It seems information about Valuecap has been pouring these days from the media and one of the most revealing thing I read about Valuecap was reported by the Edge Daily yesterday entitled, "Valuecap in the black as of end-2007".
Basically much have been said and one of the thing highlighted was a wholly owned subsidiary of Valuecap, i-Vcap has felt the impact of drop in share prices i.e. the ETF established by this subsidiary has seen its NAV decreasing by 40% since its inception in Jan 28 this year.
But that is not my focus here. My focus is on the list of investees Valuecap has invested in (see my reproduction below). 20 companies below has been directly extracted based on the Edge revelation with the other 8 being extracted based annual reports published by these companies in Bursa Malaysia (look for the top 30 shareholders list though it is not necessarily show complete stakes held by the shareholders as they may use nominee accounts).
Noticed something perculiar? Valuecap actually invested in almost the same companies as EPF. The only difference is the amount invested in each counter (I guess that is why it is called on portfolio basis *wink, wink*).
Apparently Valuecap invested in about 70 companies listed in KLCI. I am not sure how many counters EPF has invested in but I would like to roughly gauge their exposures for comparison purposes.
But I need to add a qualifier though before we proceed: The table below is not an accurate representation as "these professionals investment entities" do trade from time to time and below is only a snapshot of what they have invested. The further the historical data is from today, the more likely it might change. Anyway, would any of us know for sure what they have today since they are not required to disclose to us? So... assuming the number of shares are the same since 31 December 2007 until today, you can see for yourself the value of these investments.
Note: Click on the picture to see it clearer
To be fair, the actual mark-to-market losses may not be as severe as we see above (just compare like for like columns which have been computed based on share prices on different dates). Yet, I am not surprised if both EPF and Valuecap are quite badly affected by the fall in these equity prices.
But what seemed to be quite odd to me is, if they do mark-to-market these losses, wouldn't EPF technically have more room to invest? Maybe they have been increasing the purchases over this period on their own and have hit the limit or they had have enough of the equity market. Oh well, who really knows right? Afterall, our paternalistic 2nd Finance Minister keep releasing press releases to assure us EPF just can't do it and they have to loan Valuecap monies to do it..:P
Again, using whatever superior fundamental investment research Valuecap possesses argument, are they truly free to sell the shares when they smell trouble? Take Maybank's shares for instance. If they sold half of it on 31 December 2007, they would have locked in RM300 million+ in cash. But that would have surely pushed Maybank's share prices down quite significantly due to the multiplier effect which the Govt is banking on to support the market.
So effectively, can Valuecap really exit from these investments? If not, how is Valuecap going to pay back? Via dividends from their investees???
Also, Nor Mohamed blamed foreigners for causing "fundamentally strong" companies value to fall plus the herd mentality exhibited by our domestic investors. So Valuecap is supposed to be one of those "instruments" employed by the state to "stem" this "irrational" phenomenon. But again, if these companies are so fundamentally strong, why can't EPF do it on their own?
Or better still, why don't the Govt employ and sponsor 3rd party independent research analysts to explain why are these companies so good that the general public should take out their savings to buy them rather than taking their retirement monies and getting questioned left, right and center?
11 comments:
Hi
Well-researched and top-notch analysis. You have asked very good questions.
Either they ignore us, in which case, we will know that this bunch remains arrogant and closed-minded or, they take on board constructive views by bloggers and make a better-informed policy decision.
dear ctchoo,
so many questions yet they are so adamant in making that highly questionable loan. don't EPF understand their reputation is at stake for being dragged into the picture?
Are the investment committee really felt happy with providing this loan to Valuecap? Or are they "compelled" to do this in the name of "national service" since no private enterprises think along the same line as how Nor Mohamed put it since domestic fellows follow the foreign herd?
but if it is really that good, why don't EPF themselves invest in it? why deprive the workers their benefits of enjoying the expertise of EPF investments more so in this rare event where most of these share prices has dropped about 40-50%?
to be fair again, out of these 28 companies, you and i can easily download the annual report and find out how good they really are. so again, why deprive the EPF members with a mere loan with probably a fixed annual interest???
Yr recent write-ups on Valeucap is a rare find in M'sian blogshere!
Not many r willing to spend time & efforts to do 'free-time national duties'. Politicians of both poles included.
Justified facts + correlated figures can help to dig out a lot of hidden trashes, masquerade as national statistic by this bolihland govt.
These blogs should be make known to all Joe M'sians, who read blogs & have a mond for the heart of the nation.
gwlnet
So let's say they decide to employ independent research analyst and pay them a bomb to do so. Will the govt actually listen to their advice or rather make $ out of the hiring like how they do with the running of everything in this country? Imagine, sending ministers to overseas for "educational training" already cost them more than 150K. But what do they learn? Do they apply what they learn? It's a load of BS what they're doing.
Dear
anon@ 10.35 am: thanks. my concern is that our retirement monies would be further eroded and EPF primary duty is to look after the interests of its members, not shoring up govt coffers!
seaqueen: oh no no no... on the contrary, it should be published freely in the net, newspapers and such for the public's reading. it is the public who will decide whether to withdraw the monies and act on it. and they need not pay a whole lot, just do like what Bursa is doing.
the problem here is confidence and i don't think RM5 billion with the name tag "Valuecap" will build confidence since people are suspicious whether they are doing it because it is really of value or national service.
Yes. I totally agree. With the govt using the money, of course confidence in them comes into the picture.
we should all just ignore what liars say and concentrate on what we know and analyse things by ourselves.
dear
seaqueen: hehe...if only they get this point...
zewt: haha...the problem more often than not is people don't know how to analyse and they leave it to others to decide...
i am not trying to be more paternalistic but seriously, if the govt wants to be seen to be doing something about KLCI, perhaps it is high time they let those independent people write about it... let them say whether it will be up or down....it doesn't mean they are prophetic and right but at least let these people do their job...
to have our govt taking our monies to do a futile and half hearted attempt to prop up the market shows how naive and simplistic are our policy makers (not forgetting clear sign of greed at our expense)
Great research and analyses. However I have come to te conclusion that govts all over the world, whether democratic or communists, are not for the people. Your questions are based on the pronciples that govts want to do good for the ppl and hence should employ qualified professionals for advice.
That's why I pity those who continue to wait on the govts and banks and corporations to "do the right thing". This may happen, but let's all have our own contingency plan.
God bless us all.
Dear Born2Reign,
By right, the governments round the world should look after the welfare of the people. Sadly, to rely on the world will more often than not disappoint us.
Yet we should not give up in reminding them of their roles. I know it might be futile yet without trying, we know for certain it will not happen. but to try, there is always an element of hope.
As for our own contingency plans, there is little we can do (except to vote them out) for forced retirement savings as we surrender our fate to the govt. of course, we can always save in other ways but still, they should be responsible as we are entrusting them with our monies.
"the governments round the world should look after the welfare of the people."
Not only they should,they must show it as well in their actions.
The only way we can teach these politicians is to vote them out. Vote for a change!
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