Banks: On the War wagon!

Get globalised!

No more hiding behind affirmative policies!

Welcome to the real world.

Let us read this report.

 The doors are well flung open now for competition when BNM gave out licences to 5 foreign banks to start operations in Malaysia soon!

So, you better watch out or else your market share will dwindled to your own behest!

" Malaysian banks can expect more intense competition now that there are five more commercial foreign rivals.

This means that local lenders will have to improve their products and service level. Also, they will have to figure out how to retain their employees as the entry of new players could result in staff pinching.

RHB Research Institute head of research Lim Chee Sing said that while local banks are used to competition, they have to be wary of foreign banks which will slowly but surely intensify the heat. [Boil and bubble, Toil or face trouble!]

"It will take some time for them to fully enter into the competition, and it will arrive from various angles. Some of the local and foreign banks right now are already crossing in each other's path," says Lim.

On Thursday, Bank Negara Malaysia awarded commercial banking licences to five foreign banks, including two from Japan.

The five are France's BNP Paribas SA, Japan's Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, Indonesia's PT Bank Mandiri and the United Arab Emirates' (UAE) National Bank of Abu Dhabi.

This means that these lenders could do consumer banking, which is a growing market, as well as corporate banking, which involves lending to small and medium enterprises, among others.

Mercury Securities research analyst Edmund Tham said that local banks must buck up because foreign banks are good in certain areas, like cash management, for instance.

"Marketing people from the foreign banks will also be more dynamic because they can't operate from many branches like the local banks," he added.

Unlike local banks, which can open as many branches as they want, foreign commercial banks can only open eight.[ Never mind, they can work eight times as hard!]

Despite such limits, foreign banks are doing well. US lender Citibank has a big credit card business and was the market leader until recent years.

An analyst at TA Securities said the new banks would be strong in the corporate loan segment.

"But some Malaysian banks are responding to the challenge. Citibank, for example, was big on the credit card segment with the highest return on equity even though the bank only has a few branches.

"But now Malaysian banks are gnawing into their credit card market share. Local banks are also moving offshore to intensify their global presence, such as in Thailand, Singapore, China and other areas."

An investment banker at Kuwait Finance House said the new additions will be good for the banking landscape as there will be more options for customers.

"But local banks have to rise to the challenge as well by giving more flexible products, better rates and better customer service," he said.

Malaysia has over the years issued 19 licences for commercial banking, and three for Islamic banking, to foreign operators."

I think the field will get much more crowded in the coming years!

Who Says Orchard Road Can't Be flooded?

It flooded today.

The myth that Orchard Road has never been flooded as an adjacent Stamford Canal can efficiently drain enough water quickly  into an ocean before your latte can cool, has been proven wet and wrong!

Heavy downpour today has caused parts of Singapore’s city centre to be flooded — causing traffic havoc in the island republic.

Traffic lights at some intersections are not working contributing more to the building traffic congestion, while at some parts waters have risen knee-high making those roads inaccessible to traffic, as reported by the island’s Straits Times newspaper. 

A statement was released by the National Environment Agency at midday, confirming that 100mm of rain fell between 9am to 11am — which is equivalent to 60 per cent of June’s average rainfall.

So, the lesson we learn today-there is always a first time!

EPF: This Is Service!

Yes, the EPF has become people-centric!

Beginning this month, it opens its office at Shah Alam, Petaling Jaya and Kepong on the first and third Saturdays of every month from 8.30am to 12.30pm.

However, payments of contributions cannot be made on Saturdays.

If these days fall on public holidays, then they will also not open.

Among the services offered are receiving withdrawal applications, providing and receiving EPF forms from employees and employers, issuing members' statements of accounts, handling enquiries and giving advice on EPF services.

Looks like a minimal service offering........

Why you should attend AGMs - not for free food and door gifts

Ooi Kok Hwa wrote this in THE STAR today. Makes interesting reading.

"There are many reasons why investors look forward to attend an annual general meeting (AGM). Some attend because they hope to get free door gifts, while others look forward to the free food.

Nevertheless, there are serious investors who prepare well for an AGM. They are there to seek answers to issues related to the listed companies.

However, some investors feel that it is a waste of time to ask questions during the AGM as company directors will find ways to avoid answering them – for example, issues highlighted by investors in the previous AGM that have yet to be resolved.

We encourage investors to attend AGMs because this is the best time for them to ask questions about the financial performance and/or business decisions of the companies.

Given the time constraints of AGMs, we advise investors to read through the annual reports before attending these meetings.

Investors need to focus on company issues and not on the personalities of certain company directors. If possible, investors should take down notes so that they can refer back to the things that the company directors have promised to do.

Investors also need to examine all the resolutions at the AGM – for example, directors who are newly appointed or those seeking re-appointment.

We need to scrutinise whether these directors have relevant experience and appropriate financial skills as well as their background and reputation in the industry.

One of the most important issues to investors is dividends. We need to check not only the stability of dividend payments but also consistency according to the company’s dividend policy.

Companies need to reward shareholders with good dividends if they are unable to find any good investment opportunities to utilise the excess cash.

Unfortunately, we have seen a lot of companies that refuse to pay special dividends despite having excess cash.

One of the most common questions raised by investors is about directors’ fee. Most of the time, the fee should be the same as in the previous year.

If there are any significant increases, we need to check whether the fees are proportionate to the reported earnings as well as the overall salary expenses.

Given that AGMs are normally held a few months after the previous financial year-end, investors can take the opportunity to ask management about the outlook for the current financial year versus the previous year’s performance.

We can also request the management to elaborate further on the company’s prospects, capital expenditures or special capital calls in the near future.

Lastly, we need to exercise our rights by voting on the resolutions. Sometimes the results of the resolutions may not be in line with our wishes, but at least we have voiced our views.

If minority shareholders are active and show interest in the company’s future, management will likely be more careful in making business decisions, especially on projects that may be viewed as not maximising shareholder value.

Ooi Kok Hwa is an investment adviser and managing partner of MRR Consulting."

Now, you know why Genting M does not tell us why they did not dispose of the USD1.5 million cash hoard they have as dividends or as a bonus issue?. They are going to America!

Adventa: A Potential Buy-in

OSK has maintained its 'buy' recommendation on Adventa today, setting the target price at RM5.37. Is this a bridge too far?

Maybe at the moment, it may look far-fetched.

OSK expects Adventa to announce its second quarter 2010 results today, which they figure may come in below their  expectations.

OSK cited higher latex price, smaller new orders and the weakening of the USD against MYR during the quarter for their stance..

'Going forward, we believe 3QFY10 would be a better quarter for Adventa as the latex price increase is easing and the USD-MYR rate has stabilised, and it experienced a slight increase in production capacity from its new nitrile glove lines,' OSK added.

Seriously, is OSK talking through its hat.?

With this type of projection for Adventa's price, I fear OSK may just eat crow!

Not bird-Brained!

Smart bird!

Elvis-My Way

Amazing Grace!

Elvis Oldies yet Goodies!

 Suspicious Minds


Elvis' weddings photographs through the song, 'You Were Always On My Mind'.


 Lonesome no more with Elvis.



My first memorable song from Elvis! 'Return to Sender'



'The Wonder of You' - Elvis at his best!



Wooden Heart, we all ain't!