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S&M Show Wednesday Podcast

The Unbearable Lightness of Being Syed Mokhtar ... Ewein ... etc..

Song pick: Ballroom Blitz by The Sweet

Politics & Business In Myanmar 2013

The phlegmatic government (you can try to get rid of the booger from your fingers but it just sticks around) of Myanmar just announced a shocking awardment of foreign telco licenses to build 4G networks in Myanmar. The winners of the 15 year concession were Telenor from Norway (DIGI fame) and Ooredoo from Qatar.

What was shocking was the favourites did not get a mention. SingTel which was easily the hot favourite did not get it. SingTel was bidding as part of a consortium with Myanmar's biggest bank Kanbawza Bank. SingTel with a large footprint in emerging markets, backed by Temasek, not to mention being buddies in  ASEAN loose coalition of neighbours to boot.

It would appear that there are other concerns in the awardment of the concessions. The messages are loud and clear. One, Myanmar still regards ASEAN as not the most important grouping as the memebrs try to make it out to be. Suffice to say, Myanmar has had lingering political issues that earned the ire of many foreign countries. Be it Aung San Sukyi or the dastardly acts towards the Rohingyas. It appears you cannot EVEN say anything negative or try to interfere in any way, even by political suasian or closed door sessions. A hands off and mouth zipped policies are valued.

The other favourite was a consortium led by Digicel, a Jamaica based telco that first invested in Myanmar in 2009 and employs close to 900 people in the country. The consortium also included Goerge Soros and Seung Pun, a leading businessman in the country. This was supposed to be a shoo-in. But no.

Again, that may have a message to George Soros, an advocate of democracy and supporter of many private efforts via NGOs globally. If you want to do big business in Myanmar, be apolitical.Any country that supports sanctions etc... will be "punished".

Ooredoo was ranked 9th out of 11 bids and was unlikely given the tension with anti-Islam violence with the Rohingyas, as the company was Qatari. Still, Ooredoo is 67% owned by Qatar government and provides telco services in Indonesia, Singapore, Laos and the Philippines. It supposedly has over 60mn customers in Indonesia alone. 

Telenor can better explain its cause as it has Norway government support. Plus the Norway government has been one of the more active European countries in Myanmar, supporting and funding various projects in the country.

So, it could be political ... or it could also be corruption. Who knows? It certainly did not look to be fully on merit alone. Though Telenor could win by merit alone as well. Too many questions, the perils of doing business with government. 

Stocks To Watch

Some of you may wonder how is the Murasaki ts system doing. Our subscriber base has been growing  well. The early months were choppy as people did not fully understand how to use the system. Now we are getting back many of our trial users to our Masterclasses (which are free). The weekly crowd is good and its getting to be a big social event and sharing of investing ideas. Below are two examples of how we use the system to pick early movers.

This screenshot was taken at 12.34pm Friday 28 June for LB Aluminum. FQR, M, Live MFI and BRH are our proprietary data. FQR is a measure of the fundamentals based on last 4 quarters. M is the energy index or Murasaki index. If a stock is behaving normally, it should register an M of around 100 or below. If its 400, it means it is 4x abnormal behaviour. 

The bottom right is the last 5 days data on M, MFI and BRH. As you can see, the M index was behaving itself for most of the past 5 days except yesterday, the 1,323 was a big anomaly which was accompanied by a positive uptick in price. Its a signal that let us confirm it is an early mover. It may not go up every day after that, but at least we know the engine has been started. Hence LB Aluminum is a good trade for a 1-15 day period.

The second stock highlighted is Ewein. Again, just by looking at the last 5 day pattern, you can already confirm 3 days back that something is up. The M energy continued, accompanied by positive upticks. As it is still well below the 1,000-2,000 reading on the M, you can conclude that it is early days still. Once it gets very speculative where day traders get in, the M will usually go into the few thousand category.

The other important indicator is the MFI or money flow index. The system is about the only one that has a live MFI. Others usually calculate MFI only at end of day. MFI gives an important read on the status of smart money residing in the stock. If the figure is steady or rising, one can safely continue to hold onto the stock. Once it starts dropping (more than 2%-3% points from the week's high MFI), you can basically conclude the smart money has exited and so should you.

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Take Off The Collars

A fellow business blogger David Koay put this up his blog. Its a remarkable video. One that must be watched by all, especially our leaders. Even though I knew how the whole thing would turn out, it still made my eyes well up because it is so easy to have racism and discrimination instilled in us knowingly and unknowingly. Its powerful too. Kudos to the great teacher Jane Elliot.

Ms. Jane Elliott's "brown eyes, blue eyes" experiment in 1970 (the third one after her first in 1968). This "Eye of Storm" documentary was made by William Peters in 1970 for ABC News and later included in the documentary "A Class Divided" (1985), which included a class reunion (of 1984.)

Why Mining SPACs - Important

If you have listened to the S&M show you will have some idea of what I am talking about. The points I am trying to make:

a) why all oil & gas SPACs, the SC is sending out the wrong signals, telling the markets that they only like oil & gas sector

b) the SC has to be careful as it appears to be blurring the lines of approving based on ability and approving based on personalities

c) it is not SC's task to pick the sectors, you can put in the stringent requirements but not sector picking

We have a huge sector that has been largely ignored by EPU, the Capital Markets masterplan. Why:

1) there is no regional financial center to list regional mining stocks

2) Malaysia's vibrant equity markets have not be proactive to make it the center in terms of fund raising, listing, PE mining centric firms, primary greenfields investing, secondary investing, using of Syariah compliant instruments to promote the sector

3) the ring of fire, we are on a volcanic activity plate which also yields a lot of minerals in the region, including Laos, Vietnam, Cambodia and Malaysia ... though the mines may be smaller, they are still very much viable

4) imagine listing 2-3 mining stocks a year ... 5 years later we have 15 and there will be a vibrant equity market supporting the prospecters, early investors, even fund management and private equity

What we have now are viable mines having to go the long way to get listed or even tapping the capital markets. Why are they not listing on Bursa? There are plenty of local entrepreneurs, having to go the hard way... we are again losing talent, earnings, taxes and other multiplier effects. The following are Malaysian mines currently listed overseas and the market cap:

Gindalbie Metals / ASX / USD340m (RM1.08bn)
Avalon Materials / ASX / USD 30m  (RM96m)
LionGold / SGX / USD880m (RM2.8bn)
Golden West / ASX / USD37m (RM118m)
Peninsular Gold / AIM / USD22m (RM70m)
Besra / TSX / USD 32m (R102m)
CVM Minerals / HKG / USD40m (RM126m)
Monument Mining / TSX / USD103m (RM330m)
CNMC / SES / USD107m (RM342m)

They all could have and should be listed on Bursa!!!

Wednesday S&M Show Podcast

Why so many oil & gas SPACs, why not look at mining ...

Topical song pick ... Lazy Ways, Hazy Days by 10cc from one of my top 3 favourite albums of all time "How Dare You". Go and google to find out why they chose the name 10cc.

Famous Eyeglasses - Artwork by Frederico Mauro
















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