Inphyy Corner

Ipco International releases profit loss warning

Hurt by Financial Assets value decline.

In announncement to the Singapore Exchange, the Board of Directors of Ipco International Ltd announced that the company, together with its subsidiaries, is expected to report a loss and asset impairment for the half year ended 31 October 2013.

This is primarily attributable to declines in value of Financial Assets, of which the most significant is the Group's holding of 9.74% of the issued share capital of Blumont Group Ltd (Blumont), it added.

On 7 October 2010, Asia Plan Ltd, in which the Group holds a 70% equity interest and which is engaged in real estate development near Seattle in the state of Washington, USA via its wholly-owned subsidiary Capri Investment L.L.C. (Capri), entered into a Conditional Sale and Purchase Agreement (S&P) with Blumont Group Ltd, a company whose shares are listed and quoted on the Main Board of the SGX-ST, and Blumont's subsidiary company, Phelago Holdings Pte Ltd, to sell 37 finished lots held by Capri for an aggregate purchase consideration of S$2.96 million.

Upon completion of the transaction on 28 September 2011, the group received 137,956,868 shares of Blumont (70% of the total of 197,081,240 shares issued to Capri) at a price of S$0.015 per share.

At the time this represented 10.93% of Blumont's issued share capital, in addition to the 26 million shares previously held by the Group.

The company said though that revenue and profits from its operating subsidiary Excellent Empire Ltd, which distributes natural gas in four cities in Hubei Province, PRC, have continued to show improvements.

The Group is in the process of finalizing its unaudited Half Year Financial Results for FY2014, which will be released on or before 15 December 2013 and will contain further details.

In the meantime the Board of Directors wishes to advise shareholders and potential investors to exercise caution when dealing in the shares of the Company.

Here's why you should still invest in gold despite plunging prices

Instead of dumping it all on stocks.

The price of gold is down more than 25% this year, with most major banks also predicting another rough year for the asset class in 2014. But Kevin Quigg, Global Head of ETF Sales Strategy, State Street Bank & Trust, argues that gold should still be part of any investment portfolio.

"On an ongoing basis, and this is statistically proven, that a 4 to 10% allocation of gold, or SPDR Gold Shares, will increase performance in a portfolio and decrease volatility," said Quigg.

"Looking out into the market place, I’d probably look back. We are at the five year anniversary of the global financial crisis and what was the asset of last resort that did well in that period? It was gold when other areas were struggling.

"I would like to have a magic ball and say I knew everything that was going to happen in the market over the next year. I don’t. Most investors don’t. And if that’s the scenario, you should have an ongoing allocation to gold."

Quigg explains the weakness of gold to a lack of seasonality in the gold market.

"I think what we’ve seen more recently is the traditional strong seasonality of the gold market is not exhibiting itself this year. So traditionally, as we enter in the Indian festival season followed by Christmas, followed by the Chinese New Year, followed by Valentine’s Day, you see some seasonality in the jewelry market place," said Quinn.

How To Be As Successful As Warren Buffett

By David Kuo - December 8, 2013


How would you like to be as successful as Warren Buffett? According to research from the National Bureau of Economic Research, it can be done.

After forensically examining his Berkshire Hathaway portfolio, the Bureau has come to the conclusion that Buffett is not just a great investor but the greatest investor over the last 30 years. But we knew that anyway.

In a nutshell, Warren Buffett’s Berkshire Hathaway has significant alpha. That is just a fancy-pants way of saying that he has outperformed a portfolio comprised of similar stocks.

The researchers also found that Buffett’s portfolio exhibited a significantly higher Sharpe ratio. That’s another fancy-pants term. It tells us that Buffett has not taken on excessive risk to achieve his extraordinary returns. His Sharpe ratio is almost double that of the overall stock market and better than the average for mutual funds overs the last 30 years.

However, that doesn’t mean Buffett’s portfolio is not volatile. His portfolio was found to be over 50% more volatile than the overall market. Interestingly, Buffett also uses leverage to boost his returns. In other words he borrows money cheaply to bet against volatility.

So how has Buffett done what he has done? How has he managed to deliver an annual return of 19.7% between 1965 and 2012?

It’s really quite straight forward.

Buffett looks for:
•Businesses with high margins
•Companies with stable and predictable earnings
•Efficient operations with high asset turnover
•Companies with a strong balance sheet and
•Stocks that are cheap compared to their book value

And after he has identified and invested in his chosen companies he is happy to stomach the inescapable rise and fall of the market. That’s because he knows that his high-quality companies should continue to deliver even in down markets.

For most of us, the idea of borrowing to invest is a non-starter. But even in Buffett’s case, leverage, whilst helpful, is not the driving force behind his returns.

Instead, it is his ability to take stomach-churning market volatility in his stride. While many of us might throw in the towel at the first sign of volatility, Buffett says: “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”

Volatility is part and parcel of investing. Our very own Straits Times Index (SGX: ^STI) can be as volatile as any other index in the world. But if you can learn to overcome your fear of volatility, and be “greedy when the market is fearful” then you should be on the right path to becoming almost as successful as the Sage of Omaha.


Courtesy of The Motley Fool

Why M1 overtook SingTel as PhillipCapital's most preferred telco stock

M1 now holds 2 important advantages.

Research analyst PhillipCapital has named M1 as its most preferred stock in the telco sector, favoring it over previous favorite SingTel for two reasons.

"We like M1 over SingTel and StarHub as M1 stands to gain the most from improving mobile dynamics in Singapore," said PhillipCapital analyst Colin Tan. Second, M1 also "benefits from growth in its Fibre broadband," added Tan.

"Mobile accounts for a higher revenue proportion for M1, compared to its peers. With its fibre broadband offering, M1 continues to grow its fixed services revenue. Adverse FX movements continue to have a negative impact on SingTel’s earnings. However, SingTel’s earnings remained stable y-y in the last quarter due to effective cost
management strategy," Tan said further.

For its broader telco outlook, Tan expressed a cautiously positive outlook on the sector's stocks on the back of attractive dividend yields and stable earnings growth.

"We see data monetising gaining good traction in Singapore and expect it to continue into FY2014. More subscribers have subscribed to 4G tiered plans and are increasingly exceeding their data allowances," said Tan.

Tan cited SingTel and M1 reporting improvements in EBITDA margin on service revenue while EBITDA margin for StarHub remained stable in the last quarter. Earnings growth was stable across the three Telcos in the current FY.

"Despite expectations of the Fed tapering in the near term, we think the Telcos continue to be attractive investments, providing earnings as well as dividend growth potentials," Tan concluded.

Cordlife acquires additional 11.89% interest in Stemlife Berhad for S$7m

Increases total shareholding to 31.81%.

The board of directors of the Cordlife Group Limited (Cordlife) wishes to announce that the Company has on 6 December 2013 increased its shareholding in StemLife by acquiring from various shareholders of Stemlife an additional 29,440,880 ordinary shares of par value RM0.10 each, representing approximately 11.89% of the issued and paid-up share capital of Stemlife.

Following the additional acquisition, the initial vendors no longer hold any shares in StemLife and the Cordlife will hold an aggregate of 78,742,880 Shares representing approximately 31.81% of the issued and paid-up share capital of Stemlife.

The aggregate consideration for the additional acquisition is RM17,664,528 (which is equivalent to approximately S$7,004,000 based on an exchange rate of S$1 : RM2.522) and is based on an agreed price of RM0.60 per Share, being the same agreed price per share for the initial acquisition.

The consideration was arrived at after negotiation on an arm's length basis and on a willing-buyer willing-seller basis taking into account, amongst other factors, the aggregate net tangible asset value of StemLife of approximately RM33.17 million, and StemLife's cash balance of RM73.74 million and deferred income from operations of RM58.69 million as at 30 September 2013.

StemLife also generated cash from operating activities of RM6.52 million for the nine (9) months ended 30 September 2013.

The aggregate market value of the additional sale shares is RM11,944,165, based on the volume weighted average price of the Shares traded on the ACE Market of Bursa Malaysia Securities Berhad on 6 December 2013, being RM0.4057 per Share.

See Hup Seng receives SGX-ST approval to acquire Hetat Holdings

Will issue 144.5m subscription shares.

See Hup Seng Limited has announced that its proposed acquisition of the entire issued and paid-up share capital of Hetat Holdings Pte. Ltd. and the proposed issuance of 144,500,000 subscription shares has been approved in-principle by the Singapore Exchange Securities Trading Limited (SGX-ST).

The approval in-principle granted by the SGX-ST is subject to, inter alia, the following conditions: (a) compliance with the SGX-ST’s listing requirements; (b) shareholders’ approval for the Acquisition (and consequently the issuance of the Consideration Shares) and the issuance of the New Shares; and (c) submission of three requirements.

First is a a written undertaking from the Company that it will comply with Rule 704(30) and Rule 1207(20) of the Listing Manual of the SGX-ST in relation to the use of proceeds from the Subscription and where proceeds are to be used for working capital purposes, the Company will disclose a breakdown with specific details on the use of proceeds for working capital in the Company’s announcements on use of proceeds and in the annual report.

Second, a written undertaking from the Company that it will comply with Rule 803 of the Listing Manual.

And third, a written confirmation from the Company that it will not issue the Consideration Shares and the New Shares to persons prohibited under Rule 812(1) of the Listing Manual.

The Consideration Shares and the New Shares must be placed out within 7 market days from the date of the shareholders’ meeting of the Company. The Subscribers will be the legal and beneficial owners of their respective New Shares upon the issuance of the same.

See Hup Seng noted that the approval in-principle granted by the SGX-ST is not to be taken as an indication of the merits of the placement of the Consideration Shares and the New Shares, the Consideration Shares and the New Shares, the Company and/or its subsidiaries.