Initial Listing Requirement

Listing Requirements on KLSE

1. Quantitative Requirements
2. Qualitative Requirements
3. Special Requirements

Quatitative Requirements

Quantitative Requirements
- listing based on Proforma Accounts can be considered provided companies within group:
o involved in same/complementary business*
o have common directors
o have common shareholders
* Bumiputra Company only needs to meet this criterion

Definition of Bumiputra Company:

1. More than 50% of its equity is owned by Bumiputra shareholders; or
2. At least 35% of its equity is owned by an identified Bumiputra shareholder together with certain conditions

Qualitative Requirements

1. Business Dynamics
2. Competition Dynamics
3. Industry Dynamics

Special Requirements: Additional requirements for specific companies

• Property-Development
• Construction
• Infrastructure Project Companies (IPC)
• Plantation
• Financial Services
• Stockebroking
• Trading/Retailing
  

Increase Fuel Price! Must or Revenge?

Government announce fix fuel price will increase RM0.78 from RM1.92 to RM2.70. It is 40.625% increment. Diesel price increase RM1. It will direct hit to lot of the businesses and influence the price of goods. First, the transports and utilities such as electric and water (which need fuel energy) price will be increase. Then this will lead other sector to increase their products prices as their cost increases.

Recently food shortage, food price spike up at least 30%-50% within 6 months. Then it is nature disaster in few regions, cause the demand of building material increase. This will push up the price of building material. Conservative predict it will increase at least 20%. Government also plan to let the fuel price free float in the market on August which will be RM4 in the current crude oil price. It means almost 100% increase in 6 months.

Since government has also announce the tariff of the electric power will increase, mean almost everything will increase. There is one problem, which is I believe no company willing to increase their stuff salary by 50%-100% in 6 month right? So if salary not even increase at least constant grow while all the things out there increase by exponential grow, lot of the labours, worker, stuff and citizens will be in trouble.

Malaysia economy is previously in the close and protected environment. Government refuse to let them compete with other people because it knows their people lack of abilities to survive. It is similar to a plants in a green house. In the green house, there is not competitors, no parasite, no virus or bacteria, enough resources etc. Suddenly this plant move to the out site open environment, it's faith will be undetermined. It is now in the uncharted territory.

Looking at other country hitting by the high oil price and food price. The country will be in the disorder situation. The security of the society will fall due to the reason that lot of people is poor and starve. The society sentiment will be worry and unhappy. Political unstable is factor come out with these kind of decision which will hit to the economy, development, society and security.

Government action to increase everything with this speed is due to the must or revenge? Since they election result out and party Barisan National lost lot of the seat, there are lots of the unhappy decisions announce one by one. Look closely for this fuel price issue, Malaysia is a nett fuel exporter, this means when crude oil price increase, country will gain more then loss with the high oil price. No matter how the citizen in the country use the oil, it will not influence the profit or loss of the country. It will just reduce the profit country can get. Now the first question is, is this Party loss other income sources to earn money when they loss their power in lot of the places?

When prime minister said increase fuel price is a must, and he promise he will still look for a way to help those who really need for the fuel subsidy. The second question is why the public transport such as bus fare still increase? Does it means these buses are also use by rich?

The rumour say government is thinking to send the fuel rebate money to those needed by postal. If this is true, third question is how are they going to control? Those money will go to which kind of "needed criteria"? (supporter, income, expenses, races, religion, etc ... doubt)

I know long term is a need to increase, but is it really a must by using this speed and methods?

The market sentiment guess will be not good. The selling pressure due to the unclear of the country future.

Another Side Of Capitalism Society

I just received this forwarded story from my friend. I didn't verify how true is this story, but I wonder why I never see this in any news before. This story is from China, but I believe similar can happen almost in every Capitalism society. This is also the side effect of the Capitalism. Corruption, supreme money power and weakening ethic lead to the society disorder.

For example, government plan to use tax payer money to increase their citizen knowledge, but the person who hold the money may misuses the money for their own purposes rather than the original intention. Those who really need it, cannot get.

Capitalism help to speed up a developpment but it comes with side effect, corruption. When the corruption is out of order, it ruins the whole capitalism system too. When the money go to the person without working for it, the value of the money will decrease. Example in a country or company, when there is two group of people, group A and group B. Group A didn't work and not productive. Group B work hard and productive. When all the money go to group A easily and group B has no opporunity in whatsoever effort with it. End up group B will either extinct or migrate. When the main development engine of the country dissapear in the country, it will no longer competitive. The high consumption and low productivity group will lead to the running out of resources. The next of the limited resources is the communities will figh for the resources. I learn this from the secondary school science.

Following is the article I received.

殷彩霞 Xia die, she was a hooker, or she was a teacher. She is the most honorable teacher in China. She uses her dirty body, wash through children's heart. A hooker's death, all children cried and attend her funeral; a school drop the national flag for her.

On the funeral of this 21years pretty teacher, headmaster read Xia's diary sadly in front of all the students, she wrote: 'Each prostitution, can help one schooless child; become a mistress once, can rescue a hopeless primary school.'....

Xia lived in a small village of province of Gan Shu 甘肃省. All ladies in this small village, no matter she is pretty or not, went to Southern part of city to earn money. Every spring time, they will come back with money and beautiful cloths. Xia didn't follow after she finished her secondary school. A lot of people don't understand what is she thinking of as she has the pretty face and body. And because of this, her father always scolds her.
When she heard the only primary school in the village needs some teachers, she volunteers herself to become a free teacher. She was a very good student in her secondary school before. Because of this, she passes through all tests easily and became the teacher of the school.

When 1st time Xia walks into classroom, all children were shocked to see a pretty teacher. From then on, the classroom always fills with children's laughter. Classroom -- should call it a hut instead as the wall is made of sticks and cover with leaves as its ceiling. A big stone become their table and the most expensive should be the polished dark-green stone as their blackboard. With this condition, Xia taught thousands of Chinese words and knowledge to her students.

There was wild rain destroyed the classroom of the school and all students become schoolless. The headmaster visits the province's education minister for some money to repair the classroom; he comes back with nothing. Headmaster told Xia that the minister said only will give money if Xia asks for it. Xia never meets any minister before and afraid that she will make the things worst and decided to visit the minister. She walked more than 10km to the province ministry office and sit in a beautiful office in front of the minister. Minister's eyes look hungry and point to a room and said to Xia. Your money is in the room, if you want, follow me. Xia saw a big bed in the room and is the bed that she lost her virgin. Minister raped her.

Her virgin blood drops on the bed sheet and is more reddish than the color of the national flag in the room.

Xia didn't cry, all in her mind are the eyes of all the disappointed students that have no classroom.

She didn't tell anyone about the rape case after she went home.

The next day, with the money that brought back by Xia, all villagers bought some woods and repair the classroom. But whenever there was a heavy rain, the classroom still cannot be used. Xia always tells the students that province ministry department will built a good school for them. In the past half year, headmaster had visited the ministers more than 100 times and never ever gets any money from them. He is the only 1 knows what did Xia did and he can do nothing about it. New semester comes, a lot of student s cannot pay their fees and become schoolless and follow their parents to work. Xia feels sad about that.

When Xia feels that her hope of all students can go to school become hopeless, she drops all her cloths and swears to her naked body that she will use this body to exchange for the children to be able to go to school. She knows that all ladies in the village are working as a prostitute to earn the living and she knows this is a shortcut for her to earn money. She washed herself and say goodbye to headmaster, father, and school. She tights her hair as 2 ponytails and walk to the city. When she leaves, her father smile and headmaster cry....

In the colorful city, Xia is not happy at all, in her mind, there are only broken classroom and sadness and disappointed eyes of students. She walked into a Hair-Saloon, lie down on a dirty bed, and accept her 2nd dirty business. In that night, in her diary, she wrote: 'Minister can't even compare to her 1st customer. At least they pay.'

She sends all her earnings except those for her to live on to headmaster. Headmaster follows her instruction to use the money on the school. People ask about the source of the money and headmaster only answer that it was from some donation of society.
After a while, people knows about the source of money is from the teacher and many reporters would like to interview her and she just refused and the reason is that she is just a prostitute.

With the money, the school changed. First month, there is a new blackboard. Second month, there is wooden table and chair. Third month, all children has their own books. Fourth month, all children has a red tie. Fifth month, no children go to school bare leg.
On the sixth month, Xia comes back. All students welcome her happily and say 'Teacher is so beautiful'... With all student's smiling face, Xia cries... how many tear drops and how many sadness in the past 6 months... she feels worthy when she see all these.
After few days at home, she goes back to city.

Seventh month, they built a ball park. Eighth month, there is basketball. Ninth month, all students has their new pencils. Tenth month, the school has their own national flag; and students raise the national flags daily. At the eleventh month, a land-developer refuses to use condom and Xi pregnant. After abortion, she becomes the developer's mistress. After a few months, the developers dump her because he faced problem on land-value drop in Shenzhen, he didn't pay her any cent.

Xia feels tired, she thinks to go home and go back to the school, but she has yet to fulfill student's dream which are building a concrete classroom and 2 PCs for the students. Because of these, she went back to beg the developer and the developer just refuse to pay anything but only introduce a foreigner to her. Said the foreigner will pay her RMB3000 for 1 night. Think of the wild rain happen few days ago, she tiredly goes to the foreigner's hotel. She swears that she will go back to her home and school after this.

She was killed by the 3 foreigner because of raping. That time she just turned 21years old.

Xia died without fulfill her final wish, which build a concrete classroom and 2 PCs.

A hooker dies, silently, the sky of Shenzhen is still as blue as before, ministers still happily sitting in their office, many expensive cars still running on street, people happily discussing share market, house market value, car value, and movies, music and love story. Youngster try to suicide because of small matters happen between themselves.
At this time, students, teachers and few hundreds of villagers attending the funeral in this small village 'GanShu'

In the funeral, people see a black and white photo of Xia. In the photo, she has 2 pony tails and happily smiles. Headmaster open the diary of Xia and read in front of all students, she wrote: 'Each prostitution can help one schooless child; become a mistress once, can rescue a hopeless primary school...' The national flag drop to its half... Maybe, this is the ONLY national flag drop half because of a GREAT hooker in China’s history.

After I read this, I cried for 2 hours. From now on, I won't discriminate any hooker, because among them there is a Xia. Hope you will forward this mail to all forum, friends, web spaces, to let all our governments to understand when they are saying and empty-promising, when they are drinking in the pub, when they are doing dirty politics, Someone using her own power to change the world. Xia is using her sadly eye to look at all of us. Although she is just a hooker, she is cleaner and saint than any of us. In this cold and dirty society, what she gave to the students is human's 'Great Love'.

Malaysia Post Election

Let me tell a story of what I see and listen before I link it to the economy and finance.

I pass by a street call Desa Setapak. It was a crowded street at the time I study around that area. I go back and walk along the street, there are eight main corner of the shop were previously famous with delicious food now demolish seven of them and left one corner. These places are the food supply for most of the people and students who stay and study around.

I chat with some of the hawkers around there what happen to the other hawker stall and the food courts? They say government send town board (DBKL) to demolish and army to guard the protestors without giving any notices to them. Their prompt action ruins the income source for most of the families and laborers.

I ask them whether they have any permit or license to open stall and do business there. They said all of them have permit and license. They get the approval from the previous party who win that area. This election result the previous party of that area loss to the opposition. What is interesting is, all the people and folks say they never see government work so hard that never rest and work so complete. Those demolishing worker can ruin all the structure one by one and before they leave, they make sure everything is fully damage and scrap. All the cement, walls, fences, floor, and stalls were break and damage by heavy machinery. The only left is the dust and rubbish they didn’t clean it up. Next day, these under mission worker can come back to continue break and confirm all the structure are collapse and break. One of the farmers tells a similar story that last time his area loss to opposition in the election, the government sends people some and cut all the vegetables and every single vegetable were split at least four pieces. This is to make sure the farmer cannot sell the vegetables anymore.

Well what make the folk there angry is the newspaper wrote and publish that these hawker didn’t have any losses because the authorize person let them move out the things that belongs to them. Besides, all these news were reported not clear, not detail, and bias to government.

What I see and curious are, why some of the stall and are didn’t demolish and damage by the government? These stall is just beside and some of them are in the middle of these demolish structure. The only differences I can observe for a long time are, those remain are not good business compare to those demolish. Those remain are Malay while demolish are all Chinese.

After the long story, now is time to share what is in my mind. Country economy is depend on the productivity and how well the business in the country. This phenomenon let me fell that government is revenge on the result they loss in the election. They don’t care economy and development but they only care their power in hand. They can give reasons to stop the development structure in the opposition area. They can demolish buildings or structures by no reasons or discussion given.
Here is an interesting phrase I read in the newspaper today, Domestic Trade and Consumer Affairs Ministers Datuk Shahrir Abdul Samad says “Don’t think only of profit”. Does it mean in government mindset, they don’t want “profit” but other things?

When those people who suffering from no income, they don’t have things to eat, what they can do? The next is social problem will rise. The security of the country is now another concern.

If government can do this kind of action on the small business, I cannot get other reason that government will not do this to bigger business in the country. That’s why the economy future of the country is now a doubt and worry.

What is the World Economy Future?

Myanmar cyclone on 2008.05.04 ruins the country and wipe out lot of crops, China earthquake on 2008.05.12 collapse most of the building in Sichuan and they need lot of raw material to rebuild, and the crude oil price hit USD135 on 2008.05.22. There is an inflation worry.

All these will bring inflation fear and lot of things is under pressure to raise the price. When the prices rise, it will hit the sales volume. Everybody may start to reduce spending. The sales drop will pull down the company result. This chain effect will hit the economy world wide.

The rise of food price is also due to the fighting resources of crops and the biofuel plants. The commodity price of the biofuel related plants sustain high and it can cover the high fertilizer price while if the price of food crops don’t rise, farmer will switch to grow commodity rather than grow crops.

China earthquake will need lot of energy and raw material to rebuild their home. The building material and energy such as steel, cement, timber, and fuel will have great demand and it will bring up the price of these raw material if the supply cannot fulfill the demand. The rise of these prices will hit construction, properties, and other manufacturing sector and their cost will increase dramatically. Their profit will be thin down and giving them forces to increase the price too.

In Malaysia, the political tsunami seems still haven’t over yet. The unstable of the government and worry behind the scene will keep the investors side line. Most of the investor is looking each other’s reaction, watching what will happen then, and waiting for the economy report and company result.

Economy slow down and advice only invest in selective sector and buy as low as when it dips. Remember to take profit once it goes high.

Remisier Trading versus Online Trading

Some body wrote this article and pass to me recently. It clearly describes the differences between trade via Remisier or Online. Below is the full article.

In this article, we will look into whether we should buy shares Online or use our existing Remisier’s services to execute trade

COMMISSION rates for Internet trading and cash upfront transactions will be fully negotiable next year.

Although the full details on the actual implementation are not available yet, if the commission on internet trading drops to a low of 0.15% (it may be even lower for some stock broking firms), retailers may be tempted to execute the online transactions themselves without going through their Remisiers.

Based on the existing structure, most retailers are paying a brokerage fee of about 0.6% per transaction. Assuming some stock broking companies are willing to offer commission rates of 0.15% for Internet trading, there will be savings of 0.45% for retailers who trade online.

Nevertheless, we need to understand that transaction costs have two main components: “Explicit Cost” and “Implicit Cost”.

Explicit cost is the direct cost of trading, such as brokerage commission, stamp duties and clearing fees. Implicit costs are indirect trading costs like opportunity cost, market impact and missed trade costs.

Opportunity cost is the loss of opportunities due to the time retailers are required to spend on executing stock transactions instead of focusing on their main business or their work. If you are working and have limited time to monitor the stock market, you may still need the Remisier’s services to execute stock transactions.

I personally feel that it is really not productive to stay in front of the computer just to execute a few stock transactions. Sometimes, it can be quite time consuming getting the best price.

Any retailer who wants to trade online needs the necessary skills to be able to read market movements. He needs to know whether the current price is the best price to buy, or wait for a while because he may get a cheaper price later.

Market impact is the realized profit or loss reflecting the price movement of a share from the price decided on to the execution price.

Since Remisiers follow market movements throughout the day, they should be able to read those movements better than we do. They may not be able to get the best price in every trade but if they are able to save one or two bids lower than your intended purchase price, the cost saving can be quite substantial.

For example, your Remisier is able to get one bid lower for you when you want to purchase a stock priced at RM1.50. You will save 1 sen over RM1.50, which is 0.67%.

Assuming your Remisier is able to do that in eight out of 10 trades, the average cost saving will be 0.53% (8/10 x 0.67%).

This saving will still be greater than the commission of 0.45% that you would have saved through online trading.

Besides, you have not taken into consideration the time you could have saved and the opportunity loss on your current business if you spend too much time on share trading. The extra 0.45% that you pay is for your Remisier’s skills.

As mentioned earlier, besides opportunity costs and market impact, there are other implicit trading costs, like missed trade costs.

Missed trade costs arise from the failure to execute a trade in a timely manner.

Investor, Trader, Gambler

Nowadays there are lots of investment tools in our society. Stock and share is one of it. In every investment, some times it is not easy to differentiate invest, trade, or gamble. But different of it will have different result and risk. Before you make your decision to step into the field, you must evaluate the risk you are able to take for the result as a return. Similar to those drive in the highway, if you cannot take the risk to drive with speed of 400km/h, drive with the speed you can handle although 400km/h can reach to the destination faster. In investment, it is not how fast your investment capital appreciates; it is how sustainable your investment is.

Investor is those people who think on their investment from business point of view. They put in the money after doing lot of research and analysis that they are confidence that they can earn back the money with lower risk. Some times, investor has to analyze their investment top down or bottom up. They have to understand macroeconomic and microeconomic as well.

Trader is people have the characters of investor but some time they take higher risk. They can buy today and sell tomorrow once there is profit margin. They take opportunity in the company share that they familiar. They may use technical chart, or possibilities, insider information, psychology and so on to buy and sell in very short time. Similar, if they sense the problem, they will also sell immediately to lower their losses.

Gambler is easy to define and get in the market. They are greedy and take high risk. They might not know what is the company doing of their investment or just heard from other people that this company price will go up.

Just similar to lots of cases in the history in almost every stock market, lot of people loss huge amount of money because they misuse margin facility, borrow money, or so on. Always invest within the capability and take into the consideration of risk.

Learn Early

Before I study finance and stock market, I heard lot of people say trade on stock and share is only for those retire man who have lot of free time and retire money. No doubt, it is suitable for retire person because investment need time and money. When I get expose deeper in the stock financial sector, I realize it is not true.

Investment is a skill and technique which involve some financial knowledge and psychology. Investment skill actually involve in every decision we make. For example when we make a decision, we will analyze the allocation of time, energy, or capital before the decision final. We don’t realize the existence of the investment skill is already involved in our daily life.

Why the statement “invest in stock market is for retire person” is not suitable? Let say a person never learn and expose to any financial investment especially stock market, he or she will have to learn from the beginning. The risk to learn is there because they are lacking of experiences. Once they loss money, since they are retire, they may unable to recover their losses easily. Besides, most of the retire person hold a lump sum of money and the amount can be big and there investment will automatically bigger compare to new person who just finish study and start works. Let say retire person have lot of time and they have plenty of time to study and learn investment before they start invest, the problem I see is, their learning ability drops. Their eye cannot sustain long time to reading; brain cannot remember lot of things in one time, and so on.

The reason why Warren Buffet encourage start investment as early as you can are, the value of the market will be keep on improving, younger person start with smaller capital which is lower risk, can still recover losses once make a mistake, gain more experience from the investment decision, able to learn fast at the younger stage, and learn how to manage the money on your hands.

Fertilizer Related

Inflation hit the entire world from the energy resources and food supply. Technology breakthrough which use plant to extract biofuel compete with food crops for fertilizer and nutrients.

No. - Stock Code - Short Name - Company Name

1. 4758 - ANCOM - ANCOM BHD
2. 2879 - CCM - CHEMICAL COMPANY OF MALAYSIA BHD

To be comfirm,

1. 3298 - HEXZA - HEXZA CORPORATION BHD
2. 7084 - QL - QL RESOURCES BHD

Insurance

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. It is either a financial tool or an expenses is depend on how you define it. Formally, it is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium.

There are lot of different type of insurances can be found in our society. What I want to say here is the life and medical insurance. Life and medical insurance is a personal financial tool that it is quite useful to every person. Why say so? It is because lot of things nowadays, they have factored in the insurance element into their price. If you do not have insurance coverage especially in medical line, you are more risky and costly than those who under life and medical insurance coverage.

I do not know what the condition in other country is, but in Malaysia, when a person has committed in an accident and sent to the hospital, hospital will need to get a deposit to start their action. They want to be sure they can receive the payment. Let imagine what if the person unconscious and hospital people cannot get a medical card in the person wallet? This happen to my friend experience before, luckily he is unconscious but at least he has medical card in his wallet.

Recently one of my friends has some sickness and she needs to have a surgery. Hospital needs to get the full payment before they conduct the surgery operation. It is an emergency surgical operation but hospital refuses any negotiation on the payment date. In this case, they have to collect the huge amount of money in a very short time for the operation. What will happen if they cannot get the huge amount of money in a short time? End up they borrow the cash from all the relatives and friends for emergency use.

Sometimes, you are rich, you have lot of properties or own huge company or have high pay, but accident come suddenly without notice and emergency means every second count can be different result, you cannot take out the cash means that time you are poor. You are poor of the ability to safe your life. Insurance can lower the exposure of the personal risk for the emergency use, just like the fire extinguisher in the kitchen. It is useless for cooking, but it is useful when accidentally caught fire. This is an example of risk management in financial world.

I admit there are lots of fraud cases in the society. Before you sign and agree to the policy, read and understand carefully or you get a good insurance agent who you can trust him or her on. Some times insurance also provide investment trust, insurer use your money you deposit for investing in the equity market. Insurance policy is almost same; the different is the person you choose to be your insurance agent.

How to choose and buy insurance? It is similar to invest in a stock market, do research and understand well before you act. When you buy, don’t have to put all eggs into the same basket. When you invest in profitable mutual fund or unit trust, you choose a right fund manager, to buy a good insurance; you also need to choose a good agent. This is why insurance is one of a personal financial tool.