Friday, May 30, 2014

Good things not things may remain to be cheap

In a mind boggling deal, Steve Ballmer, ex-CEO of Microsoft the long time business partner to Bill Gates and had just retired (or resigned) from the software company a year ago, offered $2 billion to Donald Sterling for Los Angeles Clippers. For those whom do not know, LA Clippers is the other NBA franchise in Los Angeles besides LA Lakers, the one that used to house Kareem Abdul Jabaar, Magic Johnson, Shaq and Kobe Bryant who is still there.

Although Lakers is a much bigger franchise, the last 2 years Clippers happened to perform much better. In any case, the $2 billion valuation on Clippers is out of this world and so are the many deals that just happened i.e. Apple purchase of Beats, Facebook on Whatsapp etc.

Even more ironically, the sale of Clippers is about to be forced by NBA itself as Donald Sterling made a very bad racist remark filmed and exposed recently. That would however still make him a very rich man by selling a franchise which he bought for $12.5 million in 1981.

This deal is for sure a "toy" thingy for Ballmer as he had just retired and what's best to do than to own a NBA franchise in LA. So look out for the best potential assets, and do also look out for the richest guy around whom had just retired. He may want to have a piece of "toy" around town at any price.

A little bit about the deal can be read here.

Wednesday, May 21, 2014

KLIA2 a shopping complex?

This is the first time I visit KLIA2 - right smack at the busy time of between 10.00 am to 12.00 pm (may not be peak though). The general feeling is that it is more of a shopping complex than an airport. The shops are definitely closer to each other and hey! KFC (and several others) are just next to the check in counter. Food stores as usual are doing well, and as claimed by Airasia, they probably provide for 80% to 90% of the traffic by the number of flights departing and arriving.

I am looking for food but what is with the non-Malaysian food stalls? There seems to have much much more restaurants that sells non-Malaysian food. In fact, it is harder to find good Malaysian food here. If someone is to leave or just entered the country, they would want to have Malaysian delicacies right?

I do not know why Malaysia Airport's shares recently has dropped - probably due to Najib's comment of possibly let MAS to fold? But my guess is that KLIA2 is to provide a new impetus for Airport's earnings to spike despite what happened to MAS.

Note: MAS will not fold. It will be a General Motors like bankruptcy just to take care of the union issue, as MAS is a national airline. Let me know a country which does not have a national airline!

Friday, May 9, 2014

Chinese property spree

Over the last 24 hours, there were 2 articles or news that possibly points to where the property direction is heading.

The first: Tropicana sold a piece of very prime land in Bukit Bintang to Agile Property (Chinese owned and Hong Kong listed) for RM3280 sq ft - much higher than previous book valuation in 2012. This pretty much value that area very highly, although I do not know what was valuation in an adjacent area in previous transactions. The interesting thing is that it is a Chinese company which has footprint in 40 cities in China and Agile does have property launches in Iskandar as well. This shows that there are demand coming from China nationals into buying overseas property. That was what I read happened to Australia as well - especially Perth and Melbourne.

Then another story: in US. Apparently, the last quarter, there was a huge jump in cash transactions for properties in US. This story says that interest are shown in nice holiday areas in US and much more transactions were in the form of cash (compared to before), partly to do with interest rates charged by banks have increased and many banks are quite stringent in terms of lending. The story did not mention who were the foreign buyers but I would guess that many could be Chinese (non Malaysian) and Russian.

At the same time, there is this jittery feeling among stocks investors especially on China's properties. Some of these developers - Agile Property inclusive whose bond ratings are being monitored. Their bonds issuance are no longer hot properties.

We know that there many rich ones which have cash to buy, but yet property prices are probably not holding well, and the feeling is that it can be very soft moving forward.

I am just not able to piece things together in this. Is China facing the Japan syndrome of the 1980s? When Japanese were buying properties and assets offshore while its properties at home was collapsing.

Monday, May 5, 2014

Jobstreet's dividend

For those whom have enquired about Jobstreet's dividend from the sale of the core business to, here is a little clue - estimated to be RM2.40.

As for the Net Asset value of the shares, post dividend distribution - RM0.3572 per share.