GLC-Should you buy/sell/hold them?

March 10, 2008

images7.jpgInvestors are unloading their shares in GLCs to wait for any policy changes related to these companies.Before you do the same thing and follow the crowd,let’s analyse the situation calmly.

What are GLCs anyway?To answer this question,we should define Khazanah.

Khazanah Nasional is the investment holding arm of the Government of Malaysia and is empowered as the Government’s strategic investor in new industries and markets. As trustees to the nation’s commercial assets, our main objective is to promote economic growth and make strategic investments on behalf of the Government which would contribute towards nation building.

Khazanah is also tasked to nurture the development of selected strategic industries in Malaysia with the aim of pursuing the nation’s long-term economic interests.

Khazanah has investments in over 50 major companies, both in Malaysia and abroad, and our companies are involved in a broad spectrum of industries.

Khazanah is also the key agency mandated to drive shareholder value creation, efficiency gains and enhance corporate governance in companies controlled by the government, commonly known as Government-Linked Companies, or GLCs.

Who are in Khazanah?For this answer,let’s refer to this website.

Will the election results affect GLCs?Of course! In the years ahead,we will see rapid changes and improvement in GLCs.With check and balance from the oppositions,GLCs will have to succeed the transformation which they have promised. Will transformation of GLCs always work.Since the answer is very long,I provide you with this journal for leisure reading. corporate-governance-in-government-linked-companies.pdf

So,should you buy GLCs? Yes,but not now.Maybe when the price is much lower.Should you hold if you have invested in GLCs?Yes,their values will certainly go up when the economy benefited from better administration.

Can you give me a list of GLCs?Sure,why not? 31jan2008_investstruc.pdf


Cigar Butt to note in Bursa

February 29, 2008

puncak.jpgUtilico Emerging Markets Limited owned 5.44% of PUNCAK on 8 Jan 2007. It increases its stake gradually to 7.94% on 27 Feb 2008. A quick check on Utilico’s website shows that Puncak is in the fund’s top 10 list.What does Utilico see in Puncak? Is it the 2009’s potential water tariff hike? Why another water tariff hike after the 2006’s hike? A 40 per cent tariff hike in 2001 was followed by a 30 per cent increase in 2003 – contrary to state regulations allowing only a 30 per cent rise every three years. There will be 30% water tariff hike every 3 years.This is truly a windfall for Puncak.It’s time to buy Puncak? Get to know Utilico by downloading utilico.pdf

Another cigar butt which drew a lot of attention today is ten.jpgTNB. A check in KLSE announcement showed that SKIM AMANAH SAHAM BUMIPUTERA have increased its shares from 345,284,200 shares on 30/5/06 to 371,403,100 shares on 22/02/2008. We all know this ASB is for bumiputera only and it is a channel to distribute wealth to bumiputera.See NEP. This increase in stake should signify tariff hike for electricity soon,maybe after the election.Should you buy TNB to ride on the wave? tenaga-report-by-sp.pdf