Information in this guide has been obtained from sources believed to be reliable. However, its accuracy or completeness is not guaranteed. While every precaution is taken to ensure accuracy, the publisher accepts no liability for any error which may arise.The articles are based on the opinions of the various authors and do not represent the opinions of this publication and/or the opinions of the organisation he/she represents.In no event is SHARES INVESTMENT liable for all and/or any direct or indirect loss arising from any use or any reliance of any information provided.

FEATURES

p4 2010: The Malaysian Economic And Investment Outlook

p6 The 5 Essential Elements Of Financial Freedom

p8 Land Banking: Could This Be Your Preferred Choice Of Investment In 2010?

p10 Malaysian Air Plans To Buy 15 Airbus A330-300s

p11 Domestic Recovery To Boost Economy

p14 Sharing Effective Investment Strategies

■ CONTENTS ■ ■ Issue 23 ■ 11 Jan - 07 Feb 2010

PERSPECTIVE p4

All materials printed in SHARES INVESTMENT are protected under the copyright act. All rights reserved. No part of this publication may be reproduced in any form or by any means without the written permission of the publisher. Information in the publication should not be taken as offer/ advice to buy or sell securities.We, our associated companies and / or their officers, directors and employees may own or have positions in securities mentioned in the publication, and may from time to time, add on to or dispose of such securities.

Despite the challenging year that was 2009, some positives did emerge in the Malaysian investment scene, the equity market in particular.

p10

p8

MSHE_1-2_Content23.indd 1 1/7/10 1:18:24 PM

p11

REGULARS

p17 Market Indices

p20 Foreign Indices

p22 Market Capitalisation

p24 Major Trades

p26 Most Active Shares

p28 Hitting 52-Week High

p29 Hitting 52-Week Low

p30 Top Gainers

p32 Top Losers

p34 Lowest P/E

p36 Highest Yield

p38 Highest Margins

p40 Highest ROE

p42 Profit & Loss

p44 Upcoming Results Announcements

p46 Entitlements (cd, xd, cb, xb…)

p48 Performance of Recent IPOs

p49 Discount to NAV

p50 Mainboard Companies A-Z

p226 ACE Market Companies A-Z

p247 Investment Trust

p251 Warrants A-Z

p256 Inactive Shares, Warrants & Loanstocks

p267 Companies Index A-Z

ShareS InveStment (malaySIa) is published once a month.

We welcome contributions from readers, as well as from finance professionals. Please fax or e-mail (editorial@sharesinvestment.com) should you also have any queries, remarks or suggestions.

Supported by

PUBlISherPioneers & leaders (malaysia) Sdn Bhd(Co. No. 660679-A)Unit 901, Level 9, City PlazaNo 21, Jalan Tebrau80300 Johor Bahru, MalaysiaTel : (03) 7875 6908 / (65) 6745 8733Fax: (65) 6745 8321

editor-in-chief Phan Tjun Serneditorial Director Lew Poh ChanSenior Consultant Dr Ho Kah Leongeditor Sang Ah Kewregional research editor Clement Kanresearch executives Aw Jie Sheng David Chung Donavan Lim Lai Wyai Kay Lee Szu Yung Soo Yin Ling Xavier Limtranslators Catherine Mak Choo Ai Loon Yong Chia Win

❖ executive Director Christopher Fun(Business Development) regional Business S. KrishnamoorthyDevelopment managerSales & marketing manager Clay Foo

PrIntervivar Printing Sdn Bhd

(Co. No. 125107-D)Lot 25, Rawang Integrated Industrial Park 48000 Rawang Selangor Darul Ehsan Tel : (03) 6092 7818Fax : (03) 6092 8230

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w w w . s h a r e s i n v . c o m

MSHE_1-2_Content23.indd 2 1/7/10 1:18:50 PM

• editorial desk •

3

The last FOMC meeting of 2009 ended without much fanfare, as the Federal Reserve voted unanimously to keep

interest rate at the prevailing near-zero level. More importantly, the Fed reminded market watchers that a pullback of most of the special liquidity facilities will take place in the coming months, which could put a halt to the ongoing equity rally.

Before we know it, 2009 has already flown by. For the aforesaid period, the local equity bellwether FBM KLCI has recovered strongly from a trough of 836.51 in March to close the remarkable year at above the 1,250 mark. Which means to say, investors who were brave enough to go contrarian at the pinnacle of all the doom and gloom were more than amply rewarded.

As always, this is the time of the year where analysts and market experts gaze into their crystal balls, sticking out their necks to make bold predictions as to where the market is heading towards next. But whatever the pre-dictions, do pay attention to the upcoming 4Q results reporting season, which could very

much dictate the market direction at least for the near term.

For 2010, oil prices look poised to keep the upward momentum, underpinned by continuing global economic recovery and robust demand, particularly from China and India. This could benefit oil majors and players supporting the offshore and oil & gas industries. And since palm oil prices are positively correlated to crude oil prices, plantation companies could also receive a boost.

This issue, we share some equity investment strategies, which investors can adopt going into the brand new year. We also take a look at what some analysts have to say about Selangor Properties, Berjaya Corp, TSM Global and Crescendo Corp in our ‘Investors’ Corner’.

Wrapping up this first issue of 2010, the entire Shares Investment team wishes all our readers a wonderful and smooth-sailing year ahead! May you make huge profits in the stock market!

Clement KanResearch Editor

MSHE_3_Ed.indd 3 1/7/10 1:19:31 PM

4

further into 2010. The exter-nal factors are more visible, with the US recovery, China consumption patterns and regional trade and curren-cies being the main issues. However, of most importance would be understanding the internal issues surrounding the Malaysian economy. To know more about this, let us first look at the Malaysia economy in 2010.

Economic OutlookThe year 2009 was a chal-

lenging one, with an expected GDP growth rate of -3.3% (including 4Q2009-estimated figures). Industrial production was hit along with the much slower than expected growth

in the export sector, led by electronics, manufacturing as well as a slower than ex-pected growth in imports due to companies slowing down on their re-stocking and com-ponent purchases.

In 2010, the Malaysian economy is expected to grow by some 3%. The government expects private consumption to expand by some 2.9%; with private investments growing by some 3.4%. This is at the back of a 2.5% rise in per capita income to RM24,661.

According to the Malaysian Institute of Economic Re-search (MIER), the liberalisa-tion measures of the services sector that were announced in April 2009 was to ensure

Despite the chal-lenging year that was 2009, some positives did emerge in

the Malaysian investment scene, the equity market in particular. In hindsight, the Malaysian equity market performed better than most analysts predicted it would. The re-listing of Maxis into the local market provided the much needed liquidity and confidence to start the New Year. However, with the Maxis issue already factored into the equation, positive news from the external along with the internal environ-ment should play a key role to help boost the FBM KLCI

PersPectivetext : Sherman Kumar

2010: The Malaysian Economic And Investment Outlook

MSHE_4-5_Perspective.indd 4 1/7/10 1:20:26 PM

5

that the services sub-sectors were fully liberalised to for-eign investors. This is on the premise that Malaysia lacks expertise and local investments in many of these sub-sectors. Among the sec-tors opened up are computer and related services, health and social services, tourism services, transport, recre-ational, business services, and shipping.

In addition, the long-stand-ing 30% Bumiputra equity requirement for newly listed companies was removed, making investment conditions less restrictive. This develop-ment took place on 30 June 2009. The measures were to bring Malaysia’s financial market closer to regional benchmarks. For the aver-age person, the relief came in the individual tax relief on broadband subscription fee of RM500 a year from 2010 to 2012. In addition to this, the Malaysian government has decided to offer tax incen-tives for healthcare service providers who offer services to foreign health tourists with income tax exemptions of 100 per cent on the value of increased exports from 50 per cent previously. However, the impact of most measures will probably only reflect in 2Q2010.

Key Investment Portfolio The New Year will likely

see more activity in the con-struction sector as several projects are underway to boost infrastructure spend-ing. These include the RM5b to be spent by Tenaga Na-

s iona l Berhad (TNB) to implement electricity gen-eration, transmission and distribution projects in 2010. Other projects include the RM12b rail double tracking project in the northern region of Malaysia (30% complet-ed). Meanwhile, the south-ern region double track-ing project costing some RM3b is to take place from 2010. Other projects include an integrated immigration, customs and quarant ine complex in Bukit Kayu Hi-tam, construction of 6 UiTM (University Institute Tech-nology MARA) campuses and the development of the MATRADE centre.

All these developments would shift the investment play on infrastructure, con-struction and property play-ers in 2010. Most investors are bul l ish that the long dormant property sector would recover, aided by the developments of sup-porting projects that cater to the needs of the various infrastructure projects taking place in 2010.

However, the plantations industry might be sluggish in 2010, as the Malaysian palm oil plantations undergo a replanting programme. The Malaysian government has encouraged the replant-ing of trees. This exercise will take a period of three years, translating into a loss of 400,000 tons of palm oil in the marketplace. As an effort to mitigate losses due to this exercise, the main players in the Malaysian market are currently on a business diver-

sification strategy to ensure better performance of their respective companies. The exercise has however put a dent to investors holding of commodity and commodity related stocks and funds.

The oil and gas industry remains bullish despite the uncertainties of the global price of the commodity. It is estimated that Malaysia will account for 1.92% of Asia Pa-cific regional oil demand by 2014, while providing 8.74% of supply. Regional demand had risen to an estimated 16.94m barrels per day in 2009 and is forecast to reach 20.41m barrels per day by 2014. The principal import-ers will be China, Japan, India and South Korea. It is estimated that by the year 2014, the only regional net exporter will be Malaysia. In terms of natural gas, the re-gion consumed an estimated 459b cubic metre (bcm) in 2009 and the demand is expected to rise to 582bcm by 2014.This augurs well for Malaysia, a principal natural gas exporter. Malaysian gas production is expected to rise from an estimated 65bcm in 2009 to a possible 110bcm by 2019.

With all the information provided, we encourage in-vestors looking to invest in Malaysia to consider these factors before making their investment decision. How-ever, like all investment deci-sions, investors are advised to conduct an in-depth evalu-ation study before attempt-ing any capital investment strategy.

MSHE_4-5_Perspective.indd 5 1/7/10 1:20:48 PM

6

Yap Ming Hui (yapmh@whitman.com.my) is the Managing Director of Whitman Independent Advisors Sdn Bhd, who has recently launched Roadmap to Financial Freedom service to help Malaysians achieve their financial freedom.

on the definition of financial freedom that I have shared previously, your spending level measures your needs and wants component of the definition.

Inflation Inflation is another essen-

tial element that will make or break your financial freedom planning and attainment. Why? Because inflation will not only deplete your accumu-lated capital, it also reduces your purchasing power. This is one of the most challenging elements to understand and manage because it is intan-gible and difficult to see. You can only feel it stronger over an extended period of time, say 10 years or more. The fact is that most of our impor-tant financial planning goals like retirement planning and children tertiary education planning have very long time horizon. If we do not invest to grow our money higher than inflation rate, our saving will shrink by the time we need

to use it 10 or 15 years later. As a result, we will have to save much more than what we presume it needs.

ROIDespite the negative effect

of spending and inflation, one can count compound inter-est to help him to achieve financial freedom. The high-er the return on investment (ROI) rate one can achieve, the better he can make his wealth work for him. As far as achieving financial freedom is concerned, we are not talking about ROI in isolation. It is not that you have a choice as to what ROI you want. If you don’t achieve certain ROI for your money, your effort to achieve financial freedom will be very much discounted by the impact of inflation and spending.

Time Time is another essential

element for you to consider and integrate in your financial freedom planning. Based on

In order to achieve financial freedom, I believe that one has at least to understand and manage the 5 es-

sential elements of financial freedom effectively. With-out knowing how to manage these 5 elements effectively, I would say financial freedom will only be a dream, not a goal to most people. There-fore, it is very important for us to understand what these 5 essential elements are and how to manage them.

SpendingSpending is one of the 5

essential elements of finan-cial freedom. Unless and until you understand the impact of your spending to your achievement of financial free-dom, it is unlikely you will achieve your financial free-dom. We need to understand that the more we spend, the less we save. The more we spend, the more money we need to maintain our lifestyle in retirement years. Based

PersPectivetext : Yap Ming Hui

The 5 Essential Elements of Financial Freedom

MSHE_6-7_Perspective.indd 6 1/7/10 1:21:45 PM

7

the definition of financial free-dom, we need to understand the time when our financial needs and wants appear. For example, at which year will you need to finance your first child’s tertiary educa-tion, or at which year will you need to buy your house. In addition, we also need to know the time horizon that you have to accumulate your financial resources. Will it be short term, medium term or long term? Only then, you are able to structure your invest-ment properly to achieve your funding target.

SavingThe importance of saving

in achieving financial freedom needs no further empha-sis. The more we save, the less we spend. As a result we have a less expensive lifestyle to maintain when we retire. In addition, the more we save, the less ROI we will need to achieve the

same accumulation target. For example, if you can save RM16,000 per year, you will need to get an annual ROI of 18.3% to accumulate RM1m in 15 years time. However, if you can save RM36,000 per year, you will only need to achieve an annual ROI of 8.3%.

Applying The 5 Essential Elements To Your Own Life

So, do you feel that you understand all the 5 essential elements? If you do, I must congratulate you. If you don’t, I am afraid you need to learn more about them if you really want to achieve your financial freedom.

After examining the 5 es-sential elements of financial freedom, you will find that all these 5 essential elements are closely related and inter-connected. One essential element will affect another es-sential element. For example,

how much you spend will af-fect how much you save. How much time horizon you have will affect the ROI you need to achieve an accumulation tar-get. Therefore, understanding each of the essential elements is not enough. You need to un-derstand the combined result of these 5 elements.

As I mentioned before, each one of us will have our own financial freedom goal. There-fore, each one of us will also have our own code for our financial freedom. As a re-sult, we need to find out what combination of spending, ROI, inflation, time and saving is the right code for us to achieve our own financial freedom.

If you have not, you had better start finding it out before it is too late. You do not want to find it out too late. By then, without the essential element of time, it is going to be very difficult, if not impossible to achieve your financial free-dom.

Henry Ford(1863-1947)

Ford, considered the father of the auto industry, launched a business that

revolutionized American life perhaps more than any other. He founded

Ford Motor Co. in 1903 and five years later introduced the Model T, the first car to target the

mass market. Ford became the biggest automobile producer in the world, manufacturing

low-cost automobiles by cutting production costs, controlling raw materials and using an

assembly line. When his factory workers began quitting because of the monotony of the

work and rising production quotas, he doubled wages and offered a profit sharing plan.

31-12-9231-12-93

73.345114.797200.591156.831

EPS.144.187.259

*.2

984.6611,110.6

151,765.8

984.6611,110.6

151,765.8

31-12-9231-12-9331-12-94INTERIM

$12.00$11.00$10.00$9.00$8.00$7.00

73.345114.797200.591156.831

EPS.144.187.259

*.2

984.6611,110.6151,765.835

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–

–1:5

1:2

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FOR YOUR INFO

MSHE_6-7_Perspective.indd 7 1/7/10 1:22:02 PM

8

KM Lee is an Associate of TSI International Group Inc. Canada – A Real Estate & Land Banking Investment Company. He can be reached at lee.khai.mun@gmail.com

ers and commercial building companies also engage in it. Some of the richest people in history started or expand-ed their wealth through land banking.

Many people have heard of the huge fortunes made by Howard Hughes, who owned large tracts of land near Los Angeles and Nevada, and Donald Trump, who still has large holdings in Manhattan and Toronto. But few people know that one of the most suc-cessful individual land bank investors was the comedian Bob Hope, who bought 10,000 acres in San Fernando Valley, California when the area was principally orange groves, and thousands more acres in Palm Springs and Malibu when these were still undeveloped areas. He later sold these holdings at immense profits when residential development reached these areas.

The basic strategy is to identify land parcels likely to

be crossed by the develop-ment path of rapidly expanding urban centres, buy the land, bide your time until actual de-velopment approaches, then sell the land to developers at a price several times more than the original purchase price.

The strategy is essentially medium-term, or even long-term, in nature, because it en-tails holding on to the property investment and then either de-veloping it at some future time or selling to someone else who will. It is not meant to generate immediate income to support current requirements.

Three things work for you with this investment: it has huge potential for apprecia-tion; it eliminates the hassles associated with traditional real estate investing; and it is something you can do alone or in partnership with more experienced organisations.

Going into land banking re-quires plenty of time, knowhow and financial resources. You

People who wish to diversify their investment port-folios may want to include foreign

land banking in their invest-ment strategies. The potential returns are high, albeit not without risks. But as an instru-ment for medium-term place-ments of investible money, land banking may be one of the best investment products around for you to consider in year 2010.

Have You Heard of Land Banking?

The term “land banking” may sound new, but the idea is not. The concept may be as old as civilisation itself, or at least as old as private property rights.

Land banking used to be the exclusive domain of royalty and the landed gentry, and many royal families still earn large incomes from their land holdings. Real estate develop-

PersPectivetext : KM Lee

Land Banking: Could This Be Your Preferred Choice Of Investment In 2010?

MSHE_8-9_Perspective.indd 8 1/7/10 1:22:53 PM

9

Ex-DividendEx-refers to a period of time immediately before a dividend is paid, during which new buyers in the stock are not entitled to receive the dividend. A stock’s price is revised lower to reflect the dividend value on the first day of this period. On that day, a stock is said to “go ex-dividend”, which literally means “without dividend.”

31-12-9231-12-93

73.345114.797200.591156.831

EPS.144.187.259

*.2

984.6611,110.6

151,765.8

984.6611,110.6

151,765.8

31-12-9231-12-9331-12-94INTERIM

$12.00$11.00$10.00$9.00$8.00$7.00

73.345114.797200.591156.831

EPS.144.187.259

*.2

984.6611,110.6151,765.835

––

–

–

––

FOR YOUR INFO

may not have these resources if you go it alone. But you can still become a land banker by partnering with organisa-tions that specialise in raising the millions of dollars and spending the countless hours required for success in land banking. For the small inves-tor, partnering with a reliable land-banking firm is the most viable option.

Looking For The Right Land Banking Firm

While there is great promise in land banking investments, investors should always be careful in their choice of the land banking company to put their money in. Remember, the investment is for the me-dium- to long-term and many things could happen in the interim. The key factor in land banking is the thrust of gov-ernment policies on land use and development planning. Some companies are better equipped to deal with all the variables than others. Here are some things to look for when considering investment in land banking schemes.

• Company Reputation. A company with a well-established reputation is

one’s best bet. The firm is in the best position to as-sess the land and to know factors such as govern-ment policies, directives, and taxes (among others) that will influence devel-opment directions.

• Location. The old adage about “location, location, location” is always true for land.

• Timing of returns. While land banking companies will point out that their investors earned returns, it is best to find out how long it took for the returns to happen.

• Exit strategies. A land-banking project gener-ates profits for investors only when planning per-missions are granted for the development plans. One should ask the land banking company about fallback plans in case planning permissions are not obtained.

Outlook For Year 2010Starting in 2010, the pros-

pects of land banking project become more promising as

economic recovery takes hold. Land banking companies and governments learned from the lessons of the recent past about the proper manage-ment and supervision of land banking projects. There is no dispute about the fundamental soundness of land banking as a strategy for medium-term in-vestments. The fact that gov-ernments in the UK, Australia, the U.S. and Canada have, in varying degrees, felt the need to engage in land banking is proof that the strategy works. The strategy is so effective that there may be up to 200 local governments operating land banking units by year-end 2009, in the US alone. This is on top of private land banking enterprises.

Only the better-capitalised and better-managed compa-nies have been able to weath-er the crisis, and they are now poised to take full advantage of the lower property values in the fringes of major cities. Small investors would do well to strike up a partnership with successful land bank-ing companies, since their resources are not enough to fulfil the huge capital needed to pursue such projects suc-cessfully.

MSHE_8-9_Perspective.indd 9 1/7/10 1:23:07 PM

10

Corporate Digest

text : Dow Jones Newswires

will be delivered between 2011 and 2016 and further financing could be sourced later in the form of borrow-ings or further share sales. The A330-300s will be used to replace older wide-body aircraft, as well as add new capacity for its growing mar-kets in South Asia, China, North Asia, Australia and the Middle East, he added.

Airbus senior vice-presi-dent for sales and customer affairs Asia, Thomas Fried-berger, said the more fuel-efficient aircraft will lower operating costs. Azmil said the airline expects savings of RM300m a year when the 15 new A330-300 aircraft replace older planes. “The A330 will complement our incoming fleet of six A380s and 35 B737-800s. The new fleet will create a strong plat-form for us to profitably grow,” Azmil said. “By 2016, all the aircraft we have ordered will be in and we expect to have one of the youngest, most fuel efficient and environmentally-

friendly fleet in Asia.”Azmil added that the carrier

plans to start owning more of its fleet. Currently, most of the airline’s planes are leased from parent Penerbangan Malaysia “Our strategy is to transform from a 100% leased fleet to owning at least a third of the aircraft in our core fleet. This will give us the flexibility to refresh the aircraft on a needs basis to provide our customers with the latest product,” he said.

In a late announcement, the company said that it has signed agreements with Pen-erbangan Malaysia to take over its parent’s current order for six A380’s as well as two B777 and two B747 aircraft for RM3.19b. Azmil also said Airbus will compensate Ma-laysian Air with over RM300m for the late delivery of its A380 super jumbo aircraft. The first plane, which was scheduled for delivery in January 2011, will now be delivered eight months late in August 2011.

Malaysian Air-line System plans to buy up to 25 new wide-body

Airbus planes at a list price of US$5b and is partly funding its expansion via a RM2.67b cash call. The national car-rier signed a memorandum of agreement with Airbus for the purchase of up to 25 new A330-300 aircraft – 15 on firm order and an option for a fur-ther 10 planes – as part of its fleet renewal program.

The company also said it plans to raise RM2.67b in a rights issue to purchase air-craft, repay debt and to meet working capital requirements. Managing Director and Chief Executive Azmil Zahruddin told reporters at a briefing that the one-for-one rights issue, to be priced at RM1.60 each, is expected to be com-pleted in the first quarter. The planned cash call is in line with industry practice to fund major expansion, he said.

Azmil said the new planes

Malaysian air Plans To Buy 15 airbus a330-300s

MSHE_10_CD.indd 10 1/7/10 1:23:48 PM

11

benefits from the turnaround in the exchange rate of A$ and its overseas investments in 3Q09 onwards.

With demand for proper-ties still strong, especially high-end properties, Selprop is likely to launch its ma-jor development project in Damansara Heights, a 107-unit high-end condominium project (Gross Development Value: RM240m) in 2010.

Berjaya CorporationBer jaya Corporat ion ’s

(BCorp) 1H10 net profit was better than expected, grow-ing 11.5% Y-o-Y to RM93.6m, or 57% of Standard & Poor’s previous FY10 estimate. 1H10 revenue, however, was in line, rising 4.2% Y-o-Y to RM3.2b.

The improved resu l ts were mainly due to higher EBIT contributions from its f inancial services (EBIT of RM49.1m vs. LBIT of RM18.6m in 1H09), consum-

er marketing (+37% Y-o-Y), property (+546% Y-o-Y) and improved associate income (+250% Y-o-Y). There was also a RM74.2m write-back on the impairment of invest-ments in its associates and investment (impairment of RM70.2m in 1H09). Gaming EBIT, however, slipped 3.6% Y-o-Y due to lower ticket sales.

Berjaya Sports Toto’s re-silient and defensive gaming income will continue to un-derpin BCorp’s FY10 earn-ings. Its consumer products, property and financial ser-vices divisions are expected to post stronger earnings growth, in line with the recov-ering economic outlook. The impending listing of Berjaya Retail (BRB) on Bursa Ma-laysia and the injection of Cosway into Cosway Corp Ltd, meanwhile, will further entrench BCorp’s presence in the consumer products segment.

Standard & Poor’s main-tains its Hold recommen-dation on BCorp, but lifted its 12-month target price to RM1.30 (from RM1.02). However, SJ Secur i t ies maintains its Buy recom-mendation on BCorp with a fair value of RM2.24. This is based on a discount of 35%

Selangor PropertiesSelangor Properties’ (Sel-

prop) FY09 results were above expectations with a strong showing in the final quarter that pushed its net profit to RM32.3m for FY09 from a net loss of RM3.2m for 9M09. The var iance was mainly due to higher-than-expected contributions from property development, which jumped 154% Q-o-Q to RM27.5m in 4Q09 from RM10.8m in 3Q09. Selprop reported a 9% Y-o-Y raise in net profit to RM35.8m in 4Q09 from RM32.9m in 4Q08 (+7.5% Q-o-Q from 3Q09’s RM33.3m).

The strong property devel-opment profit came mainly from its two property proj-ects, Bukit Permata and Selayang Mulia, which are located in Batu Caves and Selayang, respectively and also a 50%-owned shopping mall/apartment project in Perth, Australia. Selprop also

compiled : David Chung

INVESTORS’ CORNER

Domestic Recovery To Boost Economy

Selangor Properties (FY Oct 2010) Standard & Poor’sResearch dated 29 Dec 2009Forecast EPS 10 (sen) 11.6PER 10 (x) 27.1Forecast DPS 10 (sen) 10.0Div. Yield 10 (%) 3.20Call BuyTarget price (RM) 3.90Share price as at 31 Dec, 2009: RM3.27

MSHE_11-13_InvCorner.indd 11 1/7/10 1:24:24 PM

12

on the fully diluted RNAV per share of RM3.45.

SJ Securities said that the group is set to perform better with the H1N1 scare being over. The hotel and resorts business wi l l be the key sectors benefiting from this. Meanwhile the overall property market has been stronger industry wide. Moreover, the group’s prop-erty divisions had reportedly done very well over the past few months. SJ Securities expects the consumer-mar-keting segment to continue to grow moving forward.

TSM GlobalTSM Global (TSM) re-

ported 9M10 net profit of RM17.0m. Revenue was flat Y-o-Y but operating and pre-tax profits fell by 12% and 8% respectively due to higher copper costs and a stronger Yen versus the RM,

which inflated raw material costs. A lower effective tax rate helped boost profit at the net level.

3Q10 revenue declined marginally by 1.2% Y-o-Y to RM65.1m, as sales gradually recovered to pre-crisis lev-els. Meanwhile, net profit for the quarter was 4% higher Y-o-Y at RM6.5m, largely boosted by a lower effective tax rate of 9.3% vs. 21.3% a year earlier.

Standard & Poor’s be-lieves TSM’s prospects are improving, judging from the sequential increases in sales and net profit over the last three quarters. It expects the uptrend in performance to prevail into FY11, under-pinned by the gradual revival in the automotive industry. Standard & Poor’s continues to like TSM for its resilient earnings delivery and swift recovery from the economic

downturn. TSM is expected to benefit further from the liberalization initiatives un-der the recently revamped National Automotive Policy. Valuation appears to be un-demanding at prospective 4.5x FY11 PER. The current share price is also lower than its NTA/share and net cash/share of RM2.53 and RM2.26 respectively as at end-October 2009.

NRA Research is project-ing a sustained performance in 4QFY10 and further re-covery in FY11 on account of higher vehicle unit sales and an improving economy. A fluctuating Yen and further increases in copper prices would however impact on margins. Mitigating factors for the group include its ex-posure to high-volume, fuel-efficient and affordable cars such as Perodua’s models, sales of which have been

Berjaya Corporation (FY Apr 2010) Standard & Poor’s SJ SecuritiesResearch dated 28 Dec 2009 24 Dec 2009Forecast EPS 10 (sen) 5.7 8.3PER 10 (x) 21.1 14.5Forecast DPS 10 (sen) 2.5 5.0Div. Yield 10 (%) 2.1 4.1Call Hold BuyTarget price (RM) 1.30 2.24Share price as at 31 Dec, 2009: RM1.31

TSM Global (FY Jan 2010) Standard & Poor’s NRA ResearchResearch dated 28 Dec 2009 27 Dec 2009Forecast EPS 10 (sen) 41.2 44.0PER 10 (x) 4.9 4.6Forecast DPS 10 (sen) 5.0 5.0Div. Yield 10 (%) 2.5 2.5Call Buy BuyTarget price (RM) 2.30 2.40Share price as at 31 Dec, 2009: RM2.08

MSHE_11-13_InvCorner.indd 12 1/7/10 1:24:39 PM

13

more resilient during the cur-rent economic downturn. The group also appears to have been successful in its efforts to improve productivity and control costs.

Crescendo CorporationCrescendo Corporation’s

(Crescendo) 9M10 net profit of RM14.4m came in below expectations, achieving only above-50% of consensus estimates. The variance was largely due to lower-than-expected progress billing and sales of concrete products.

Standard & Poor’s expec-tation of a stronger 2H10 has not materialized, as evident in the respective 11% and 29% QoQ fall in Crescendo’s 3Q10 revenue and net profit.

Consequently, 3Q10 net prof-it margin fell to 10.8%, vs. 13.4% in 2Q10 and 17.7% a year earlier. Revenue from the property development and construction division in 9M10 fell 23% Y-o-Y, while the manufacturing and trad-ing arm suffered a 27% drop in sales.

Given the lackluster 9M09 results, it appears that de-mand for industrial/commer-cial properties, construc-tion services and concrete products in Johor has yet to recover, despite the gradual improvement in the domestic economy. On a positive note, Crescendo’s balance sheet remains healthy, backed by a NTA/share of RM2.59 and a net gearing of 0.3x as at

end-October 2009.TA Securities (TA) esti-

mates Crescendo’s 9M10 sales to reach RM110m, rep-resenting 54% of total sales for FY09 (i.e.: RM203m) and expects sales to pick up in 4Q10 as the company is in negotiation with a few par-ties for sale of completed factories.

As for the manufacturing division, TA expects the price and margin for concrete man-ufacturing to stabilise in 4Q10 as demand for concrete prod-ucts remained strong, thanks to the construction boom in Singapore and the stimulus packages. The 2 ready-mix concrete plants are currently running at 80%, producing 654,000m3 of concrete.

Crescendo Corporation (FY Jan 2010) Standard & Poor’s TA SecuritiesResearch dated 28 Dec 2009 24 Dec 2009Forecast EPS 10 (sen) 11.7 13.0PER 10 (x) 9.0 8.2Forecast DPS 10 (sen) 7.0 7.0Div. Yield 10 (%) 6.6 7.0Call Hold BuyTarget price (RM) 1.10 1.14Share price as at 31 Dec, 2009: RM1.07

Dollar Cost AveragingDollar Cost Averaging is a well known investing technique that involves investing a constant amount of money each month, quarter or year. The advantage of the technique is that the investor buys more shares when stocks are cheap and fewer shares when prices are high. While the

technique can be used with any investment, it is most commonly used when investing in mutual funds. The disadvantage to using dollar cost averaging when investing in stocks is that transaction costs, as a percentage of the periodic investment, can be relatively high.

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MSHE_11-13_InvCorner.indd 13 1/7/10 1:24:51 PM

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1. DiversificationNo matter what the financial

experts say of investing, the best investment advice contin-ues to be maintaining diversity in your investment portfolio. This is because you do not want to put all your eggs in one basket. Unfortunately, many people fail to understand that true diver-sification comes from holding

stocks, bonds, mutual funds, cash and currencies, and not stocks and stocks alone.

Those who believe that di-versifying their portfolio equates choosing stocks in various sec-tors rather than focusing on one, suffered many sleepless nights when the stock market crashed in late 2007 to early 2009 due to the financial crisis. Many people

In today’s rapidly-chang-ing economic climate, a company needs to de-velop a business strat-egy that can adapt to

changes effectively. Compa-nies, both big and small need to understand that a small company may not always be the one, which will end up be-ing ‘eaten’ by a big company. It is a slow company that is most likely to be ‘beaten’ by a fast company. A fast company is one that anticipates what might happen or what it might be able to make happen, and is fast to bring its products and ideas to the marketplace. Therefore, companies should understand how to develop and use fore-sight and anticipation to envis-age possible future scenarios in preparing for change and managing it well.

The same reasons apply to investment. A well-planned investment strategy is essential before making any investment decisions. With many uncer-tainties yet to be resolved, the investment climate remains challenging. Taking action now may feel counter-intuitive, therefore, it is advisable for investors to develop an invest-ment strategy to handle the volatile market conditions. Here are some suggested strategies that may help you invest with more confidence in 2010.

Sharing Effective Investment Strategies

5-Year Historical Benchmark Yield

Yiel

d (%

)

Source: Monetary Authority of Singapore, as at 30 November 2009

5.0

4.0

3.0

2.0

1.0

0.0

Nov-

94

Sep-

95

Jul-9

6

May

-97

Mar

-98

Jan-

99

Nov-

99

Sep-

00

Jul-0

1

May

-02

Mar

-03

Jan-

04

Nov-

04

Sep-

05

Jul-0

6

May

-07

Mar

-08

Jan-

09

Nov-

09

10-year period chart for STI

text : Xavier Lim

Across the cAusewAy

MSHE_14-15.indd 14 1/7/10 1:25:27 PM

15

learned valuable lessons during this time frame.

Nobody dare to say that we will never again experience a significant stock market crash. If this were to happen again, your entire retirement hopes, dreams, and funds invested in the stock market would be in deep and shark infested waters.

2. Keep It SimpleThe key point is to under-

stand what you invest. Investors may want to figure out their own financial goals and develop an investment strategy that re-quires little analytical research and time. For example, invest-ing in stocks such as United Overseas Bank, Venture Corp and Keppel Corp will reduce your worry of these compa-nies going bankrupt when the economy is in a bad shape as these 3 companies are leaders in their field. Investors should also invest in simple products with transparent structures that help to provide assurance, such as the Singapore Government bonds, REITs and international funds.

3. Asset Allocation“No pain, no gain”, all invest-

ments involve some degree of risk. By investing in more than one asset category, investors re-duce the risk of losing too much money and their portfolio’s over-all investment returns will have a smoother ride. Besides holding stocks, bonds and cash, inves-tors may want to consider allo-cating some of their investable assets into foreign currencies, leaving this money in a bank's foreign deposit account.

Investors need to determine his/her financial goal and risk tolerance in order to establish an appropriate asset alloca-tion model. Investors will be able to handle volatile market conditions with an established appropriate asset allocation model that will smooth his/her ride in investment. The model should also allow investors to limit their losses and reduce the fluctuations of investment returns without sacrificing too much potential gain.

4. Rebalancing Of PortfolioPeriodic rebalancing of as-

set allocation is a good way of market timing. For example, if an investor’s 60/40 stock/bond allocation has morphed into a 70/30 split, then that investor should sell stocks and add bonds to bring the portfolio back on track.

Data has shown that inves-tors who aligned his/her portfo-lio back to the target range once a year between 2003 and 2007, was less exposed to the market crash in 2008. What’s more, if an investor trimmed the bond portion at the beginning of this year, he/she will have captured more of the rebound in stocks.

5. Be SensibleThe recent recession has

taught us that we need to be more attuned to the valuations of a stock. Runaway real estate and stocks at high prices made everyone think that ‘this time it is different’ - until it was not. Everyone think they are an ex-pert when the market is bullish, in fact, one should be staying on top of his/her investment plan and look at the valuations

of the stock using the financial ratios (those who want to find out more can visit our website www.sharesinv.com to read the archived “Education” articles). Put it simply, be proactive, not reactive. Investor should find an asset allocation model that works, stick to it, and be pre-pared to hold more cash if you think stocks are overvalued. This writer urges investors not to jump in and out of the stock market.

This writer feels that having a cash reserve would reduce some worries of investors, al-lowing investors to use averag-ing down technique to lower their average cost in a stock that has dropped in price and ride out the storm. One of my peers complained to me that averaging down technique does not work and it is only a ‘game’ for the rich. Yes, he is right that you need some cash reserves to practise averaging down, but you do not need a huge cash reserve if you understand and has developed your investment strategy well.

Global stock markets have been soaring since 09 Mar-09 on the back of efforts by the governments over the world to stabilise the financial system and push for economic growth. However, it remains uncertain whether the current rally will be sustainable in 2010. Therefore, this writer suggests that inves-tors should not only diversify their portfolio among different class of assets, but also choose stocks in various sectors to reduce risks. Remember that in-vesting in what you are comfort-able with is one way to balance your risk and return.

MSHE_14-15.indd 15 1/7/10 1:25:38 PM

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