Who says that there are no FFM in Malaysia now?

http://www.klse.com.my/website/bm/market_information/market_statistics/equities/downloads/trading_participation_investor2008.pdf


There are still plenty of foreign investment funds in Malaysia... it's just that the HEDGE FUNDS have moved out... most of them anyway.

Basically, foreign participation is still the BULK of our Malaysian share trades.

CIMB desperate for Unit Trust infusions -> Launches FD "trick" to increase purchases.

I went to CIMB today... there was a new deal that they are offering:

48% pa interest on your 1 month Fixed Deposit! (T&C apply)

Sound too good to be true? ... duh. Of course it is.

The way their deal works is, you deposit 100,000 into their account. Out of this, 40% will go into this special Fixed Deposit. 60% will go into UNIT TRUST.

40% and 60% ???

WHAT THE HECK???

Is there anyone out there seriously stupid enough to fall for this?

hmm.

By the way, for those of you who are too lazy to work out the maths:

You deposit 100k with CIMB.

You will earn RM1,600 interest in 1 month.

Because of the 5% initial charge, you will be charged RM3,000 just for buying Unit Trust.

Oh... by the way... if your unit trust falls 10%, that is going to cost you RM6,000.

So, is this a good deal?


Summary: IT'S a TERRIBLE DEAL!!! AVOID LIKE THE PLAGUE!!!!

Malaysian exports dropping fast... recession looking BAD for Malaysia

http://biz.thestar.com.my/news/story.asp?file=/2008/11/27/business/2654048&sec=business

"Federation of Malaysian Manufacturers (FMM) president Tan Sri Yong Poh Kon said there were factories reporting slower demand, with some saying exports had dropped 20% to 30%."

The focus of the article was about how they've managed to avoid rentrenchment.

But... a 20%-30% drop in exports should be a cause for panic!

Seriously, do you know how much of malaysian income is derived from exports? It's huge...

We'd better hope that the fall of 20% is limited to only certain select sectors. Because... if that 20% is across the board... all other factors taken in, I would have to revise my projection of 12% GDP contraction upwards... it is starting to look like a 15% contraction in GDP. (possibly less, depending on exchange rate of USD to RM)

... Even I feel these numbers are looking rather ridiculously high. I'm quite possibly projecting too high... however, even if I'm wrong, I can say that Malaysia is going to be hit with a far far worse recession than these developed nations.

At the end of the day, Malaysia has ALWAYS relied on Foreign Investment for growth. And we are a net exporter. Basically, whatever the government claims, Malaysia is completely NOT self sufficient. We rely BADLY on foreign trade and cash inflows. VERY badly. We won't even have enough rice for our people if this situation in Thailand continues. We can't afford to continue our decades long fuel subsidy.
When the global recession hits, it will hit Malaysia HARD. And if it continues for more than 3 years, I expect the state of our economy to be TERRIBLE. ... of course, who knows, things might get better by the middle of 2009.

Have any of you given thought to what happens if it DOESN'T get better, though?

Seriously, everyone is, of course, hoping that the economy will turn around relatively soon.

But.

What if.

Just consider... what if... however unlikely you might think it....

What if this turns out to be a 5 year depression?


... I have made back-up emergency plans. Which I hope that I will not have to actually fall back on.
I mean, basically, everyone is hoping Plan A will work, which is "place your trust in the buggers who got us into this mess in the first place"... everyone is hoping Plan A will work. (it isn't working so far, BTW... but they keep saying that they are hopeful it will start working anytime SOON)
But my point is: IF... IF IF IF... if this turns out to be worse than the governments claim it will be...
Everyone should start preparing PLAN B. Just in case Plan A fails. What are you going to do if the governments and banks and insurances and big companies fail to save us?

... In fact, having back-up Plan C isn't a bad idea either.


Summary: Start preparing yourself for a recession. A severe one. Don't panic. Don't do anything silly. But make sure that you have a plan which will keep you safe in the event that things turn out worse than what the governments and corporations have been telling us. Even if things turn out ok, a little precaution never hurt anyone.

IOI Corp’s RM73m deposit for Menara Citibank forfeited

http://biz.thestar.com.my/news/story.asp?file=/2008/11/27/business/20081127190735&sec=business

"KUALA LUMPUR: IOI Corp Bhd’s RM73.36mil paid to the vendors of Menara Citibank was forfeited after the plantation heavyweight aborted its proposed acquisition of Menara Citibank for RM586.73mil.
IOI Corp told Bursa Malaysia on Thursday that the share sale and purchase agreement dated Aug 29 for the proposed acquisition became unconditional on Oct 31.
The due date for payment of the balance purchase price was on Nov 11.
However, due to the recent sudden adverse developments in the global economic environment which have spread to this region and impacted negatively on business sentiments, IOI Corp decided not to proceed with the proposed acquisition.
IOI Corp it had received a letter from the vendors’ solicitors dated Nov 26 that they were terminating the agreement and had forfeited RM73.36mil paid earlier by IOI Corp.
The plantation company said it was seeking legal advice on the quantum of the forfeiture."


That's how bad the recession is getting. IOI would rather forfeit RM73 million than to pay up the remaining 513 million.
That's a 12.5% deposit. Forfeited.

In other words, IOI expects that it would take a BIGGER than 12.5% loss if it had continued the deal!

There you go.

Basically this (probably) means that IOI expects property prices... or at least the property price for Menara Citibank... to be drop by over 12.5%

Probably over 20%, actually, considering that doing this thing generates a lot of bad publicity for them, and damages their business relationships.


It might mean something else... but whatever the case is, this is definitely bad news. The exact form of this bad news is still unfolding though.

Genting Lost RM40million last quarter.

http://www.btimes.com.my/Current_News/BTIMES/articles/20081127191006/Article/index_html

GENTING Bhd, Asia's largest listed casino operator, posted a quarterly loss of RM40.4 million (US$11.2 million) compared with a profit of RM275.2 million a year ago, after taking charges related to its Chinese power plants and casinos in the UK.

Genting, which gets two-thirds of its sales from hotels, gambling and theme parks, has invested in businesses that include power generation and palm oil to manage swings in casino revenue. The Kuala Lumpur-based company expects the rest of the year to be “challenging.” “The group’s prospects for the remaining period of this year will be challenging, in view of the global economic slowdown and lower commodity prices anticipated,” Genting said.
“The slowdown in the local economy could impact consumer sentiments and may affect visitations to Genting Highlands Resort. "

"Pre-tax profit at the plantations unit, its second-biggest earner, fell to RM130.8 million from RM131.3 million.
Profit at its power division plunged 96 per cent to RM5.5 million." (previous year 137 million!!!)

Well... Genting... well done. Obviously, Lim Goh Tong's son has not been doing quite as well as his dad did.

Something important to look out for. Genting's outlook for 2009 is going to be EVEN WORSE than 2008. For the simple reason that pre-tax profit for plantations for Genting in 2009 is projected to be between RM20million loss and RM20 million profit, based on projected Crude Palm Oil prices.

How will it's power plants in China do?

Well... China is planning to build 12 Nuclear Power Plants... how do you THINK Genting's power business is going to do???
Obviously very very badly, since china is basically going to have much much cheaper power once these plants are running, you can expect Genting's power business in china to drop to RM 1 million once those nuclear power plants are up.

As for the gambling and hotel and theme park business... EVERYONE is assuming that gambling will be ok. But look at UK, US, Macau... every single country's gambling businesses are in trouble. You think that Genting will be fine? ... somehow, I think that if other country's gambling business is in trouble, malaysia's will be in EVEN MORE trouble.
As for hotel and theme park... meh. Airflights have dropped 20% in America for this thanksgiving season... I don't hold out much hope for the whole tourism sector.



Summary: Genting is in deep DEEP trouble.
That's what happens when you leave your core business of CASINOS,(which frankly was the most incredible deal ever, and just about everyone knows that Lim Goh Tong's greatest achievement in his life was getting the monopoly on casino license in Malaysia) and try to dabble in other areas which you don't understand, Lim JR.