Melissa M Chen Sells EIG Shares

This is the actual report as discussed in the earlier posting. It was taken from the STAR.

Esthetics International Group Bhd’s (EIG) substantial shareholder Melissa M. Chen has sold her stake and ceased to be a substantial shareholder in the company.

According to filings with Bursa Malaysia last Friday, Chen, who is EIG executive director business development and founder, sold 26.85 million shares, or 20.35% stake, in EIG via off-market transactions.

In the group’s latest annual report, Chen was listed as the second largest shareholder with a 20.35% stake after group managing director Lim Yee Soon with a 24.66% stake. Chen is Lim’s spouse.

At the time of writing, Lim’s office had not returned StarBiz queries while attempts to contact other EIG officials were unsuccessful.

EIG is involved in the wellness and beauty industry. The group manages and distributes skincare and wellness brands such as Averine, Bioxil, Clinelle, Dermalogica and EfiSlim.

Chen started Head to Toe Beauty Centre in 1984. She became interested in skincare brand Dermalogica in 1988 and four years later launched the first Leonard Drake centre in the country.

For the first quarter ended June 30, EIG reported a net loss of RM3.2mil against a net profit of RM1.02mil a year earlier. Revenue, however, rose slightly to RM39.9mil from RM37.8mil previously.

Concurrently, Providence Capital Sdn Bhd, in which EIG chairman Eddy Chieng Ing Huong has a stake, acquired 28.5 million EIG shares via off-market transactions.

With this acquisition, Providence Capital is currently EIG’s largest substantial shareholder with 42.2 million shares, or 31.97% equity.

Meanwhile, Kan Kok Chee, whose 10.04% stake as at June 30 made him the fourth largest shareholder in EIG, has disposed of his entire holding of 13.26 million shares.

Gambir Capital Sdn Bhd, in which independent non-executive director Felicia Lim Chang Ching has an interest, has acquired 11.6 million EIG shares, upping its stake to 18.04 million shares, or 13.67%, from 4.87% as at June 30. i suspect Gambir Capital could be linked to Lim.

EIG-Quo Vadis?

I thought it was not really a harrowing experience for the Board at the last AGM. I felt throughout the meeting that they could parried any the questions posed to them most convincingly.

Compared to the earlier AGM, this was the pits as their profit has frittered to less than RM700,000. The Chaiman who is incidentally the head honcho of Selangor Dredging was adept in his responses. I have mulled over the reasons for the diminution of the profit and they are plausible.

The one division they did not do well was in the Wellness sector. Their operations in Thailand  was a real loss situation given the civil unrest there that last for more than a few months.

Secondly, they were trying to promote their own brands rather then be a seller of licensed products.

What is interesting was there was a big share sale from a majority shareholder (Melissa) and another substantial seller. What piqued my interest is all the sales were mostly bought over by Chairman Chieng and another shareholder Jessica whom I believe is related to Melissa and Lim, the Deputy Chairman of EIG.

So what do you think he will do with EIG now that the top beautician R&D and developer has exited the scene?

The share is currently trading below 60 sen and interest is scant.

The Yea-Sayers- Are They Right or Guessing Again?

Yvonne Tan write this in the Malaysian Insider. Are you persuaded?


With most companies having reported their second-quarter results, traders and investors would do well to be conservative given the looming threat of a double-dip in the world’s largest economies, analysts said.

“Near-term catalysts are lacking now with the results season over, and certainly there will be some spillover effects from the overseas markets. We advise sticking to defensive and blue-chip stocks,” a senior equity analyst with Hong Leong Research said.

Recent data from the world’s biggest economies have been less than cheerful, resulting in renewed worries on the growth momentum of these countries.

In the United States, a record plunge in home sales was recently reported. And in Japan, which has been overtaken by China as the world’s second biggest economy, export growth is showing no clear signs of picking up.  

Nevertheless, the local bourse has been fairly insulated, thanks to a positive earnings season together with a stronger ringgit – a key factor for foreign interest but with less strong catalysts now, any profits could very well be capped. “Add this to the uncertainties in global economies, which could spill over to markets and cause volatility, it pays to exercise caution,” the analyst said.

From a technical perspective, however, things appear to be still looking good for Bursa Malaysia, according to a senior technical analyst.

“The bulls had over the past couple of weeks demonstrated their power and determination to investors by outperforming their regional peers.

“With the daily and weekly moving-average convergence/divergence indicators continuing to expand positively against their respective signal line, they suggest more upside can be expected going forward,” the technical analyst said.

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) has chalked up gains of more than 3% in the past two weeks compared with Japan’s Nikkei 225 which lost 3.55%, Hong Kong’s Hang Seng which shed 2.7% and China’s Shanghai Composite Index which is down 0.87%.

On Monday, the local 30-stock gauge finished 11.44 points or 0.81% up at 1,422.49.

Meanwhile, of the sea of blue-chip and defensive stocks, the Hong Leong Research analyst likes the banking and telco sectors which reported a good set of results in the quarter just ended.

OSK Research also likes banks, which are seen to be the first proxies to a recovery in Malaysia’s economy. In a second-quarter results update on Aug 24, the research house said banks led the strong corporate results posted by big-cap companies during the three-month period.

Among the big caps, 26% exceeded expectations while only 16% underperformed, it said in its analysis.

Where Have All The Retailers Gone, Long Time Passing...

This article by Yow Hong Chieh of the Malaysian Insider should prove worthwhile reading.

KUALA LUMPUR, Sept 1 — Individual investors continue to shun the Malaysian stock market as public confidence remains shaky due to fears that the market’s recovery following the 2007 US sub-prime mortgage crisis may not be real.

Economists and analysts said that a slowdown in foreign investments, poor enforcement against unscrupulous activities and overseas competition for local funds also contributed to the lack of interest among ordinary Malaysians in investing in the local share market.

Kenanga Investment Bank economist Wan Suhaimie Wan Saidie said most investors were tired of the Malaysian stock market, which was not as competitive as other bourses in the region, and added that participation was also muted due to the lack of foreign direct investment (FDI).

“There is a correlation between retail participants and foreign investment flows,” he said, referencing the massive 81.1 per cent drop in foreign direct investment (FDI) Malaysia experienced last year.

“If foreign investment flows are not forthcoming individual investors are more likely to shun the local market.”
He said there was a possibility that investors might “go back to hibernation” until they saw signs of a firm recovery, but cautioned that the flow information both locally and abroad did not suggest that things were getting any better.

Until then, however, investors still had many other options to buy both locally and abroad or put their money into properties and commodities, he explained.

The Kuala Lumpur Composite Index’s 45 per cent gain last year lagged behind Southeast Asian neighbours even after the government announced stimulus plans totalling RM67 billion to help pull the region’s third-largest economy out of a recession.

The slump in trading by individuals coincided with an exodus by foreigners from Asean’s second-biggest stock market, leaving Bursa Malaysia more reliant on domestic institutional funds.

Overseas investors have sold a net RM1.36 billion of Malaysia’s equities this year, adding to RM8.57 billion withdrawn in 2009 and RM38.6 billion that flowed out in 2008, paring their share of local stocks down to 20.6 per cent at the end of April from 27.5 per cent in April 2007.

Wan Suhaimie was critical of the level of participation in the market by statutory funds such as Employees Provident Fund (EPF), which he said distorted the market as they focused only on index-linked stocks.

On March 30, Prime Minister Datuk Seri Najib Razak revealed that the state-controlled EPF accounted for 50 per cent of daily trading volume in the equity and bond markets. Additionally, more than half of the RM417.1 billion market value in the benchmark stock index is owned by government-linked funds, according to calculations by Bloomberg.

“It doesn’t really reflect the real overall performance of the stock market. Most of the information and research is skewed towards big cap stocks,” he said, adding that it was possible that investors might miss out on smaller companies that have better growth potential because of this.

A Hwang-DBS remisier who wanted to be identified only as Kok explained that, during good times, retail investors make up 60 to 70 per cent of trading value in a normal market.

However, according to a Bloomberg report, trading by individuals have fallen to as low as 20 percent of trading value from more than half before the start of the 1997 Asian financial crisis, when the KLCI slumped by a record 52 per cent.

Kok said the battering individual investors took in 1997 and the recent sub-prime crisis led many to put their money in safer alternatives like unit trusts or sukuks (Islamic bonds), adding that many were also still holding onto stocks that had yet to recover.

“With the market in such a lacklustre mode, you can’t make money punting,” he said. “The market is just drifting. The main market movers are just blue chip index counters... Most retail investors are still on the sidelines nursing their wounds.”

“Any spare money they’ll probably keep in interest-bearing accounts or, if they have more money, they’ll probably just park it with a fund manager.”

Most individual savings started shifting to mutual funds and unit trusts since Malaysia’s economy went into a recession in 1998 but have not returned to stock trading even as the economy expanded at an annual average of five percent over the past decade and the benchmark index more than doubled, Bursa Malaysia CEO Yusli Mohamed Yusoff said in June.

In order to boost retail investors’ share of trading to closer to one-third and tap into Southeast Asia’s second-highest savings rate, Bursa is currently working with brokerages and banks to encourage investors to open up accounts and pursue online trading.

However, Kok said he felt that investors were still wary of trading on the market because they were not convinced that Malaysia’s economic recovery was real.

“When you talk about six or seven per cent (GDP) growth, I suppose you and I don’t see it,” he said.

A broker with a local investment bank who declined to be named was similarly sceptical of the strength of the market’s recovery, pointing out that the KLCI, which is used as a bellwether for the Malaysian stock market, focused only on selected blue chip stocks.

“It is very obvious that the index, targeting only 30 counters, is not a true reflection of the overall market. A lot of the companies are actually really going down,” she said.

“Because the downtrend from ‘07, until today, in terms of all those general stocks that people buy and sell, a lot of them are still very much at the bottom.”

She added that retail investors have also been “very quiet” partly because they had lost confidence in market regulators, citing the recent case of furniture make Kenmark Industrial Co Bhd.

Kenmark’s troubles began in late May when its Taiwanese managing director James Hwang disappeared mysteriously — leading to a plunge in share price and plant closures in Port Klang and Vietnam — only to resurface nearly a week later, claiming his absence was due to illness.

During Hwang’s absence, Datuk Ishak Ismail entered the market and amassed shares amounting to a 32.36 per cent stake in the company over 10 days at prices of between 5.8 sen and 6.0 sen, claiming he had done so to help out his friend Hwang and offer re-employment to the company’s workers.

However, Ishak later sold his direct and indirect stake in Kenmark between June 9 and June 11 at between 14 sen and 16 sen after failing to convince Hwang to return to the company.

The Securities Commission finally stepped in on June 16 when it obtained a High Court order to stop Ishak from using or dealing with the RM10.16 million proceeds from the sale of shares in Kenmark as part of a move to probe possible insider trading.

Kenmark’s share price plummeted from a high of RM0.85 to just RM0.07.

“Stocks can drop from a dollar to penny stocks... These sorts of events happen in the Malaysian market, yet the authorities are not taking action,” the remisier said.

“A company doesn’t just fold up within a month. I can understand how those investors feel.”

Berjaya Group Shares-A Tsunami of Sellers

One look at the board and you would see Berjaya Group shares gravitating down in price every trading day. so what is happening?

Anyone care to tell?

Look at the doyen in the group-Sports Toto. In its history, it is always a range-bound share floating between RM4.50 to RM5.00. Now look at it. It is in the teens above RM4.00. Dividends paid is still okay but why it is looked at with so much disdain these days for it to break the RM4.50 mark?

BJ Land though priced at about the RM4.30 price level is a counter that is too tightly held or interest is just not there in spite of the share split and bonus. Is it because some of its so-called grand projects are not coming through.. The one of most concern is the project to shift the Selangor Turf Club facility from Sungai Besi to Salak Tinggi. That has gone down for sometime as the PR government is still looking at the plans. Until we receive a whisper on that, BJ Land has to seek other exciting games to play.

BJ Corp has seen the best of times when the Ascot Game licence was in the offing for sports betting. With the failure to secure that licence, prices spiral downwards. Then after off-loading BJ Retail, it has sunk below RM1.00. I think it may go down further at this rate if BJ Roosters gets listed. True it will be cash rich and could become the war-chest for Vincent to play his games in 2011. Or is the General elections around the corner?

BJ Retail, newly listed is facing a slew of sellers every day? I wonder who is selling. Is Vincent cashing out while Berjaya Sampo is picking it up for cheap, benefiting Vincent either way? Looks like it as a majority seller must be in the market. Until the bleeding stops, BJ Retail will be in this price stupor.

BJ Media is another poor thing. After giving dividend-in-specie to its shareholders with the sale of THE EDGE business paper, the price of this stock started going south from 65 sen. Today it is about 40 sen though it surprisingly showed new life picking up 6 sen in today's morning session.

BJ Asset is also suffering from the same malaise. From a sprightly move to the 70 sen level given the better returns on number forecast operations in Sarawak, the occupancy of Berjaya Times Square and sale of  some condominiums, it has succumbed to selling pressure and has moved back close to the 50 sen level. How sad!

So, Vincent-where is the beef?

Or are you cashing out just like Bob Kuok,Ananda, Francis and Kok Thay?

That Special School Without Students

By Debra Chong from Malaysia Insider has a telling story which will bring out the guffaws.

Let us read on.

KUALA LUMPUR, Sept 1 — The nation’s first school for pregnant teens — dreamt up by Melaka Chief Minister  Ali Rustam is slated to open its doors today. Sadly there is a ghost of a chance to find any students there.

Obviously there was interest when the idea was mooted so claimed certain quarters. However,  
Melaka State Islamic department (Jaim) director, Sulaiman Harmain Shah, has this to say now. “We’ve had a few people calling up to ask,”  he said as he is is in charge of the management of the state-run private school in Jasin named “Sekolah Harapan” (School of Hope).

“But no one has registered to be a student yet,” he admitted to The Malaysian Insider in a recent phone interview.

Sulaiman quickly added that enrolment into the school was not automatic and candidates were required to first attend an interview with the state Islamic department.

The interview was necessary to determine, among others, if the schoolgirl in question was a genuine case, whether she had the support of her parents or had been disowned and required housing, Sulaiman explained.

The religious head also disclosed that the school may not be fully ready for its first intake today, with the premises still undergoing a makeover from its previous incarnation as office suites.

“It’s still under renovation. The dormitory is complete. We have a dormitory that can accommodate 12 people,” Sulaiman said.

Apart from the physical aspects of the school, the Islamic department only has a few religious teachers on its faculty.

Other teachers will be hired “part-time” as and when needed, Sulaiman said.

“It will be like a tuition centre,” he added.

Mohd Ali had first announced his idea to set up a dedicated school for pregnant teens in July, with the thought that it could help cut down incidents of newborn babies being dumped, setting off a national debate on the need for such a school and on the reasons behind it.

The education ministry has refuted the need, pointing that its regulations allows all girls access to schooling regardless of whether they are pregnant or married.

But the Melaka CM disputes the ministry’s statement and claims some principals have sent home students after they were found to be pregnant and leaving the teens at a loss on what to do next, which he linked to the spate of baby-dumping cases.

Mohd Ali has also highlighted that the phenomenon affects the Malays, the largest racial group in Malaysia, and carries with it a whole slew of social-religious consequences as the community is constitutionally Muslim.

His controversial idea for a “sekolah hamil” was cemented after the state approved the conditional marriage for minors, with some groups questioning if the “husbands” would be enrolled into the same campus and what subjects would be taught there.

“It’s only for the pregnant girls. Men have no problem. They can still attend school,” Sulaiman replied when asked if the “husbands” would also be attending the school.

Much about the school continues to be wrapped in a veil of mystery. The exact whereabouts of the school in Jasin is also confidential.

“We are trying to protect the girls. They are malu (ashamed),” Sulaiman defended.

He was also reluctant to disclose details but has described the school to be more of a spiritual, moral and educational shelter facility.

 Priority will also be given for pregnant Malay-Muslim teens, especially those who have been disowned by their parents and have nowhere else to go, Sulaiman added.

All 13 reported cases of baby-dumping this year have so far only involved the Malay community, police statistics show.

“This is a symptom of social ills among the Muslims… From experience, those who are pregnant seldom are interested to continue their schooling,” Sulaiman said.

This CM certainly has superb conceptual vision.

Let's give him our cheers, won't we when he should succeed  to recruit his first pupil?

Will Banks Cap Housing Loan Quantum?

Bank Negara Malaysia is thinking seriously of imposing a  loan-to-value ratio (LVR) for mortgages at 80 per cent to avert the risk of a potential property bubble in the country.

It is seeking feedback from banks on the possibility of doing so.

Currently, there is no fixed LVR. Banks usually lend up to 90 per cent of a house value, or even up to 100 per cent in some cases.

A banking analyst at a local research house thinks this is unlikley thta bank is going to support BNM's move as it will affect their profitability.

Still, BNM is likely to be mindful of this and if it feels that such a move is necessary to curb property speculation and a potential rise in non-perfoming loans, it may reach a compromise in that it may not slap the 80 per cent cap across the board, he pointed out.


"We believe that it is unlikely that BNM will enforce a strict capping of LVR across all residential property classes, but rather impose a restriction only on higher-end properties where the speculative element could be more apparent," OSK Research said in a note to clients yesterday.

Kenanga Research said it wouldn't be surprised if BNM implemented the 80 per cent cap on, at least, properties valued at more than RM500,000.

The central bank's concerns about a potential bubble are warranted, interest rate hikes this year, loan growth has remained robust while deposit growth has lagged, due in part to the channeling of retail deposits into property purchases.

Residential properties currently account for 26.6 per cent of total industry loans.

Still, OSK felt that it was not feasible to set a blanket enforcement on the LVR, pointing out that residential properties were considered one of the safer asset classes for banks to lend to, with promising growth prospects underpinned by the country's relatively young population.

As it stands, it is understood that most banks already have an internal risk control policy, limiting the LVR to 85 per cent for higher-end residential properties valued at more than RM700,000. Most banks also have a LVR cap of 85 per cent for non-residential properties.

OSK noted also that LVR was just one of several criteria that banks use in their credit scoring process. They also tend to look at the debt servicing ratio, location of property and the borrower's other financial backing.

Meanwhile, any mortgage restriction is also seen to be negative for the property sector. Kenanga Research said it is likely to downgrade the sector from a "trading buy" now if the restrictions are implemented as property transactions will fall since deposit requirements will basically double.

"If the LVR is official at 80 per cent for all borrowers, we see a negative impact on the property sector, especially on the low- to medium-end market as housebuyers will need more equity under the new scheme," said Maybank Investment Bank research.

For example, a housebuyer would need RM80,000 instead of RM40,000 as equity for a RM400,000 house. "This could cause a delay in purchasing decisions," it noted.

RHB Research, meanwhile, felt that first-time home buyers should be exempted from a higher down-payment ratio since the government has been encouraging home ownership.