A very sad situation - the spa chain only has $0.0614 in assets for every dollar is owes. It looks like most of the creditors would not be able to recover much at all....

Nov 17, 2010
Creditors hound spa director at meeting
By Jessica Lim

Disgruntled customers of spa chain Subtle Senses signing a petition seeking a government probe yesterday before attending the meeting with the spa's director. -- ST PHOTO: KEVIN LIM

ABOUT 1,000 people, mostly disgruntled customers of spa chain Subtle Senses that went belly up last month, turned up for a creditors' meeting in Suntec City Mall yesterday.

Also in the 100m-long queue outside Rock Auditorium yesterday were the defunct spa's other creditors, including landlords and other suppliers.

All wanted to know their chances of recouping what Subtle Senses owed them - but most came away none the wiser after four hours.

When a number of spas closed down suddenly in the past two years, leaving customers stranded with unredeemed packages, spas that were apparently doing better, including Subtle Senses, stepped up to take over the customers from the failed spas, providing the services out of goodwill.

But Subtle Senses, with more than 15,000 'rescued' customers on top of its own 8,000, also tanked. Now, its customers have in turn been absorbed by nine members of the Spa, Beauty and Wellness Alliance (SBWA).

At the meeting yesterday, liquidators Stone Forest and Subtle Senses director Billy Hardie were in the hot seat, fielding questions from shouting, jeering creditors.

Some customers wanted to know what checks were done before Subtle Senses took over True Spa in April, and whether they were going to get anything back. Others accused Dr Hardie of pocketing their money and even of fraud.

He apologised to his creditors and told them he would work with the SBWA to ensure customers could redeem their packages.

Figures released at the meeting indicated that Subtle Senses was $12 million in debt, but its assets amounted to only $737,254 in realisable value.

Dr Hardie told The Straits Times: 'There were over-bookings, staff shortages and reduced sales at our outlets. We have no choice but to close.'

Design company Toolbox Design director Jerry Wee, 38, said the spa chain owed him about $27,000, and so 'shouldn't be able to just close shop just like that. I hope someone looks into their accounts'.

Meanwhile, more than 300 customers have signed a petition asking the Government to begin a probe.

Extracted from PetroMin (Sept/Oct 2010)

Peak Oil: Peak Oil Supply or Peak Oil Demand? Is There Something to it All

With the days of easy oil having passed and world energy demand rising as Asian economies and industries grow the balance between energy demand and supply grows ever , more important. This article explores the concept of peak oil, a concept that has been floated around the last few years.

There has been much talk in the past few years about peak oil. While the talk has focused on the supply side, now we have important debates on peak demand too. Is this all hype or is there something to it?

Peak oil people are not extremists. Many are eminent geologists, reservoir engineers, and scientists. They base their theories on the foundation of the work done in the 1960s by King Hubbert. The so-called "Hubbert curve" applied to the United States, correctly predicted the US peak oil production in the 1970s. Peak oil proponents apply the Hubbert curve to the global oil supply. Many argue peak oil has already passed and expect the global oil supply will be less than 85 million b/d within 10 years and will decline further.

Then there are policy peak people, who believe a combination of geology and nationalist policies restricting access to oil resources is resulting in a de facto oil supply peak.

Then there are my fellow economists, many of whom believe that high oil prices result in lower demand and higher supply will then bring the prices down. They believe that it is just a matter of time before oil prices decline dramatically.

Who is right? Let me share my views with you. First, we are indeed running out of oil. Not geologically, but because of limited access to oil resources. We see a policy peak of 95 million b/d (including Iraq) of conventional oil, plus 5-10 percent of non conventional oil. (We are not running out of gas. There is still plenty of gas to be found and produced.)

Second, Non-OPEC oil is already nearing a peak. Within the next 2-3 years, we will be at peak supply within Non-OPEC, after which supplies will remain flat and eventually decline.

Third, peak oil demand has already been reached in OECD countries and there is no possibility of revival of demand.

In short, peak oil demand has already been reached in the industrialized world. Non-OPEC peak supply is imminently upon us. These two peaks are real.

On the other hand, OPEN supplies can still expand, despite certain limits. Demand in the developing counties, especially emerging markets will continue to see growth and giant economies like China and India have great growth prospects ahead of them. So peak supply and peak demand is not a reality in OPEC and the developing world.

Eventually, supply limits will catch up with demand growth sometime in the second half of this decade. Prices will rise as supply limits work their way through and high oil prices of US$150-$200 per barrel will be reached which will, in turn, reduce demand. The biggest drop in demand may come in the United States and could result in a substantial drop of several million barrels per day, mainly in the gasoline market. Lower demand results in lower prices, say, US$70-$100/barrel range. The lower demand in the United States will provide room for countries like China and India to grow in a world of limited physical supply outlook.

Economists are blamed for many wrong forecasts. The problem is that any forecast requires a forecast of GDP growth. GDP growth forecasts come from the IMF (and others) and their long-term GDP growth forecasts are often times less reliable than oil price forecasts. Economists depend heavily on assumptions of GDP forecasts which, in reality, are purely guesses!

Oil demand forecasting is easy if you have a GDP estimate to use. Many economists in the private sector and international organizations use GDP assumptions to forecast increasing oil demand. GDP growth rates are always positive, so the demand goes up and up forever!

But there is one unchangeable reality: If there is no supply, there can be no demand.

Those who forecast demand, more often than not, do not concern themselves with supply issues. Indeed, most demand forecasters know little, if anything, about supply. We must take to task every oil demand forecast if the forecaster cannot show us where the supply comes from. If the supply requirements are much more than 95-100 million b/d of oil, we must question the wisdom of such forecasts.

One of the most common problems is demand forecasting in China. Often, demand forecasts show never ending demand growth for China because of their expected large and continuous GDP growth rate. It is true that China, like India, will consume more oil but we are often asked, "What happens if every person in China drives a car?" Our answer is, "The people in the US and Europe will have to walk." There is not enough oil in the world to support every Chinese driving a car!

One of the consulting companies has recently come up with an unrealistically high demand growth for China over 10 years. The forecast is misleading. While China is already the third largest gasoline exporter in Asia, their study concluded that China will be short of refining even with their massive expansion programs. These kinds of forecasts, pointing not only a need for more refining but also more tankers, pipelines, storage facilities, etc., in China beyond what has already been planned , are all based on the assumption that demand keeps increasing with no limits and supply is not an issue! This does a disservice to the industry and hurts potential investors.

We need to train ourselves to think of supply and demand in an interactive fashion. Higher oil prices result in lower demand. It is not possible to forecast energy demand in an emerging market in the same manner as it has happened in OECD countries. A new path has to be found. So let us take all of the every-growing demand forecasts with a pinch of salt. Again, we emphasize that if there is no supply, there can be no demand.

Article from Dr. Fereidun Fesharaki, Charman of FACTS Global Energy.

Interesting question raised by a forumer from CNA forum. Just for discussion.

Qn:

Anybody can tell me what's the difference?

I understand that bonus shares involved classifying retained profits as shares capital in the balance sheet, but for some recent bonus issues like wee hur and sim lian, they state that the bonus shares are issued at nil consideration without capitalisation of company's profit or reserves.

If there is no change in share capital, then isn't it the same as stocks split?

Anyone?




My view:

I do not think it has much difference for stock investors.

From stock investor's perspective, in both instances, stock price will be adjusted downwards and number of shares will increase, accordingly and respectively.

From company accounting point of view, the main difference between the two is on the face value (par value) of each share it issues. In the case of a stock split on the existing shares, the face value of each share will be reduced. As for bonus shares, they are normally in relation to the increased of retained equities since its inception of IPO, and they are issued addtionally to the existing shares - the par value of each of its share will remain the same.

Hence, after a stock split, the overall share capital (calculated from the face value of each share) remains the same. For bonus shares, the overall share capital will increase.

Base on the understanding by the above definition, in the case when bonus shares are issued at nil consideration without capitalisation of company's profit or reserves, I personally think it is as good as a stock split.

Does this park and ride actually work? Any forumers here actually used it before?

Nov 10, 2010
Two more carparks for Park & Ride scheme

ANOTHER 40 parking spaces will soon be added to the Park & Ride scheme, which encourages motorists to leave their vehicles in carparks near where they can hop onto public transport to get to work.

Two carparks, each with 20 spaces, will become available in the next two months. They are at Block 11A Pine Close near Mountbatten MRT station, and Block 320 Shunfu Road near Marymount MRT station.

This brings the total number of Park & Ride sites to 41, with 4,793 parking spaces.

Under the scheme, motorists pay $70 a month: $30 goes towards the season parking ticket valid at the designated carpark for the month, and $40 into a stored-value transit card for use on buses or trains to get to their workplaces.

Sales of Park & Ride ticket sets for Mountbatten start next Monday for use from Dec 1; sets for Marymount will be available on Dec 15 for use from January.

The scheme, launched 20 years ago, aims to get more motorists to drive shorter distances and use public transport.

About 1,600 Park & Ride ticket sets were sold last month, with about 30 per cent purchased through the online booking system launched in June.

Motorists who buy their sets online may pick them up at any TransitLink ticketing office.

Up until plans were made to add the Pine Close and Shunfu Road carparks to the Park & Ride scheme, the carparks most recently added were those in Queenstown, Yio Chu Kang and Buona Vista.

The Land Transport Authority said reception to these three carparks has been positive, with three in four spaces taken.

CHONG ZI LIANG

Possibly yet another indication of impending exuberance?

Business Times - 08 Nov 2010

Investors hum to frenzied beat of the IPO gold rush

Brokerages report rise in opening of new accounts as new listings bring buzz back to market

By JOYCE HOOI

(SINGAPORE) The ground floor of brokerages across the CBD have been livelier than usual, as walk-in clients clamour to part with their money, keen for a piece of the initial public offering (IPO) gold rush. But already, it is evident that some prospectors will do better than others.

With blockbuster offerings from Mapletree Industrial Trust and Global Logistics Properties (GLP) making splashy starts this month, remisiers have seen a surge in new account openings by novice investors.

'I've had 10 new accounts opened in a two- week period. For the majority of them, it was because of the IPOs,' said Shane Ng, a remisier with Kim Eng Securities.

CIMB Securities has also seen a jump in the opening of new trading accounts. 'For the months of September and October, clearly things have picked up a fair bit,' said Malcolm Koo, head of sales at CIMB Securities.

'As a whole, on a year-on-year basis, we are seeing growth in terms of new accounts being opened. It has been a good double-digit growth for us every month,' he added.

While most of them tend be new believers in the gospel of stockmarket recovery, others are born-again investors who have gained renewed faith in stocks.

'We have seen reborn investors who have not been trading for decades coming back because of the IPOs, and we've got enquiries that have been a lot more frequent since September,' said Albert Fong, a remisier at OCBC Securities.

'They are investing also because the interest rate offered by banks is almost zero,' he added.

Over at Phillip Securities, the revival has been resounding. 'I've seen 50 accounts being reactivated over the last one or two weeks,' said Henry Tjoa, a remisier there.

On the whole, the numbers have appeared compelling as well. Since June, total monthly turnover on the Singapore Exchange (SGX) has risen rapidly, from a volume of 22.6 billion shares in June to 45.4 billion shares in September.

While the numbers for October are not out yet, they are bound to be higher than September's. The greater mystery, however, is whether the players that stampeded into the market in October will still be there by year-end.

Already, brand-new accounts have seen little action beyond the flurry of IPO-flipping, which usually happens within three days of a successful application. 'Most of them are fresh graduates with not a lot of money to invest anyway,' said Kim Eng's Mr Ng.

In a market that had been starved of IPO action for the first part of the year, some brokers and investors have begun opting for a scattershot approach, now that offerings are abundant. 'I just tell them to apply - doesn't matter what stock. I mean, GLP? Who really understands logistics? I don't even read the financial statements,' one remisier said.

Another remisier with two decades of experience has his reservations about the IPO euphoria. 'They like the government-brand stocks like GLP. Whether or not it's a good choice remains to be seen,' he said.

In what could cast doubt on the underlying fundamentals of the market, some of the smaller issues have already been priced below their offer price, as investors do a hit-and-run with IPO applications.

XinRen, which was 4.3 times oversubscribed earlier this month and had a euphoric adjective placed right before 'debut' to describe its first day of trading, saw its share price drop to 53 cents the day after - below its offer price of 55 cents.

Oxley Holdings, which listed last week, did not even have a debut worth writing home about because it felt the fickleness of the punters before its first trading day closed, leaving it 1.5 cents below its 38-cent share price.

And poor Anchun International Holdings, which listed last Monday with an offer price of 28 cents, ended the week at 23.5 cents.

Some remisiers, however, believe that the good times for the market are here to at least visit for a while. 'The market will still perform for the next 3-6 months. It's not at a frenzied point yet,' said Phillip Securities' Mr Tjoa.

Others think that, good times or not, it is the turbulence that will separate investors from punters.

'On a long-term basis, it will be on an uptrend but in between, there'll be some pullback here and there,' said OCBC's Mr Fong. 'The fear used to be prevalent among the small-time investors but the confidence is coming back. I just hope they don't get carried away.'

Nov 7, 2010
New MAS safeguards for investments =
Better protection for retail investors
What the new measures are and how they affect your investment decisions
By Lorna Tan, Senior Correspondent

Retail investors can look forward to more protection with the rolling out of new safeguards put forward by the Monetary Authority of Singapore (MAS) last month.

The MAS says the measures aim to ensure that financial institutions recommend suitable investment products.

Product features and risks should be conveyed effectively in order to safeguard customers, particularly those who may not have the relevant investment knowledge or experience, it says.

The measures will be rolled out in stages. First up will be those not requiring legislative changes. They follow some rude shocks suffered by investors during the financial crisis that were later investigated by the MAS.

The MAS looked into the huge losses of about 9,900 people here who lost some or all of their investments, totalling about $520 million.

These retail investors had bought products known as structured notes such as Lehman Minibonds, DBS High Notes 5 and Morgan Stanley Pinnacle Series 9 and 10 Notes. These products came unstuck when United States investment bank Lehman Brothers collapsed, for instance.

The MAS probe had pointed to three major failings in the selling of these products.

First, the institutions wrongly classified the notes they were selling as having a lower level of risk than was actually the case. They were, in fact, highly complex and carried considerable risks.

Second, the institutions did not provide accurate, complete information about the notes to staff. That meant the notes were sold by staff without the proper financial advice being given.

Third, the institutions did not ensure that their sales teams were sufficiently trained to sell the notes.

The Sunday Times highlights some of the new safeguards which aim to address these and other concerns.

1 Enhanced product due diligence before new investment products are distributed for sale

This calls for financial institutions to put in place formal policies and procedures to assess the nature of each new investment product and its suitability for its targeted customers before placing them on the shelf.

OCBC Bank set up a group product suitability committee last year comprising senior executives from various divisions like risk, legal compliance and customer service. They are responsible for giving the green light before products are allowed to be distributed. Some of the questions they ask include: 'Is it a product that will expose the bank to reputational risk? What's the extent of loss that the customer has to bear?' For a product that receives the green light, the committee will decide how it should be classified according to the product's risk profile.

OCBC was not among the 10 financial institutions that sold the ill-fated products.

2 Enhanced documentation of basis of recommendation

With this in place, representatives would be required to give the customer a document setting out in detail the basis for a recommendation. It must state, at least, the customer's objectives and needs, explain the reasons why the product is suitable for the customer having regard to the information obtained, and explain any possible disadvantages of the investment to the customer.

Mr Christopher Tan, chief executive of financial advisory firm Providend, gave this proposal the thumbs up.

This will ensure that representatives of financial advisory firms will be more serious in gaining a thorough understanding of a client's financial needs and risk tolerance before making recommendations. Therefore, clients can expect better advice, he said.

3 Enhanced quality of information to be collected from customers

Representatives are already required to collect key information such as the customer's financial objectives, risk tolerance, financial situation and current investment portfolio.

In future, they would be required to collect additional information, including the source and extent of the customer's regular income and whether the amount to be invested is a substantial portion of the customer's assets.

Mr Patrick Lim, associate director at financial advice firm PromiseLand Independent, noted that there are currently four options available to retail investors in the 'fact find' process. He suggests that investors should be given only two options, that of disclosing all or specific financial information. By doing away with the options of product advice and no advice, the quality of information collected from customers will be enhanced.

DBS Bank's managing director and head, consumer banking group (Singapore), Mr Jeremy Soo, said the bank has taken steps to ensure that customers are properly assessed in terms of their suitability and risk profile for various products.

'Based on the analysis, DBS' relationship managers will shortlist products that are aligned with the customer's profile,' he said.

4 Raised competency standards of representatives

By the third quarter of next year, there will be additional examinations for representatives covering securities and futures, collective investment schemes and investment-linked life insurance policies (ILPs).

Singapore Insurance Institute president Stanley Jeremiah noted that ILPs range from straightforward ones to very complex plans which are merely wrappers for more complex financial investments with a negligible insurance element.

He recommends a further sub-classification of ILPs.

'Otherwise the new exams will not capture the complexity of the sophisticated products or the test will be unnecessarily complex for the average representative who is selling a simple straightforward ILP,' he said.

5 Representatives to undergo training on a new non-excluded investment product (NEIP) prior to sale

Besides meeting the minimum entry and exam requirements, financial institutions must ensure that representatives have undergone training on a new NEIP before they are allowed to sell it.

Only investment products that are less complex and generally well understood are prescribed as EIPs. They include shares and life insurance policies other than ILPs.

6 Product Highlights Sheet with key information in plain language

The Product Highlights Sheet will provide key information about an exchange traded fund, unlisted unit trust, investment-linked life insurance policy fund, asset-backed security or structured note.

To be provided to investors together with the prospectus before the sale of an investment product, the Product Highlights Sheet will be written in plain language in a 'Question & Answer' format prescribed by MAS.

It will describe the profile of customers for whom the product is suitable, what the product invests in, and the risk areas that could cause a customer to incur a loss.

Mr Tan said that when customers understand the product better, this will help them to make informed investment decisions.

The guidelines will kick in from March next year.

7 Fair and balanced advertising and marketing materials for investment products

Financial institutions will be required to ensure that such materials give a fair and balanced view of the investment product. The materials should clearly set out both the potential upside and downside of the investment, and all material benefits and risks. They should not give the impression that a customer can profit without risk.

To ensure that statements on the downside or risks are legible and not downplayed, information and footnotes contained in advertisements appearing in any document would be subject to a minimum font size requirement.

Financial experts suggest that institutions benchmark the clarity of their materials and Product Highlights Sheet to a global standard like the Crystal Mark stamp which is given by a British-based body known as the Plain English Campaign. It is an internationally-recognised standard for plain English and is used by many leading financial institutions in Britain and Australia.

8 Timely and meaningful ongoing disclosure requirements for unlisted debentures

To provide investors with timely and meaningful ongoing disclosure on their unlisted investment products, MAS will require all issuers of unlisted debentures with tenures of 12 months or longer to issue semi-annual and annual reports to inform investors about developments concerning their investments.

In cases where a product has predetermined payouts, MAS will require product issuers to explain any significant deviations from the expect-ed returns.

9 Mandatory safeguards for customers without relevant knowledge or experience

This requires financial institutions to conduct a Customer Knowledge Assessment before selling certain products to retail investors. The assessment will look at whether the customer has a finance-related background and any investment or work experience related to the products.

Its aim is to deter inexperienced investors from putting their cash into sophisticated investments that they do not really understand.

If the customer still wants to invest after being assessed as not having enough knowledge or experience, the financial institution must give advice and outline the risks.

If these customers want to invest in certain listed products requiring trading accounts, they will be offered an Internet-based tutorial on derivatives - a risky and sophisticated form of investing - developed by the Singapore Exchange.

Mr Lim noted that the Customer Knowledge Assessment is valid for one year for the purchase of the same or similar product from the same intermediary. This may be cumbersome for the consumer as the assessment cannot be applied to a different intermediary.

10 Policies and procedures for sale of products

If a customer chooses to receive advice, the financial institution and representative must have a reasonable basis for recommending the investment product to the investor. Where a customer wishes to purchase an investment product even after the financial institution advises that it is not suitable, he may decide to do so.

However, the sale can be completed only if certain conditions are met. They include the representative informing the customer in writing that the product is not suitable for the customer and the reasons for such an assessment, and seeking the customer's confirmation that he still wishes to proceed with the transaction. The customer is informed that he will not be able to file a civil claim in the event he alleges he has suffered a loss. These conditions must be confirmed and signed off by senior management.

11 Prohibition of referrals by bank tellers

Bank and finance company tellers will be prohibited from referring customers to representatives for the purchase of investment products. They can do so only when the customer has approached the teller with an explicit request for information on investment products.

Mr Lim highlighted that if this had been put in place earlier, it may have the effect of 'saving' some elderly and illiterate customers from buying complex products. Before the recent financial crisis, bank tellers - who earned a referral fee - could have given the wrong impression that the products they were recommending were similar to fixed deposits.

Mr Tan said that even without referrals by bank tellers, he has noticed that some banks are asking staff to question bank customers who are in a queue to find out if they are potential clients for certain products. If they were, they would be placed on a shorter queue which leads to a relationship manager.

12 Cooling-off period for unlisted debentures

Cooling-off periods are currently mandated for unit trusts and life policies. They are seven days for unit trusts and 14 days for life plans.

In future, a cooling-off period of seven days will be implemented for unlisted debentures such as structured notes with tenures longer than three months. This would allow investors to exit the investment without having to incur sales charges or commissions.

'This is good as clients who are mis-sold, or who regretted, buying the product or upon being better advised by family members can have a chance to reverse the decision,' said Mr Tan.

lorna@sph.com.sg

I've seen Pahlawan on SI. I just didn't expect ST to report on him! Gosh....

Nov 7, 2010
'That IPO? It's chicken rice,' says Pahlawan
Online stock 'guru' wins admirers with his quirky IPO ratings and ability to pick winners
By Jonathan Kwok

Share investors are familiar with the usual 'buy', 'hold' and 'sell' calls that analysts often make on stocks.

But one folk analyst has been making waves online with his stock picks, using a ratings system more suited to a restaurant than the trading floor.

The mysterious ShareInvestor.com forum user - known only by his online moniker 'Pahlawan' - has been using rankings like 'chicken rice', 'bird's nest' and 'shark's fin' to rate initial public offerings (IPOs).

While his actual identity remains unknown, he has quite a following on the popular online forum.

ShareInvestor users have dubbed him a 'prophet', 'the master' and the 'IPO King', based on his ability to pick out winners from new share offerings.

Pahlawan has been a member of the ShareInvestor forum since 2004, and has made over 1,600 forum postings.

Not only does he give his take on IPOs, he also gives tips on listed counters. Many forum users say they seek his views before an upcoming IPO, and his cryptic pronouncements are always received with thanks.

One user, Wkl, said that when Pahlawan makes a pronouncement, 'I don't want to ask Pahlawan why, I just follow him.'

Another user, Syong0280, posted: 'I have been a follower of Mr Pahlawan for a number of years. Like all prophets, he is a man of few words... He never provides any definition. As a prophet, he expects his believer to do some thinking.'

But going by the responses on the forum, it appears that there is a consensus on how to interpret his ratings.

IPOs that are rated 'bird's nest' are clearly the best, followed by those rated 'shark's fin'.

Lower in the pecking order are hawker fare like 'chicken rice' and 'char siew pau' (pork bun).

The two recent government-linked mega IPOs - Global Logistic Properties and Mapletree Industrial Trust - were both ranked 'bird's nest' by Palawan. So was oil and gas services firm Kreuz Holdings, another market newcomer.

Mr Christopher Lee, chief executive of ShareInvestor, said such folk gurus add vibrancy to the share investing community.

'We have quite a number of people in our ShareInvestor community who are very established, who share their experience in various aspects of stock analysis.'

Mr Eric Tan, a retail investor and ShareInvestor member, said: 'I've seen Pahlawan's postings. He's got quite a following there.

'There were a lot more colourful characters (on the forums) before the 2007 stock market crash, but a lot of them have since left.'

Despite his popularity, Pahlawan is not always right.

While the three stocks listed recently that were given the highest 'bird's nest' ranking are trading well above their IPO prices, one of those ranked a strong 'shark's fin' has done less well.

XinRen Aluminum is five cents below its 55-cent IPO price. On Oct28, when XinRen lost over 15per cent to end below its IPO price, Pahlawan said he was 'in shock', 'lost and confused', and 'never expected such a tumble'.

Most retail investors The Sunday Times spoke to said that while such postings were interesting, they would be sceptical of folk gurus like Pahlawan.

'I wouldn't really trust their advice,' said Mr Tan, the investor. 'I go on forums only to get a feel of the general market sentiment towards the IPOs. I don't take the advice (of these gurus) at face value.'

Retail investor William Koh said: 'It's hard to gauge the expertise of these people. You don't know their backgrounds. He's expressing his personal opinion, and I wouldn't easily trust him.'

But the 53-year-old quipped: 'In my experience, some of the research reports by some of the big broking houses have also proved unreliable, so I trust my own analysis more.'

jonkwok@sph.com.sg

Nov 4, 2010
Sales race pushes COE prices up
Traders say rush to meet annual targets, fears of another cut in quota fuel bidding

FOUR out of five certificate of entitlement (COE) premiums ended higher at the latest tender yesterday, as motor traders rushed to meet annual sales targets in the last two months of the year.

The COE price for cars up to 1,600cc climbed 4.9 per cent to end at $34,001. Observers said the category jumped by $2,000 in the last five minutes on the back of strong bids from a taxi company.

The COE premium for cars above 1,600cc hit a seven-month high of $45,501, up 2 per cent from two weeks ago.

The price for the open category COE, which can be used for any vehicle type but which is mainly used for cars, was 2.5 per cent higher at $46,001, another seven-month high.

The COE price for commercial vehicles ended at $31,006, up 1.6 per cent. The premium for motorcycles was an exception. It closed at $1,452, 14 per cent lower than its last price a fortnight ago.

Motor traders said the traditional year-end spurt to meet sales targets had fuelled bidding.

A number of new car launches in recent weeks had an effect as well.

Mr Chan Kee Min, senior manager at Cycle & Carriage Kia, said: 'Come the year end, there'll be the usual rush for numbers.'

There is also widespread anxiety over another imminent reduction in COE supply from February. Car dealers think the cut will be sharp.

Mr Ron Lim, general manager at Nissan agent Tan Chong Motors, noted that premiums 'usually peak one to two months before an actual cut'.

'As the year end draws nearer, the expectation of a quota cut in February becomes starker,' he added.

COE supply is fixed every six months; and supply is determined by the number of vehicles taken off the road - either scrapped or re-exported - in the immediate preceding six-month period.

This deregistration number has been falling noticeably in recent months. In September, total deregistrations dipped below 3,000 for the first time in almost a decade.

Looking ahead, motor traders expect COE premiums to continue trending upwards in the coming months, followed by car prices.

CHRISTOPHER TAN

Hi all fellow buddies,

I just scanned through the latest edition of Shares Investment and shortlisted some companies before going to read through the ARs. Basically my scan criteria was consistent ROE above 10% and PB of less than 2 but above 1.0. Pls feel free to give any comments/advice for any companies below. Thanks!

Company / Industry
Lian Beng / Construction
BRC Asia / Steel
NSL / Chemical & Const
Hiap Seng / Rig construction
SMB United / Power & Switchgear
Valuetronics / OEM & ODM
CWT / Logistic & Transport

Hi, forgive me my lack of knowledge, but i am from europe (germany) and i am amazed how Mr. Market seems to be different here in asia.
I look at stocks from singapore and china, and i find many many that are below PE of 10 and many that are below PE of 5.
In europe & USA however, a PE of 15 is pretty normal with things below 10 being cheap, and a company with PE 5 is usually in serious trouble and heading for bankruptcy. In northern europe even a PE 20 is still pretty normal.
So i am amazed about the amount of 'cheap' stocks and different valuation that seems be used in asia.
Maybe this difference is because there is higher inflation in asia?
Maybe it is because the asian people dont have so much money and cant invest in stocks?
Maybe the money of the asian people goes into a different asset (real estate bubble?)
Just my 0.5$ observations