Sunday, April 20, 2014

Tracking Murasaki

Updated recent highlighted stocks

Stock CodeStock NameHighlight Price(RM)Highlight DateLiked
0151KGB 0.610 18/04/2014 09:05:24 AM 0 
7212DESTINI 0.625 18/04/2014 09:04:10 AM 0 
0059MMODE 0.565 17/04/2014 03:35:51 PM 0 
7073SEACERA 1.050 17/04/2014 03:33:18 PM 0 
9083JETSON 0.680 17/04/2014 03:31:54 PM 0 
1538SYMLIFE 1.090 17/04/2014 09:04:40 AM 0 
2208PTGTIN 0.345 17/04/2014 09:03:31 AM 0 
8893MKLAND 0.480 16/04/2014 03:08:45 PM 0 
0108N2N 0.880 16/04/2014 02:21:11 PM 0 
6181MALTON 1.030 16/04/2014 09:05:30 AM 0 

Friday, April 18, 2014

Gaming Global Trends

A very interesting article from Seeking Alpha:


 Gambling Revenues (GGYs) for Selected Countries and Macau, 2013
Source: GBGC and Morss Analysis
US gambling revenues are twice as large as any other country, while its per capita level is about average. Macau is a gambling "destination" site for many Asians, as is the west coast of Australia. Per capital gambling revenues in Sweden and particularly France are low.
The preferred gambling activity differs significantly among our countries/region (Table 2). In Macau, most of the gambling is done in casinos, while in France and Sweden, the lotteries dominate. In Australia and the US, slots/machines outside of casinos are very important. In casinos, there is a striking difference: in the US, slots dominate with revenues almost 3 times greater than card games. In Macao, Macau, card games, especially Baccarat, are the primary gambling activities.
Table 2. - Gambling Shares by Vehicle, 2013
(click to enlarge)
Source: GBGC and Morss Analysis
Gambling Growth
In most of our countries/regions, legal gambling is a growth industry. As Table 3 indicates, Macau's growth is torrid, with healthy growth in 4 of our other countries. The US is a special situation to be examined later in detail.
Table 3. - Gambling Methods by Country:
Compound Average Growth Rates, 2001-13
(click to enlarge)
 GGY Growth (US$)
Source: GBGC and Morss Analysis
To highlight the differences, consider gambling in Macau and the US.
Macau is a destination site for Asian gamblers. The government limits its gambling growth by how many visas it issues to Chinese citizens. The Macau "package" includes smoking, drinking, gambling and sex.
Things are quite different in the US: there are indications that the demand for gambling per se has leveled out. The casino mainstay is individuals who want an opportunity to smoke and drink indoors. So the vast majority of casino space is given over to slots and other gaming machines where smoking is permitted. But most Americans are concerned about second-hand smoke. The casino operators are aware of this, so they are trying to convert gambling sites into Disney-type locales that will appeal to families. Indoor malls are primary recreation sites for families, and casinos want to copy them. So Foxwoods is putting in 75 discount outlets. It is interesting that when MGM announced plans for its new casino in Springfield MA, it focused on plans for a new 5-star hotel and a number of high-end restaurants.
Investment Implications
"Governments are now seeing the taxation of gambling without any backlash from voters so there is a drift upwards throughout the world except Nevada and Macau. Gambling companies are therefore easy targets. So taking that into account those that supply the industry have more insulation and are best placed. Playtech on the London Stock Exchange (PTEC.L) (OTCPK:PYTCY) and Net Entertain (NET-B.ST) provide software for e-gaming companies. Otherwise, you have to look to Macau: Galaxy Entertainment ((27:HK)) (OTCPK:GXYEY), Wynn (WYNN) (OTCPK:WYNMY) and Las Vegas Sands (LVS). For a pure Macau play, buy Galaxy.
What are the risks?
China's economy. I doubt the Chinese government will issue so many visas to Macau if economic growth suffers. It would not be politically correct. Also, the medium to small business owners may have less money to spend in Macau, but over the next 10 years it is a no-brainer. The Zhuhai Bridge will be complete in 2015 making it much easier to get to Macau. Huge developments are taking place by Galaxy and these will add to earnings (phases 2, 3 and 4 on Cotai)."

Thursday, April 17, 2014

Be Respectful ....

CNN's interview with Karpal Singh ... for those who did not like his stance against hudud or just being a good opposition politician ... watch and learn about principles above everything else.

The Nation Owes You, Mr. Karpal Singh

He need not have any of those honorific titles in front of his name but his name garners more respect from most Malaysians. Easily Malaysia's best criminal and constitutional lawyer. His motivations in life, a stout defender of human rights and an unwavering advocate for justice.

We Malaysians, sometimes pooh-pooh or are a bit blase over activists/opposition politicians and the roles they play. We are guilty of basking in the light of of their sacrifice and hard work, without so much as thanking them or being grateful. 

Warriors and defenders of our justice system make it "harder" for injustice to prevail, they may not succeed all the time, but we need them to be there so that we have hope for a better present and certainly a brighter tomorrow for our younger Malaysians.

When we sit in the shade ... we must acknowledge and thank the person holding up the umbrella for us tirelessly.


RIP Cornelius Selvam Vellu (Michael) , loyal and devoted personal aide to YB Karpal Singh.


Wednesday, April 16, 2014

S&M Show Podcast

Suggestions To EPF

Delves into how EPF can be more forthright about their investing strategy; wondering if EPF practices true asset-liability matching; actual returns against inflation; and proposing the creation of a small cap unit with RM5bn to energise the markets.

Song Pick:  The late Eva Cassidy, what a brilliant performer and interpreter of great songs. You can feel her strong spirit. Listening to Somewhere Over The Rainbow for the first time many years back, it was easily the best rendition ever. It lifts you up, then crushes your heart into pieces with devastating impact, before lifting your spirits up again in hope and yearning. Its all the more meaningful and poignant when you realise that when she sang the song, she already knew she had terminal cancer. For her, the meaning is even deeper, we can only guess at that.

Monday, April 14, 2014

Establishing A Track Record

The market has not been easy for the past few weeks. I am loathed to have to keep buring out Murasaki's track record, but we have a sustaining growing subcriber base, and soon with the onset of a new strategic investor, we will be charting the second phase of growth. Below were ALL the recent "highlighted stocks", date and time and price. Do note that our recommended strategy is to hold between 1-15 days, and to sell using our live MFI indictor. Our long strategy is based on our M index, go and find out more.

1589TEBRAU 1.410 14/04/2014 09:02:48 AM 0 
5085MUDAJYA 2.810 10/04/2014 03:25:56 PM 0 
5125PANTECH 1.000 10/04/2014 09:03:12 AM 0 
6254PDZ 0.140 09/04/2014 03:36:24 PM 0 
6548MPCORP 0.500 09/04/2014 03:19:43 PM 0 
5236MATRIX 4.010 09/04/2014 03:18:44 PM 0 
5151HALEX 0.935 09/04/2014 03:17:36 PM 0 
5077MAYBULK 2.150 08/04/2014 04:08:10 PM 0 
5166MEGB 0.445 08/04/2014 04:06:15 PM 0 
0081IDEAL 0.245 08/04/2014 04:05:35 PM
0051CUSCAPI 0.405 08/04/2014 09:08:03 AM 0 
5213SNTORIA 1.000 07/04/2014 03:26:49 PM 0 
5160HOMERIZ 0.770 04/04/2014 09:05:26 AM 0 
9261GADANG 1.200 03/04/2014 09:05:35 AM 0 
5070PRTASCO 1.980 01/04/2014 03:59:05 PM 0 
0099SCICOM 0.960 01/04/2014 03:58:35 PM 0 
6548MPCORP 0.465 28/03/2014 09:09:16 AM 0 
7140OKA 1.680 27/03/2014 03:21:24 PM 0 
5171KIMLUN 1.620 27/03/2014 03:20:53 PM 0 
8567SALCON 0.755 27/03/2014 03:20:13 PM 0 
0032REDTONE 0.735 27/03/2014 03:19:18 PM 0 
4286SEAL 0.650 27/03/2014 03:17:27 PM 0 
6254PDZ 0.125 27/03/2014 09:13:04 AM 0 
5207SBCCORP 1.810 26/03/2014 03:20:41 PM 0 

To sign up for a free trial or attend our free Masterclasses to know more, go to or call  1800-88-3788. Our customer service can converse in English, Malay, Hokkien, Cantonese or Mandarin.

Sunday, April 13, 2014

China's Move Is Important For More Reasons Than The Obvious

Alibaba, who? The decision last month by the Chinese e-commerce giant to list in New York presented Hong Kong with an existential crisis. Now that seems like a distant nightmare, after China announced it would link the stock exchanges of Hong Kong and Shanghai and allow a combined $4 billion of daily cross-border trading. It's New York's turn to question the very foundations of its place in the world.

 ($4bn is not much when you consider the actual turnover in Chinese exchanges and HKSE. There are rules of course, its not a free for all, only limited counters are allowed initially. Is the move more to internationalise the Chinese markets? There is some pent up demand as the red chips (the good ones) do trade at a premium in HKSE. Having said that, the view is still strong that China still has to align the accounting and reporting standards to global best practice before a proper valuation matrix can be assumed. This move while good needs to be accompanied by an overhaul of their accounting standards and reporting integrity. Without the latter, any move will only be scratching the surface.)

Yet at the risk of being a party-pooper, I have wonder if this step, coming now, is in China's best economic interest.
It's certainly a godsend for Hong Kong. The former British colony is about to gain the ultimate competitive edge to attract new initial public offerings and money flying out of U.S. markets. Offshore punters will finally be able to act on all those reports they've churned out over the last five years claiming that Chinese stocks are crazy cheap. Mainlanders will enjoy unprecedented trading opportunities, which explains today's massive rally in shares of Hong Kong Exchanges & Clearing. Opportunities abound for arbitrageurs to bet on stocks trading at a discount to A-shares, and vice versa, and for banks hawking volatility products based on mainland markets.

The trouble is, China is putting the cart before the proverbial horse. Sure, capital liberalization is a reform all its own, part of Premier Li Keqiang's pledge of deeper integration with international markets and a greater role for the yuan in global trade. But nothing about this step makes China's government more transparent, its companies more shareholder-friendly, its financial system sounder or the shadow-banking boom any less of a risk to the outlook. 

(The move is tied more to alleviating the liquidity problem in China, or rather too much of it. There are not sufficient assets to go around, which is why, after numerous attempts to deflate property prices there, real estate is still pricey and mostly out of the reach for the common folks. Herein lies also a conundrum, the move will effectively allow hot personal funds to get out of China. Currently for the Chinese to buy overseas properties, there are numerous obstacles in transferring the funds. Thus while this move makes for better movement of hot money, it is not exactly in line with the current clampdown on corruption. I guess its the lesser of two evils.)

Personally, I think China should fix its internal problems before tending to external opportunities.

The question comes down to this: Do you really want your U.S., U.K. or Singaporean pension being invested via Hong Kong into a retail-investor dominated, non-transparent, hugely volatile and corrupt market where the amount of flow in or out is subject to a quota? Limits on how much investors can trade mean that six months from now, when China opens the equity channel, it won't be a capitalist free-for-all. In that sense, this step isn't as tectonic as many investors think.

But it does raise troubling questions about the motive behind capital liberalization. To some, it's about increasing China's global reach and power. To others, like reform-minded People's Bank of China Governor Zhou Xiaochuan, it's a means of forcing through painful, but vitally-needed changes like internationalizing the banking system, prodding state-owned enterprises to improve governance and efficiency and upping the quality of Chinese assets in general. Linking the Shanghai and Hong Kong markets now seems to be of the former variety.

(A bigger problem which I am sure Beijing is aware of is the black market for lending, which is rampant in China. The banking sector there artificially puts out a low interest rate, and the corporate lending structure is fragmented at best. Many listed entities and most private entities have to resort to black market for funding purposes. There are too many inter linked big issues when it comes to hot money, black market lending, the huge debt burden for many state companies and local government offices. It will take a huge blueprint to overhaul the whole thing without disturbing the economic progress and stability of the financial system. At least I think Beijing is taking the right baby steps but there is a lot more things to do, even more important ones such as the "undeclared private debts", the real debt burdens of state companies, engineering more affordable housing without derailing the property market, revamping accounting standards to international levels, etc...)
China should be acting boldly to strengthen its macroeconomic environment, something it can't do while slavishly maintaining a 7.5 percent growth target. Far more energy goes toward meeting that goal than deemphasizing investment and exports and developing a thriving services sector. China needs to build a credible and globally competitive banking sector. At the moment, it's little more than the credit version of a filling station for politically-connected companies. China also needs a financial system that's both stable and trusted.

If looser capital flows outpace domestic reforms, all China is doing here is expanding the transmission mechanisms should its $8.2 trillion economy hit a wall. On April 9, the South China Morning Post warned about Hong Kong's exposure to a mainland debt crisis. The International Monetary Fund characterizes the growth in loans by Hong Kong banks to mainland entities as "rapid" at roughly 19 percent of total assets. The Bank for International Settlements says there are $430 billion in loans outstanding from Hong Kong banks in China. For a $263 billion economy, that's a ridiculous amount of exposure. Compliments of "reformers" in Beijing, it's about to get bigger.

Wednesday, April 09, 2014

S&M Show Podcast


09-Apr-14 10:32

Looks at the kind of companies under Syed Mokhtar; the need for justification and transparency to have so many strategic goods and services under one umbrella; would this be allowed in any country at all??? Can we do things better?

Song Pick:  Bob James on electric piano, David Sanborn on sax .... from their magnificent album Double Vision... "You Don't Know Me". When great jazz exponents get great material to work with.

Red Hong Yi

How good is she ...., she is Hong Yi. By the way, she is a trained architect .... and a Malaysian.

Monday, April 07, 2014

A Liquidity Correction

With the onset of High Frequency Traders, not to mention programmed trades by smart machines, the bulk of turnover can be said IS controlled by these "whatchamacallits". I can see a liquidity driven correction happening sometime soon. It kinda happened during the Greek crisis when market makers stayed on the sidelines in light of huge sell orders, thus prompting big price slides to match the sell order. That in turn triggered program based sell orders and cut loss orders, reinforcing the downward spiral. 

When you have so much of the liquidity in the hands of so few people/machines, them staying sidelined in light of a surpernormal order will trigger flash sells which can cause stomach churning down swings even though in all likelihood, these downswing will not lasts more than a day or two once the real cause has been determined. So beware of upcoming flash crashes
John Maudlin's blog:
Before the credit crisis, market makers like Bear Stearns, Goldman Sachs, Merrill Lynch, Morgan Stanley, and Bank of America created a huge amount of the overall liquidity in major markets by consistently taking “the other side” of trades. If the markets were selling, market makers bought, and vice versa.
In the wake of 2008, the big market makers either went out of business, merged, and/or were forced to operate at much lower levels of leverage. The net effect is far less trading volume from market makers and other forms of “real money,” to the point that high-frequency trading and ETFs accounted for about 66% of all trading volume in 2010. While that number has fallen to about 50% today, equity mutual fund flows suggest that higher trading volume from smaller investors, not the resurrection of market makers, is responsible for the shift.
In fact, the following chart from Credit Suisse suggests that the average daily trading volume from “real money” fell by more than half from 2008 to 2012, as high-frequency trading advanced. I do suspect that “real money” volume is rising today with the rotation that is underway into an overvalued, overbought, and overbullish market (but let’s save that for our conclusion).
Understanding how the structure of market participants has changed, let's think about the effect of there being less market-making volume to balance against high-frequency trading and the retail/institutional herd.
On May 6, 2010, the markets sold off for most of the day, and market makers expanded their volume as the media ran all-day coverage of a small riot in Greece. But (and this is critical), market makers who can no longer buy at 40x leverage will carry only so much inventory overnight. At some point market makers must stop buying ... and they did when a large sell order came into the market toward the end of the day on May 6. The market makers stepped back instead of providing liquidity, precipitating a sharp drop in prices. Then many of the HFTs shut their systems down, seeing an irregular trading pattern and fearing another “Quant Crisis” like the one in October 2007. Liquidity dried up in a matter of minutes, and the market went into free fall triggering stop losses and emotional selling from the general public. (As they saw the market collapse and the rioting in Greece, people may have thought, “Something big just happened and I am late... sell everything!”). Without market makers to provide volume, an orderly sell-off became a chaotic collapse.
Now, with market-maker volume way down, a similar situation could develop again; and once again the general public will rush to sell if liquidity evaporates. We should really think about this dynamic, because the next correction may look more like the stock market crashes of 1929 or 1987 as opposed to the more gradual "cascading crash" we all experienced in 2008.
With that in mind, investors will do well to pay attention to the ever-changing structural makeup of the markets before blindly jumping in. Just because US stock markets – along with a lot of the major markets around the world – have found new highs since 2008 doesn’t mean they have healed structurally. It doesn’t mean they are stable. And with long-term valuations at historic levels, both on an absolute basis and relative to the rest of the world, US equity markets are both unstable AND overpriced.
The inevitable correction that is coming to US markets could be a catalyst for a downturn in the broader economy, and without much of a warning. It could be another lion, prowling through fiber-optic cables, data feeds, and stock exchange servers.
I continue to believe that high-frequency trading should be reined in. It is creating the illusion of liquidity, which can dry up in a heartbeat while at the same time sucking billions of dollars from the trading of individuals and institutions.