Foreign Land Deals-Silly Risk Taking?

Investing in land is a very good move towards developing a nest-egg. Remember, location of your land is very important if it is to appreciate in value.

Strangely, many Malaysians have invested much of their hard-earn money in overseas property from USA, Australia,UK to Canada.

There were a number of issues with regard to these overseas land investment. Some people are of the view that this type of investment is illegal and disallowed by Bank Negara Malaysia. A few years back, a local company dealing with UK land was in the lime-light. This land investment was advertised widely on Malaysian radio stations then but I do not know whether the issues were amicably resolved with BNM.

Buying land overseas is very risky. You do not know the laws in that foreign country. You can likely fell prey to sundry risks from illegal activities to misrepresentation. There are loop-holes just like what Edgeworth took advantage of, for their own nefarious leverage purposes or even those that constitute downright cheating of the gullible.

In many overseas land sales, foreign buyers have been duped to buy non-residential or commercial land with the most remote hope that it will be converted in due time. Sadly, not all such lands may be allowed to be converted and may be land to be reserved for 'green lungs'. After all, agents are just interested in their commision and not in after-sales service. They convince you to get your sale in grand style by giving you a hard talk,lunch at a 5-star restaurant as well as complimentary shopping vouchers. So, caveat emptor when approached by any such agents.You may just be the 'sucker' that they are waiting for!

When I read about the plight of Malaysians who fell prey to the Canadian land scheme sold through Edgeworth Properties, I remembered all too clearly my experience with one such company a few years back.

I do not know about anyone getting super returns from their risky investments but my investment forays overseas have been bitter sweet,at best. My investment in an overseas insurance policy in an off-shore facility was disappointing and that pertaining to an Australian scholarship trust was really not worth the while.

A friend of mine who invested in a piece of land in Florida had so much anxiety woes that he visited the land physically in the USA and seeing that there was no' safety net' in the investment, he sold it. Thank God, he did it before the sub-prime fiasco.

Some people are really gutsy. Investing RM750,000 in parcels of land overseas through dubious companies and agents.They dared to invest in the 'unknown' overseas and yet not invest in blue chips on Bursa KL or land in their back yard in Malaysia.These are definitely less risky, for sure!

I wonder why the so called investors are attracted to the remote, 'potential gains' from such land purchase overseas?

Gullibility, again, financial adventurism or just plain silly greed.

TASCO-Better Net Profits and Dividends

TASCO officially announced its results for the full fiscal year,paying good dividends of another 12.9%.

Performance has also improved. For the full year ending 31 Dec 2011, TASCO's revenue rose to RM469,211 million which is 5.5% better that that achieved in the corresponding period ending 2010 of RM443,362. Profit after tax for the period was RM34,676 million,almost 40% of that attained in 2010 of RM24,776 million. Basic earnings per shares has also risen to 34.59 sen from 24.78 sen in 2010.In terms of dividends, the dividend declared for the current year is 12.90% where 1.3% is tax-exempt while 11.6% is taxed at 25%,effectively translating net dividend to 9.13%. This is better that 9.3% gross declared in 2010.

The last quarter results, though, was lower than that achieved in the corresponding quarter in 2010.Revenue shrunk to RM113,870 million, RM10.8 million lower than RM124,692 million chalked up in 2010. This is equivalent to a 8.6% fall. Thankfully, net profit has been higher at RM13,963 million as compared to RM8,471 million registered in 2010. This is equivalent to a spectacular improvement of 65%.

Let us now look at TASCO's quarter results thus far.

Though revenue is so much lower than in 2010, net profit earnings per share, dividend (12.90%) and NTA (RM2.41)have been good.

Dividend-wise, this year has the best yield thus far ;comparing to the low pay-out of 7% in 2009 and 9.1% in 2010.

If the yearly and quarterly revenue is any indicator, the logistics industry continues to be challenging for TASCO though profits has indeed improved tremendously. Whether the industry can still support such a profit performance is very much dependent on both the global and domestic economy.

TASCO-Weak Holders, Tired Holders

After a few days of stimulating buying, TASCO is now taking a breather.

Just like the marathon runner, there are times you paced and there are times you may spurt.

So TASCO is now at an even keel as far as demand is concerned as weak and tired sellers sell down. It is definitely a buyer's market for this counter today but volume is small at only 30,000 shares.

An interesting question to ask is: Why was there volume from RM1.70 to RM1.90? Random board walk or something hidden under the corporate sheets?

Tasco is trading two sen down at RM1.88 now. Interesting number by Chinese geomancy,right?

At the end of trading, TASCO fell 5 sen to RM2.85.

Is there still a 'Crouching Tiger' and 'Hidden Dragon' somewhere in TASCO?

The Flight of BAT

Yes, BAT has done it again.

After some yoyo-yoyo motion, it took off for the final countdown, pushing the price up by an extraordinary RM1.38 to RM53.90, just before the finishing bell.This is ten sen shy of RM54.00. Some 31 lots out of 141 lots were done at this price.

Does that mean, BAT will hover higher tomorrow? Hindsight is 2020.

Let it test the water tomorrow.

ESSO-Wither Thou?

It's all be quiet on the ESSO front since the announcement and approval of the sale of the 65% controlling stake in Esso Malaysia by its principal, Exxon International Holdings to San Miguel Corporation of the Philippines.

The share price went ballistic on the take-over announcement touching RM5.97 from a low of RM2.85 during the ensuing year. The price of ESS0 has moved up from a low price of RM3.30 during the last 26 weeks to RM4.23 before falling back to the RM3.00 level once more.

It has been gathering strength during the last three months and touched RM3.84 on 17 February.

Today the counter took a fall when the quarterly results was announced. It fell 8 sen to RM3.76. However, there was no panic selling for this blue chip. In fact, for many, it represent a buying opportunity.

Looking at the quarterly results ending 31 December 2011 as compared to the corresponding period last year, it would seem that the net profit has sunk by 2.8 times.Similarly EPS has dropped from 0.45 sen to 12.8 sen.

It can be seen clearly that cost of sales viz-a-viz revenue is very high; equivalent to 96%, causing net profit to deflate to RM120,653 compared to gross profit of RM265,695 attained in 2010.

On a yearly basis,cost of sales viz-a-viz revenue for the current period is also high equivalent to 95% of total revenue.In 2010, this was about 90.7%.

Now that the 'not so good' news is out, what is left will be what has San Miguel in store for minority shareholders
after buying the share at RM3.50.

Esso has now taken a political label since Mirzan Mahathir holds a substantive share in this brewery corporation.Will a de-listing be expected with a boon for minority shareholders?

I think speculation will move the price up. It is a matter of time now.

TASCO Climbs ON

I have been tracking this stock for a couple of days now and both price and volume have been improving. I still wonder what is the reason for this sudden buying interest. Does anyone has the answer or is it still blowing in the wind?

Today, it ended up 6 sen to RM1.90 after hitting an early trading high of RM1.95. The volume has also increased almost two folds to more than 62,360 shares. (31,400 shares on 17 Feb)

Let us track this stock further to see what is in the offing.

When will there be a near term stabilisation or price hiatus?

Risk Taking And Fortune Smiles

I had lunch with an old friend today.

We were talking about risk taking. Surprisingly, he told me he is now fully invested in some pieces of choice land and does not own even a single share of Bursa KL.

He was involved in the stock market but fortune has been kind to him finally after many hits and misses. There were times when his heart was in his mouth and he had to cut losses. However, on balance he made a huge amount of cash just buying on the lows and exiting on the highs. That was life-changing for him!

Reflecting on this true story, I know that many among us, myself included, almost had it but has since lost it all as lady luck would not shine on us.

Life is short and there are many not given second chances. With meager resources, as age catches up,risk taking will be the furthest thing from our minds.

As we become more cautious and careful, we will become more risk averse.

As such, the chance of making it in a great way becomes even more remote.

Calculated risks and lady luck will favour those who take risks.

Are you that risk taker?