycle."

Buffett urged American political leaders to act to counter that fear.

"I've never seen the consumer or the Americans just generally more fearful than this. And they're also confused. And you can get fearful very quickly, but you don't get confident, you know, in five minutes. You can get fearful in five minutes, but you won't get confident for some time.

"And government is going to play an enormous factor in how fast it comes back. And if you're confused and fearful, you don't get over being fearful till you aren't confused. I mean, the message has to be very, very clear as to what government will be doing.

"And I think we've had – and it's the nature of the political process, somewhat, but we've had muddled messages, and the American public does not know … they feel that they don't know what's going on and their reaction, then, is to absolutely pull back."

Sunday 8 March 2009

Unemployment Rises may cause another credit crunch wave in bank

(纽约8日讯)美国上月失业率急升至8.1%,今夏更可能直逼双位数,有分析担心,若失业率继续攀升,更多消费者会无法偿还信用卡贷款,引爆另一场信贷危机。


失业率高企更可能引发另一场信贷危机。由于失业及收入减少,消费者拖欠信用卡数的情况愈来愈严重,预计到年底信用卡撇帐率,可能由目前的7.5%升至9%。

国际评级机构惠誉估计,失业率若升至9%,信用卡撇帐额就会增加20%。

据悉,在美国信用卡市场中风险最高的银行,包括美国银行、汇丰银行和花旗集团。

美国2月份流失多达65.1万个职位,经济步入衰退14个月以来,企业已裁减440万个职位,当中制造业、金融服务业及零售业是重灾区。

各主要行业在短时间内有大量职位流失,显示不少企业可能已放弃整个业务。

虽然与次按市场相比,信用卡市场规模较小,但信用卡“毒债”亦已打包成各种衍生投资工具,深入金融市场每个角落,假如信用卡市场崩溃,所造成的冲击绝不低于次按危机,将进一步打击美国经济。

Saturday 7 March 2009

Citigroup share worth just a soft drink at $1

New York (PTI): Buying one share of Citigroup will cost its CEO Vikram Pandit his full-year salary -- $1, which can also buy a soft drink at any neighbourhood McDonald's store.

There are, in fact, as many as eight items available at the US outlets of McDonald's for $1, which is now the price of one share of Citigroup -- the global financial behemoth having assets worth about $2 trillion.

In the previous trading session at New York Stock Exchange (NYSE), Citi shares plunged by 10 per cent to hit a sub-$1 low of 97 cents, before closing at 1.02 dollars.

This marks a sharp plunge from its 52-week high of $27 and over $50 a share before Pandit took over in December 2007.

With this sharp plunge, Citi has got the dubious distinction of being among the cheapest blue-chip stocks and probably the only one in the benchmark Dow Jones Industrial Average index stocks worth just about $1.

It is, however, closely followed by struggling carmakers GM and Ford, whose prices are now below $2.

For $1 -- also the annual salary of Mr. Pandit -- a plenty of products are available outside stock market, including some mouth-watering items at McDonald's.

Friday 6 March 2009

Malaysia Bumi-Commerce Bank overtakes Citigroup

Bumiputra-Commerce holdings Bhd overtaken Citigroup by market value with RM22.2billion compare to Citigroup RM21.2Billion. In US, Citigroup was once the world's biggest bank by market value of US$277.2Billin when share price at US$55.7

Citigroup will not remove from NYSE

Citigroup's shares will remain on the New York Stock Exchange. Last week, the NYSE relaxed its listing rules to allow stocks that fall under $1 to still be listed and traded on the exchange.

The exchange said the change was warranted given the "current period of unusual market volatility and decline."

Ordinarily, an NYSE-listed company's shares cannot remain below $1 for more than 30 consecutive days. If that happens, the company gets about six months to prove to the NYSE it can boost its stock price.

Citigroup to sell out of Japan broker Monex-media

Citigroup (nyse: C ) plans to sell its 26 percent stake in Japanese online broker Monex Group Inc as part of the struggling U.S. bank's efforts to raise cash worth $144 mln.

Thursday 5 March 2009

Citigroup drop from USD54 to USD1 in 2 years...


The deterioration in Citigroup stock over the past two years has meant billions of dollars in lost value for company shareholders.

Citigroup stock falls below $1 a share

CHARLOTTE, N.C. (AP) — Shares of Citigroup Inc., once the nation's most powerful bank, fell below $1 a share Thursday.

The stock fell as low as 97 cents in late morning trading. It was down 11 cents, or 9.7 percent, at $1.02 in mid-afternoon.

New York-based Citi has lost more than 85 percent of its value so far this year, and is down more than 95 percent from a year ago as the bank was pummeled by the financial market crisis.

Citigroup's shares will remain on the New York Stock Exchange. Last week, the NYSE relaxed its listing rules to allow stocks that fall under $1 to still be listed and traded on the exchange.

The exchange said the change was warranted given the "current period of unusual market volatility and decline."

Ordinarily, an NYSE-listed company's shares cannot remain below $1 for more than 30 consecutive days. If that happens, the company gets about six months to prove to the NYSE it can boost its stock price.

Citigroup used to be not only the largest bank by assets, but also by market capitalization, which has now been decimated by the stock's decline. At the start of 2007, its market cap was riding high at around $270 billion. But by March 2008, it had fallen below the $100 billion mark. Now, it's at $6.2 billion.

As the recession deepens, the problems facing Citigroup — souring loans and the impact of the recession — are only getting worse.

On Friday, the government agreed to exchange up to $25 billion in emergency bailout money given to Citigroup for as much as a 36 percent equity stake in the company. The government, along with other private investors, will convert some of their $45 billion in preferred stock into common shares. If the maximum amount of preferred stock is converted, current common stockholders will see their ownership stake fall to about 26 percent.

The deal between the Treasury Department and the bank is the third rescue effort in the past six months.

The problem is the market knows Citigroup received no new capital last week. The conversion to common stock will create a wider equity base aimed at keeping investors calm as the economy deteriorates — but Citigroup still has $45 billion in Troubled Assets Relief Program funding, the same amount as it did before. The switch to common stock will help boost Citigroup's "tangible common equity," Wall Street's and Washington's new favored gauge of banks' health.

Citigroup, criticized for years for being too multi-tentacled, has already sold off several businesses over the past several months.

It has also split into two parts: Citicorp and Citi Holdings — effectively undoing the merger that created the company in 1998. Citicorp holds the company's "core" businesses like retail banking, investment banking, credit cards and transaction services, while Citi Holdings runs the company's riskier assets, the consumer finance franchises and asset management.

Citigroup, which hasn't turned a profit since the fall of 2007, will face its next test in April when it reports first-quarter earnings.

Copyright © 2009 The Associated Press. All rights reserved.

Monday 2 March 2009

Citigroup shares tumbled 96 cents, or 39%, to $1.50 in 4 p.m

Citigroup shares tumbled 96 cents, or 39%, to $1.50 in 4 p.m. New York Stock Exchange trading Friday, reflecting that current holders of the bank's common stock will hold as little as 26% when the deal is completed.

Some investors were especially rattled by news that Citigroup will stop paying dividends on most of the bank's preferred shares. At many banks, preferred shares have been a haven from the epidemic of dividend cuts and eliminations on common stock. "The cost of doing this with one bank is that it makes shareholders at other banks nervous," said Campbell Harvey, professor of finance at Duke University's Fuqua School of Business in Durham, N.C.

Instead, financial institutions that need to bolster their balance sheets following regulatory "stress tests" now under way at the 19 largest U.S. banks can get new convertible preferred shares from the government or convert existing shares under terms announced by the Treasury Department this past week. The conditions include converting preferred shares to common equity at a 10% discount to the prevailing price as of Feb. 9.

Wall Street also is worried about "whether the company will be run in the interest of private shareholders or for the public good," said John McDonald, a banking analyst at Sanford Bernstein & Co. "It's a valid question what the priorities will look like."

Messrs. Geithner and Pandit began discussing details of the stock-conversion plan last Sunday evening, according to people familiar with the situation. Agreement on a basic framework was reached relatively quickly, but Citigroup and officials from the Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corp. and Treasury then haggled over issues such as what would happen to $20 billion of taxpayer-owned preferred shares not included in the deal.
At times, Citigroup executives grew frustrated by what they viewed as slow responses from Washington. Asked Friday about the back-and-forth of the negotiations, one Citigroup executive responded: "There isn't one. We just wait." Some executives worried that private investors needed to go along with the deal might get cold feet if an agreement wasn't reached quickly.

On Friday, Citigroup said that most of the private institutions that hold a combined $12.5 billion in Citigroup preferred shares have agreed to convert their shares to common stock at $3.25 apiece. Among them are Singapore's sovereign-wealth fund and Prince Alwaleed bin Talal of Saudi Arabia. The New Jersey pension system, which bought Citigroup preferred shares in January 2008, is "still reviewing" the agreement, a spokesman said

Citigroup Inc. and the federal government agreed to a third rescue

Citigroup Inc. and the federal government agreed to a third rescue that will give U.S. taxpayers as much as 36% of the bank but expose their ownership stake to greater risk from the recession and housing crisis.
Friday's agreement shows how hard the Obama administration is trying to stabilize the U.S. banking industry without a full-fledged nationalization that would wipe out investors and leave the government in charge. But the deal will punish existing shareholders of Citigroup, who will see their stake diluted by 74%, and likely do little to change the awkward relationship between federal officials and management of the New York company.

Government officials don't see the latest agreement with Citigroup as a template for other rescues, though bank stocks fell on worries that the agreement will be cloned at other suffering U.S. financial institutions.

According to Citigroup executives, the Treasury Department and other banking regulators didn't try to squeeze new concessions from the New York bank. For example, the company wasn't pushed to make more loans, rein in foreclosures or curb executive pay beyond previously agreed or required levels, these people said.
Over the past several days, Treasury Secretary Timothy Geithner and other government officials discussed whether to require the removal of Citigroup Chief Executive Vikram Pandit, according to a person familiar with the discussions. But government officials concluded it was impractical to oust him, partly because of a lack of strong potential successors. A boardroom shake-up already is in motion, largely due to pressure from the Fed.

This rescue also was more palatable because the government isn't pumping in additional taxpayer dollars. Instead, as much as $25 billion in preferred shares held by the U.S. government will be converted into common shares as Citigroup struggles to stabilize itself following more than $37 billion in net losses during the past five quarters.

Depending on how many current holders of Citigroup preferred stock agree to a similar move, the company's tangible common equity could surge to $81.1 billion from $29.7 billion at Dec. 31. That would reverse the recent slide in tangible common equity -- a gauge of what shareholders would have left if the company were liquidated -- that fueled a downward spiral in Citigroup shares.
The conversion leaves taxpayers exposed to the risk of greater losses. The government's preferred holdings had stood ahead of common stock in Citigroup's capital structure, meaning they were less likely to lose value if the company's woes continue to mount. In addition, by converting much of the U.S. stake to common shares, Citigroup won't have to pay the hefty dividend payouts that were attached to the preferred stock.

"The government is bending over backwards to not go along the lines of nationalization," said Bernie Sussman, chief investment officer of Spectrum Asset Management, a unit of Principal Financial Group Inc. that manages about $6.9 billion in assets. "They had the alternative to completely zero out the common stock."

美國財政部將250億美元的花旗優先股轉為普通股

美國財政部願意將至多250億美元的花旗集團優先股轉換為普通股
2009年 2月 27日 21:38





國財政部(Treasury Department)週五宣佈﹐願意將所持花旗集團(Citigroup Inc., C)至多250億美元的優先股轉換為普通股。此舉將更好地保護股東利益免遭損失。

但是﹐美國財政部同時明確表示﹐美國政府這樣做的前提條件是花旗集團能夠吸引私人投資者也這樣做。


美國財政部週五上午在一份公告中表示﹐願意參加花旗集團優先股到普通股的轉股計劃﹐但轉股額將與私人投資者轉股額保持一比一的比例。

美國財政部還在公告中表示﹐將接受交換計劃中其他優先股股東所獲得的最優惠的條件和價格。

美國財政部還表示﹐這一交易不會增加財政部對花旗集團的投資額。

花旗集團週五也在一份公告中表示﹐根據可以轉換的最大股數計算﹐美國政府可以擁有花旗集團發行在外普通股總股數的36%左右﹔現有股東將擁有花旗集團發行在外股數的26%左右。

美國財政部還表示﹐花旗集團董事長已告知財政部﹐花旗集團將盡快對董事會進行調整﹐以後董事會的多數董事將是新的獨立董事。

【美股盤後】銀行股領跌 標普500挫至12年低點

中央社台北2009年 2月28日電)美股週五收黑,標準普爾500指數挫至12年低點,主要因政府三度紓困花旗集團 (C) 將削減現有股東持股74%,加上最新公佈的數據顯示美經濟衰退速度超乎預估,拖累美股走勢。
Federated Clover Investment Advisors基金經理人Matthew Kaufler接受彭博訪問時表示,花旗問題簡直是場噩夢,並且持續擴大,何時可終結尚不得而知。而且就發生在惡化的GDP數據公佈之日,進一步打擊市場信心。花旗收盤重挫39%,報1.50美元,改寫18年低點。美國政府三度紓困花旗,財政部表示如果民間股東也同意以相同條件轉換成為普通股,財政部將高達 250億美元的優先股轉換成為普通股。
花旗週五爆大量,成交量超過18億股,改寫美股紀錄,佔總成交量140億股約13%,超過全美國交易所 3個月日均量46%。

美國政府與花旗就擴大政府持股展開談判

美國政府與花旗就擴大政府持股展開談判

據知情人士透露﹐花旗集團(Citigroup Inc., C)正在與美國聯邦政府官員就政府大幅擴大對花旗集團的所有權一事進行談判。

儘管上述談判仍可能破裂﹐但美國政府也可能最終持有花旗集團多達40%的普通股。上述知情人士稱﹐花旗集團高管希望美國政府持股比例更接近25%。

此類舉措將使聯邦政府官員在花旗集團的影響力得以提高﹐花旗集團已將相關計劃提交監管機構。瞭解談判情況的知情人士稱﹐奧巴馬(Obama)政府並未表明是否支持上述計劃。

知情人士透露﹐根據正在考慮的方案﹐政府持有的450億美元花旗優先股中的大部分將轉換成普通股。政府之前通過注資獲取了這部分優先股﹐相當於花旗7.8%的股權。

此舉不需要動用納稅人更多的錢﹐但花旗其他股東將面臨股份被稀釋的局面。聯邦政府獲得花旗更多股權可能引發其他困境銀行也將陸續達成類似協議的猜測。



知情人士稱﹐作為方案的一部分﹐花旗管理人士希望說服購買了該行優先股的私人投資者能夠像美國政府一樣將所持優先股轉換為普通股﹐這些投資者包括新加坡政府投資公司(Government of Singapore Investment Corp., GIC)、阿布扎比投資局(Abu Dhabi Investment Authority, 簡稱ADIA)和科威特投資局(Kuwait Investment Authority)。此舉將進一步提振銀行的有形普通股權益資本(TCE)這一晦澀但越來越重要的資本衡量指標。

上述方案的細節仍可能發生變動﹐政府將優先股轉換為普通股的價格等關鍵問題尚未得到解決。

此前TCE作為衡量銀行財務情況的一項指標一直未受到太大重視。該指標還被認為是最保守的財務狀況指標之一。

銀行家和監管部門傾向於使用第一級資本來衡量一家銀行的資本充足情況。第一級資本率考慮的是股本而非普通股。以第一級資本率衡量﹐包括花旗在內的多數大銀行財務情況似乎都屬健康。花旗的一級資本率為11.8%﹐遠高於被評為資本狀況優良所需的水平。相反﹐多數銀行的TCE率顯示出情況相當糟糕。花旗截至去年12月31日的TCE率為1.5%﹐遠低於被投資者界定為安全水平的3%。

US Goverment in Citigroup

美國政府將加大對花旗集團的掌控力度正文

美國政府可能增持花旗集團(Citigroup Inc.)股份﹐此舉將使這家在困境中掙扎的金融服務業巨頭更直接聽命於政府。
目前持有花旗集團7.8%股份的美國政府已經在迫使該公司剝離部分業務﹐並對管理層的綜合薪資事宜擁有否決權。
政府近幾個月向花旗集團注資450億美元﹐還同意吸收該行資產負債表上價值數千億美元的不良資產損失。
專注於金融服務行業的紐約投資調研公司Keefe Bruyette & Woods Inc.董事長兼首席執行長John Duffy稱﹐從注資到資產保護﹐花旗集團實際上已經被國有化了。
位於弗吉尼亞州亞力山德里亞的金融服務諮詢公司Ely & Co.負責人Bert Ely表示﹐政府已經暗中掌控了花旗集團的許多方面。他認為﹐政府的這種掌控可能會變得更加明顯﹐而不是更加隱蔽。

Citigroup will restructure

花旗集团(Citigroup Inc., C)16日表示正在进行重组,把个人和企业银行业务整合成一家名为Citicorp的公司,把其他门类的客户贷款或金融服务整合成名为Citi Holdings的公司。花旗集团承认,在重组完成之后,Citi Holdings与Citicorp之间将泾渭分明。

  花旗集团首席执行长潘伟迪(Vikram Pandit)并没有重新定义花旗集团的全能银行模式,也丝毫没有背离他本人和其他管理人员长久以来所讲的花旗集团的特色:即全球银行业务。在银行办理存款并把交易帐户与贷款挂钩的客户是花旗集团核心业务的基础。

  花旗集团全球银行业务负责人Ned Kelly在接受道琼斯通讯社(Dow Jones Newswires)采访时表示,由非核心业务组成的 Citi Holdings有两个特点:第一,它的消费者业务超出了花旗集团所希望的水平,第二,它更倾向于一家非银行机构,换句话说,它更像是一家传统银行以外的实体。

  花旗集团这一次把消费者金融业务和存款业务彻底分离,从而改变了近期消费者金融业务要么被其他银行收购、要么转型为一家银行的做法。但是接下来,花旗集团要想剥离消费者金融业务可就难了。潘伟迪说,他并不急于出售这部分资产。或许,他没这个能力。

  咨询公司Booz & Co.的金融服务合伙人Seamus McMahon表示,与其他拥有消费者金融业务的银行一样,花旗集团也遇到了难题。他说,花旗集团的两大客户群之间没有任何重叠,尽管消费者金融业务的盈利能力诱人,但依然无人问津。究其根源,主要在于消费金融业务是与资本市场密切相关的,是依靠出售在二级市场发放的贷款来融资的。自从金融危机爆发后,这种融资方式就成了问题。

  但花旗集团的Kelly坚称,证券化市场融资成本上升和融资难度加大并不是花旗决定重组的原因;对花旗来说,消费者金融业务的规模太大了,导致其难以专注核心业务。

  Citi Holdings将由以下几个部门组成:

  -CitiFinancial:消费者金融公司,在全美拥有3,000家以上的分支机构,提供私人贷款和汽车贷款等金融产品;按照潘伟迪的说法,这家公司与花旗集团的银行业务联系不大。

  -CitiMortgage:主要处理经纪行、而不是花旗分支机构所经办的抵押贷款。花旗集团最近几年才开始在花旗银行(Citibank)与CitiFinancial之间建立联系,但这种试验还不成气候。

  -Primerica:出售年金和退休基金,同时也发放消费者贷款。

  -企业联名信用卡业务:其发放的信用卡上标记的是一家零售商的名字,而不是花旗集团。一些观察人士认为,这部分业务相对容易出售。摩根大通公司(JPMorgan Chase & Co., JPM)就可能存在收购意向。

  以上业务合并之后的总资产将达到8,500亿美元左右,其利润将约占花旗集团总利润的20%。流动性较差的资产也将被并入Citi Holdings。受资产冲减影响,这部分业务曾给花旗带来不小的冲击。

  潘伟迪称,Citi Holdings所囊括的这些子公司都是优质资产,在花旗集团看来它们都很有价值,这也是为什么这些业务或许应该被剥离出去,或是像美邦(Smith Barney)那样与其他公司的业务合并。

  Mendon Capital Advisors Corp.研究部门负责人Frank J. Barkocy认为,将花旗集团一分为二是很有道理的; 就Citicorp而言,该公司可以重新专注于其熟悉的业务,这部分业务的扩张和盈利机会也都具有吸引力;至于Citi Holdings,花旗集团分拆了这部分非核心业务;在当前的经济环境下,这部分资产难以卖个好价钱,但他相信,当状况有所改善时,花旗集团会把这部分业务作价出售。

  花旗集团首席财务长Gary Crittenden表示,对于股东而言,此次重组的好处就是战略彻底明确了;新的结构让人们清楚地了解到花旗集团的盈利和增长前景,另外也明确了Citi Holdings能给花旗带来多少收入;而且,这一切都能发生在不完全剥离业务的情况下,就像美邦交易所表现的那样。