MRCB: Why is EPF Gobbling it up?

 The blogger, Value Investing in KLSE has his take on the above topic.

Not all the reasons he gave are based on actual rock solid facts. They are mere speculation and the product from an over-active mind.

These are its possible reasons cited.

"(a) It is a way for the connected shareholders to cash out so they can use the proceeds to invest in foreign markets which give higher return compared to MRCB. No one will buy up MRCB except for EPF who is remotely controlled by someone.

(b) It is a way for the government to share the country growth with EPF contributors “you and I”. MRCB has high chance to secure government lands in KL. It also means higher dividend yield in the future since EPF is investing more of its fund in equity now rather than bond.

(c) If EPF has successfully acquired MRCB, MRCB can raise funds from EPF, to fund the land price and development of government lands in KL for 10 years. Construction contracts will then be given to connected parties. Government can also use the proceeds from the sale of government lands to pay its debt. And there are various loop holes in construction and development to suck the cash out

(d) Malaysia is running on deficit already and it would be too obvious and unpopular to announce huge development to be funded by government. Hence, using EPF to fund development is the best “not so obvious” way. Whether EPF will benefit from it will remain unknown. But what is certain is that “reaping the money today is less risky than trying to get back the money 5 years later”. Shareholders of MRCB and connected parties understand this principle very clearly.

I don’t know the actual answer but looking at the direction which EPF is heading, I better take out my EPF as soon as possible now."

Well, whatever it was worth, make your decision if you are still holding MRCB shares.

A Gastronomic Delight

It sure was satisfying watching 'Julie and Julia'. Well acted, well paced and well crafted. Never a dull moment and such witty dialogue.

Set in an intervening time period when Julia Childs was in her 40s and the 30th Birthday of Julie Powell, this movie, traces Julia Childs entry into French cooking and the beginning of a blog where Julie challenges herself to complete all the recipes in Julia's book, "Masterpiece of French Cooking" within 365 days.

The story ended well for both protagonists as they got the books printed.

This is one 'cool cat' of a movie. If the field had not be overcrowded at the oscars this year , Stanley Tucci could have won his Academy Award for Best Supporting Actor.

As usual, Meryl Streep was in her element!

MRCB: Going for the Jugular?

The Employees Provident Fund (EPF) has acquired another 24.8 million shares in Malaysian Resources Corp Bhd (MRCB) since last Friday.

In a filing with Bursa Malaysia yesterday, MRCB informed that it bought these shares at  an average of  RM1.479 each.

Last week, the EPF extended a conditional general offer (GO) for the 66.2% of MRCB that it does not own after it triggered the GO following its subscription of 171.47 million MRCB rights shares late last year.

We know the error that triggered the mandatory general offer. They should have been more careful when subscribing for excess shares. Their foolhardiness caused the imbroglio.

So, now that they have fumbled big time, why are they buying more MRCB shares? Moreover they did inform the public that MRCB will not be their flagship for property development.

However, if you look at the counters where they controlled directly such as RHB and MBSB, it looks like the MRCB purchase fits right into this strategic  troika of inter-connected shares that would form the core of the property and property finance holdings of the EPF.


There is also a very strong chance that they will sell the excess MRCB shares after it has accumulated good premium values which obviously it can.

I guess in a way it will help bolster the earnings of EPF in 2010 and onwards.