Hot Sauce Tips!

Here's another blog on the same issue yet again...

Should OUR financial news be used as a TOOL to promote a given stock?

I'm talking about the TA Research report which was given extensive coverage on the local papers: Business Times: Scomi to bid for bus fabrication, Star Bizweek: Scomi eyes more jobs By TA RESEARCH and blogged on Jeff Ooi's The RM4.4 billion test... ( 2 ).

Let's look at the articles from an investor perspective...

Let's start with the article posted on the Business Times..

• SCOMI Group Bhd will submit a bid by the end of March for a contract worth some RM120 million to make body parts for about 400 buses for state-owned Syarikat Prasarana Negara Bhd, sources said.

Hmm... Scomi Group will submit? How does TA knows for sure? If it does know that Scomi will submit a bid, isn't this insider info? And I am so sick and fed-up to read our financial news splattered with phrases like sources said or according to soures. Certainly this was not the first time that Maggie and its Sauce appeared on our financial newspaper and unless something is done about it, this will not be the last time either!

• "The bids are made through its 71.5 per cent-owned Scomi Engineering Bhd," a source close to the group said yesterday.

Again.. who is this source? And again.. isn't this insider information? Is this allowed?

• The source said the outcome of the bus fabrication bid may be known only after March. "It's an open tender made by Syarikat Prasarana, which will be closed at the end of March."

Err... what's the purpose of open tender if the source has all these info?

• Meanwhile, TA Securities said the fabrication contract could be worth some RM120 million, assuming an average fabrication cost of RM300,000 per bus."The PBT (profit before tax) margin is expected to be around 7 to 8 per cent," the firm said in its update on Scomi dated yesterday.TA Securities has maintained its "buy" recommendation on Scomi and has set a target price of RM1.47, which gives investors a 30 per cent upside from the current share price level.

Now if you look at the whole article.. the whole selling point is that according to SOURCES, Scomi will be bidding for a huge job..

me say?

If Scomi does win the job or if Scomi does bid for the project.. how on earth does this source have all the information? Insider trading anyone?

Now anyone can be a source!!!!

The makcik cleaning the toilet can be a source. So can the jaga-kereta boy at Scomi. So can the jaga kereta boy cleaning the buses for SPN.

How? The press helping TA Reserch spitting out rumours ka?

Ok... let's look at it from the share market point of view.

• Scomi closing price on Friday was 1.15.
• Scomi Engineering closing price on Friday was 1.01.

Current traded price at 4.02 pm, Monday 20th March is ..

• Scomi is now at 1.20. (up 5.2%)
• Scomi E is now at 1.11 (up 9.9%)

See how profitable it is to have such a blatant write-up like that?

Like this.. again I ask... why don't we name our Financial News as the 'Hot Sauce Tips'?