I am perplexed. I tried re-reading the articles again and again trying to figure out what makes the Valuecap shareholders so happy that they are willing to settle for mere 3.5% coupon rate and RM135 million dividend for an investment they made back in 2003 which technically was restructured in 2006.
The fact that there are 3 shareholders namely, Khazanah, KWAP and PNB investing in Valuecap and lending them monies with such low returns makes me wonder what was the other factors that Khazanah, KWAP and PNB would have considered lending Valuecap RM5 billion facility with 3-year tenor.
Source: http://goal-exchange.com/?p=104I mean PNB paid its investors annual dividends of more than 7% per annum while KWAP is tasked with managing the pension funds of the civil servants. Surely settling for something akin to inflation rate is not going to help much with the growing burden of supporting the pensioners or getting close to the more than 7% annual dividend PNB unitholders look forward to right? As for Khazanah, well, they still have to answer for a lot of weird investments like Silterra so for this purpose, I will just leave it out for now.
I wonder, in providing financing, would they have asked themselves as they quietly ponder their investment papers on how Valuecap is going to pay back the principal back? Afterall, with Valuecap main activities revolve around buying undervalued stocks which technically need a medium to long term timeframe to exit, is it unreasonable for them to ask for a timeline of sort for orderly disposal and building up of cash reserve to repay (since it is safe to assume now that these debts consist of bullet repayment).
Again, they may have nagging feeling that considering the size Valuecap was investing in, if Valuecap was forced to sell at the last moment i.e. around Feb 2006, that would negate the reason Valuecap was set up at that time which was to provide support and build confidence in our local share markets and undervalued counters. So did they?
For further assurance, not that they don't trust their fellow GLC or state agencies, being independent and with interests of stakeholders such as pensioners and unitholders at hand, shouldn't they too requested for undertakings from Valuecap to ensure that they stick to some sort of sell down schedule?
For PNB and KWAP, which are no strangers to managing funds and investing in the share market, wouldn't they too might have considered that in the event Valuecap can't sell down, they could settle for in-kind like taking the shares at that point in time (with perhaps a slight discount) as payments rather than settling for cash if Valuecap fails to follow the dsupposed isposal schedule? But did they asked and considered such possibilities?
Or perhaps in lending, did the Government also guaranteed the RM5 billion advanced in 2003 and that perhaps has been the major scoring point the lenders take into consideration in lending those monies in the first place? If such is the case, why didn't they call on that guarantee in 2006?
Source: http://www.bowmancoaching.co.uk/coaching.html
And now we are back to the same question, why then are they happy to settle for mere 3.5% coupon rate and RM135 million dividend return made over close to 6 years investment?
Meanwhile, left with more questions rather than assurances from the Minister himself, I am not too glad he only allowed for employees to voluntarily reduce EPF contribution by 3% for the next 2 years. I wish he should have been more specific, like for those with housing loan, they can opt to not contribute for 2 years and use their monies to pay off their housing loans.
Surely that would have encouraged more people to consider settling their loans faster. That may free up more monies and encourage the banks to lend more as their loans to deposit ratio will reduce further.
Unlike the Government, I will admit why I favour that as I do have an ulterior motive. I just want to contribute as little as possible into a forced savings plan I don't trust and sure as hell want to pay for something I am quite happy to live with.
So can we have less beating about the bush and just more frankness in the explanations given?
Again, they may have nagging feeling that considering the size Valuecap was investing in, if Valuecap was forced to sell at the last moment i.e. around Feb 2006, that would negate the reason Valuecap was set up at that time which was to provide support and build confidence in our local share markets and undervalued counters. So did they?
For further assurance, not that they don't trust their fellow GLC or state agencies, being independent and with interests of stakeholders such as pensioners and unitholders at hand, shouldn't they too requested for undertakings from Valuecap to ensure that they stick to some sort of sell down schedule?
For PNB and KWAP, which are no strangers to managing funds and investing in the share market, wouldn't they too might have considered that in the event Valuecap can't sell down, they could settle for in-kind like taking the shares at that point in time (with perhaps a slight discount) as payments rather than settling for cash if Valuecap fails to follow the dsupposed isposal schedule? But did they asked and considered such possibilities?
Or perhaps in lending, did the Government also guaranteed the RM5 billion advanced in 2003 and that perhaps has been the major scoring point the lenders take into consideration in lending those monies in the first place? If such is the case, why didn't they call on that guarantee in 2006?
Source: http://www.bowmancoaching.co.uk/coaching.htmlAnd now we are back to the same question, why then are they happy to settle for mere 3.5% coupon rate and RM135 million dividend return made over close to 6 years investment?
Meanwhile, left with more questions rather than assurances from the Minister himself, I am not too glad he only allowed for employees to voluntarily reduce EPF contribution by 3% for the next 2 years. I wish he should have been more specific, like for those with housing loan, they can opt to not contribute for 2 years and use their monies to pay off their housing loans.
Surely that would have encouraged more people to consider settling their loans faster. That may free up more monies and encourage the banks to lend more as their loans to deposit ratio will reduce further.
Unlike the Government, I will admit why I favour that as I do have an ulterior motive. I just want to contribute as little as possible into a forced savings plan I don't trust and sure as hell want to pay for something I am quite happy to live with.
So can we have less beating about the bush and just more frankness in the explanations given?
3 comments:
Good points. There is a need for more details from the Minister about the elements of the Stimulus Package.
well, if ppl are smart enough, they should use the 3% wisely, like paying of debts.
dear
de minimis: i doubt we will get much since the MOF1 said this is not a supplementary budget...
zewt: a big if...
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