Financial crisis unlikely

"The Asian banking system has done extremely well since the last crisis. Capital levels are high, reserve levels are high, they've been well provisioned, and there's a lot of liquidity.

"If you look at the Latin American banking system, that's the case as well. The US is in a completely different place than in 2008," he said. "The banking system as a whole has raised a lot of capital. Capital levels are quite high, liquidity levels are quite high, and reserves are high."

CapitaMalls Asia’s secondary listing

by introduction in Hong Kong
Singapore and Hong Kong, 30 September 2011 – CapitaMalls Asia Limited is pleased to
announce that it received approval-in-principle from the Stock Exchange of Hong Kong Limited
(“HKEx”) today to list on the Main Board of HKEx. The listing is expected to take place on 18
October 2011. The stock code for the company is 6813.
The Listing Document relating to CapitaMalls Asia’s Listing by Introduction in Hong Kong is now
available in the main offices of China International Capital Corporation Hong Kong Securities
Limited (“CICC”), J.P. Morgan Securities (Asia Pacific) Limited (“J.P. Morgan”), Computershare
Hong Kong Investor Services Limited, as well as on the websites of HKEx, Singapore
Exchange (“SGX”) and CapitaMalls Asia.
CapitaMalls Asia is one of the largest listed shopping mall developers, owners and managers in
Asia by total property value of assets and geographic reach. It is listed on the Main Board of
the SGX and is a component stock of the Straits Times Index (“STI”).
China currently accounts for about 42.0%
1
of CapitaMalls Asia’s total property portfolio. Given
the growing importance of its China business going forward, the proposed secondary listing will
complement CapitaMalls Asia’s expansion in the country, enabling the company to achieve its
longer-term strategic objectives via:
Creating a platform to widen its investor base and enhance CapitaMalls Asia’s
attractiveness to investors in Hong Kong and China;
Attracting research coverage on CapitaMalls Asia and helping to raise its profile and
enhance its market visibility; and
Enhancing CapitaMalls Asia’s ability to access additional sources of capital in two
leading global capital markets in Singapore and Hong Kong.
Mr Liew Mun Leong, Chairman of CapitaMalls Asia, said: “CapitaMalls Asia is Asia’s leading
mall developer, owner and manager, with 96 malls in 51 cities in Singapore, China, Malaysia,
Japan and India. Our proposed secondary listing on HKEx will widen our investor base and
make us more attractive to investors both in Hong Kong and China, which will augment our

1
On an effective interest basis. 2
growth in China. We thank HKEx for its efficient handling of our secondary listing application,
as well as SGX for being our primary listing platform.”
“As this is a listing by introduction on HKEx, no equity will be raised. As such, we do not expect
any immediate, short-term impact on our share price. However, we view our secondary listing
on HKEx as a long-term, strategic move. This will enable us to tap capital from the top two
financial markets in Asia in the future.”
Mr Lim Beng Chee, CEO of CapitaMalls Asia, said: “Since our IPO on SGX in November 2009,
we have consolidated our leadership positions in our key markets of China, Singapore and Malaysia with 11 acquisitions with investments worth a total of about S$4 billion – seven
∗
in
China, and two each in Singapore and Malaysia. We are the market leader in Singapore and
Malaysia, are growing strongly in China, and continue to build up our operations in Japan and
India.”
“With the dual listing, investors will have a choice of exchange to trade CapitaMalls Asia
shares. We are happy to help facilitate the transfer of CapitaMalls Asia shares for our
shareholders who wish to trade on HKEx, and have put in place a Batch Transfer system. In
order to commence trading of shares upon our planned listing in Hong Kong on Tuesday, 18
October 2011, shareholders should submit both the share withdrawal form to The Central
Depository (Pte) Ltd (“CDP”) and share removal form to the Boardroom Corporate & Advisory
Services (“Boardroom”) by 5 pm on Tuesday, 4 October 2011.”
“We have also arranged a second transfer of shares, under which shareholders should submit
both the share withdrawal form to CDP and share removal form to Boardroom by 5 pm on
Thursday, 20 October 2011. They will then be able to trade CapitaMalls Asia shares on HKEx
from Thursday, 3 November 2011.”
CapitaMalls Asia will bear part of the costs for the first two batch transfers, but shareholders will
be able to transfer their shares from SGX to HKEx and vice-versa at any time after these two
transfers. More details on the Batch Transfer process can be found in CapitaMalls Asia’s
announcement today.
CICC and J.P. Morgan are the joint sponsors of the proposed secondary listing

Gold Could Fall to $1,100

"We overshot on the upside when we went over $1,900," said the fund manager, who has 25 percent of his portfolio in gold. "We're now close to bottoming at $1,500, and if that doesn't hold it could bottom to between $1,100-$1,200."

Toshiba is to launch the world's first WiFi-enabled SD memory card, the company announced today at the IFA consumer technology show in Berlin. The new FlashAir card looks outwardly like a standard SDHC memory card and weighs in at a measly 2g. It will initially be available in a capacity of 8GB. Building wireless communication directly into the memory card means users of devices like digital cameras will be able to use it to upload and download photos, videos and other files to their PC, phone, tablet or other WiFi-equipped device directly over a wireless network, without having to faff around with cables or card readers. The cards will be compatible with the 802.11n wireless standard, and backwards-compatible with the b and g variants. Security is provided by WEP, TKIP and AES encryption (WPA and WPA2). According to Toshiba's specs, the card's power draw is similar to that of a standard SD card, so users shouldn't see too much of a dent in their camera's battery life when using the FlashAir card. Toshiba is currently seeking Wi-Fi certification for FlashAir in Japan, North America and Europe, and says the first FlashAir cards will go on sale in February 2012. Read more: http://www.thinq.co.uk/2011/9/1/worlds-first-wireless-sd-card-toshiba-ifa/#ixzz1X562UgJX

On any other normal market day, unlike today's gloomy day, Trek would have soared with this news >> SINGAPORE – 21 September, 2011 - Trek 2000 International Ltd. (“Trek”), inventor and patent owner of the ThumbDriveTM , today announced that it will start delivering customized FluCard® to PLUS Corporation (“Plus”) from October 2011 onwards, a premier provider of leading-edge digital projectors and electronic Copy/White boards. Trek will deliver approximately 50K units of Flu Card to Plus in FY2012. It will have a positive financial impact on Trek’s FY2012 earnings

ThumbDrive inventor out to prove he is no one-hit wonder

Henn Tan could have ruled the global market in what became the ubiquitous USB flash drive that helped consign the floppy disk to the dustbin of technological history. But his grip on the ThumbDrive slipped and the market was flooded with a myriad of brands for the handy memory device which could be small enough to dangle on a key ring. Now the Singaporean entrepreneur hopes to prove he was no one-hit wonder. Tan, who holds the patent for the compact data storage device in over 30 markets and the global trademark for the ThumbDrive brand, now has a firmer hold on another invention with a rather unusual name. The FluCard - a postage stamp-size storage device that can also transmit data wirelessly - is Tan's new baby, and he hopes to see it used by millions of people; just like the USB drive. Tan said many thought the ThumbDrive was a one-hit wonder. "I told them no, but many refused to believe me," the 54-year-old said. "We are more than just about ThumbDrives and the power of this FluCard is going to be immense," insisted the chairman and chief executive of Trek 2000 International, which is listed on the Singapore Exchange. Tan laments that he made a mistake with the ThumbDrive by going it alone instead of partnering with an established player in 2000, an admittedly "naive" move that allowed rivals to get big slices of the USB-based data storage pie. This time around, he has teamed up with Japan's Toshiba Corp to promote the FluCard and ensure its patent is protected globally. Why the name? "It's contagious and easy to recall," says Tan, a marketing man who employs technical experts to flesh out his ideas. "You go to Afghanistan, you say flu, and they understand." Marc Einstein, regional manager at technology consultancy Frost and Sullivan, said the FluCard is a sign of the convergence underway in consumer electronics and computer technology. "I do think that this is where the future lies for technologies and consumer devices," he said, adding that securing Toshiba's support "is a good first step" for the Singapore firm. Tan said his company and Toshiba, now the second largest shareholder in Trek 2000 International after him, formed a consortium of camera makers to adopt the FluCard as the industry standard. Terence Wong, co-head of research at Singapore brokerage DMG and Partners, sees good commercial prospects for the FluCard and also feels partnering Toshiba is a right move for Tan. "This FluCard can potentially kill off the dummy SD card if they get it right," Wong said. Shaped exactly like the Secure Digital (SD) memory cards now used widely in compact digital cameras, the FluCard comes embedded with Wi-Fi to transmit data to other wireless-enabled devices such as mobile phones, laptops and tablet computers. "It can do more than what an ordinary dumb, dumb SD card can do which is just to store data," Tan said. "As long as you have a hardware embedded with Wi-Fi, you can download anything from the FluCard." Launched earlier this year, the FluCard works in any device that has an SD slot and the camera market is the most obvious target for Tan. SD cards are predominantly used in compact digital cameras, 100 million of which were sold in 2009 alone, according to industry estimates. Using a FluCard in the digital camera the user has the option of uploading new photos directly to the internet for sharing with friends on Facebook and other social networks. It also functions as a data storage back-up since the content inside the FluCard can be instantly transferred to a private user account on a portal set up by Trek 2000 International. Tan's idea for the FluCard came about after a holiday with his family in China five years ago was ruined when they lost their camera. "You can't be going back to the places to retake the photos, and I felt lousy there wasn't any data backup," said Tan. "The power of this FluCard is going to be immense if I get it right," he said, adding it could catapult his company from a fringe player into the major leagues of the data storage industry with Toshiba's support. Tan's anguish was clear as he recalled how his company lost out to the "big boys" of data storage who came out with their own USB-based devices - and to pirates who simply made ThumbDrive knockoffs. "Right now we are still generating income [from royalties] but not much," said Tan. "Size counts, and I learnt my lesson real hard." In retrospect, Tan said it would have been better if he had partnered one of the big brands when the ThumbDrive was launched in March 2000, but his eagerness got the better of him at the time. "I was naive, I was gullible and I decided to take this product all alone, believing that we can do it." "Now I have Toshiba, I am riding on the coat-tails of Toshiba." AFP

ARA ASSET: Resilient Earnings, Super-High Profit Margins, Steady Dividends

ARA Asset Management is a billion-dollar company listed on the Singapore Exchange. Especially in turbulent market conditions such as currently, stocks like ARA get noticed by investors searching for businesses that are resilient and offer decent dividend yields.

NextInsight met up with ARA’s management as well as attended a presentation by its Group CEO recently to come to grips with its business model – it’s unique and powerful. To begin with, its strategic partner is Cheung Kong Group of Hong Kong whose boss is, of course, Li Ka Shing. Having the region's largest real estate developer as a substantial shareholder gives it access to a critical mass of real estate assets. Other barriers to entry include its track record, which is what regulators look at, the network and knowhow in real estate...

1. What is ARA’s business?

Founded in 2002 as a joint venture between ARA Group's CEO, John Lim, and the Cheung Kong group, ARA has grown to become one of the largest real estate fund managers in Asia. It deals only with physical real estate, not equity.

The assets under management amount to S$18.8 billion as at end-June this year. It takes pride being an Asian manager focusing on Asian assets and attracting global capital.

ARA manages 6 REITs - Fortune (SGX and HK-listed), SUNTEC and Cache Logistics Trust (SGX-listed), Prosperity and Hui Xian (HK-listed), and AmFirst (KLSE-listed).

Its portfolio of assets spans every sector -- office, retail, industrial/office and logistics - as well as private real estate funds investing in real estate in Asia.
There are also supporting services that it also owns (more on this later).

2. How does ARA generate revenue?

ARA is well diversified with 5 revenue streams – REIT management fees, private real estate fund management fees, real estate management fees, acquisition and performance fees as well as distribution and other income.

REIT management

A REIT manager’s income increases with the number of buildings held under the REIT. REIT managers’ base fees are a percentage of gross property value (assets under management) and net property income.

For example, ARA collects 0.3% of Fortune REIT’s gross property value and 3% of its net property income. Fees may be marginally higher or lower from REIT to REIT.
According to John Lim, the CEO, about US$500 million in assets under management for a REIT manager is the break-even point.

Beyond that, the margins of the REIT manager grow rapidly because of economies of scale and operating leverage.

REIT management fees accounted for 51.4% of ARA’s 1H2011 revenues

Private real estate fund management

Other than REIT management fees, ARA derives significant management fees from its private real estate funds, which has attracted top-notch American pension funds such as Calpers.

While REITS hold stable mature real estate with over 90% of its space leased out, private real estate funds typically invest in newly completed properties, properties under development, turnaround properties and distressed real estate.

ARA derives management fees for these funds based either on investors’ committed capital or gross property value. Such fees accounted for 21.8% of ARA’s 1H2011 revenues.

Real estate management services

At this point, it is useful to bear in mind that ARA derived 73.2% of its 1H revenue from managing REITS and private funds. ARA has two other business segments that provide supporting services to its core businesses.

One of these is real estate management services such as property management and convention and exhibition services. This segment belongs to the more traditional realm where, for example, it handles the human resources necessary for building maintenance and space leasing.

This is obviously a less scalable business but it complements the core business units of the group. Its real estate management service segment employs about 500 even though the segment contributed only 11.7% to 1H2011 revenues.

Corporate finance advisory

ARA Financial Pte Ltd is the Group’s in-house corporate finance advisory arm that provides advisory services on asset acquisitions to the REITs managed by the Group and advises the Group on the establishment of REITs, partnerships and joint ventures as well as mergers and acquisitions.

3. Is this a unique business model?

Yes. It is the only one of its kind on the Singapore Exchange - in fact, the whole of Asia. It is highly scalable, resulting in greater profits as it expands its assets under management. And its net profit margin is very attractive.

4. What kind of profit margins does such a business generate?
The Group’s 1H2011 net profit margins were 56.3%. It has consistently exceeded its internal net profit margin target of 50% since listing in 2007. It is one of a very few listed companies anywhere that can enjoy such lucrative margins.
5. What else is attractive about investing in ARA?

Resilient earnings model
ARA is one of the region’s largest real estate fund managers with a very well diversified portfolio of physical buildings.

In 1H2011, 85% of its revenue are from recurring income derived from REIT, private real estate fund and real estate management fees.

This is augmented by performance fees. For example in Aug, it announced the divestment of the interests of the private investors in the ARA Harmony Fund.

The ARA Harmony Fund is a private real estate fund established by ARA in September 2009 to acquire the Suntec Singapore International Convention & Exhibition Centre and had achieved an IRR of 64.8%.

For such an instance of fantastic performance, ARA is receiving a whopping one-off income of over S$10 million in 3Q2011 of performance fees for crossing its hurdle rate.

Its unique business model gives investors, who are less risk-averse, the desirables such as resilient fee-based income model and consistent dividends even in uncertain economic times. As John Lim said: "We are not like equity fund managers. We don't have redemption issues."

Even in an economic downturn, it can increase its AUM by setting up a property fund for distressed assets. And ARA has proven to be innovative, having launched the Hui Xian REIT in Hong Kong in April this year, the world's first offshore RMB-denominated equity offering.

Rapid growth

Its AUM has grown by a CAGR of 61% since incorporation in 2002, rising to S$18.8 billion as of Jun 2011.

REIT management is a highly scalable business as the same manager can manage all the physical assets in the REIT portfolio.

For example, FORTUNE REIT does not need to hire another manager when a new mall is added to its portfolio of malls.
Strong balance sheet

Its balance sheet is as clean as can be. It is debt-free, and has cash of S$40.0 million.

Consistent Dividends

ARA paid out dividends of 4.8 cents a share per annum in FY09 and FY10. On top of that, it had a 1-for-5 bonus issue and a 1-for-10 bonus issue in those years, which effectively raised the dividend payout by 32%. Based on its recent stock price of S$1.345, it dividend yield is 3.6%.

Powerful strategic partner

The Cheung Kong Group of companies, with its worldwide presence of over a quarter of a million employees, combined market cap of HK$865 billion (as at Jun) and shareholding interest in ARA as well as the REITS means ARA has a very powerful strategic partner.
6. What are the roles of its other business segments?
The role of the REIT manager is to obtain financing for acquisition, capital management of the trust, engage in asset enhancement activities such as increasing traffic and source for new real estate assets that the trust may acquire.

Unlike the REIT manager or the real estate fund manager, a real estate manager handles the human resources necessary for building maintenance and space leasing.

With its corporate finance advisory arm, the entire supply chain of the real estate management business is taken in-house.

What makes things happen in ARA, in the words of Fortune REIT CEO Anthony Ang: “John Lim is a very creative person. He is very focused and persistent. When he gives you a task, he doesn’t forget and constantly reminds you about it. When he sees an opportunity, he goes for it.”

ARA’s personnel are from 16 to 17 nationalities. Over the past 5 years, ARA has experienced an influx of senior people from leading organizations like Merrill Lynch, GIC, DBS, Ascendas and Mapletree.

It prides itself on its corporate culture, which is neatly summarized by the acronym REIT - Respect, Excellence, Integrity, Teamwork:

RESPECT - Treat our colleagues and business partners with consideration and respect at all times.

EXCELLENCE – Excel not just in financial performance, but in every aspect. We do not cut corners and always put our customers first.

INTEGRITY – Integrity is a commitment to honor the trust placed on us. We abide by a strong code of ethics and uphold the highest standards of professional conduct.
TEAMWORK – We constantly support each other and build an environment that values the team player, while working creatively, and performing to our best potential.

ARA Asset Management

Last Friday, I divested GRP (I may buy in again) and bought shares of ARA Asset Management with a longer time horizon. At the moment, ARA Asset Management is trading to new one year low with P/E 15x. For me, I am planning to buy in batches and average down should the price of ARA Asset Management becomes more attractive.

About ARA
ARA Asset Management is an Asian real estate fund management company focusing mainly on the management of REITS and private real estate funds. ARA currently manages REITS listed in Singapore, Malaysia, and Hong Kong with a diversified portfolio of retail, office, industrial and logistics; private funds investing in real estate and real estate securities in Asia.

Here are quick 5 pointers why I chose ARA Asset Management:



1) Growth of Asian REITS
According to industry chamber Assocham, Asian REITS currently accounts for 10.6% of global REITS and expected to grow to US$500 billion in 8-10 years time, a projected figure of USS$100m billion from 2010. Majority of revenue (FY2010 reports 41%) of ARA is from REITS management fees, thus ARA is well positioned to maximize opportunities mid to long term. Indirectly, ARA could benefit from Singapore's aim of being the world's leading wealth management hub, overtaking Switzerland & London. This in turn attract rich private investors to park their monies in funds - one of which is properties. Already, Europe and America are facing troubled times, especially Greece debt situation.

2) Unique Business Model
ARA is asset light and does not own any properties but earn recurring income from managing it, appointing REITS Manager to take care of day-to-day operations. As long as Asian REITS exist or ARA wishes to create a new REIT in Asia to capitalize opportunities in rental income (e.g. buying distressed properties during economic slowdown), a portion will be made payable as "management fees" to ARA. In addition, ARA is not subjected to redemption issues - no matter what happens, someone will have to own the REITS and the Manager can't dump the assets. ARA also earns the fees from private real estate funds such as Harmony and Dragon. As of June 2011, AUM (assets under management) reaches S$18.8 billion.

3) Clean balance sheet, consistent earnings and high ROE
Using the data from Share Investor and my primary calculation, the average net earnings margin and ROE from 2007-2010 inclusive is 54.9% and 39.2% respectively. Debt-free with a cash of S$40 million with double digit FCF (free cash flow).

4) Strong Sponsor
Cheung Kong Holdings owned by Li-Ka Shing has a 15.7% stake in ARA as of now. ARA is a joint collaboration between John Lim and Cheung Kong Holdings.

5) People
This will be a little subjective - to each and every individual point of view. From my opinion, I view the management astute to some extent. Under the stewardship of John Lim, AUM rose to S$18.8billion and ARA was chosen by Forbes Asia 2010: "Asia's best 200 companies under a billion market capitalization". John Lim emphasizes strong values in ARA. There are other compelling reasons but I shall leave them for you to decide - please feel free to put in your comments.

Of course, there are risks and disadvantages of investing in ARA Asset Management. Which company does not? We can think of 101 reasons of good and bad - the most important question is "does ARA fits into your overall investment objective and profile".

Now, I will look forward to the future growth of ARA, having it as part of my portfolio that focuses on capital appreciation.

Source:http://ktwealth.blogspot.com/2011/09/ara-asset-management.html

The Rise and Fall of Yahoo! (Infographic)

The Rise and Fall of Yahoo! (Infographic):

'via Blog this'

Three Litmus Tests for Chinese Listings in the US

A former senior executive of a Chinese company that listed on the Nasdaq in 2005 says investors need to stay wary of new initial public offerings (IPOs) from the mainland, because many firms keep multiple sets of books.


"I've been investing in China for the last 10 years and there's one thing I've learnt - with many Chinese companies there are usually two sets of books, and whenever there are two sets of books, there are usually three," Eric Rosenkranz, Chairman and Founder of strategy consulting firm E.Three and a former Vice Chairman of Focus Media China

Rosenkranz says the first set of books, which tend to minimize profits and taxes, are generally submitted to the government; the second set, usually shown to investors, aim to maximize earnings. But it's the third set of books, that reflect the true information on the company, which investors need to seek before investing, he adds.

Rosenkranz recommends investors check off three boxes before betting on a listing. First, whether the company is listing on a "reputable" exchange such as the NYSE, Nasdaq or Hong Kong stock exchange.

Second, if it’s a new or reverse listing. Rosenkranz says investors should avoid reverse mergers that use U.S. shell companies to list, noting that of the 200 Chinese companies that have gone public in the U.S. over the last four years, 75 percent had done so via reverse listings.

And third, Rosenkranz says, invesors should look at whether the company is using one of the “big four” accounting firms: KPMG, Ernst & Young, Deloitte and PWC.

"Failing any one of those three things is a worrying sign and the investor should run away," he said.

Of the three points flagged, the use of a reputable auditor is most crucial, says Rosenkranz.

Rosenkranz is currently the independent non-executive director of Focus Media Network (a company unrelated to Focus Media China), which listed on the Hong Kong stock exchange's GEM board in July 2011. He says Focus Media Network keeps only one set of books, passed the tough regulations of the Hong Kong exchange, and retains PricewaterhouseCoopers as its accounting firm.

"Over the last 3 years there have been 40 U.S. accounting firms with less than 10 employees auditing Chinese IPOs," Rosenkranz said. "Now let's not forget that one of the reasons Bernie Madoff was able to get away with what he did - he used a three-man ‘mom-and-pop’ shop to audit his books."

But even “big four” accounting firms haven't been immune from controversy. Deloitte for example has come under scrunity over possible accounting fraud at the Chinese financial software firm Longtop Financial, which it audited. Rosekranz suggests that this incident was different and was largely a result of the lack of SEC oversight of accounting firms in China.

"It's not Deloitte U.S., it's a subsidiary of theirs, which is a Chinese company and one of the issues is U.S. regulators are not allowed into China to look at the books. So the U.S. regulators from the SEC have been forbidden because of country sovereignty issues from looking at the books," he said.

Longtop, which was listed on the New York Stock Exchange in 2007, had its shares suspended in May, and resumed over the counter trading in August.

Rosenkranz says Deloitte was working to fix the issues and he expects a change in regulations in the next three months, which would give the SEC broader oversight of Chinese accounting issues.

© 2011 CNBC.com