Berjaya Food Berhad: A Wholesome Investment?

To buy or not to buy Berjaya Food Berhad (BFB)? Would that be the question?Not by any measure, a Hamlet moment.

This share which was offered at 51 sen on IPO opened at 53.3 sen on 8 March 2011,went to a low of 53 sen and ended the day at 63.5 sen on a commendable volume of 36 million shares. 

Pushed to a high of 74.5 sen on 9 March, it touched a low of 64.5 sen before ending at 67.5 sen. Volume decreased to 21.5 million shares. By 10 March, volume shrunk to only 3.7 million shares and the share price lost its upward direction to close down 4 sen at 63 sen. 

By 16 March, the price limboed down the price pole to 58.5 sen on a volume of 2.3 million shares. Volume shrunk to 1.5 million shares by 17 March when BFB share price leveled at 58.5 sen. Volume started going up again on 21 March to 3.3 million shares.  BFB’s share price then moved up strongly to close up 3.5 sen at 62.5 sen on 23 March on a buying wave of 3.5 million shares.

From a layman’s view- point, from the BJRetail fiasco, BFB is a stock that will also go nowhere soon. Contingent on only one product, Kenny Rogers Restaurants, has yet to grow its business the way KFC went.  It has only 49 restaurants and most of them are located in shopping complexes unlike KFCs that are literally every where. Moreover, the food industry has a low barrier to new entrants who can spoil the market for existing players.

To me, there is no hurry to buy this share. Every time there is a substantive price rise, sellers will come in like a mini tsunami and price will slide. 

I do not foresee it to beat the dismal share price performance of BJRetail but I also see little price upside. There will be little speculative buy and only parties close to Vincent Tan and know the going-ons in that group may be biting from time to time.

Watch for volume, if you intend to take a position on this counter. Remember- there is little likelihood of short term trading profits here. 

Postscript:

At the time of writing, volume has spiked to 60 million shares and BFB touched 71 sen before climbing down to trade at 69 sen for a 6 sen gain.

I think day traders are shoring up the price to profit take by the day's close. They could also be shorting the counter. If the price remains close to the 70 sen level, it only means that Vincent Tan and gang are playing the counter.

Let us see how the scenario pans out this evening at 5pm.

Bye-Bye Dame Elizabeth!

Elizabeth Taylor passed on today (24 March 2011) at Cedars-Sinai Hospital in Los Angeles.

A consummate actress, Taylor acted in her first film at the age of 10, three years after her American parents had returned to the United States from London, where she was born in Hampstead in 1932.

After just one film, she was hired by MGM, and became a child star with National Velvet, starring opposite Mickey Rooney.

One of the longest-surviving stars of the old studio system, she was widely acclaimed for her roles Cat on a Hot Tin Roof, Raintree Country and Cleopatra - as well as Butterfield 8, for which she won her first Oscar in 1960.

This blog says good-bye to another legend.

Axiata: Projecting a Ten Percenter for 2011

HwangDBS Vickers Research Sdn Bhd is projecting Axiata Group Bhd’s revenue for financial year 2011 to grow by 10 per cent while the earnings before interest, taxes, depreciation and amortisation (EBITDA) margin will remain stable at 49 per cent.

This is premised on Axiata’s 2011 plan to grow its revenue from Robi in Bangladesh, Dialog in Sri Lanka, XL in Indonesia and Celcom in Malaysia.

Except for Dialog,  the other subsidiaries are targeted to perform ahead of the industry.

While Celcom and XL will continue to grow mobile data services while remaining cost efficient,Robi will work to improve service quality and offerings.

Meanwhile, Dialog will focus on growing its data services revenue and managing cost efficiencies added HwangDBS.

As for dividend payout, it is projected that hte level would be 35 percent as  Axiata will be able to pay more dividends, given an expected more than sufficient free cash flows over the next two to three years.

Axiata has a dividend policy of a minimum 30 per cent payout ratio, translating to about a two per cent yield.

HwangDBS has maintained a “buy” call on Axiata with a sum-of-parts (SOP) derived target price of RM5.60. 

It's about 90 sen from that point.  I will buy now and leave at RM5.30

EPF-Backwater Payor

You would think that the EPF could do better that those people at Permodalan Nasional Berhad.

As usual, we are off the mark.

During the good years when banks were paying off fixed deposits at good rates, EPF was in the shadow-a laggard and whipping boy giving good money away at 'chicken shit' rate. Now it is forecasting low rates again, giving a thousand reasons why it cannot give better rates. So, what is new?

Right now, it has one bank, RHB, under its belt, a development banking agency, MBSB as well as a construction giant called MRCB with its nuggets of property in Brickfields. And what about the Sg.Buloh project and its profit offerings to EPF?

Coupled with that the government has been throwing handsome assets in the way of EPF. What can possibly go wrong? London property purchases? Tokyo stock market?

Let us read what Azlan of EPF has to say about your dividend potential next year.

The Employees Provident Fund (EPF) expects to declare a dividend rate of between 4.5 per cent and 5.5 per cent annually despite challenges in the global economy so says its CEO, Azlan.

He trumpeted in a good year like 2010, 5.8% was possible.

“The important thing is capital preservation. We feel that EPF now has got very good investments. Going forward, we are steady and comfortable,” he said

Azlan added EPF’s overseas investments during these challenging times were safe.

“On the positive side, we may find opportunities to buy or sell during the current market uncertainty, on a selective basis,” he said.

He said EPF was talking with the government to finalise the terms of the agreement on the development of the 1,200-hectare Rubber Research Institute land in Sungai Buloh.“We hope to finalise it before year-end,” he said.

So, do something for the members-build houses we can afford and give us first preference!

BJRetail: Return to Sender

Yes, this is so strange.

After listing BJRetail (BJR) on the Main Board last August 2010, it is really unexpected that Vincent Tan and his related parties will want to take it private once more after a mere 8 months.

In fact the stock has performed very poorly despite better results and a potential dividend in store.

It was offered at 50 sen during the IP0 and got as high as 56 sen. Subsequently, it succumbed to selling pressure because of too much loan stock conversion by related parties which to my notice, happens almost all the time. Before the price could stabilised, more were converted and off-loaded on the market as such miserable prices.

For those still holding BJR at 42.5 sen, this could be a God-send  opportunity to get out of this dog counter at 65 sen.

Another thing that I noticed is BJFood (BJF) is also experiencing loan stock conversion and today, it occurred, bringing the price down.

With the trouble in Saudi Arabia and the tsunami in Japan,next week would not be a good week for any stock and BJF may just go down to its offer price of 51 sen.

So, for those intending to get into BJF, just watch out for the price next week to make an entry.

I Am Back

So after his two gubernatorial terms in California, the Terminator is back to Hollywood. Possibly, he will play small  cameo roles in those movies that made him a household name.

No longer as nimble and fleet, he will have to work out and huff and puff just  like Harrison Ford when he did the latest Indiana Jones movie.

What else can we say except, " Welcome back, Arnold!"

NATIP: Zeroing on Thrust 3

In the 1970s, Malaysia's chief timber imports range from the export of round logs to sawn-timber,plywood and veneer. The industry has changed. Today,the nation exports boast value-added products such as high quality furniture and builder' joinery and carpentry.

Behind the advent and growth of these valued added industry is the use of machinery and skilled labour.

The current global timber industry is driven by competitiveness. On one hand, is the intense competition unleashed by the People's Republic of China(PRC) and Vietnam which specialises in low-end products.On the other hand, there is Japan and the Republic of Korea (ROK) which utilises high technology in their production of timber products. For Malaysia which is sandwiched somewhere in  between, its status as a a producer of comparative advantage based on cheap labour costs is but over.Its moment of truth is here.

Malaysia needs to reinvent itself if it is to maintain its stature as  a major exporter of timber products. The way forward will be through the adoption of technology. The industry must accept the reality that the industry now must be technology-driven. There is no longer any other option. Gone are the days of cheap labour or dependence of foreign labour.

The timber industry community must have an innovative mind. And the premise of an innovative mind is an innovative attitude.

As soon as timber industry players become  innovative and forsake quick gains for long term strategic advantage, will we then see them in  the driver's seat, spearheading technology adoption into the industry.

A corollary to an innovative attitude is the ability to take on risks. This is required if the nation is to successfully migrate  to technology intensive processes.

The timber industry is now at a crossroad. The situation is clear. Malaysia cannot compete with low cost producers like China and Vietnam. It is also no match for the technology-savvy Japanese and South Korean manufacturers. Local labour is not interested in the timber industry while foreign labour is fast disappearing.

What choice do the industry really have but to go technology?