2V1G @ nbt with Zyan & Roger Wang

It was a wonderful night at No Black Tie. It was an intimate night of heartfelt music generated by the talents of 2V1G and special guest Zyan. Zyan's and Roger's albums were available for sale as well. Their actual release is about in a week's time. So we get to buy them earlier at NBT.




I have said enough about Zyan. Roger Wang is probably the best guitarist in Malaysia alongside Paul Ponnudurai. His Milestones album encapsulates his career so far. The double discs are worth its weight in gold. Brilliant and great value for posterity.

If you guys were not there last night, try and beg for a seat tonight (last night) at NBT. I will be there again.

I am still enthralled by 4 songs of the many they performed last night: Winnie Ho's Coming Home and her absolutely heartfelt And I Love You So (Don McLean's not The Beatles' version), then there was Ah Fei's surprising take on Alan Tam's Mou Chi Luen, even better than the original, and Roger's instrumental version of The Beatles' Here, There & Everywhere, taking us everywhere that is unconstrained by lyrics.

Commentary On Hot Stocks

Its been a tough week for the markets. You know people are disturbed when I have readers emailing me to ask me to stop with the sea creatures mastheads, and switch back to louts flower as they made a lot of money when the lotus flower appears as masthead.



Realistically, nothing much has changed an markets uptrend is intact but in a moving market it will always be susceptible to minor negative news as those will always be reason enough for people to take chips off the table. I do think its a good time to reload your guns, both for traders and fundamental longer term players as the markets whipsaw action brought quite a number of opportunities.

Some of the stocks to take a look:

Air Asia - I have not been keen on it for the longest time. However the recent 3Q 2010 PBT was a shocker on the upside. Looks like it has surged past critical mass. The second factor which is causing analysts covering the stock to scramble to upgrade Air Asia is the potential of its Indonesia operations - looks to be surpassing the size of Malaysian operations soon if not already. That is testament to a good replication strategy and the ability to transplant its business model successfully in the region. The execution ability will be well regarded as that can only hint of future successes in other regional countries for Air Asia. Now, maybe the plethora of Air Asia covered warrants will finally start to move up. Its currently at a 30% to regional peers, watch funds surge to buy the stock.

EAH - Maybe its because of the missiles thingee but many investors may have missed the fact that it is trading cum-free warrants on Tuesday 30 Nov, which means its the last day to buy and still be entitled to the 1-for 2 free warrants. As the warrants are exercisable at 59 sen, its a no brainer. Company fundamentals are intact for this new kid on the block. Recently visited the company and am confident with their outlook. It does not want to be just another ACE company but with grander plans to move to the next level via smart acquisitions. Pipeline is healthy with a good chance of securing a couple of significant GLC related contracts, which should make current valuations cheap in 3-6 months time.



IJM Land / IJM Land-W - Both suffered the North Korean dengue, but among the recent flurry of property mergers, this looks to have the better upside. Even though it may take 6 months for the merger to be completed, the price is now too skewed to the negative. All things being equal, IJM Land should be at RM3.30 and the warrant should be closer to RM2.05. Let it be known that IJM Land is about the only one which will get an upper hand in these recent mergers, most of the rest are a merger of equals, while IJM Land gets in with something in hand and more.


NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Carlyle Knows Where Malaysia Is

When we travel overseas, many times we get flustered when people don't even know where Malaysia is located. Usually we end up explaining its that mass of land between Thailand and Singapore. Well, fret no more, the giant private equity unit with possibly the world's most connected retired personalities, is making a bid for QSR.



Ambank Research:

Kulim (M) Bhd (BUY, KULIM Mk Equity), parent company of QSR Brands Bhd (QSR Mk Equity, Non-rated) which in turn has 51% control of KFC Holdings Bhd (KFC), announced that it has received a non-binding offer for the entire 100% stake in QSR from Carlyle Asia Investment Advisors Ltd, on behalf of the Carlyle Group.

• No timeframe was disclosed for the proposed take-over bid, while trading of KFC shares has been suspended until further notice.
• The proposed take-over price of QSR by the Carlyle Group is RM6.70/share. This
represents an 18% premium to the earlier indicative proposed price of RM5.60/share offered by Idaman Saga Sdn Bhd. Recall, Idaman Saga, owned by Tan Sri Halim Saad and Datuk Che Mokhtar Che Ali, had back on 19 November 2010 offered to acquire QSR’s entire business and undertakings.
• We view Carlyle Group’s proposed take-over positively. At RM6.70/share, this translates to a 5% premium to our intrinsic valuation for QSR, as stated in our report on Kulim dated 19 November 2010.
• The Carlyle Group was founded in 1987 and has more than US$98bil of funds under management in multi-industries globally - from aerospace & defence to technology and healthcare. The Carlyle Group’s consumer & retail portfolio lists 38 varieties of companies worldwide.
• A change in ownership could be beneficial to KFC, as the group would be unencumbered with further related-party transactions involving ultimate parent company, Johor Corporation. RPTs involving the group and Johor Corp companies amounted to RM28mil as of July FY10.
• No change to our BUY recommendation with an unchanged fair value of RM4.15/share based on PE of 20x FY11F earnings, pending further corporate developments. The proposed takeover by Carlyle Group is also subject to approval by KFC franchisor Yum! Brands Inc.



As a side issue, my initial reaction is why doesn't a Malaysian company or government vehicle buys QSR (Halim Saad does not count). Then I came to the conclusion that it should not matter. It is not a time nor the place for nationalistic fervour. I do agree that there are certain assets that should not be controlled by foreign interests such as utilities, military or services that are critical to the country. Anything else should be fair game.

If we wish to be an open economy and attract foreign investments, we have to be open to foreign buyers for our banks or even jewels such as KFC (don't ask why I think KFC is a jewel la...). We should welcome FDI in any form as long they are in for the long haul.

My view on QSR or KFC is that there is upside from here on, but you have to hold for a couple of years to see substantive returns. I think investors in general are still not fully appreciative of its India link up.

Dilbert@Malaysia by SDali, Part 8

Jeffrey Cheah, Pusing-boy Masterstroke!!!

Malaysian Insider: Sunway is expected to have potential market capitalisation of over RM3.5 billion, revenue of over RM3.3 billion and assets of over RM8 billion said Cheah. This comes as UEM Land and Sunrise have proposed to merge and IJM Land and MRCB have signed an MOU to explore a merge. The Sunway founder said that the merger was due to right market conditions and the need for size rather than as a response to the latest industry developments.

“I am not fearful of being taken over,” he said. “The size of the new company makes a difference rather than 2 separate entities. Size brings us opportunities. We will have access to larger markets and the ability to bid for projects with higher value, particularly in international markets," said Cheah.

He added that the larger merged entity should boost the company’s profile.

“We aspire and now with this merger, we are well-positioned to become a truly Asian brand, through one name and one identity,” he said.

Cheah and his daughter, Sarena Cheah Yean Tih, are the owners of Sunway and will have a stake of about 44 per cent stake in the company after the merger. They currently have direct and indirect stakes of approximately 43.68 per cent of SunCity and 46.53 per cent of Sunway Holdings. The Government of Singapore Investment Corporation will emerge as the second largest shareholder in Sunway with a 12 per cent stake.

The merger is pending shareholder approval and the acquisition will be satisfied by cash and shares and warrants in Sunway. Following the acquisition, Sunway Holdings and SunCity will undertake a capital repayment exercise to distribute proceedings to shareholders.

Sunway Holdings meanwhile reported a RM48.5 million net profit in the third quarter ended September 30 on the back of RM411.5 million in revenue.

-----------------------------------

So how will the proposals be greeted? The structure and terms seem a bit convoluted, that can be understood only by the bloody lawyers and bankers who were part of the advisory team. I read and re-read it a few times, I will try to explain what "I think" they meant, but I could be wrong.

Offer Valuation for existing shares
a) Sunway Holdings 2.60
b) Sunway Holdings warrants 1.50
c) Sunway City 5.10
d) Sunway City warrants 1.29

The value will be exchanged at 2.80 new shares in the Newco, plus they will get 20% of it in cash, plus a 1 free newco warrant for 5 newco shares.

If I understand correctly, lets take the example someone owning 10,000 of each securities:

a) 10,000 Sunway Holding shares x 2.60 = RM26,000. 80% of it will be converted into Newco shares = 80% x 26,000 / 2.80 = 7,428 Newco shares. 7,428/5 = 1,485 Newco warrants. Cash 0.52 x 10,000 = RM5,200. Hence the owner will now get the highlighted components.

b) 10,000 Sunway Holding warrants x 1.50 = RM15,000. 80% into Newco = 80% x 15,000 / 2.80 = 4,285 Newco shares. 4,285/5 = 857 Newco warrants. 0.30 x 10,000 = RM3,000. Hence the owner will now get the highlighted components.

If I am correct, this is a highly attractive deal and a swift one as well as the last date for submission is 23 December 2010. It is attractive because:
- it values Sunway City relatively cheap at just below 1.0x Book Value (not even RNAV) when the big boys get at least 2.0x
- it values Sunway Holdings relatively cheaply considering the 20%-30% year on year EPS growth for the next 3 years
- the cash component basically is a generous capital/dividend repayment which would ensure a great acceptance rate
- the capital repayment extends to everyone, including warrant holders
- the free warrants is a good kicker
- its a swift deal, which will see the Newco being traded within 2 months

The merged entity will kick off trading at 2.80, do you think it will go up or down from there? Together, at 2.80, it will trade at around just 7x current year's earnings.Where the prices will go will depend on where investors think the newco will trade at when requoted.I think 3.20-3.50 is fair. So if you think likewise, where will you be buying the shares and warrants up to??? I provide the platform and ideas, you do the math.

In a brilliant masterstroke, Jeffrey and his advisors have basically revalued his two flagship companies closer to a genuine valuation. The often said drawback of his shares as lacking in liquidity can be almost eradicated now.

Both Sunway City and Sunway Holdings suffer from gross undervaluation. Please re-read my posting on both a couple of days ago. Hence the present offers still present very decent upside for the merged entity.

I think from the 3 property deals so far, UEM Land-Sunrise, IJM Land-MRCB and Sunway City-Sunway Holdings... If I can present in simple math: UEMLand-Sunrise is 1+1=3; IJM Land-MRCB is 1+1=2.5; Sunway Holdings-Sunway City is 1+1= 3.5 ... Jeffrey's deal is far superior. It now only unlocked value, it gives back a healthy bonus cash dividend which does not stretch the balance sheet, it prompts the market to give the companies a better valuation and sustains it. No one is left out, no minority should complain at all.

Sunway Holdings Press Release

:

Reference is made to the announcement by SunH dated 23 November 2010. On behalf of the Board of Directors of SunH (“Board”), CIMB Investment Bank Berhad and RHB Investment Bank Berhad wish to announce that the Board has today, received a letter from Sunway Sdn Bhd (formerly known as Alpha Sunrise Sdn Bhd) (“Newco”), which sets out Newco’s offer to acquire all of the business and undertaking of SunH as carried on by SunH as at the date hereof, including all Assets and Liabilities of SunH as at Completion (“SunH Business”) at an aggregate purchase consideration (“Offer Price”): (i) equivalent to RM2.60 per ordinary share of RM1.00 each in SunH (“SunH Share”) multiplied by the total outstanding SunH Shares (less treasury shares, if any) at a date to be determined later; (ii) equivalent to the Black-Scholes valuation based on RM2.60 per SunH Share and calculated by applying all the relevant variables as at 22 November 2010, for the options issued under SunH’s employees’ share option scheme (“ESOS options”), multiplied by the total outstanding number of ESOS options issued (for every issue of the ESOS options, batched by their respective conversion prices). The Black-Scholes values for the ESOS options range from RM0.98 to RM1.67 per ESOS option (subject to the respective conversion price of the options); and (iii) equivalent to the Black-Scholes valuation based on RM2.60 per SunH Share and calculated by applying all the relevant variables as at 22 November 2010, being RM1.50 per warrant of SunH (“Warrant”), multiplied by the total outstanding number of Warrants in issue at a date to be determined later. Further details of the Offer are set out in the said letter and a copy of the said letter is attached herewith. The Offer is a related party transaction pursuant to Chapter 10 of the Listing Requirements of Bursa Malaysia Securities Berhad. Therefore, the Offer will only be deliberated by the non-interested directors of SunH. The interested directors of SunH will abstain and will continue to abstain from deliberations and voting at the relevant Board meetings of SunH in respect of the Offer. An independent adviser will also be appointed to advise the non-interested directors and non-interested shareholders of SunH. The Board will deliberate on the said letter and decide on the next course of action. Accordingly, a further announcement will be made in due course. This announcement is dated 24 November 2010.

SUNWAY HOLDINGS BERHAD (FINANCIAL RESULTS ANNOUNCEMENT)

MEDIA RELEASE 24 NOVEMBER 2010

Sunway Holdings’ net profit up 2.7 times

Sunway Holdings Berhad maintained its course to achieve a record profit year, recording RM48.5 million net profit in the 3^rd quarter of 2010 and a cumulative 9-month net profit of RM 137.0 million.

The Group achieved higher revenue of RM489.0 million as compared to the revenue of RM411.5 million in the previous corresponding quarter ended September 2009.

The net profit reported for the current quarter was 2.7 times higher than the net profit recorded in the previous corresponding quarter ended September 2009, with a 2.6 times increase in basic earnings per share to 8.40 cents for the current quarter ended September 30, 2010, compared to 3.30 cents in the previous corresponding quarter. The cumulative basic earnings per share for the current 9-month period is 23.75 cents.

The construction division continued to be the main contributing segment to the quarter’s earnings with stronger margins recorded by its Singapore precast division, followed by the trading and property development divisions.

The Group expects its construction division to record impressive profits backed by its healthy construction outstanding order book which currently stands at RM2.3 billion.

“During the year, the Group secured new construction orders of approximately RM700 million to date. The government’s commitment as stated in the recent announcement of the Budget 2011 and Economic Transformation Programme (ETP) complemented with the pick-up of private projects will be the key catalyst to the construction industry,” said Mr Yau Kok Seng, Managing Director.

“Our trading arm has leveraged on its increasing regional presence as well as diversified earnings stream to continuously provide the Group with sustainable earnings. This division will continue to be one of the Group’s biggest revenue contributors,” Yau added.

The Group’s trading division has expanded its geographical footprint with presence in 7 different countries, namely Malaysia, Singapore, China, Thailand, Indonesia, India and Australia.

Yau continued, “The Group’s property unbilled sales stands at about RM400 million from existing property development projects, both locally and abroad. Coupled with up-coming launches as well as continuous exploration for new land banks, we expect the property development division to continue to contribute positively to the Group’s earnings.”

The Group made its first foray into the Sri Lanka property market with the signing of a Joint-Venture Agreement with the Dasa Group of Sri Lanka for a RM250 million mixed development project in Colombo. This quarter also saw the launch of the Group’s 3^rd property development project in Singapore, being its first private development project, called the Vacanza@East, which has seen impressive take-up rates since its launch.

With main contributions channeled in by construction, property development and trading divisions, the Group expects to record sustainable earnings in the current year, with more than 80% of its profit contribution expected from outside Malaysia.

For more information, please contact:-

Ng Lai Ping

Chief Financial Officer

Sunway Holdings Berhad

Tel: 03-5639 8998

Fax: 03-5639 9866

Email: nglp@sunway.com.my

3.65 and 2.30

Update: The best laid plans can still be thwarted if we do not manage to grasp all the available info. I thought this would be completed within a couple of month but apparently they are projecting this to be mid-2011, which is a terribly long time as a lot of things could occur from now till then. The gap will narrow every time they go through board approval and as more concrete offers come in for how they will treat the IJM Land warrant. Have to hold I guess to get max value.

Blogger Buyer said...

Hi S.Dali,

IJMLand will resume trading tomorrow, and since the rm3.65 is fixed, what is the expectation under this condition?? will it be only trading around 3.6 range?
Pls advise
Thanx in advance

5:19 PM



buyer,

thats a loaded question which plenty of ppl will pay good money to know ...lol ; )

if its a straight out G.O. ... then it should trade slightly below 3.65, maybe 3.60 because many ppl will give a bit discount so that they don't have to wait n go thru the exercise.. but in a G.O. there is an end buyer willing to pay at a fixed price

this is a swap exercise, and unlike the uemland sunrise deal, it will be swapped into a newco... one will notice that ijmland valuation has a higher premium than mrcb, which is fair considering mrcb's higher PB

does it mean that ijmland will go to 3.65??? well, maybe ... its not as straight forward .... as u can see, what if both parties just pull a figure from thin air and say ijmland swap at 5.00 and mrcb swap at 4.00, does that mean both will still go to those levels? its a swap, which means u will get something for the swap, in this case u get shares in the newco which will be listed as well

the key IS will everybody clamour to have shares in the newco ... if the swap was at 5.00 for ijmland, even krishnan tan won't want the shares in the newco, and will sell even at 4.80 or 4.50 or even 4.00 ... hence the key is whether ppl want to own shares in the newco

collectively, the newco will have a pb of around 2.1x, which is highly acceptable ... the merged entity will be a force to be reckoned with, and this merger basically confirms that the newco will get the mega Sg Buloh project, which will underpin strong interest, plus the newco will have very good liquidity, hence the controlling stakeholders and substantial shareholders will be silly to just offload shares at 2.30 and 3.65 for MRCB and IJMLAND respectively as that will mean they will get zero shares in the newco ... EPF won't sell, IJM Corp won't sell and definitely Krishnan Tan won't sell because they all know after the exercise, the newco will move even higher

if anything, the stakeholders will want to own more shares plus the merged entity is really a 1+1=3 just like uemland-sunrise

methinks both ijm land and mrcb will trade around 3.50 and 2.25 for the first hour to digests the traders and contra players .... before moving to 3.65 and 2.30, and then surge past those levels in a day or two ... because seriously, none of the stakeholders will be selling, they want shares in the newco .. you add in institutions and foreign funds into the fray who want to own a key property vehicle ... there are a lot more buyers out there than genuine sellers


NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

IJM Land n MRCB Proposed Merger

Terms Of The Proposed Merger
3.1.1 Scheme Of Arrangement
The Proposed Merger will be implemented through a scheme of arrangement under
Section 176 of the Act. For the purpose of the scheme of arrangement, a newly
incorporated company will be formed (“Newco”) to facilitate the Proposed Merger.
3.1.2 Exchange Of Securities
Shares in IJM Land and MRCB will be exchanged for securities in Newco or a
combination of securities in Newco and cash. The exchange will be determined
based on RM3.65 per Share in IJM Land (“IJM Land Share”) and RM2.30 per
Share in MRCB (“MRCB Share”).
The exchange will also apply to IJM Land Shares to be issued from convertible
securities and MRCB Shares to be issued for the exercise of options granted or to be
granted pursuant to MRCB’s Employee Share Option Scheme 2007.
The Proposed Merger will include a scheme for the warrant holders of IJM Land in
compliance with the terms of its constituting deed poll.
3.1.3 Listing Status
Newco is to be admitted to the Official List of Bursa Securities upon completion of
the Proposed Merger, in place of IJM Land and MRCB.

Sunway City Or Sunway Holdings? Its A Wabak!

Sigh, wrote the following last night ... was going to post, then found out both were suspended .... sigh...

Following the rerating in UEM Land and Sunrise, we had the MRCB and IJM Land being suspended now pending a material disclosure. Is this rotational play? Rather not I think. Its a pivotal point for the entire market. There is a deep underlying need to rerate many of the property related counters. Its like a wabak, they are like an epidemic, its a tectonic shift one might say. You and your neighbours may be sitting a huge coal deposit for the longest time.

Sunway City and Sunway Holdings have been active for the past few days. Are they headed somewhere higher? Or is this rotational play, which will mean it petering very soon, or forming a false high point very quickly and then fizzling out. My views at the end.

The run up in Sunway City can be attributed partly to the big 28 page CIMB report:

CIMB Research: Suncity is 44% owned by Tan Sri Jeffrey Cheah, 21% owned by Government of Singapore Investment Corp (GSIC) and is a sister company of Sunway Holdings (SGW MK, Not Rated). Suncity can be considered a unique property company as its earnings are well-balanced between development and investment. After the listing of Sunway REIT (SREIT MK, Not Rated) which is now 37% owned, property development is targeted to contribute around 60% of core profits. The group has landbank in excess of 1,400 acres spread throughout the Klang Valley, Perak and Penang. It also has 300 acres of overseas landbank in China, India and Australia. Property investment is targeted to contribute 40% of group profits, coming from numerous hotels, shopping malls, education buildings and theme parks.

The group’s landbank is mostly in prime locations in the Klang Valley, the most important ones in terms of gross development value (GDV) being the RM5.2bn Sunway South Quay in Bandar Sunway, the RM3.6bn Sunway VeloCity in Kuala Lumpur and the RM2.7bn Sunway Damansara in Kota Damansara. The Klang Valley houses 34% of the group’s landbank while the largest single piece of land is the project in Ipoh which makes up 43% of the total landbank. Overseas
projects in Australia, India and China comprise 15% of the landbank but a larger 26% of GDV. The most significant is the RM5bn project in Tianjin, China and the RM950m Hyderabad project in India.

Of the total GDV of RM21bn, 59% is from the Klang Valley, 6% from Penang and 2% from Perak. A significant 33% is from overseas, with China making up 25% of group GDV, India 5% and Australia the remaining 3%.

SunCity is one of the very few Malaysian property companies that have significant property investment assets. The only other major property developer with substantial investment properties is IGB Corp (IGB MK, Not Rated). SunCity’s assets are located mostly in Bandar Sunway but the group also has a shopping mall on mainland Penang, a hotel in Cambodia and a hotel in Vietnam. All in, it has six hotels (two in the Klang Valley, two in Penang and one each in Cambodia and Vietnam), three shopping malls (two in the Klang Valley and one in Penang), two themes parks (one in the Klang Valley and one in Ipoh), one medical centre (in the Klang Valley) and two college buildings (both in the Klang Valley).

Management dynamics - SunCity ranks third after SP Setia and Mah Sing in terms of property development dynamics. In the raw material inputs category, SunCity scores highly in all areas as it has a strong track record of acquiring strategically located land bank and providing good accessibility. It scores moderately in the business operations category because its track record for sales is patchy and often swings with the business cycle, unlike SP Setia or Mah Sing which have managed to push out sales in good times and bad. SunCity also scores moderately in the marketing proficiency category as its strong brand name and product differentiation are offset by occasional delays in reacting to market conditions. In terms of financial planning, SunCity scores reasonably high as the strengthening of its balance sheet after the listing of Sunway REIT puts it in an enviable position to take advantage of expansion opportunities.

Industry SWOT analysis - SunCity also scores relatively well in terms of relative industry SWOT analysis. Its beefed-up balance sheet, strong ability to acquire strategically located land throughout the Klang Valley and professionalism stand out. On the flip side, its track record in terms of earnings and property development sales is more erratic, which can be a significant negative in terms of earnings predictability. The group also scores well in terms of its ability to take advantage of opportunities. This will be even more the case going forward given that it now owns the largest REIT in the country which is hungry for acquisitions. SunCity should not disappoint on that front as it is undertaking the development of numerous office and retail buildings in the Klang Valley alone. The threats to the group remain the economic and property cycles, which could cause earnings to swing. Should the group manage to execute successfully its overseas projects, the domestic volatility could be reduced.

FD RNAV of RM5.86 and 23% discount to NTA of RM5.21. We initiate coverage on SunCity with an OUTPERFORM call and RM5.27 target price based on 10% discount to RNAV. Potential re-rating catalysts include 1) robust sales due to continued strong demand for properties, 2) the successful launch of new projects in China and India, and 3) steady pipeline of investment properties to inject into Sunway REIT.

470m shares




OSK Research: With the cash freed up from its REIT, we believe that SunCity (NR) can now undertake more developments. The company has been awarded RM968m worth of contracts from its sister company, SunCity, over the past 5 years. We understand that SunCity has another RM1bn-1.5bn worth of jobs to be tendered out within the next year. These include: (i) Sunway office tower, (ii) Monash Uni extension, (iii) Sunway Medical Centre extension, and (iv) an office tower in KL.

The 65:35 Sunway-Dasa Group JV will be embarking on a mixed development in Colombo, Sri Lanka comprising 70 commercial and 180 residential units with a GDV of USD250m. Management expects the launch to take place in 2Q2011 and is guiding for PBT margins at a lucrative 20%. The group will enjoy a 5-year tax holiday once the project is completed in 2014. We are positive on its maiden Sri Lankan venture as the country’s recent political stability has spurred property prices.

P/BV 1.7
604m shares




My Views: These two stocks have been quite popular for the last few months. Many fundamental players have been buying in dribs and drabs but both shares did not move very significantly because the big fishes have not been keen on Malaysian equities in general. Sometimes we can get the 10%-20% gain even when the big fishes stay out. One must not be too angry about it, even though you may have been a tad early in discovering them, you may not get the big returns.

Hence when the platform shifts and the liquidity shift occurs, we need to reassess these stocks in the new light. Both are great trading buys.

Sunway Holdings' key is that its EPS growth in 2010 and 2011 will be a staggering 24% and 27% respectively, and supposed to breach 30% growth for 2012. How to go wrong here??? They get a large chunk of work from Sunway City anyway. Even RM3.00 is deemed as cheap to me for Sunway Holdings.

As for Sunway City, this is going to rock our socks off. The average P/BV for top players in the market for property stocks is around 2.0x. They are at 0.8x??????????????? Why .... Let's not look at why first. Sunway City has as good a landbank as any top local players. Yes, you may want to put in some discount because they have some overseas projects, even then should these overseas projects be even subjected to a discount in the first place??? They have a good stake in Sunway REIT which will provide good recurring income and will also act as an outlet for them to realise deep value in investments. So, is it that Sunway City is a second rate property player, of course not!!!

Yes, its not overly big ... yet. Its branding is good to superior. The brand is extracting value by expansion overseas. No matter how you cut it, its should not be below 1.0x.

Let's use NTA of RM5.21 and not the RNAV. I would not be surprised if it goes to 2.0x P/BV = RM10.42. Seems Repcoish doesn't it? Let's not be overly optimistic. I will wait for the reasons why they are not at 2.0x, you can supply the reasons as well: it could be that EPF or PNB or LTH etc. are not a sizable owner .... hhmmmm, why??? ... it could be that foreign funds are not in the local equity market for the longest time. We know the second part has improved markedly of late, I will be conservative a bit la and put a P/BV of 1.5x for a 6 month target = RM7.81.

These are just my blogging thoughts, don't use this without doing your own research.


NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Zyan, Malaysia's First Chinese Bossa Princess n The Production Team

This is a video highlighting all the critical members of ZYan's upcoming Brasileiro ~ Bossanova Chinese album. Leslie Loh being the producer and owner of the amazing pop pop music label. There is Tay Cher Siang, the leader of the brilliant jazz unit WVC and the piano man behind JZ8. Then there is arguably the most talented arranger and saxaphonist in Salvador Guerzo, better known as Ador, and very much part of the Soliano family clan. Then there is Xiong, a great performer of Spanish music, an expert in bossanova and regular performer at No Black Tie. Lastly there is Stefano Chen, who is also a respected classical tenor in his own right, and will be a featured performer in one of YTL's upcoming major musical event. and... of course the lovely Zyan.

Further Thoughts On MRCB-IJM Land

Yes, the shares have seen increased activity, however all that is still speculation in the market place. To make better sense, one has to look at the volume and activity of related shares. There was enormous buying IJM Land warrant a few days ago. Yesterday saw the activity in the mother share picking up, even surpassing the warrant's volume, which is a good sign. If it was an unfounded speculation, there would not be corresponding volume increase in the mother share.

The final key has to be the trading in IJM Corp as it holds more than 60% in IJM Land. If there is some merit to the whole thing, there has to be some firm activity there. Bearing in mind that IJM Corp is not a very liquid counter, not many traders would want to bet on that counter, hence any activity is likely to be genuine. How it moves should tell us a lot more about the overall picture.

This is not to feed on speculation but rather to alert all on how to better maximise the way we read information that is available.




Have a look at IJM Corp's trading activity yesterday and today, you should be able to form your own views.


NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Does A MRCB-IJM Land Merger Makes Sense?

Apparently the word has switched from an IJM Land privatisation to a merger with MRCB. Something along the lines of a UEM Land-Sunrise deal it seems.



MRCB
1.37bn shares
P/BV 2.4x
Net Gearing 62%

Major shareholders: EPF 42%, Public Mutual 9.6%

IJM Land
1.1bn shares
P/BV 1.7x
Net Gearing 21%

Major shareholders: IJM Corp 62.5%, GIC 7.3%



MRCB
The value in MRCB due to its expected involvement/major role in the redevelopment of the federal government’s land in Sg Buloh, and a possible strong uplift to the construction order book from the 10MP rollout. MRCB has been assisting the Employees’ Provident Fund (EPF) in drawing up the masterplan for the Sg Buloh land. Thus, the group should be among the favourites to get one of the first pockets of land there. Details are sketchy at this juncture but the government is expected to announce the award and details by 1Q11.

MRCB group usually prefers to go at it alone. But EPF could be smarter to suggests that MRCB do it with the strong IJM Land proven brand power. MRCB currently has two low-key township developments in Perak and Kajang, with a combined GDV of RM4bil. Its track record in residential development is not significant, which means a link up with IJM Land would make a lot of sense.

MRCB has guided analysts that its involvement in the redevelopment of federal land would most likely be limited to Sg Buloh given that the Cochrane land is now to be auctioned off, rather than given outright to MRCB as previously speculated by the market. The government and the Employees’ Provident Fund (EPF) will form a joint venture to promote the development of the 3,300 acre-land in Sg. Buloh into a new hub for the Klang Valley. This land is believed to have a gross development value of RM10bil. This is a very positive move by the government given the scarcity of land in the Klang Valley where high land costs have resulted in very pricey residential properties. Homebuyers are now looking at prices of RM0.7mil-RM1mil for double-storey link houses in prime areas such as Bandar Utama, TTDI, etc.

Looking at the neighbouring areas of the MRB land such as Subang, Kota Damansara, Shah Alam and Sungai Buloh, land scarcity is prevalent even in recently developed Kota Damansara where only 30-40 acres of land are left available for development – most if not all are meant for high-rise developments. At 3,300 acres, the MRB land is about 3x the size of Petaling Jaya. Given it is bounded by the matured townships in Subang and Damansara and partly Sg Buloh, this parcel of land most certainly has a significant development potential.



IJM LAND
The recent tender by the Penang state government for 93 acres at Bayan Mutiara for RM200psf may establish a new benchmark price for seafront land. This may lead to a repricing of implied land values at Phase II (103 acres) of The Light, which should cost less than RM50psf to reclaim. Newsflow momentum is re-accelerating. The imminent debut of Light Collections II (GDV: RM260m) in November 2010 is highly anticipated. IJM Land is actively negotiating with anchor investors to pre-commit on its highly sought after waterfront retail mall (GFA: 1.0msf) at Phase II.

IJM Land is acquiring some 2,000 acres of converted development land at Canal City, adjacent to the mature Kota Kemuning township. The said land will be acquired for about RM5.00psf or RM436m, with the payment to be staggered over four years. IJM Land will acquire a 50% stake in the project, with KEURO holding the balance 50%. The entire township development is expected to generate a significant GDV of RM6.5bil over 10-15 years. Canal City is accessible via the existing Kota Kemuning township as well as via the Saujana Putra Interchange along the ELITE Highway.

IJM Land will spearhead the entire development of Canal City. It will be positioned as a medium-to-high end development, with maiden launches of the bread-and-butter terrace houses expected by 4Q11. The indicative pricing range is between RM300,000 and RM350,000/unit. The land is at the edge of Kota Kemuning and neighbours Putra Heights, Bandar Saujana Putra and Puchong. These are growth zones given affordable home prices in the area. The significance of this deal is its attractive pricing, sheer size and immediate development potential given a large residential catchment in the locality.



ANALYSIS
The key here is pricing. IJM Land suffers from low liquidity and hence its unable to realise a proper valuation for the counter. As the size of both companies are almost similar, IJM Corp could end up with the controlling stake with EPF coming in second. EPF being EPF will not mind not being the largest shareholder.

By doing the deal, IJM Corp will have an absolutely mega sized property counter with immense reach. Going on its own IJM Land will not be able to realise the deep value in its counter. But just like the UEM Land-Sunrise deal, how the new company will be run will be a big matter to resolve. That could be the deal breaker.

A probable deal should value IJM Land at 2.2x P/BV against MRCB's 2.4x, hence it should favour IJM Land should it happen. The deal should be strongly favoured by EPF as it will guarantee success almost for the Sg Buloh development. Let's face it, its 3x the size of the Petaling Jaya township, you cannot afford for this not to be a huge success in the planning, implementation and delivery chain.

Even without this deal, IJM Land has deep unrealised value since its P/BV is at just 1.7x when the average for the sector is 2.2. If not this deal, I believe some other value unlocking deal should be in the works, making IJM Land a safe buy.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Petronas Chemical IPO

Finance Asia: Petronas Chemicals Group has raised M$12.89 billion ($4.15 billion) from the largest ever initial public offering in Malaysia and Southeast Asia, exceeding Maxis Berhad’s $3.3 billion listing at this time last year.

At the moment it ranks as the fifth largest deal both in Asia and globally so far this year, but if the 15% greenshoe is exercised in full, it will raise $4.77 billion and push ahead of Samsung Life’s $4.4 billion offering to become the fourth largest – after AIA, Agricultural Bank of China and Dai-ichi Life Insurance. The deal brings the total IPO volume in Southeast Asia this year to $14.5 billion, which is more than triple last year’s volume and well ahead of the previous full-year record of $8.1 billion from 2007.

Remarkably, this year has now seen record-size IPOs in six Asian markets. Aside from Malaysia, Singapore (Global Logistics Properties $3 billion), the Philippines (Cebu Air $537 million, which is a record in dollar terms), India (Coal India $3.46 billion), South Korea (Samsung Life $4.4 billion) and Hong Kong (AIA $20.5 billion) have all broken new ground, and while no further records are expected before year end, the deal flow looks set to continue unabated for the next four weeks at least.

Petronas Chemicals is a spin-off from state-owned oil and gas giant Petroliam Nasional (Petronas) and the leading petrochemicals producer in Southeast Asia. It is also part of the government’s efforts to make more public sector companies available to domestic and international investors a means to attract more private investment and to boost liquidity in the country’s capital markets. The company sold a 31% stake at the top of the price range at M$5.20 per share. The shares were initially offered between M$4.50 and M$5.20.

As indicated by the price, investors were keen on the stock which gives exposure to a profitable company with a strong market position is several key chemicals. According to a source, the deal attracted about $30 billion of institutional demand, which means the institutional tranche was more than 14 times covered.

As indicated by the price, investors were keen on the stock which gives exposure to a profitable company with a strong market position is several key chemicals. According to a source, the deal attracted about $30 billion of institutional demand, which means the institutional tranche was more than 14 times covered.

The company offered 51% of the deal to institutional investors, domestic and international, while 37% was set aside for ethnic Malay investors under the so called Bumiputera tranche and 11.8% went to retail investors. The latter category was offered to buy the shares at a 3% discount, which resulted in a final price of M$5.04 per share.

About two-thirds of the institutional demand came from international investors with Asia accounting for about 60% and the rest split between US and European account, according to a source. Long-only investors accounted for more than half the demand. A portion of the institutional tranche, equal to 18% of the deal, was sold to Malaysian pension funds the Employees Provident Fund and Kumpulan Wang Persaraan as per a pre-launch agreement.

International funds have been keen on increasing their exposure to Malaysia in recent month amid expectations that the country’s equity market will at some point play catch-up with other Southeast Asian markets. Year-to-date Malaysia is the fourth best performing stock market in Asia with an 18% gain, just ahead of India, but well behind Indonesia, Thailand and the Philippines which are up between 44.3% and 35.6%. But while Petronas Chemical would have been an obvious choice from a liquidity perspective – Hwang-DBS Research estimated in a report that the stock will be the fifth largest on Bursa Malaysia in terms of market cap and will quickly be included in the benchmark KLCI index -- the valuation was viewed by some to be on the rich side.

The final price of M$5.20 translated into a 2011 price-to-earnings ratio of about 15.8 times and an enterprise value-to-Ebitda of 9.1 times. Among its key comparables Thailand’s PTT Chemicals trade at a 2011 P/E of 13.3 times and at an EV/Ebitda multiple of 8.9. In the Middle East, Saudi Basic Industries Corp (Sabic) trade at a 2011 P/E of 12.7 times and an EV/Ebitda multiple of 7.8. However, both these companies gained significantly during the marketing of Petronas Chemicals, which helped make the valuation of the newcomer look more reasonable. Since the start of investor education four weeks ago, PTT has added 20% and Sabic 14.9%.

Petronas Chemicals is scheduled to start trading on November 26. CIMB, Deutsche Bank and Morgan Stanley acted as bookrunners, while Citi and UBS were co-bookrunners.

When Cartoons Make More Sense

Here is all you need to know about present day economics. The truth and logic are laid bare. We will laugh but beneath the laughter is the stupidity of it all.

How To Spot A Good Trade Part 6

Back in September 2010, I posted something that came from a local broker which hinted on a possible privatisation of IJM Land. Looking at the way the warrants traded with volume, I would be leaning towards a corporate exercise for IJM Land. The counter suffers from low liquidity, and current shareholders all do not want to sell at current low levels. If you judge the way SP Setia and the rest of the high flying property counters, it would be silly not to take the vehicle private.

No liquidity means you cannot really raise much funds with it as no institutions would be keen to take up shares. There are not many attractive property counters left. I figure a valuation of at least 2.0x P/BV (RM3.29 or higher) if an exercise is to happen, considering that the market average for property counters is now at least 2.2x.

The warrants activity hints at something, no smoke without fire.

------------------------------------------


This was from a local broker:

Market talk indicates IJM Land may be privatized by IJM Corp, its parent company. Further details are not available at this point. We spoke to management and they were unable to comment.

We are quite surprise by the rumor given injection of IJM Properties (previously 100% owned by IJM Corp) into RB Land and subsequent rebranding into IJM Land in mid 2008. IJM Land has suffered low liquidity as it is tightly held by its parent, IJM Corp, which has 62.5% stake. Inclusive of EPF (8.7%) and GSIC (7.3%) stake, free float is 21.5%. The stock has been a laggard with only +0.9% Ytd returns vs. KLPRP +11.3%.

Catch-22 situation. Although it is unorthodox to take private a subsidiary that has been listed not too long ago, we will not be surprised if it happens. IJM Corp is unlikely to dilute its interest as more than 50% of its pretax profit is derived from property division in the future. Given the difficulties in replenishing its large orderbook of more than RM5b, the group will be more reliant on IJML earnings.

However, the low liquidity of the stock meant that IJM Corp will never be able to fully realize the value of IJML. In fact, many foreign funds are interested in IJML given that it is an alternative proxy to SP Setia and the Malaysian property sector, but are unable to invest due to lack of liquidity.

(Privatisation is possible as none of the substantial shareholders are wanting to sell at current levels. No liquidity means no other institutions are likely to buy in as they may find it hard to buy big blocks or sell them when they want to. This will make it less attractive as a listed vehicle).

IJM Land valuations. At current price of RM2.38, IJML is trading at 1.4x FY11E PBV while FY11-12E PER is 14x-13x. Our RM2.80 fair value (SoP RNAV) implies 1.7x FY11E PBV, which is a discount to SP Setai’s current FY11E PBV of 2.2x or a premium to average property development companies’ average P/BV of 0.9x. Assuming privatization price at our TP, which is 18% premium to current price or 1.7x FY11E PBV, The value of the shares not owned by IJM now is worth RM1.16b.

FY11E BV/sh (RM)			1.64
PBV (x)			RM
2.2	0%	discount to SP PBV	3.61
2.1	-5%	discount to SP PBV	3.45
2.0	-9%	discount to SP PBV	3.29
1.9	-14%	discount to SP PBV	3.12
1.8	-18%	discount to SP PBV	2.96
1.7	-23%	discount to SP PBV	2.79
1.6	-27%	discount to SP PBV	2.63

RCULS conversion. There is RM400.0m nominal value RCULS (maturity in 2013), owned by IJM Corp, which is unconverted in IJML’s books. IJM Corp can convert these into shares at any time at a conversion rate of RM1.74, which is ‘in the money’. If IJM Corp converts all RCULS, share base will be enlarged by 21% to 1.34b whilst IJM Corp’s shareholding increases to 68.9% from current 62.5%, giving them a higher shareholding to start the privatization exercise with high chances of success. Alternatively, the other two substantial shareholders EPF and GSIC could also be persuaded to act in concert with IJM for the privatization exercise.

Privatization of listed property arm of construction and conglomerate companies is not unusual. Sime Darby privatized Sime Properties in its mega merger. WCT and IOI privatized WCT Land and IOI Properties respectively. Both WCT Land and IOI Properties were privatized at 1.5x – 1.7x P/BV and at 4%-17% premium over the market price on the date of announcement.

The incentive to privatize becomes more apparent. Listed property developers are under pressure to maintain a pipeline of launches to maintain an increasing profit track record. By privatizing the property company, it has no pressure to do so especially in light of a slowdown in the growth rate of property launches, prices and take-up rates as BNM is mulling on capping LVR and pulling the plug on interest absorption schemes.

We think the privatization is possible. At IJM Corp’s Company level, net gearing is 0.22x, which is ample room to gear up further. On IJM Land’s level and assuming all RCULS converted, its net gearing will be very low at 0.03x. Assuming if IJM undertake an LBO structure to privatize IJML and subsequently “push” the debt down to IJML operating levels, IJM Land’s net gearing will be 0.69x. Given a strong FCF of RM200m-RM240m p.a. in the next 3 years, it can easily service a 5-year RM1.16b debt in addition to the current operational debt outstanding.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

My Soon To Be Fav KL Restaurant

Max Chin has graduated from Tengkat Tong Shin to Pudu and now in Solaris Dutamas, its housed in Menara Kencana Petroleum ground floor actually. The pics were taken from cumidanciki.com, apologies folks.

http://cumidanciki.com/



There were some detractors in early days as there were some teething problems in the first few weeks. Now all that seems to have been ironed out. The concept here is Max will serve the freshest produce he can lay his hands on, so no a la carte menu. Well, at least you will get to choose between two main courses but that's about it.




The food is good to brilliant, as usual, but my previous complaints at his other two restaurants have been answered. We have an affable wine guy in Albert with a much much better wine selection. Their Australian wines have gone up a few notches. The very hard to find Clarendon Hills were widely available, and trust me, the price here is deep value for money - go try and buy some Clarendon Hills elsewhere. The two bottles I tasted so far were fantastic. I saw the coveted Eileen Hardy and placed the bottle on my table, only to ask for the price ... sigh RM800, a bit rich for me ... sigh...




Service has improved markedly from the previous two places, and there's there lovely host Sophia to soothe things over, how to go wrong. Go for dinner, the lunch time menu is value for money but you do not get the full experience.

Millesime,

G1-01-3, Level G1
Menara Kencana Petroleum, Solaris Dutamas
No. 1, Jalan Dutamas 1
50480 Kuala Lumpur

Operation hours are from 12pm-12am

Call now for reservations: +603- 6211 0648

Up Or Down?

After weeks of positive sentiment across all equity markets, Friday saw a pullback. Let's be fair, you cannot be all running at the same time and see no pullback. But its interesting to see what the media and experts say were the reasons for the pullback.



a) China was making news all week, and on Friday the Shanghai Composite rattled world markets with a sudden 5% drop on inflation fears and the threat of tightening by the government. Is this a surprise? Of course not. What is more important is sentiment is still good and the pullback is just a breather. When you run for sometime, you have to pullback even if there were no bad news.

b) US municipal bonds took a huge hit and could be flashing danger signals for further problems to come. Muni prices have plunged as concerns about municipal debt and default continue to grow. So far this has been a back burner issue as everyone has assumed that the Federal government would bail out the states and municipalities, but with QE2 and a new House of Representatives in town, confidence in this outcome seems to be on the wane. So when did the rest of the markets really care about US housekeeping issues?



c) U.S. policy makers had a bad time at the G-20 meeting and while they were getting beaten up there for QE2 and devaluing the dollarIn Seoul, President Obama failed to get a much ballyhooed trade agreement with Korea, and the U.S. delegation took heat from countries like China, Brazil and Germany for devaluing the dollar at their expense. Later in the week, the Chinese again expressed their displeasure with current affairs as Commerce Minister Chen Deming said they didn’t support quantitative easing and espoused on the risks of growing more global bubbles. These are policy concerns, not liquidity driven issues.

d) While investor sentiment remains at extreme bullish levels. However in the U.S., insiders didn’t share the same optimism and set records for selling at a 12-1 ratio, perhaps sensing an interim stock market top. This is a concern.

e) In reality, US data has turned slightly more upbeat, reflected in higher US yields.



f) As the USD recovered, commodity markets have fallen back to earth with a thud, causing some to say the commodity bubble has burst, that's bull. A weaker USD caused a rally in commodity price, a slight rebound in USD would do the same in reverse, and since when we have a commodity bubble???

g) Debt worries are widespread in the Euro zone, the market is currently fixated on the Irish situation. Rumors are currently circulating that EU talks are underway that will lead to a financial rescue plan for Ireland as early as next week. Ireland’s Finance Ministry stated it had made no application for emergency funding from the EU and the European Commission said it has not received an aid request from Ireland. They are going through the motions. The Ireland issue is much smaller than the Greek's crisis, and the ECB have to do likewise and bail them, so what.

Being bombarded by various news and opinions can make one confused on market direction. Like I said before, all markets are running for quite some time, they have to pause even if there were no bad news. What's irksome is the business channels and media have to write "something" to explain the markets' pullback. As you can see, there are a plethora of reasons if you want a reason to sell.

I do not see any of the given reasons as anything new, we all know that. What is real is we are in for a low interest rate environment. The USD is moving down on QE2 and rebounding every now and then but the downtrend is there, which will move commodity prices higher and support US equity prices as well.

Elsewhere in emerging markets we are on a tear, or rather just starting. Its not a long drawn correction, its a blip. Thing should move up this week.

BA dispute – Pride and promises

I did not think I would be commenting on this subject again but, instead of fading into apathy and compromise it is back again. BA made another of its final offers and the union involved was expected to ballot the cabin crew. But the unions did an about turn and has delayed the ballot despite admitting that it was the best deal they could achieve through negotiation. Why? Because I believe they think it would be too damaging for the union.

The crazy thing is that the main disagreements that caused the strike have mainly gone away in that BA has won the essential core of disputed issues. All that is left is the argument concerning staff travel perks. What is the problem? Well, in précis BA gave advance notice that all striking cabin crew would lose these perks. From what I understand the union went to the crew and told them to take no notice as they would get the concessions back for them within the dispute settlement. Partly on this basis enough of the crew voted to strike.

We now have a very large, proud and, in my view, arrogant union that promised something they are having difficulty delivering. Initially BA said a firm no to any kind of renewal of perks to strikers. They pointed out that they told the union at the time they would not move on this once the discounts were forfeited. This silly issue involving a reasonably small number of cabin crew now reached a disproportionate level of intensity purely because the union had dug itself a big negotiating hole and jumped in it. A perfect example of the expression ‘pride comes before a fall’.

And then BA relented. Well, not exactly relented but at least came up with a compromise of sorts. They offered to give the perks back to strikers. But there is a catch as they were not going to give this up for nothing further in return. BA have demanded a guarantee of no industrial action for at least 3 years and also any current legal action by the unions to be stopped.

They then went further to say all strikers would lose their seniority status for these discount and standby tickets until 2013. This is quite ‘serious’ as seniority and years served determines where you are in the queue for these tickets. To places like Barbados there can be scores of crew standing by. In fact, on one memorable occasion BA had to send a 747 to Barbados purely to pick up stranded standby staff. The strikers do not want to lose their status but BA knows that this is the only thing they can do to appease all those majority of staff who did not strike. After all these loyal staff would be pretty mad if they saw the strikers getting away with it by winning this point.

So, the soap opera continues. The argument that led to the strike have to a great extent gone. Instead a bi-product of the negotiations may cause yet another strike possibly some time in March 2011. At least Christmas is safe…I think. The union will ultimately ballot the staff once more but will not recommend the latest BA offer which they are now saying is “a step too far.” This sounds a bit different to their earlier comment about it being “the very best available through negotiation”.

What a fuss over a few cheap staff tickets. However daft I do not see where resolution will come from without a major and damaging stand down by the union. They know that this is no longer really about tickets. It is about the credibility of the union movement in the UK. What a mighty hole they dug for themselves over such an unimportant argument

Dilbert@Malaysia by SDali, Part 7

Zyan, Malaysia's First Chinese Bossa Princess

Well, Leslie Loh has done it again, the thankless task of discovering great talents and shaping their music in audiophile recording. Constantly pushing the boundaries. She is Zyan and tackling Chinese classics in the soothing bossa style is something I welcome and is sorely lacking in the market. The album should be out by end of the month. Don't forget the 2V1G gig at NBT, and I think Zyan will be the surprise guest performer. See you there!!!

we don't do it very often but once we do it, it is a special occasion.

2v1g is back to NBT for only the 2nd time since its inception in 2008!

besides playjng a vastly new repertoire, the presentation format will be totally different (it is not just singing and light bantering like a normal gig).

add another very special guest to it, you would have a show that promises to take your breath away.

dates: 30th november and 1st december 2010
time: 9:30pm - 12:30am
presentation: 2 sets of 45-minute each, 15-minute interval
cover charge: RM40
NBT reservation line: 03-21423737 (after 5pm)

Leslie Loh: yes, the mastering of brasileiro is completed in hong kong and we are ready to let you listen to some songs!

let's us introduce you to the first song in the brasileiro album : autumnal night, a classic of bai guang. [look to the panel on the right, click the play icon and you are on!]

before we even talk about how zyan tackles this song, let's credit the arranger, maestro salvador guerzo, for his masterful work. there is a story to this arrangement. ador initially did a brilliant big-band arrangement which had us screaming in joy, but due to the need of having 8 musicians and the associated costs, we asked ador to redo another version, which is the one you are listening now.

ador employed "a double bossa" arrangement style which gives the song a very rhythmic foundation that will make the listener sway with the music. the acoustic guitar intro, played by nick from aswara, is quite a magical intro. pay attention to ador's brilliant saxophone solo (sorry, it is not found in this edited version, you have to get the album la!) , this alone is worth the admission! ador's sax has the burnish tone similar to sax legend stan getz (that's why many regard ador as the stan getz of malaysia!) the tone is intoxicating and sensuous to the ears. not many sax players can blow like this, we assure you.

another signature and brilliant style of ador's arrangement (fans of ador would know this!) is the attack. the attack adds drama and contrast to the song. coupled with rizal soliano's dynamic drumming, this attack is very evident in many passages in the song. ador uses even more dramatic attacks in the solianos "pusaka" album. only arrangers of great skills can devise attacks in the arrangement, this we can assure you.

our bossa princess has a way with oldies, despite her age. she sings with a deep tone that oozes maturity and sex appeal. there was once she sang this song at a function and an auntie came to the stage and praised her profusely!

stefano, the producer, wanted zyan to maintain a rhythmic sway while delivering this song. it is a sweet song about longings. zyan sings it with an ease and confidence that is positively convincing. we definitely could feel zyan's sweetness and happiness in her voice.

recording wise, this is also one of the best recorded tracks in the album.

with all these reasons, we made it the first song in the album!

next week, we would premier another song, a local composition titled "romance in the rain" 【灑灑雨】, a great bossa nova ditty that truly carries the brazilian vibes....