Green Packet

TELECOMMUNICATIONS solutions provider Green Packet Bhd is committed to investing at least RM500 million over the next three years to expand its wireless broadband coverage and roll out its services by funding from internal funds, equity and other financial instruments.

Such services are crucial for Green Packet as they provide the firm an avenue for recurring income. This means the company will not be too dependent on infrastructure projects.

In 2006, the company posted sales of RM98.93 million and a net profit of RM55.29 million. The majority of revenue was project-based. By 2010, the group expect the recurring income will be the biggest revenue contributor for the group.

Green Packet shares on Bursa Malaysia closed unchanged at RM4.90 on March 30. The shares have gained 8.41 per cent so far this year, with a market cap of RM2.18 billion.

On March 16, the Government awarded the WiMAX spectrum to Green Packet's 55 per cent-owned MIB Comm Sdn Bhd (Packet One Networks Sdn Bhd), Bizsurf (M) Sdn Bhd (a unit of YTL Corp), Redtone-CNX Broadband Sdn Bhd and Asiaspace Dotcom Sdn Bhd.

Carry Trade - Suspected major cause of Feb crisis?

If anyone notice, the chinese press use still believe that China is the main impact of the great fall. The US economist think it from different perspective.

Carry Trade Defination
A strategy where an investor borrows in a foreign country with lower interest rates than their home country and invests the funds in their domestic market, usually in fixed-income securities.
Notes:It's like free money, right? Well, not quite. The big risk is the uncertainty of exchange rates. Remember, you've still got to pay back the money in a foreign currency. If your domestic currency falls in value relative to the currency you borrowed, then you run the risk of losing money. Also, these transactions are generally done with a lot of leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately. An example of a "yen carry trade" is borrowing 1,000 yen from a Japanese bank, exchanging the funds into U.S. dollars and buying a bond for the equivalent amount. Assuming that the bond pays more than the amount you must pay the bank for borrowing the funds, and the exchange rate does not move adversely, you will earn a profit.

How does it impact share market of countries with higher interest rate and cause the selling pressure ...

Speculators borrow yen, trade the currency for dollars, and then buy Treasuries or U.S. properties or U.S. stocks. The Bank of Japan lends money at only 0.25%. This it has been doing ever since the mid-‘90s, when the BOJ sought to get the Japanese economy out of its funk by making money easier to get. A hedge fund, for example, can take advantage of this low interest rate by borrowing yen at, say, 1% and buying US bonds at a 5% yield. Or, he can be more aggressive and go for 7% by buying New Zealand bonds.
What makes the transaction dangerous to the speculator is that the yen may rise. What makes it dangerous to everyone else is that there are so many people who owe so many yen. And what makes it so attractive to contrarian investors is that with so much money counting on the yen to go lower...it is almost sure to go up.
If the yen were to rise 6% the speculator’s profit would be wiped out. And since these transactions are almost always highly leveraged, his capital could be wiped out too. This is exactly what happened when the most famous hedge fund of all time blew up in the late ‘90s. The yen went up. The Russians had a financial crisis. Speculators looked at their holdings and decided to unwind some of the leverage. That meant selling their assets and repaying yen. Of course, to repay yen you have to have yen. So, you’ve got to go into the currency market and buy them – which pushes up the price of yen. In 1998, the yen rose about 25% against the dollar in the space of a few weeks and Long Term Capital Management went bust.
Nobody knows how much of this ‘carry trade’ there is...but today, there is almost certainly a lot more than there was ten years ago. Today, there are thousands more hedge funds and many more speculators – with billions more to work with - all betting that the yen will stay put.

~ From Daily Reckoning

Genting is the top gainer TODAY! Gained up to RM38.50 from RM36.25 by 3.30 pm. It was traded between a low of RM36.25 and high of RM38.75 with a total of 1.01 million shares. Genting covered warrants was also 11sen higher to RM1.32 while Resorts up 30 sen to RM17.70.

However, the shares dropped by the end of the day as expected. The speculators must have earned a lot from today's speculation.

Genting group gained a foothold in the casino business in Macau via a tie-up with Ho, who in turn will take up a stake in its associated company Star Cruises Ltd.

What They Say?

OSK Research has revised its target price upwards for Resorts to RM21 from RM17.60 and Genting from neutral to buy with a target price of RM43.10 from RM32.50

What's the Deal?

Star Cruises and Genting International would buy a controlling stake in the yet-to-built casino in Macau. The deal would give octogenarian Ho a stake in Singapore’s casino resort while offering Genting group access to the lucrative China gambling market.

What's Next?
On 15-Jan-2007, Genting Berhad and its subsidiary Resorts World Berhad have proposed a share split of their 50 sen shares into five 10 sen shares each. They mentioned that the share split would not have a direct impact on the companies’ market capitalization but would accordingly reduce their market price to one-fifth of that before the share split.

In matured foreign stock exchange, a share-split normally shows a particular stock is doing well and normally the stock price will be on uptrend towards the date of share-splits take effect. Both stocks do show the same uptrend pattern.

Kencana Petroleum Bhd made an impressive debut on the Main Board of Bursa Malaysia Bhd on Dec 15, opening at 80 sen, which was almost double its offer price of 41 sen. Unfortunately, I was not able to get the IPO due to limited offer and high demand. Now considering buying it from the market.


Group chairman Mokhzani Mahathir, a son of former prime minister Mahathir Mohamad, controls a 69.28-percent stake in Kencana Petroleum, via privately-owned Khasera Baru. Mokhzani said the company currently has projects worth about RM 1 billion on hand, which will last until early 2008.Besides partnering with Thailand-based Cuel Ltd, Kencana also works with Petronas Carigali Sdn Bhd, Murphy Sarawak Oil Co Ltd, Sarawak Shell Bhd, ExxonMobil Exploration and Production Malaysia Inc, and Talisman Malaysia Ltd.

For the financial year ended 31 July 2006 :
- total revenue : RM 473.3 million
- net profit : RM 26.72 million (forecast RM 45.2 million for year ended 31 July 2007)
- ratio of Local vs Overseas revenue : 45.4 % vs 54.5 %

The offer price values the stock at 7.98 times its forecast earnings of 5.14 cents per share.

Some of the Risks Analysis:
- fluctuations in market price of hydrocarbon, iron & steel and aluminum will affect the demand
- oil producers (OPEC) may lower forecast of hydrocarbon prices
- any global economy slowdown may affect demand for hydrocarbons - will affect demand for supporting products and services
- fluctuation in foreign exchange rates will have direct impact on price of imported raw materials such as steel and stainless steel (stringent specification requires raw materials from particular sources - not locally, be used only).

Based on turnover, Kencana Petroleum Group is ranked fourth among operators within Metal Structure Fabrication Industry in Malaysia.

Earlier this year, Kencana Petroleum clinched its biggest contract worth RM790mil from the Thailand-Malaysia Joint Development Authority to build an offshore oil rig facility some 150km from Kota Baru.

With its' low price-earning-ratio of 7.98 which is lower than industry P/E, this was really great investing opportunity.

Genting is so HIGH!

Genting Bhd’s share price extended its gains, rising as much as 3.92% or RM1 to RM26.50 in early trade on Oct 10 on the positive outlook of its bid for Singapore's second casino licence.

Genting's odds for winning Singapore's second casino licence have been strengthened after the abrupt withdrawal of US gaming giant Harrah's Entertainment Inc from the race.

The deadline for bids is Oct 10 and the results will be known by year-end.

Genting is widely seen as the frontrunner because it would spending more than US$1 billion (RM3.7 billion) to bring in theme parks giant Universal Studios to build family attractions on the 49ha site on Singapore's resort island of Sentosa.

~ From TheEdgeDaily

Foreign Investor Factor

Share prices of Kosmo Technology Industrial Bhd, Farm’s Best Bhd, MoBif Bhd and Iris Corporation Bhd fell sharply on Sept 19 after the US Securities and Exchange Commission and the Securities Commission launched probes into Aeneas Capital Management LP, which was among the largest investors in these companies.

Aeneas Capital Management LP, the hedge fund company run by former SAC Capital Advisors LLC money manager Thomas Grossman, is under investigation by regulators in the US and Malaysia after bets on Malaysian stocks caused losses of about 60 per cent in one of its funds, people familiar with the situation told Bloomberg yesterday. The US Securities and Exchange Commission (SEC) is examining Aeneas to determine whether it broke any securities laws, three people with direct knowledge of the inquiry said. In Kuala Lumpur, Aeneas is being probed for potential stock manipulation, said the people, who declined to be identified because the investigations aren't yet public.

Aeneas was among the largest investors in the four counters, in which its investment more than doubled this year. It lost money in stocks, including Iris and Farm’s Best, prompting Deutsche Bank AG to demand repayment of loans that finance the trades:

• IRIS
• Mobif
• Kosmo
• Farmbes

Do review the chain reactions from May to September. The selldown did not have a serious impact on the overall market sentiment, except for investors who had bought the stocks.

VC-backed companies

When considering an investment in a "MESDAQ" company, we do need to count on the presence of a VC. Of cource, we need to have a deeper understanding of the roles and objectives of VCs, and how these vary from one VC to another as different VC has different vision .

OSK Ventures International Bhd (OSKVI) is one of the most famous VC company in Malaysia with portfolio of about 20 companies. MTouche and Green Packet are backed by OSKVI where their performances have been very outstanding since their IPO. May be we can pay attention to future IPOs which involved by OSKVI.

My previous company got funds form Maybank VC. However, there were no guidance from their site and certainly does not match their objective: "Help improve the quality of the investee company's management". So far they are only 1 or 2 listed company (With poor performance) actually funded by Maybank VC.

So my perception is, the quality of a company sometimes do effected by their VC involvement (Good or Bad).

Example of VC Factor:
ISS Consulting Solutions Bhd, a software solutions provider that was listed on Aug 2. One of the substantial shareholders, Malaysia Venture Capital Management Bhd (Mavcap), sold almost 16 million ISS Consulting shares within the first three days, slashing its stake from 16.6% to 9.3%.
ISS Consulting ended its maiden trading day at 32 sen, well below its offer price of 41 sen. The stock closed at 21.5 sen last Thursday.

GENTING - Recent Analysis

12-Sept-06
Genting Bhd's share price closed 60 sen lower to RM24.40 on Sept 12 as investors perceived its subsidiary, Genting International plc's proposed acquisition of UK-based Stanley Leisure for RM4.36 billion cash offer as too high.

28-Jun-06
GENTING, a major shareholder in British companies Stanley Leisure Plc and London Clubs International, was among the top gainers Tuesday after reports that the British groups were in merger talks. The counter added 20 sen to RM23.40. An analyst said the merger, if materialised, would benefit Genting because the new entity would have good prospects at clinching regional casino projects.

30-May-06
Genting was Monday's top loser, shedding 60 sen, or 2.45%, to RM23, on volume of 872,700 shares. A dealer said the drop was due to the soft market yesterday. Last week, Singapore picked Las Vegas Sands Corp to build the first of two casinos in the island state. Although Genting failed in its bid, analysts expect the group to have a better shot at clinching the second casino resort project on Sentosa Island. The dealer added that Genting's share price should pick up when it got closer to the bid outcome for the second casino.

29-Apr-06
Genting: THE stock staged a remarkable rebound yesterday, gaining RM1.20, or 4.94%, to close at RM25.50. An analyst said investors snapped up Genting shares on bargain-hunting because the gaming stock had been depressed the whole week. Singapore was expected to announce the winning bid to develop the Marina Bay integrated resort in June, he said, adding that Genting was considered a dark horse for the project. “There is still some upside potential for Genting regardless of news from Singapore,” he said.

07-Mar-06
THIS gaming stock was locked within a narrow range after peaking at RM24.20 last Tuesday, the highest since March 7, 1996. Technically, the flat to marginally easier trending of the moving average convergence/divergence against the signal line and the falling stochastic from the overbought area suggest that Genting shares may extend their consolidation for a moment, unless the recent peak is cleared successfully. Firm support is seen at RM23.30.