MERRY CHRISTMAS - 25 December 2014

JoY to tHe WoRLd aNd PeAcE oN EaRtH

COMPASSION

FAIRNESS

JUSTICE

INCLUSIVENESS

Investing in Black December

Within a space of 10 days I witness all my stocks come tumbling down. By the way the plantation and oil and gas have started the rot well before that. My capital depreciation mimicked the one in 2008 though to most big-boy league investors, losing 75k  on paper is nothing to shout about, for small-time ones, it's something to learn from. The important thing here is to have the staying power.

The current rout in our stock market is due in part to the falling price of oil and the effects on other oil and gas counters such as PChem, SKpetro and Icon. As a result the financial counters like Maybank  follow in tandem. The low crude palm oil (CPO) price has already affected the plantation sector for more than 11 months now. I only have Bplant and due to its being well-established, the decline in its price is not as alarming unlike my O&G counter, Icon, a new kid on the block. My other bad let-down counter is Caring, a pharmaceutical and healthcare/personal care products  chain, another newbie on the stock market. This one I regard as an ugly stock, a terribly bad investment and will definitely off load it as soon as my loss on it is manageable and compensated for by my other counters. By the way, this stock might go up again once its wealthy owners decide to perk it.

Caring: Gradual decline since August
Source- Bursa Malaysia

I noticed the recent surge in price of my telco stocks namely TM and MAXIS but as per my investing strategy, I have refused to sell them and in less than a week, the gain was wiped off by almost by 50%. This development is attributed to foreign selling on our Bursa, as they say, Christmas comes early to those foreign funds eager to dress up their portfolios before the start of the new year which is fast approaching.

TM: The gradual rise and the steep tumble
Source - Bursa Malaysia

MAXIS: Tumbling as well in December

Source- Bursa Malaysia

The hope for a pre-holiday stock market rally this December has gone to the wind. In fact this December has become a black one for many investors. For some of us this is the time to pick up those stocks which have been overvalued a number of months ago and wait for the bull to return because it sure will return.

You've got to stay positive in all this up and down of the market. Here's hoping a Black December's giving light to making more in the future.

In the meantime, hold on tight to the rail of your roller coaster guys!

Seven Years A Mystery

A 21 year-old girl came with her relatives to the clinic last week. She travelled about an hour to get to the clinic even bypassing other clinics on the way.

She complains of a nagging skin condition for the last seven years when she first noticed it. The crops of lesions would grow in different parts of her body: face,neck,trunk,arms and legs. She has been to many doctors both government and private and has been prescribed with several medications: antibiotics,antiviral,antifungal and anti allergy plus all kinds of creams but the condition never goes away instead more lumps have cropped up.

The papules (elevated lesions) are not tender or itchy or red or ulcerated, in fact nothing which causes physical discomfort. Her problem is cosmetic as the lesions have become unsightly and she is very sensitive when people look at her. In effect, she looks depressed as all manners of treatment, modern and traditional have been tried by her family but nothing comes out of them.

I took one look at the lesions in the neck and immediately knew what they were. To confirm it I had to ask her to undress to check other parts of her body. what I observed on her bare back, convinced me that she is suffering from a genetic disease called "neurofibromatosis". No amount of medications would cure this condition.

Elevated small lumps in the skin
(non-erythematous papular lesions)

The sine qua non of the condition -
 cafe au lait (flat coffee-coloured) spots on the skin

I referred her to a dermatologist to confirm my diagnosis and there it is. I have explained to the close relative the nature of the genetic condition which is passed down through an autosomal dominant gene; meaning to say that her offsprings will have a 100% risk of contracting it as well. The condition could be a mutation in her body itself or she could have got it passed down from one of her parents though, I did not get that history from her as she denied that either of her parents suffer from the condition.

Counselling is mandatory in genetic diseases so as to give the best advice as far as future generation is concerned. In this sad case, at least they do not have to keep looking for a cure for her as they have been doing for the last seven years.

The non-diagnosis of this condition for so long earlier is likely due to the history not been taken adequately, examination is only done cursorily and on only the exposed part as too much emphasis is given to preconceived patient's sensitivity (patient is a hijab-wearing Muslim) and also the preoccupation with using drugs as answers to all ailments.

A seven-year of mystery is finally solved but the emotional pain will need a long time to heal, if at all it could be healed.

MAXIS issues dividend as promised and soaring again

Late last year when there were talks of MAXIS being unable to pay the 32 sen annual dividend like it used to due to some financial issues, I was feeling anxious as I have fallen thoroughly "in love" with the stock and was not about to abandon this blue chip comes what may. I also have great faith in the new CEO, Morten Lundal who has a lot of experience in the telco industry being ex-CEO of Digi, Maxis's rival. He came after Johan Dennelind, another ex-Digi CEO was not able to fill the post citing family commitments.

True enough after a number of months the stock began to slide and I watched with horror as my capital was being attacked so to speak. I kept telling myself to persevere as over the years of my investing in MAXIS, I have received quite a substantial amount of dividends, far more than the amount which was eroded mercilessly during the second quarter of this year. Yes, I cringed when the shares dipped to 6.20 but I took it as part of the excitement of investing.

Heart flutterings when MAXIS dipped  and normalising
 when it starts soaring

I was elated when MAXIS third quarter financial results were rather unexpected and Maxis is still able, up to this stage, to issue another 8 sen dividend per share with its earning per share (EPS) standing at 6 sen. The dividend ex date is on 26 Nov. From then on the stock began to rise to its previous high and today it has reached 6.93.

Credit to Maxis especially its hard-working CEO for having made many transformation and market initiatives to stay competitive in the industry despite declining revenue partly as a result of a reduction in income from voice and SMS usage owing to the introduction of applications such as WhatsApp and Telegram, Viber  and Skype , all of them are free at the moment. Notwithstanding the intense competition, they have succeeded in maintaining the population mobile coverage. Apparently, greater penetration of its service via internet usage is in the pipeline. Now I know how sticky MAXIS is.

Here's hoping MAXIS would be able to sustain its efforts to stay in the mainstream of the industry and continue to add value to all the stakeholders of the company including this minnow investor.

Commander Hadfield's Iconic Zero-G Rendition of "Space Oddity"

 I am very happy to be able to watch and listen again to this exceptional performance of a song recorded in International Space Station (ISS) where Canadian Astronaut, Commander Hadfield was based. The video was uploaded in May 2013 and was taken off till the new agreement recently made to keep it in cyberspace for the next two years.

This famous space song "Space Oddity" was first performed by celebrity singer/composer, David Bowie in 1969. Commander Hadfield recorded it as a farewell gesture before departing from ISS .He was in ISS from December 2012 to May 2013.

This video brings back memories of his daily chattering and chronicling of activities from ISS  and posting them through Twitter, Facebook and Tumblr to be shared across planet earth and inspiring million.

Pretty awesome!

MyEg and MyGirl Friday

Zana is a busy professional working in a prestigious organisation known for employing only the best in their fields. To keep up with the organisation's well known performance, the staff there have little time to dabble in shares market. They may have the money to invest but not the time to keep track. So many of them just confine themselves to mutual funds. Slow and steady alright but the fun is in the market.

Early this year Zana had a bonus bounty and had asked me to invest as I like for her. So I acted as her fund manager so to speak. She apparently has been impressed with the little success I've made over the years in the market despite my busy practice.

I told Zana to stick to my decisions and not to ask too many questions ( not the normal fund manager I must say! After all I am not paid for this task so could afford to be dictatorial :)

And with Zana's fund I went to the market and after some general research I chose to invest her fund in MyEg, the company which provides tax collection services system to the Custom Departments. I bought the shares at 2.93 and for awhile due to some delays in system implementation, had gone down quite badly. But I persisted telling Zana that the shares would rise once everything is in place. At times though, I was regretting putting all her fund in one basket!

Today MyEg hits 3.95 and hopefully will continue ascending

But as expected today MyEg has soared beautifully. Zana has made a tremendous capital appreciation well over her investment on those slow and steady funds. A real joy to see such investment rise and rise. I wish I had put my own fund in the stock and ride with it.

In the meantime, I have yet to inform Zana of her fortune. She would doubtlessly be pleasantly surprised if she happened to read my blog today.

 I must however disclose that Zana has helped me with a lot of tasks without taking the credit. Thanks Zana,  my Girl Friday!

ASNB Funds: Taxation of Dividends

All these years many of us have taken for granted that dividends derived from ASNB funds are not taxed forever unlike mutual funds managed by other companies. Well it's not strictly correct that these ASNB funds are going to be tax-exempted forever except perhaps for ASB.

Reading the Master Prospectus 2013 -2014 today , I discovered that the tax exemptions for all funds except ASB are temporary in nature and investors should not be taken by surprise if the time should come when all their dividends issued by the various ASNB funds will be taxed in the future.

The current taxation status of the funds are as below:

The Funds managed by ASNB are granted an exemption from income tax under Section 127(3)(b) of the Income Tax Act, 1967

Funds	Taxation Status
ASB	The Fund is exempted from income tax for the year of assessment 1991 and subsequent years.
ASN ASN 2 ASN 3 ASG-Pendidikan ASG-Kesihatan ASG-Persaraan ASW 2020 ASM ASD	These Funds are granted an extension on the period of exemption from income tax for the year of assessment 2007 to the year of assessment 2016.
AS 1Malaysia	The Fund is exempted from income tax for the year of assessment 2009 to the year of assessment 2018.

Source: ASNB Master Prospectus 2013 -2014

There are many other aspects of these funds which are unknown unless you care to read the voluminous Master Prospectus. The point is if so-called new developments are taking place, you cannot feign ignorance as they are all already stated in the prospectus . So, go on read the prospectus to increase your knowledge about the funds you are investing in.

Icon Offshore : The Shockingly Ugly Ride

It looks like my investment in Icon Offshore is going to stay there for the next two years. With the current downgrading of the oil and gas sector, we can expect many of the local players in this industry will be in the doldrums. There are several factors contributing to this state of affairs from delayed projects to the rising stiff competition from foreign concerns. And there is also the fact that this industry is cyclical in nature.

Lamenting after the event whilst irritating, need to be released so as to learn from the debacle that I let myself into and risk my fund to existing in a dormant state. I have had this heart-dipping experience before during the Global Financial Crisis (GFC) in 2007-2008 when I made extensive losses in my plantation and construction stocks. I used the "opportunity" to buy more into stocks such as MRCB,Sime Darby and HSL and managed to recoup my losses by 2010.

Icon Offshore  IPO was 1.85 on 25 June 2014
 and now on a tumbling ride

However this current scenario is different in the sense that the stock I bought is recently launched  as an IPO, though now I am encouraged to think that the stock was unfairly valuated at 1.85. It made only a slight premium for about ten days then it started falling and now it has fallen precipitously with the current declining contract rate for offshore transport services. That has sealed the fate for Icon offshore. I did think of dollar cost averaging but my instinct told me to let it go and I am glad I did just that.

Actually I was not successful in my application for Icon IPO instead I bought over the counter during those crucial 10 days after its launching and was nicely trapped by those who have prior knowledge of this industry and sold their shares relentlessly. It reminds me of the ugly Astro IPO but my loss on Icon this time is multiple that.

Then I remember a book on investment by Burton M Malkiel entitled " A Random Walk on Wall Street" where there was a warning about buying IPO stocks. He reminds that IPO stock is launched when somehow the people who own the company have negative knowledge about the environment in which it is operating. And these people are the ones who will sell their shares gleefully post IPO and make money from ignorant retail investors. They actually time their IPO launch and it is not a coincidence, it is a well thought out timing to share their losses with the public.

Remember JCY? That technology company which had made millions before deciding  to list on Bursa just before the hard drive industry started to decline? Yet had we  read the financial report of Western Digitals and Seagate which order its supplies from JCY, we would not have been so adventurous in buying into the company's stock. The financial results were showing a decline in profit! The price was from 1.60 (IPO) to as low as 0.35 sen in less than nine months. The stupid thing I did was to dollar cost average and got myself right down to the pit. No fun there I must admit.

I have not learnt my lessons simply because I thought Icon was related to some government-linked outfit and its association with Petronas, our national oil giant, and so would not go on this route of failed ride and lose 30% of my investment on paper.

Though my loss is partly compensated by the uptrend in TM stock, I found this experience humbling and will definitely think thrice about buying IPO stocks. The last eight years have seen unhealthy activities on IPO stocks like Caring which was propped up by a single wealthy person and when he sells at the height of the price, the whole stock price comes tumbling down. The market is indeed a jungle, enter at your own risk!

Ebola At Our Gate?

I was rather down when I read the statement from our immigration Department which stated that there would absolutely be no restriction of entry for Students coming from Africa despite the current Ebola crisis occurring  largely in West Africa and now has spread to Nigeria.

Rapid travel by air is the culprit. Those who travel are well advised to take precautions like washing hands with soap and water frequently and resort to wearing masks if the passenger next to you is coughing and sneezing all night on long-haul journey.

The news of an African student entering Malaysia with signs and symptoms which are suspected to be an Ebola infection is disheartening and frightening to say the least. Though Malaysia is equipped to deal with the scourge having dealt with the SARS problem ten years ago, we cannot but be highly concerned. Unlike SARS, Ebola Virus Disease (EVD) has a high case fatality rate, killing almost 50% of its victims and like SARS there is no cure, neither  is there a vaccine to prevent it.

The report of the fourth doctor to have died of the infection in Liberia is disconcerting though we understand the condition there is a lot less favourable in terms of detection, diagnosis, management of cases, contact tracing and isolation procedures. The problem there is compounded by poor education of the people and the belief in the unknown, poverty and the  mistrust of health personnel.

Though it is said that Ebola virus is hard to be transmitted, the risk of fatality to infection is high due to its virulence nature and massive immune response causing widespread internal bleeding in organs.

So do be careful when you are in the crowded international airports. You never know.

Mid-Autumn Mooncake Festival Celebration 2014

The Mid-Autumn Festival falls on the 15th day of the eighth month of the Chinese lunar calendar, it's a joyous festival celebrating the harvest (in the past), family and friendship.

One of the most important part of celebrating the Mid-Autumn Festival is to buy and give mooncakes to your friends and family.

For me the best part is surely eating slices of a mooncake together....

Yummy Lotus Paste Filling

The mooncake is round, like the moon, and this represents reunion of family and friends. When friends and relatives eat slices of the mooncake together, the moment signifies that they will be reunited in the future. And If you eat mooncakes given to you as a gift by other people, it is a sign that you will meet them again.... all good and happy thoughts! A beautiful tradition.

AMB Value Trust Fund 2014:Unit Split and Income Distribution

For financial year ending on 31 August 2014, AMB VTF has decided to go for a unit split of 1:6 that is one unit free  for every existing six existing units that an investor has on Thursday 28 Aug 2014 when the NAV was 0.5325. Transaction was suspended on Friday 29 Aug.

Spreading Love on MERDEKA day

Hence if you had 500k units then, you would have an additional 83,333.33 free on the following working day Tuesday 02 Sept. when the NAV was down to 0.4564 translated into an income of RM38,033.33 and your accumulated units now stand at 583,333.33.

Basing on the NAV on 28 Aug, your income distribution is at 14.28%. But to calculate your annual return on investment you have to go back to the total capital you have invested at the various NAVs over the period of investment.

I have been investing in this unit trust for just over two years (after holding off for a number of years due to lack of certainty ). When I compare this investment with say AS1M, the same capital over a two year period at a dividend rate of 6.60 sen per annum,  I must say AMB VTF has given me more return on my investment by about 16% over AS1M's return. For me this asset class in my portfolio is doing just fine.

So folk I have decided to let my money stay in AMB VTF for another three years to maximise the returns (barring any risk factors in the financial market of course). Another thing, I always look forward to celebrating Merdeka every year when more love is being spread by AMB VTF.

Polypharmacy - A Question of Ethics or Pure Ignorance

I have come across quite a number of patients coming to my clinic seeking for treatment for the same condition after having attended other private clinics. I have chosen a couple of paediatric cases. Both children, one is a three year-old toddler and another is one and half-year old. They both suffered from intractable diarrhoea and vomiting. The older one had been suffering for more than ten days and the latter for more than a week. They both looked listless and irritable. They had not been feeding well and appeared dry and thin. The little one's bottom was raw due to prolonged purging.

According to both mothers they had been to clinics and were prescribed medications which they kept giving to their children and yet the diarrhoea never seemed to ease let alone cease.

The mother (AR) of the older child was desperate and without being prompted had proceeded to take out from her bag all the medications prescribed by the clinic and altogether with consultation, she said she forked out RM75.00. I noticed that the woman was not really educated and yet had the sense of bringing all the medications which had failed to "cure" her child, to show them to me. I was impressed as not many would bring along their "failed" or ineffective medications and yet expect the next doctor to "cure" them.

The second mother (CP) did not bring the prescribed drugs but I made her go home to get them for me to see. I always tell this kind of patients that since I don't know what drugs have been given to them earlier, I might prescribe the same ineffective drugs and they would still not get better.

What I found was interesting. For simple diarrhoea, an array of drugs: an anti-diarrhoeal preparation, anti-vomiting, anti-fever,vitamin and anti-colic were prescribed between the two kids.

Five different types of drugs prescribed
for childhood diarrhoea (Mother AR)

Three different types of drugs to treat
diarrhoea in a child  (Mother CP)

All the kids needed was an oral rehydration therapy using a pre-packed oral rehydration salts. These should be given to them as directed till the diarrhoea stops  and other soft diet like porridge and milk can be continued.

In this case, the purging should not be prevented by giving an anti-diarrhoeal preparation as the body is throwing out "something" which is not safe for absorption by the body. Use of many drugs for this simple diarrhoea which 85% of the time is due to virus, would only prolong the diarrhoea and discomfort as happened in these two cases.

For most childhood diarrhoea only
oral rehydration salt (ORS) solution is needed

Why are these drugs prescribed? It seems to me either the practitioner is treating the symptoms such as vomiting rather than the root cause of the condition or for pure monetary considerations: the more drugs are prescribed, the more profit is generated (and likely the more side-effects). Either way, the patients suffer. It is an undesirable outcome.

For both children, I just advised their mothers to stop those drugs and offer them oral rehydration salt (ORS) and told them to return in 48 hours if the diarrhoea had not subsided. True enough they both recovered on that treatment alone and at the cost of RM7 (without consultation fee)

I have seen adults also being prescribed an anti-diarrhoeal preparation when all they need is only a replacement fluid therapy till their diarrhoea usually due to gastritis or food poisoning stops. Most diarrhoea except for bloody ones are supposed to be treated this way. Over treatment with several drugs will only worsen or prolong the gastrointestinal condition.

Polypharmacy is unethical and ignorance is unacceptable.

For Just A Moment - David Foster

A beautiful song and a nostalgic one at that for me from one of my best loved versatile artistes of our life time, David Foster, a great musician and a talented Canadian.

Selamat Hari Raya Aidil Fitri 2014

Maaf Zahir Batin

I would like to wish all my Muslim patients and blog visitors "Selamat Hari Raya AidilFitri, Maaf Zahir Batin" or "Happy Eid Fitr".

After a month of fasting, the Hari Raya, the first day of which falls on Monday 28 July is indeed a celebration of gratitude born out of strict self discipline and rejection of physical and psychological temptations.I salute all of you who have gone through this rigorous mental and spiritual exercise.

During the feast remember the Ministry of Health guideline in its campaign against rising obesity in Malaysia. It is called 55555 guideline. Here they are:

1. Eat 5 food groups a day to get a variety of nutrients
2. Put not more than 5gm or one teaspoon of sugar in your drink
3. Eat not more than 500 calories at each meal
4. Eat 5 servings of fruits and vegetables a day
5. Exercise 5 times a week

Celebrate but keep your discipline developed during the fasting month and stay healthy, avoid obesity.

Obesity leads to shortened and poor quality of Life ;
Don't  contribute to an early statistic

ASN2 - Unit split : Time to invest more.

Last week PNB through ASNB announced on the share split of 1 to 1 for ASN2. This is the first time since the unit's launch in 1999 that such an exercise is undertaken. The split is based on the number of units held on 18 July 2014. So if you have 50k units on that date, you would now have 100k units but the values will remain the same as the unit's price (NAV) from 1.3576 ( the one recorded on 17 July) was adjusted by half to 0.6745 on 21 July.

Encouraging growth performance

PNB stated that as at June 30, ASN2 ( a variably priced equity growth fund), has consistently outperformed its benchmark consisting of Bursa Malaysia Top 100 index and three-month KLIBOR. ASN2 apparently has managed to record 89.72% of cumulative return, higher than the total cumulative return of 66.51% recorded by its benchmark during the five-year period until 30 June.

Moreover, PNB maintained that the annualised returns of ASN2 have shown encouraging growth rates during the three-year, five-year and 10-year period of 10.01%, 13.66% AND 10.86% respectively.

The split offers an opportunity for new investors to invest in the unit trust and for existing investors to buy more units at a lower price. For those eligible to purchase these units, this is the right time to do so. I notice the price since last Monday 21 July is declining as is the case for this product following the dividend distribution on 30 June. It was 1.4135 on 24 June before it was suspended for dividend calculation and distribution at 6.90 per unit; 0.02 sen lower than last year's rate at 7.10.

According to ASNB, the income distribution portion involved  a total payout of RM18.77 million, an increase of 48.9% compared to the RM12.61 million paid out last year.The payment has benefited 9,822 unit holders which currently hold a total of 272.04 million units of ASN 2.

For those of you who are averse to risk-taking at the stock market, products such as ASN2 will give you a good dividend yield along with your capital appreciation as the dividend is automatically reinvested into your account. In another word, make money while you sleep.

Memories of FIFA World Cup Brasil 2014

This YouTube video and the iconic song by Shakira really cement my memories of the exciting FIFA World Cup 2014 from Jun 13 to July 14. From the round of 16 I was rather "addicted" to the games, watching them with my equally football-crazy better-half.

 I was impressed with those teams from Africa and South America especially Costa Rica which came out top of its group and was advancing in the quarter finals.

Names like Naymer of Brazil, James Rodriguez of Colombia, Messi of Argentina, Ronaldo of Portugal and of course that infamous Suarez of Uruguay littered the games with excitement.

 Memorable times like Germany's thrashing of host Brazil 7-1 at their semi-final, Naymer's foul by the Colombian player, Van Persie's goal as well as Suarez's bite of the Italian player come rushing in when I watch and listen to this video.

Thank you indeed to the uploader for cementing  my memories.

 At the final, I was supporting Argentina to win the coveted Cup only to be disappointed by that German, Mario's fantastic goal! Argentina lost 0 to 1.

 Waiting for 2018 when Russia is given the turn to host the Cup.

IPOs - Icon Offshores and Boustead Plantations: Between Failure and Success

By now most of us IPO applicants of Icon Offshores and Boustead Plantation stocks would have known whether we have been successful or not in our applications.

On 11 June, I found out that I did not have luck on Icon IPO and naturally felt rather down. I had a wrong strategy of applying at a lower amount and so had to face with a lower chance of being successfully balloted. However, for Boustead I went for a bigger amount and of course have a higher chance of success and sure enough (plus better luck here), I am being rewarded with 25% the number of shares I applied for. I just found out about this an hour ago online through my Maybank Account.

I am waiting for Boustead Plantations' listing day on 26 June to see how it would debut but as usual I am going to hold these precious shares for some time and see how the CPO price is trending in the medium to long term.

As for Icon, to be listed on 25 June, I will definitely buy on the market. It's going to be a steely watch over the debut but my broker has been well informed on what to do in case I am not able to keep glued to the screen.

From now on, it's going to be a fun ride with these two new stocks, one obtained through luck, the other would be through sweat. I will keep a close monitoring of these two companies and observe how they perform and have some time blabberings and commenting on stock analysts' reports.

Congratulations to those of you who are successful in your applications and to others you can still make something if you are able to time your purchase at market price. At any rate, good luck to all my reader-investors.

Remember, between failure and success, there is still an opportunity.

This skin infection is preventable

A 36 year old woman came to the clinic with a five-day history of pain and swelling of her right thumb. She is not suffering from diabetes. She claimed that there was initially some redness and itchiness on the skin of her affected thumb with a small scratch which later developed into a larger area with pus formation.

Instead of letting the pus drain naturally, she went on to squeeze it and applied some rice powder paste for good measure and the local swelling worsened to involve the lower two-third of the thumb (proximal phalanx and first metacarpal).

This is how her thumb looks:

Cellulitis of thumb.
Note the small depressed ulcer where it started

There is the rare risk of the infection extending to the joint of the digit (proximal inter-phalangeal) that can turn into septic arthritis and damage the joint affecting its function.

I have come across quite a number of patients with cellulitis ( superficial infection of skin surrounding a boil or carbuncle) because they prick, probe and squeeze the swelling and apply all sorts of concoction from herbal paste to traditional oil.

The best method is to leave it alone and let it drain. If it gets bigger with increasing pain then an incision and drainage will be undertaken by health personnel with or without an antibiotic cover. 

IPO - ICON Offshore

Coming up fast on my IPO radar is Icon Offshore, an oil and gas support service company which launched its prospectus last Friday 30 May 2014. It is a pure-play OSV (Offshore support vehicle) company with a fleet of ships used for transporting people, goods and equipment to offshore rigs. 

The company was formed in 2012 through the merger of  Tanjung Kapal Services Sdn Bhd and Omni Petromaritime Sdn Bhd. It is the first of the spin-off companies under government-linked private equity, Ekuinas, to list on the main market. It is reported to have the youngest fleet of ships compared to its competitors.

Though its valuation is high at RM1.85 (trading at 17-18 times its estimated earnings in 2014), investors however, are not deterred by it. So far it has managed to rope in cornerstone investors such as Permodalan Nasional, Tabung Haji, AIA Bhd and several major funds. Together they have taken up more than 50% of the offered units. These investors will be subject to a lock up period of six months.

According to its prospectus about 35m shares are made available (compared to 64m shares by BPB) to the public via balloting. Applications are being accepted till 6 June at 5pm and balloting on 10 June, allotment of shares to successful applicants on 23 June and listing on 25 June, a day before Boustead Plantation Berhad (BPB).

I don't know about you all, but I think any stock related to  an oil and gas (O&G) industry has always been investors' darling irrespective of analysts' reports. 

 I missed out on UMW IPO last year as I was not happy that they were raising capital to pay off their mammoth debt. I advised some relatives not to apply as well: it was at an IPO of 2.80 (listed on Nov 1 2013) and look at it now, last closing price on Monday June 2 2014 was 10.80! And this fantastic rise is recorded slightly over six months. 

On the other hand, I thought the port operator; Westports was a better choice as they did not issue new shares to pay off any debt at their listing around the same time as UMW. And look at the performance of the two stocks: Westports hardly moved from its IPO of 2.50 over the six months' period from the date of its listing.

Needless to say, I have not been popular ever since. My relatives have stopped asking for my opinion. Well, it's okay as I won't ever get blamed again :)

By the way, there are risks in this O&G industry as it is a cyclical industry coming in waves of five to seven years and an analyst has opined that local OSV market could currently be at the top end of the cycle but did not see a downtrend any time soon.

Other risks are well spelt out in its prospectus which includes business related factors such as governmental regulations, high gearing, Petronas policies towards the oil and gas industry, stiff competition and its dependency on limited customers.

Unlike Boustead Plantation, it doesn't have any fixed dividend policy.

And so for Icon Offshore IPO, I have chosen to review my decision on the amount of fund to be used in my application for BPB IPO as I am going to also try my luck for this O&G related stock. 

To all of you it's "Caveat Emptor", good luck and happy investing!

Double Whammy - Backache and Gastric Pain

A 56 year old lady, an old acquaintance of mine, CML, came to the clinic with a two -day complaint of an explosive diarrhoea, painful abdomen (stomach) and bleeding haemorrhoids.

She was from outstation and came to the city to attend a conference. She stayed at a hotel and the following morning suffered from a severe backache which she attributed to the lumpy hotel bed. As she had to do a lot of walking, she decided to buy a painkiller (generic) from the pharmacy to reduce her back spasm. The backache prompted her to change hotel room for a firmer bed.

She took the painkiller on the first day of her conference and did not suffer from any side-effects. On the second day, she took the second dose and later had a very hot Thai foods for lunch. That very night she experienced the most excruciating abdominal pain and started to purge and was not able to sleep. The purgings continued and they worsened her haemorrhoids which began to bleed. Whatever she ate became watery stools and she was really sick and unable to continue attending the conference.

She was treated with oral rehydration, anti-haemorrhoidal treatment and ordered a strict bland diet. The diarrhoea continued for almost five days before normal stools finally reformed. It was a horrible period for CML. What started off as a local backache which was alleviated by sleeping on a better bed had turned into one miserable episode of general illness.

The lesson here is whenever you are taking a painkiller in the group of non-steroidal anti-inflammatory drug or NSAID like brufen or voltaren, you must not irritate your stomach by subjecting it to extremely spicy foods. Somehow the combination of NSAID and chilies is disastrous for the lining of your stomach and intestines. Irritated, the intestinal tracts just cannot absorb what you are eating and pass on rapidly through the system. I also noted that her painkiller was generic and not film-coated which predisposed to gastritis as compared to the safer film-coated and more expensive proprietary drug.

The whole of the intestinal tract is affected by the unfortunate combination causing it to develop multiple minor bleeding points. Somehow milk further worsens the condition due to possibly the rapid transit time in the tract and reactive acidity due to sudden alkalinisation. The only way is to take bread slowly in small but frequent amount and insipid tea and oral rehydration salt to replace the lost fluid and minerals in the diarrhoea.

Avoid Hot Thai Foods
when taking strong painkiller

Painkiller in the NSAID category especially non-film coated ones cause gastritis and hot chillies also cause gastritis due to its high acid content and so we have a potent mixture which could bring any person down. People need to be extra careful about foods especially when they travel.

TM- Advantages of Dividend Reinvestment Scheme (DRS)

I have been with TM for a long time. A fairly long time. I have gone through the company from the time it still had the international component that is now AXIATA. I like it because it is a defensive stock which has been giving generous dividends of about 22%. It's capital repayment exercises, every two to three years also allow the investors to lock up gains and reinvest at a lower stock price. I must say TM has been creating wealth for me all these years.

For the financial year of 2013, I received the first dividends of 9.8 % and the second declared value is 16.3% which in all constitutes 26.1%, slightly higher than that in FY2012, at 22%.

Four days ago I received a message on my phone that the new policy of the company is to give an option for all eligible shareholders to reinvest the dividend units, an entire electable portion or part of it. I have yet to get the DRS form from the share registrar, Tricor.

 I have no problem about this policy because most of the time I have not used the dividends but instead invest it into another unit trust. I have noted TM's EGM resolutions which have all been approved recently and downloaded the TM DRS proposal . 

I have also looked at the Maybank write-up on their dividend reinvestment plan or DRP which is similar to  dividend reinvestment scheme or DRS by TM and have some ideas on how this policy operates. Maybank is among the first to implement DRS or DRP in Malaysia and have prepared an excellent FAQs.

From my understanding, following each dividend declaration, you will be asked whether to reinvest 100% of the electable portion of the dividend or part of it or you would rather accept cash. So your decision is based on a particular dividend.

Dividend Reinvestment Scheme (DRS)
is a form of Forced Savings

Why reinvestment of dividends? To me it shows that the company is confident in giving long-term value to its investors. Moreover the reinvested shares will be calculated at a discount of not more than 10% of the market price and bypassing brokerage fees. Thus I am getting more for my money.

 This is also a form of forced saving, making you more disciplined in handling your dividend payments. Apart from that you would be buying the shares regularly regardless of the price at the time and in the end the cost would average out and as your overall number of shares appreciates so does your wealth in the longer term.

I think it's a good scheme for me as I am not really able to monitor the daily stock prices and have much earlier on made a decision to stay with TM for the long term.

IPO - Boustead Plantation Bhd

Here I go again, salivating at an IPO. Since the announcement of the proposed listing of this pure plantation stock following the privatisation of the Al-Hadharah Boustead Real Estate Investment Trust ( BSDReit)  last year, I have made up my mind to apply for this new kid on the block in the plantation counter.

I have a thing about this stock as I had had shares of BSDReit since 2007 purchased at 1.04 and made a substantial gain when I sold all off at 2.06 just before the company's exercise in late 2013. I kept it very long because I was enjoying an annual  dividend rate of about 9%. I had calculated that I would make much more by clearing my position than staying on and be given Boustead Plantation Bhd shares at a given ratio of  three Boustead Plantations shares for every five Boustead REIT units held - without balloting.

And now I am going after its plantation IPO.

The name Boustead itself gives a sense of confidence for me when looking at how the company Boustead Holdings Berhad (Bstead) stock has risen in values over the years. The last closing price on Friday 25 April was 5.56 and currently volatile due to the impending removal of its plantation arm for the new listing.

Lembaga  Tabung Angkatan Tentera (LTAT)-linked Boustead Holdings Berhad, listed on Bursa is involved in businesses of the following sectors: Plantation ,property pharmaceutical,heavy industries, trading & industrial and finance and investment.

To unlock the value of its plantation business, Boustead has decided to list it separately (removing 18 plantation companies from Boustead Holdings Berhad). The indicative price is said to be 1.60 subject to bookbuilding by  AffinBank. So far I am made to understand that the majority of its 580 million new offers of shares are allocated to existing Bstead's shareholders and directors and those of the delisted BDSReit. There are no cornerstone investors as yet. A small proportion (64 million) is allocated to the Malaysian public via balloting.

I used to have several plantation stocks during their heydays before the global financial crisis in 2008: THPlant,Sarawak Plantation,Kwantas,MHC and Unico. I held them for far too long and  as a result made great losses on all those except for THPlant in 2009. It's water under the bridge now. I had wanted to purchase one plantation stock to add excitement to  my portfolio last year but missed the opportunity due to packed commitments. By that time, my target stock (giving generous dividend) THPlant has risen from 1.60 to 2.00.

And so I thought this is another opportunity to own a plantation stock and ride with the current good crude palm oil prices.

The Boustead Plantation Bhd IPO is not launched yet but I would not like to miss the opportunity to compensate for my previous specific losses on those plantation stocks and this time I have to be more aware of factors affecting the crude palm oil (CPO) prices such as rating agency's evaluation of the industry,  production, consumption, "greenie" attacks and competition from other vegetable oil like soya.

Even if I am not successful in my IPO application, I will buy the shares on the open market. And this is when you have to gauge the stock performance on post-listing. A lot may have to do with luck, though, beside good knowledge on the company: one way is through reading its prospectus. And of course, the CPO price factor, which even if it's high may not be reflected in the stock price.

All said, stock market is a playground for people who are not averse to taking risks, and either way, will take it in their stride and move on.

An Update on Boustead Plantation (BPLANT) IPO timetable:

Last day of IPO application : 11 June 2014 at 5pm
Balloting date : 16 June
Allotment of shares to successful applicants : 24 June
Tentative Listing : 26 June, Thursday

Julio Iglesias - Historia de un amor ( A Love Story)

A classic song and sensuously delivered by Julio Iglesias. Sensitive, tender and relaxing. The song is about a man's old love written by Panamanian songwriter Carlos Eleta Almarán . I enjoy listening to the melody and the beautiful Latin voice and the sounds of those lyrics.

Music can be therapeutic to the mind.

Tuberculosis - Unnecessary Spread Through Poor History Taking

Last week a 37-year old woman came all the way from a district to the city in search of a "cure" for her malady. The night before she saw me, she had gone to one of  Klinik 1 Malaysia nearby for breathlessness and she was nebulised ( given a bronchodilator through a spray pump). Normally patients are given this treatment to alleviate their asthmatic attacks.

This poor woman gave a long history of coughs (more than five months). She had gone to the district hospital a couple of times and getting no relief, she started to medicate herself, buying over the counter (OTC) medicine apart from  seeking traditional treatment.

Her relatives brought her to the city when her condition deteriorated with severe breathlessness. Upon questioning, it was revealed that she coughed badly and occasionally her sputum was blood-streaked. She has evening fever and excessive sweating and her weight has drastically declined. Physical examination revealed reduced air entry on her left lung with fine crackles on auscultation but no wheezing was heard. And there are enlarged lymph nodes (lymphadenopathy) on the left neck area ( posterior triangle). All classic signs and symptoms of tuberculosis.

This is the patient's Chest XRay- her left lung is
virtually consolidated with a very small unaffected apical area.
The right lung is over expanded to compensate for affected breathing function of the left lung.

The next thing to do was a chest X-ray and sputum test for acid fast bacilli ( Mycobacterium tuberculosis- the germs causing this preventable disease). Her chest xray shows widespread consolidation of the left lung with a tiny area of respirable lung tissues. The sputum was positive for the bacteria.

The question is how many persons has this lady infected over all those months that she was not detected? She had had contact with a health facility last February 2014 on two occasions and yet was not diagnosed.

A colleague opined that the case was due to a low index of suspicion but for me it was more likely due to poor history taking and worst still if it was a case of pure laziness on the case of the health worker to take the history. It could be a case of " What is your complaint?" and the timid patient would have replied "coughs" and the doctor proceeded to prescribe a cough medicine and dismissed the woman without going into the nature,character and duration of the symptom.

The woman is put on an anti-TB treatment but the extensiveness of the infection on her right lung would affect the prognosis and as a result, her morbidity and impact on her family and economic contribution.

As TB is a notifiable communicable disease, Public Health  service  would have to trace all her contacts and test them and given treatment should any found to be positive.

TB is still a public health problem in Malaysia particularly in areas where there are many immigrants, legal and illegal.

Respiratory Virus - MERS-CoV has landed in Malaysia- The First Death in Asia

The first case of death due to the Middle East respiratory syndrome corona virus , MERS-CoV has been reported in Malaysia. According to the Ministry of Health, Malaysia's statement, the victim is a 54 year old man who went to Mecca for Umrah (pilgrimage) and returned to Malaysia, using a Turkish airline on 29 March 2014. He started to have signs and symptoms of respiratory disease on 8 to 9 April and as these deteriorated, he was admitted to a hospital in Batu Pahat, Johor on 10 April and expired three days ago on 13 April. The first reported death due to the virus in Asia.

MERS CoV and Distribution of Cases since 2012 with most detected in Saudi Arabia

The Ministry of health has put on a public health alert on this potentially fatal disease.

The virus was first detected in 2012 in Middle-eastern countries ( I posted in my blog earlier) . It causes similar signs and symptoms to the dreaded SARS (severe acute respiratory syndromes) and its origin is believed to be from animals such as bats and camels. The disease can be transmitted through close contact. The frightening thing about this disease is that it kills about 50% of reported cases (high case fatality rate) and it has no vaccine. And there are no medications against it. For a more detailed information on this disease you can visit the CDC Atlanta website .

All close contacts of the case would have been investigated. But like all other diseases caused by viruses, they show a spectrum: some are very ill, some have mild disease while other cases may not show the signs and symptoms, in fact they appear well but may carry the virus (known as carriers) and could transmit to others through their body fluid. You might like to read this report from Manila on a health worker tested positive for the virus but has not shown symptoms. This is the part which is causing problems or anxiety to public health so we must all do our part by being overcautious through awareness,good personal hygiene and knowledge of the disease.

PRTASCO : The Slow and Steady Tortoise

I invested in PRTASCO about three years ago when its share was priced at about 99 to 1.05 sen. The good thing about this construction company is it gives a steady dividend between 5 to 8 sen a year and last year it gave a special dividend of 6 sen making the annual total of 14 sen.

As I was looking for a short term gain, I was not patient enough to ride this slow tortoise.  For almost two years its unit price hovered between 1.00 to 1.05 and so I cleared my position after a couple of dividend issues.

This company which traditionally has a contract on road maintenance and later migrated to construction. It has consistently been issuing an annual dividend for more than seven years. Another feature I like about this construction company is its wealth sharing with employees. I suppose many big companies have already been doing this through Employee Sharing Scheme (ESS). I know Westports has such an arrangement.

Late last year (2013) I reviewed my portfolio and in the process decided to re-purchase PRTASCO shares at 1.42 much to the the mirth of my better half. Well, he is no longer laughing at me now as PRTASCO has climbed up to 1.84  as at 1pm today.

PRTASCO_The Turtle seems to be sprinting
Source:BURSA MALAYSIA

I invested all my 2013 dividend from AS1M and a hefty loan from Jeff (already paid up with no interest) on this stock and the capital appreciation is now about 26.8% in less than six months, albeit unrealised gain. Last January 2014, I received its dividend at 4 sen a unit. I was quite pleased with it.

A dig at my better half ;)

I bought PRTASCO for two reasons; firstly I like its dividend policy , secondly I have been following its development, diversification activities and looking at its fundamentals generally. It's now into oil and gas as well.

I should have bought the stock much earlier but was mulling over it a long time and eventually forgot about it till last October 2013 when the tortoise has traversed so far ahead and now is crawling fast steadily.

I am glad I made a considered choice as far as investing in PRTASCO is concerned but really it's not always like this though. Take it from me, a small time investor who has gone through the up and down of the market, at times gritting my teeth.

Look What A Virus Can Do to Your Skin

A 31 year old man came to the clinic yesterday afternoon complaining of itchiness and pain over his left back extending to the front of his abdomen. He could not sleep the night before due to pain and itchiness. He said the skin condition started off with a few blisters on the described skin area four days ago and thinking nothing of it he did not see any doctor.

Well, the eruptions became more extensive with intense itching and pain which became so unbearable that he hardly could sleep. He had applied an anti-itch lotion bought over the counter (OTC) for relief. And when the spread became larger and pain worsened, he decided to seek medical attention.

I just took one look and I knew what the condition was. If he had come to the clinic a day following the appearance of blisters, he could be given medication to prevent more extensive eruptions hence reducing itchiness and alleviating pain which he described as sharp and pricking.

Crops of blisters starting from the midline to the left

Eruptions extending around his right side

The blistering crops kept traversing till just before the frontal body midline

The skin condition is called Herpes Zoster (shingles) and it is as a result of reactivation of Chickenpox (varicella) virus which have been dormant in the spinal nerve of the patient following an earlier infection. The infection follows the nerve distribution area called dermatome and so you see a characteristic pattern on the body.

It can occur in any part of the body like the face , the neck or upper part of the body.

It is unknown why this virus become reactivated. Most likely the immune system changes could have something to do with the condition.

I had another patient a female who came to see me some time last year with a complaint of pain and fleeting numbness on the right side of her face of about two day-duration and later she noticed small crops of tiny blisters on the right side of the face nearer to her right year. She came to the clinic the next day.

I made a diagnosis of Herpes Zoster and treated her with a course of anti-viral and on review 21 days later, the blisters had subsided and there was no new eruptions and extension. She no longer complained of any pain or discomfort over the right facial area.

An early crops of blisters on the face of a 30 + yr old woman

The condition would not have been as extensive like the above male patient had he come to the clinic within 24 hours of the blisters appearing as an anti-viral treatment would have been prescribed. Yet, not many people know as to when to visit a doctor so the best thing to do is to just come and ask for an opinion if you suspect abnormal crops of tiny clear, fluid-filled swellings on your face or any part of your trunk that may be accompanied by pain or uneasy numbness or less commonly itching.