Horizon.my

Asset prices have fallen tremendously since the recent stockmarket contagion. Deflation has set in across the globe. Let’s take a quick look at the global leader USA and how some top names are faring:

On 16 October 2008, the New York Times published an op-ed letter contributed by Warren Buffett. The message of the letter was clear–Buffett is a buyer of US stocks.
In the letter, Buffett offers a few words of wisdom which has made him perhaps the greatest investor of all time.
“A simple rule dictates my buying: Be [...]

2008 Annual Report data now in our database (for YE 30-Jun-08). See:
http://www.horizon.my/investor/profile.php?counter=ioicorp
We note that Net Borrowings has increased from RM903 million to RM3.1 billion. Amounts Due from Jointly-Controlled Entities has jumped up to RM1.5 billion (from RM160 million previously). IOICORP’s explanation is as per below:
Amounts due from jointly controlled entities represent outstanding amounts arising from subsidiaries’ [...]

The current market climate is certainly not for the faint-hearted. It is during times like this that we would do well to remember the words of Warren Buffett:
“As far as I am concerned, the stock market doesn’t exist. It is there only as a reference to see if anybody is offering to do something foolish.”

It’s all about cash and confidence. How do you persuade banks to lend money more freely again? The US has decided to throw $250 bil into its troubled banking system. Beneficiaries include:

ROCE is a good indicator was to how well a company’s management is using its business assets to generate earnings.
ROCE = EBIT / Average Capital Employed
where EBIT is the Earnings Before Interest and Tax
Example: Petronas Dagangan Bhd
PETDAG’s earnings for the year ending 31-Mar-07 were reported as follows:

As per the above, its Average Capital Employed
(2641+3004.2) / [...]

ROE = Net Profit After Tax & Minority Interest / Average Shareholders Funds
ROE is a popular measure of how efficient a company is using its funds to generate income for its shareholders.
Unlike Return on Capital Employed, it does not take into account a company’s gearing position. For example, a company can increase its ROE by [...]

Capital Employed is also sometimes referred to as Funds Employed. It is basically the total of a company’s Business Assets (excluding its Cash holdings) less its Trade-related Liabilities.
Capital Employed = Net Assets – Cash + Borrowings