Tuesday, November 30, 2010

the humbler IPO and yet ...

After the milestone Petronas Chemicals Group Bhd IPO, I next applied for the IPO of little-known Careplus Group Berhad. At 23 sen a unit, it was cheap as cheap gets. Its bosses were folks from Seremban and it was an all-Malaysian, all local company. This was an ACE company and ACE companies unlike Main Board companies on Bursa don't need to have 3-5 years' profit track record to qualify for listing on Bursa. I even felt a tinge of remorse after applying for it as this company seemed too tiny to really make any significant impact in the market. They make rubber gloves, mostly latex rubber gloves, not the nitrile ones although in its prospectus the company had said that it was venturing into nitrile gloves with new machinery purchased from the proceeds of this IPO. Surprise surpise, my application and another application i know of has both been REJECTED today. this means that the retail over-subscription rate for Careplus' IPO is probably quite impressive. More impressive than even big brother Petronas Chemicals, i'm begining to believe. I didn't even get 1 blessed unit of Careplus Group Berhad out of the 20,000 units which i applied for. The company debuts on the Bursa ACE market on 6th December so i'm really curious as to how it will perform on market opening day. Unlike the Petronas Chemicals Group Berhad IPO which raked in billions of Ringgits, Careplus is projecting IPO proceeds of around RM15 million only.

POST-BLOG NOTE: little David falls the mighty Goliath. The Careplus Group Berhad IPO was oversubscribed by 84.67 times for the public category while the Petronas Chemicals Group Berhad IPO was oversubscribed by 2.98 times for the public category.

Thursday, November 25, 2010

North Korea

Rogue states like North Korea should be taken out forcibly by an international expeditionary force sanctioned by the United Nations. They are a threat to world peace and are not only illegitimate, but hopelessly corrupt and criminal. There is no basis whatsoever for such a regime to continue to exist on paper or in fact.

Wednesday, November 10, 2010

Quantitative easing, anyone?

The US Federal Reserve prints money in QE2 (no, not the cruise ship, the second round of Quantitative Easing) as much as US$600 billion to buy up long term US treasury bills over the next 8 months. This is supposed to flush the US banking system with cash so that US Banks will lend out more money to US businesses which in turn create more jobs in the US and lower the US unemployment rate which is now hovering near 10%. That's in theory. But what happens in fact is that all this new money gets pumped OUT of the US into emerging markets in developing countries, so-called "hot money" snapping up properties, stocks, commodities, bonds in emerging economies and creating asset bubbles. Then i dread that as fast as this hot money comes in, foreign fund managers will take profit and spirit out their investments INCLUDING yours and mine hard-earned cash leaving markets in emerging economies crumbling in a tailspin.