In the short time since I posted, I have tried to advance economic and social inclusion.
Since July 8, I have only posted my stock portfolio. I invested in these companies solely on the basis that these stocks appear to have price and volume momentum, based purely on a mathematical algorithm developed recently by us.
I have stopped writing in this blog and you may now view my portfolio updates in www.theedgemarkets.com. Enjoy!
My Say by Tong Kooi Ong (The Edge issue Feb 10-16, 2014)
On Oct 7, 2013, I wrote in the Forum pages about the need to reject
corporate kings working hand in hand with political elite to stop competition
and argued that we should instead be pushing for fair competition and economic
When the private sector is allowed to operate freely and
competitively, the people and the nation benefit from greater efficiency,
innovation, lower costs and superior products and services.
An example I used was the application by The Edge Communications
Sdn Bhd for a publishing permit to print a general daily newspaper called FZ
On Aug 20, 2013, the Home Ministry (KDN) approved the
licence. But one week later on Aug 28, we received another
letter from the Ministry saying that the license approved just over a week earlier was
now “deferred”. No reason was given and neither was there any
indication for how long.
I believe I know the reason and explained it in my column
on Oct 7 last year.
Two months later, we wrote to the Ministry for an explanation.
We did not receive any response.
On Nov 19, our lawyers filed an application for judicial review and the affidavit in support. In other words, we asked the
Court to decide on the legality of the actions taken by the Ministry.
On the morning of Feb 5, 2014, The Edge’s application
for leave to commence judicial review proceedings was heard before Justice Datuk
Zaleha Yusof. The Attorney General's Chambers did not object and leave
In the afternoon, The Edge received a letter from the ministry
saying that the FZ Daily licence has been REVOKED. The letter was dated Jan 21, 2014. Again, no reason was given.
The Printing Presses and Publications Act 1984 was amended in
2012 on the prime minister’s expressed desire for greater press
freedom. After all, Malaysia prides itself on being a beacon for democracy and a
global voice for moderation. And freedom of the press is integral to
any democratic and free society.
Under Section 13 of the Act, the minister can revoke a
printing permit if the said publication contains anything that is prejudicial
to public order or national security. But since FZ Daily never even had the
opportunity to go to print, the decision to revoke the permit could not have
been made under this section of the Act.
Section 6 (2) is the only other option for the revocation of a
printing permit issued by KDN. This section states “The Minister may at any
time revoke or suspend a permit for any period he considers desirable”.
I do not believe the law intends to give any one person such
absolute discretion. It would contradict the democratic values and principles
we so proudly proclaim to have. We must expect that in any fair
and just society, there will be reasonable grounds for a particular action
taken by the authority.
But what reasonable grounds could there have been for the ministry to approve, defer and then revoke the permit for FZ Daily before the
first copy even hit the stands?
To say I am intrigued by this whole affair is an understatement. But
what else is there to say in this MY SAY?
Chronology of events
Edge applies for a permit for Fz Daily
Oct 31 Kementerian Dalam Negeri (KDN) asks for a
revised mock-up and printer’s licence
Nov 1 The Edge
supplies the mock-up
Nov 2 The
Edge faxes a copy of printer’s licence to KDN
Nov 9 KDN
confirms the application is being processed
Aug 20 KDN
grants a one-year approval and asks for payment of licence fee
Aug 22 The
Edge makes a payment of RM2,000 to KDN
Aug 28 KDN “defers”
the license approved
Oct 31 The
Edge writes to KDN for an explanation
Nov 19 The law firm representing The Edge - Raja
Daryl and Loh - files an application for judicial review and an affidavit in support
Nov 25 Hearing date fixed for Feb 5, 2014, before
Yang Arif Datuk Zaleha Yusof for leave to seek judicial review
Dec 9 Cause papers are served on the Attorney
Feb 5(am) The
Edge’s application for leave to commence judicial review proceedings is heard
before Justice Zaleha. The AG's Chambers did not object.Leave is granted.
Feb 5(pm) KDN
licence for Fz Daily dated Aug 20, 2013, has been revoked. See KDN letter
This week, The Edge Malaysia carried a
special report, The State of The Nation. It addresses the various issues of
what you need to know about the economy, stock market and politics today.
Here are a few highlights:
is no imminent or immediate economic crisis. However, the risk bandwidth has
has a grace period of up to two years to successfully reform, rejuvenate and
implement its transformation policies. These include widening its tax base,
reducing subsidies, cutting wastages and leakages in government spending,
instilling fiscal discipline, improving its current account surplus and
increasing private sector competitiveness by eradicating rent-seeking and
the country could sustain its fiscal deficit by printing more ringgit. In reality, there are limits.
holdings of MGS (Malaysian Government Securities) are very high and the current
account surplus is vulnerable. Too much of the government’s revenue is dependent
on oil, and its operating expenditure is stubbornly rising.
an environment where issues of politics, economics, race and religion are politicized,
the bet is that politicians will likely resort to populist policies, or do
nothing. They would be reluctant to push through painful and unpopular – but
right – decisions.
sharp rise in US interest rates (the long-term yield is already steepening) or
a major decline in oil and commodity prices will quickly reduce this two-year
grace period we have to fix the problems.
stock prices, based on fundamentals, are currently overvalued. Earnings growth
will slow, interest rates will rise and capital outflows by foreign investors
will likely continue.
if some foreign equity funds return to emerging markets should the US economic recovery
be weaker than expected, the upside for Malaysian equities will be limited
relative to the region. Since March 2013, the FBM KLCI has outperformed other benchmark
indices in the region due to heavy buying by domestic institutional funds. If
foreign appetite for equities in this region returns, the laggards and cheaper
markets are likely to be re-rated upwards first.
holdings of MGS will fall further with the expected global rise in interest
rates.The current level of almost 45%
foreign ownership is one of the highest in the world, and creates a risk. When
foreigners exit their holdings of MGS, the locals must replace them. This will
require a re-balancing of the portfolios of major local funds such as the Employees
Provident Fund (EPF) into MGS, leaving them less room to increase their equity
biggest risk going forward is that no amount of local institutional fund buying
will be able to counter any accelerated and concurrent selling by both foreign
and retail investors in the equities and bond markets.
this stage, our view of the Malaysian stock market is that the potential risks
overwhelm the potential rewards.
Using the horse as the analogy, given
that this year is the year of the wooden horse in the lunar calendar, The Edge
argues that for Malaysia, it is not a wooden but a WOUNDED HORSE.
The horse was overstretched the last
few years, galloping strongly after being fed with financial steroids.
The fiscal indiscipline and consumption
spree of the last few years were facilitated by the massive injection of cheap
global liquidity and an enormous expansion in domestic bank loans to consumers.
The steroids are now being gradually
withdrawn. Liquidity is moving out of emerging markets and interest rates are
set to rise globally.
Below is the performance of major
global stock markets since the start of the year of the horse:
Index onIndex on
30 Jan5 Feb% Change
Dow Jones15,848.61 15,440.23Down
Hang Seng22,035.4221,269.38Down 3.48%
Looking at the performance of the global
stock markets so far, this horse is certainly not galloping. Whether this was
due to the poorer than expected US and Chinese manufacturing data or the strengthening
Yen, is really quite secondary.
The point is that the world is in an
anxious period of uncertainties.
These stock markets not only fell over
the last few trading days, but more significantly, it was universal with major single-day
plunges in stock prices.
Japan’s Nikkei 225 plunged 4.18% and Hong
Kong’s Hang Seng fell 2.89% on 4 February, while the Dow Jones Industrials
Average fell 2.61% on 3 February.
Over the course of the coming months,
The Edge will discuss these issues and attempt to provide essential insights,
analysis and understanding.
And on every issue of The Edge for
2014, there will be a The State of The Nation Update, highlighting recent
developments in the form of updating and analyzing further the charts used in
the original report. This will help you track the key variables to assist you
in making informed business and investment decisions.
For those of you without a copy of the
special report by The Edge, The State of The Nation, we will send a free
complimentary copy to you if you write to
The Edge (Special Report), Level 3,
Menara KLK, No. 1, Jalan PJU 7/6, Mutiara Damansara, 47810 Petaling Jaya,
A "restaurant" along the back lane of residential homes. No real name except locals call it "bee hoon lala@bukit beruang", in Malacca town. Good food but lots of mosquitoes. Cost RM20 to RM40 per head. I had one of my dinners over the Chinese New Year here.