AppAsia....the Edge Financial Daily must be smoking something

From the Edge Financial Daily:

The Edge Financial daily should exercise some control in its stock selections.  They may argue its not a recommendation, but have some quality control for goodness sakes.  This is not just any publication, it is the premier financial publication in Malaysia.  Putting penny stocks like these just enriches all the pump and dump schemers.

I'm not sure who this Anticipatory Analytics Sdn bhd.  is but the Edge should give them the boot as well for printing such garbage.

AppAsia, is a speculative stock.

1.  This company has had NO record of track earnings, hasn't turned a profit except for 2012.  Almost every year, they have lost money.

2.  10 times book value.  This is a joke.  Even by raising 13 million ringgit, no way is this company worth 73 million ringgit on fundamentals.

3.  If no news in the next year or so, this stock will go to the toilet.  so will all the people who jumped on this retarded valuation today.

4.  Surprise, no dividends.

Anonymous blogger wielding some serious power...not really

From the Edge Financial Daily:

Much has been made of the "anonymous" blogger who has criticized many authoritative figures in Malaysia.  Just who is this blogger?  is there an ulterior motive?

I think there is, it is money.  Money from advertisers who pay the blog because of the huge amount of hits that are generated.  People in Malaysia love conspiracies.  Blame who you want, but as long as a few hundred thousand hits are generated, the "anonymous" blogger will come up with lots of blog posts, true or not.

By poking and prodding some of the largest news agencies, the anonymous blogger has in effect gotten free publicity.  Now even more people will go visit his blogs generating thousands in revenue, if not, tens of thousands.  All he has to do is come up with creative blog posts.  

If there is one thing I know about the blogger, is that the blogger has blogged somewhere before, probably well known.  To generate the amount of content that consistently requires a lot of will power that not everyone has.  The content seems similar and consistent, indicating not much variation in the people that write the blogs, thus a singular blogger and not a huge group.    Beginner bloggers don't generate this kind of content overnight.

He's familiar with the style of "online" investigation although "online" investigation can seem legitimate, it really isn't.  Lots of holes can be found in these "online" investigations.  Don't read too much into the "anonymous blogger", I won't.

Astro shareholders should accept offer

Astro is going private:

IT has finally happened. Astro All Asia Networks will be taken private, putting to rest rumours that have been been brewing over the last two years, with continuous denials from company officials. Not surprisingly, it has happened at a time least expected.

In a style similar to the RM16bil privatisation of Maxis Communications Bhd in 2007, Ananda Krishnan is taking his pay-TV company private at a price of RM4.30 per share, equivalent to a RM8.5bil deal.

The reason? The same as when he took Maxis private; going private would provide a more conducive shareholding and operating structure given the company’s future high capital expenditure (capex).

Astro’s estimated capital requirement is between RM3bil and RM3.5bil. Half of that will be for the domestic market, while the other half is for its overseas markets in the Middle East, Australia and North Africa.

The article came out a few days ago, but is significant for shareholders. Unfortunately, the shareholders will be bought out, many at a significant cut to the highs. The good thing is, they should take it, if Astro wants to lever up its balance sheet for future expansions into risky markets, then it's all good.

At this time when TM is coming into the market and offering HD quality TV to homes everywhere, (Word is they are coming out with 40 channels in the official trials) Astro wants to use its cash flow here to expand in services elsewhere. Ok! If they want it that way!

Shareholders should be glad Ananda is willing to buyout the Astro shares at a fair price. It's not horrible, but not great either. Perhaps Astro should be listed as a growth company instead of a dividend paying one. They might not get a huge IPO following, but at least there will not be any conflict with future shareholders who will know what they are getting.

TM mulling over EPL TV rights, country upgrade from CIMB for Malaysia, and thoughts on the effects of recent years' tax cuts

I mentioned last month that Telekom was possibly planning on offering television services with its HSBB infrastructure that it is currently deploying. It seems like this has come true with the possible bidding for English Premier League broadcasting rights for Malaysia as mentioned in the Edge Weekly this weekend.

Hardline infrastructure has so many advantages over wireless infrastructure that it's a no brainer Telekom Malaysia will have a leg up over the competition. For one, wireless signals can get interrupted by bad weather and weak transmission. Hardline or cable television will have no such problems. People will always get a near perfect picture with hardline televsion technologies.
The same goes for internet as well. But at the same time, I hadn't fully considered that TM would have to spend a lot of money in starting up its media division, buying rights, etc. I do expect the government to give TM a lot of support in forcing Astro give up exclusive TV channels like the Star channel, similar to what Indonesia did. After all, the government owns TM.

I'm not expecting the dividends to stay where they are now. The dividend payouts and policies are quite generous at the moment. I believe they will have to cut it soon as they start ramping up the HSBB and televsion divisions. They will most certainly take a hit to their stock price if they were to cut dividends.


I think the CIMB upgrade of Malaysia is silly. Moving to cyclical stocks will amplify profits and losses in stock returns. Yes, in that case for the short term, it might be a good idea as the market has been rebounding. But if the markets turn south, cyclicals will take the worst beatdown. In the longer term outlook of 6 months to a year, It's simply way too early to move into cyclical stocks.

We are only 9 months in this stock bear market. 9 months ago is when the markets really began to collapse by just looking at charts of the nasdaq and dow. And we're at a bottom already? Give me a break. The stock bear market in 2000 lasted for at least 2.5 years until 2003. And guess which recession is worse? Just because GDP may turn positive doesn't mean anything if growth is weak. In this case the markets will still deteriorate, albeit at a slower rate.

One of the things I've been mulling over is the effect of tax cuts from the government over the past few years. In my opinion, tax cuts can be used as an effective monetary instrument. Because the government cut taxes over the last few years during the good times, most of the money went back into the economy and people spent more as shown by gdp. During bad times, people will save money from tax cuts. But when things get better they have more options.

So, if taxes stay where they are now, we will recover in sync. If taxes go up, our recession will be more severe. Anyways, I believe the tax cuts are all done and won't be lowered anymore. So we had a chance if we didn't cut taxes a few years ago to cut taxes now and get out of this recession a bit faster or in better shape. So I think it was a bit of a failure from a view of fiscal responsibility. If we cut taxes now instead of then, we would not have had as much growth, but at the same time we would be in a good position when the recession ends. Anyhow, there are other things to consider, but that is my general view. But we are not alone, the US did the exact same thing. They aren't that much better.