Where is the Integrity of Our Financial Press?

Previously, I blogged on the following topic: According to Sources

In which I got a nice comment from ttt07 (a forum member from Sahamas ):

• We have Creative Accounting, Account Engineering, why not have Creative Reporting? Maybe there is a suggestion to set up prizes similar to Putlizer Prize in Journalism for those Creative Writer.
  
  There might be a disclaimer in the future in every article written as:
  "While it is a Creative Writer to write this article, it is solely based on his/her own imagination. If the reader could write a more Creative article, you would be rewarded. Accuracy is not the consideration, creativity is."

I fully agree.

What purpose does the financial press serves us if there is no integrity in what the journalist writes?

And the main source of it comes from this journalist named Jose Barrock.

I blogged on this issue since last year: Barrock on Mutiara and earlier this year: Should financial press be allowed to spin-off rumours?

This is what I wrote back then:

Should Financial Press be allowed to spin-off 'rumours'?

Should it?

On the Saturday Bizweek, there was this one article.

Again it was by Mr. Jose Barrock! Want to check a sample of his past handywork? ( see Mutiara ). This is what I wrote then.

Being creative in one’s writings help sells books.

Being creative in a financial business article?!!??

In the financial world, when the writer attempts to be creative, more often than not, the actual facts is simply distorted and twisted as per the writer’s wimps and fancy.

And the end result? We end up with business financial articles which do nothing but mislead investor(s) who uses the local news media as a source of information for their investing purposes.

So what chances does the investor(s) have if what they reads is badly twisted as per the writer’s own vested interest?


Here's the link to it: Courting AV Ventures

Let's take a look the whole article. Original article is in dark blue italics and my comments is in green.

By JOSE BARROCK

SECOND board counter, AV Ventures Corp Bhd (formerly Autoindustries Ventures Bhd) may have a new controlling shareholder pretty soon, sources familiar with the company say.

Perhaps my 'England' is that bad but 'may have' means nothing. It's just mere heresay or speculation.

Datuk Amanullah Mohamed Yusoof, who is a non-independent, non-executive director of the company, is currently the majority shareholder with 28% equity or 12.1 million shares in AV Ventures.

He is believed to be looking to cash out of AV Ventures to focus on his oil and gas business currently held under a private company Pivotal Achievement Sdn Bhd.

BizWeek was told that several parties have expressed interest to take up his stake in the company, one of whom includes Tan Sri Syed Mokhtar Albukhary.
Told by several parties? And the author of this blatant creative piece threw in a star corporate name to spice up the article. Now as expected, AV Ventures announced yesterday that there was some parties sounding interest BUT it states clearly that Tan Sri Syed Mokhtar had NOT expressed any interest.

So tell me.. how can the reporter write like that? Where's the integrity in his reporting?

Here is the link to AV Ventures announcement yesterday: Click here

Question 1 Dato' Amanullah Bin Mohamed Yusoof confirmed that he is not looking to cash out of AV Ventures. However, as an entrepreneur, Dato' Amanullah may be open to any offers which may benefit the shareholders of AV Ventures.

Question 2 Dato' Amanullah has confirmed that several parties have expressed interest to take up his stake in the Company, but did not receive any offer from Tan Sri Syed Mokhtar Albukhary.

Question 3 Dato' Amanullah confirmed that Tan Sri Syed Mokhtar Albukhary did not make any offer.

Syed Mokhtar’s interest in AV Ventures, which manufactures automobile parts, such as wiper arms, car window regulators, horns and other parts for the auto industry, it seems stems from his shareholding in another automotive player, conglomerate DRB-HICOM Bhd in which he acquired 15.8% equity last year.

The tycoon is believed to have sent his feelers out and made an offer to Amanullah via merchant bankers CIMB Bhd, offering RM1.20 a share, which works out to a total of about RM14.5mil for Amanullah’s shares.
The RM1.20 per share offer is a steep premium to AV Ventures close of 66 sen on Thursday and its net tangible asset peer share which at end September stood at 27.5 sen.

It is still not clear what Syed Mokhtar has planned for AV Ventures, but an analyst says he may be looking to inject his equity in AV Ventures and other existing motor related businesses for additional shares in conglomerate, DRB-HICOM.

There is also a possibility that Syed Mokhtar who also controls MCIS Safety Glass Sdn Bhd, which manufactures windshields and Mardec Bhd, which is largely involved in tyre manufacturing may rope in all his auto related businesses to strengthen his shareholding in DRB-HICOM.

DRB-HICOM’s as part of its sprawling automotive empire has a 34% stake in Honda Malaysia Sdn Bhd, which manufactures, assembles and distributes Honda vehicles in Malaysia and some other parts of Asean.
An analyst from Mayban Securities says the acquisition by Syed Mokhtar and the subsequent injection into DRB-HICOM may be due to more assembly work inked by the auto giant DRB-HICOM.

There have been rumours that DRB-HICOM may look to assemble Chevrolet marques for the Malaysian market.

The conglomerate also directly distributes or has a hand in the distribution of several other marques, via its 29.3% unit Edaran Otomobil Nasional Bhd, which distributes marques such as Audi, TD 2000, Mitsubishi and Tata vehicles among others.

Look at the above paragraphs. Littered with phrases such as is believed, a possibility, have been rumours.

So if there was no offer made, then what about the above statements? A fragment of imagination from the reporter?

Don't you find it strange that we have such quality reporters reporting?

The jewel in the crown for AV Ventures it seems is its 70% unit, Autoventure Mando Sdn Bhd (formerly Autoventure Halla Sdn Bhd), which manufactures steering columns.

Up until June last year, AV Ventures controlled only as much as 51.7% of Autoventure Mando, but has since acquired 8.3% equity from Tengku Malek Tengku Mohamed and another 10% from Bank Islam Malaysia Bhd, collectively for about RM1.5mil.

See how the reporter tries to SELL and PROMOTE the company by insinuating that there is a jewel somewhere in AV Ventures?

The company turned the corner in FY04, but has been posting paltry earnings.

For the nine months ended September, AV Ventures posted a net profit of RM201,000 on the back of RM33.8mil in sales. For the third quarter of FY05, AV Ventures made a net loss of RM67,000 on RM10.2mil in revenue.

As at end September, the company’s current assets stood at about RM26mil with cash and cash equivalents of some RM8.3mil, while its current liabilities stood at about RM20.1mil.

LOL!

Yup, Av Ventures indeed has been paltry.

But... to be even more precise ... AV Ventures made losses for its most recent 2 quarters.

So what do we have?

We have a below average company which lost money for its most recent 2 quarters and whose stock price was drifting lower and lower in the market. And out of the blue, the star CREATIVE reporter decided to do a creative article, throwing in a SPECULATION that a star corporate player MIGHT BE interesting in buying a stake.

How? When our financial press is turned into such a circus, what's left of our financial news?

Err... doesn't it turn it into a funnycial press?

Now take a look at the trading pattern b4 the news was published on Saturday, Jan 21st 2006

Date      Vol(Lots) Close
24-1-2006 10213     0.830
23-1-2006 39412     0. 860
20-1-2006 5524      0.700
19-1-2006 2228      0.660

See how the stock was trading below 70 sen b4 the article was published?

See how the stock JUMPED from 70 sen to 86 sen???

Btw... this is just my usual mumbling and i have absolutely NO idea how this stock will perform in the stock market.

Would it go up? or would it go down? Ask me not. I dunno!

I am mumbling this cos I care... and i simply find it strange how our reporters could churn out such poor reporting.

Do you care?

>> Or how about his handywork on Salcon ?

Here is a snapshot of that blog posting:

Company never deliver what they promised to their IPO investors (still can trust ka?).. and today.. there's a huge write-up on Star Bizweek: China boost for Salcon , which was written by me favourite creative write, Jose Barrock.

Correct me if i am wrong here cause i am seeing a trend developing here. Want a nice juciy article written in a 'creative manner', just call Jose!

Sigh. Isn't it utterly disgusting? No?

Take a look: (snippet of the creative writing in italic)

For the first six months of its financial year, Salcon posted a net profit of RM570,000 on the back of RM112.6mil sales. The company’s earnings per share during the period was 30 sen, while its net tangible asset per share stood at 52 sen.

EPS of 30 sen????!!!!???

See how badly the fact is twisted? An error of intent? Or was it a mere printing/typo error?

If this was a printing/typo error, how come such error occurs so frequently?

And i like this part...

“At present, Salcon is for investors with an appetite for slightly longer-term gains. The fund managers are not sure when the sector will pick up, so they are scared to take positions, I can understand that ... There is a lot of opportunity here, we have the right contacts and have forged some strong relationships here. Just like when we started out, it was difficult. It is all part and parcel of business. So far we have done well,” he says.

See how creatively written?

Here's my simple question: How can an investor trust that you will deliver when you have utterly failed to deliver what you promised to them ipo investors? Another case of talk is cheap?

At its close of 45.5 sen on Thursday, Salcon is trading at a price earnings ratio of some 9.4 times. The company’s price to net tangible asset per share is at an attractive 0.9 times, which is well below that of its peers, Puncak Niaga Holdings Bhd and Taliworks Corp Bhd.

A PE ratio of 9.4 times?

LOL!!!.... yet another badly twisted fact. EPS is only 0.3 sen lor and not 30 sen. So how to get a PE ratio of 9.4 times? LOL!!!


Isn't it utterly disgusting that we have such blatant shenanigans going on in our daily financial news?

Sigh!

>>

Was that a one-off case? Perhaps a typo? Human error maybe?

I would really like to give him the ebenefit of a doubt but take a look at this blog posting: Where did Maggie get her sauce?

>>>

So who is them sources?

Do they really exist or....

Or perhaps it could even be Ms. Maggie and her famous sauces.

Now is it logical that the market is made and dictated by this infamous Ms.Maggie?

Flashback...... Feb 12 2005.

• Tradewinds breaks six-year losing streak
  
  BY JOSE BARROCK
  TRADEWINDS Corp Bhd (formerly known as Pernas International Holdings Bhd), it is believed, will report profits of about RM100mil for FY04. This represents a marked improvement, breaking a six-year losing streak.
  
  ( it is believed?? Hmm.. is this wonderful financial reporting or what??? )
  
  The company is expected to announce its results at the end of the month.
  
  “Tradewinds (Corp) has turned around significantly. It made about RM100mil profit after incurring losses last year. Debt too has been slashed considerably,” says a source.
  
  (Ahhh.... ladies and gentleman... pak cik and mak cik.... ah pek and ah so.... introducing...... Ms.Maggie and her Sauce!!!...... now Tradewinds in only expected to announce its earnings at the end of the month.... soooooo.... why and how can this Ms.Maggie is so resourceful that she knew that Tradewinds MADE ABOUT rm100 mil profit? Ahemm... either way... how can? If it is true... then issit insider info ka? If false... then... pure financial gossiping??? )
  
  For the financial year ended December 2003, Tradewinds Corp suffered a net loss of RM73.7mil from RM1.1bil in sales. But the signs of improvement were already evident from the first nine months performance of the company. For the nine months ended September 2004, the company - largely involved in the hotel business, property development and plantations - posted a net profit of RM54.2mil on the back of RM938.5mil in revenue.
  
  Sources say both the plantations and sugar businesses have lent a boost to the company’s earnings. (This one chili sauce kah or sweet sour sauce?)
  
  Tradewinds Corp controls as much as 53% of Tradewinds (Malaysia) Bhd, a company that owns Central Sugar Refinery Sdn Bhd, which controls as much as 40% of Malaysia’s RM1.5bil sugar market.
  
  In the future, more can be expected from Tradewinds Malaysia as the company just strengthened its position in the sugar business via the acquisition of Gula Padang Terap Sdn Bhd, from among others Tan Sri Robert Kuok Hock Nien’s PPB Group Bhd, for RM188mil.
  
  Tradewinds Corp’s hotel business, it is understood has just about broken even, but the prospects seem promising. “There are a lot of improvements ... some of the loss-making hotels have turned around. The Mutiara Pedu (Golf and Lake Resort) in Kedah and the Hilton Batang Ai (Longhouse Resort in Sarawak) have also made progress, things are looking better for the group,” the source adds. The two hotels were previously up for sale with a price tag of around RM100mil. (Elo world... what is being understood here? huh? .... and gee.... I wonder what sauce did Ms. Maggie add? Black sauce kah? Or issit oyster sauce?)
  
  Tradewinds Corp has managed to cut its debt from RM2.5bil in 2003 to the region of RM1.2bil now which will undoubtedly reduce its finance cost burden.
  
  Year to date, Tradewinds shares have gained 11 sen, having reached a 52-week high of 78.5 sen in late January this year. The counter ended trading on Tuesday at 76 sen.

Let's do some digging. Tradewinds last reported quarterly earnings was on 30th Nov 2004. And this is what the company management said in its notes.

• But the signs of improvement were already evident from the first nine months performance of the company. For the nine months ended September 2004, the company - largely involved in the hotel business, property development and plantations - posted a net profit of RM54.2mil on the back of RM938.5mil in revenue.
  

Hmm... so TWSCorp has indeed managed to post a net profit of 54.2 mil, but this is not that accurate as this earnings performance was aided by an extra-ordinary gain of 25.991 mil as stated in TWS financial report.

Anyway.... one just gotta wonder.... Tradewinds first 3 quarters net profit only totals 54.2 million.

So this incredible Ms. Maggie is suggesting that Tradewinds makes a whopping net profit of 100 million for its current fiscal year.... which means Tradewinds will make a whopping 45.8 million (100 -54.2 ) for the last quarter of the year. (ahhh... would it be wrong for me to suggest that ze whopping huge profit is used as a catalyst to seduce punters to whack this bugger stock up?)

Well.... that's pretty optimistic if you ask me!

• Tradewinds Corp has managed to cut its debt from RM2.5bil in 2003 to the region of RM1.2bil now which will undoubtedly reduce its finance cost burden.

Debts only 1.2 billion? Errr.... correct ka? Here is the snapshot of Tradewinds balance sheet then.



Hmmm.... if my eyes do not fail me...it states that Tradewinds short term borrowings is some 873 million. Bonds and Long term borrowings is at 1.021 billion. Which means total debts totals some 1.894 BILLION!!! - oh what did Mr. Jose write? 1.2 billion!

So I really wonder if this is a simple innocent reporting mistake.

Or perhaps this is ze handywork of Ms. Maggie?!

Doesn't one wonder how and what sauce Ms. Maggie used to cook the following statement: Tradewinds Corp has managed to cut its debt from RM2.5bil in 2003 to the region of RM1.2bil now which will undoubtedly reduce its finance cost burden.

How?

Anywayyyyy....... Tradewinds announced its 2004 Q4 quarterly earnings on 25th Feb 2005...

And how did Tradewinds do? It lost 1.746 million for its 2004 Q4 earnings.

Ahem!!

And only ended its fiscal year making some 52.504 million.

And 52.504 million is a huge cry from a profit of 100 million as suggested by the reporter and Ms. Maggie!!!!!

And now comes the very interesting point.

AHem....

On 25th Feb 2006, the Star had a news clip stating the following:

• Tradewinds shares have been trading below par value of RM1 for almost three years. The company’s stock hit a 52-week high of 80.5 sen on Feb 14 this year, after touching its low of 43 sen on Aug 20, 2004. It closed at 63 sen on Thursday.

Do you know what is so interesting about that above statement in red?

Well Jose Barrock wrote that article on Saturday, Feb 12th... now check this out.... before that incredible Ms.Maggie and her sauce article was written... TWSCorp (Tradewinds) was a stock trading around the 77 sen.. and the minute Ms. Maggie showed up... TWSCorp went zoom, zooming up some 4.8% on Feb 14th.

What an incredible lovely Valentine present from Ms. Maggie to the market!!!

Anywayyyyyyyyyyyyyyyy....... after TWScorp hitting a 52-week high on the next trading day, Feb 14th 2005......8 trading days later... on Feb 24th, TWSCorp closed at 63 sen!!!!

Well... doesn't it sound like Jack went up the hill sooooo fast that Jack came tumbling down there after?!

Sooooo...... see how great and POWDERful Ms.Maggie and her sauce is?

Just splatter the business news article with all the according to Ms.Maggie or her sauces.... and watch the wonderful chain effect(s) on the stock!

>>>>>

Ok, how about some closet stuff?

Saturday January 31, 2004

Metro Kajang eyes Lankhorst

BY JOSE BARROCK

PROPERTY development and management company Metro Kajang is aggressively looking to beef up its land bank. One plan being considered towards this end involves the possible reverse takeover of Lankhorst Bhd. The biggest pull for Metro Kajang is Lankhorst's 54,753 sq ft undeveloped land in Shah Alam. The latter also has 14,000 ha land southwest of Seremban.
Details, however, were hard to come by as industry sources say the plan is still in the preliminary stages.
The vacant land in Shah Alam was valued at RM5.7 million while that in Seremban was valued at RM2 million, as stated in Lankhorst's annual report for the financial year ended December 2002
As at end-September 2003, Lankhorst – a second board civil engineering and building construction company – had a net tangible asset of 43 sen per share.

ahem..

cause Metro Kajang denies it.... and this is what Lankhorst is saying...

Type
:
Announcement

Subject
:
RE: ARTICLE "METRO KAJANG EYES LANKHORST" IN THE STAR NEWSPAPER


Contents :

With reference to the article entitled "Metro Kajang eyes Lankhorst" appearing under Bizweek of the Business Section of the Star newspaper on Saturday 31st January 2004, on behalf of the Board and management of Lankhorst Berhad, we wish to state that we have not been in any discussion nor are we aware of any discussion held with Metro Kajang for any possible reverse takeover of Lankhorst by the former.

The vacant land in Shah Alam as mentioned in the article, as announced to the Exchange on 1st August 2003, has been disposed to Haji Ahmad Shalimin bin Ahmad Shaffie vide a Sale & Purchase Agreement dated 30th July 2003 and is pending completion.

In addition we do not own 14,000 hectares land in southwest of Seremban. What we own is 14.164 hectares of quarry land in the Mukim of Jimah, District of Port Dickson, Negeri Sembilan.

We trust the above would clarify the position in relation to the said report.

Thank You.

By Order of the Board.

back on 5th feb 2004, i wrote the following:

U know why i post this message? Cause i remember this name in those past Edge articles.... articles like what he wrote about Metro Kajang and Lankhorst...

Isn't there a code of ethics for these writers? Take a look at what happened to Lankhorst yesterday. I saw a high of 1.10. Now it is trading at 0.925.

Ahem... look in the chart on those dates and have a look at what happend to Lankhorst ... many thanks to the handiwork of one pen!

Here is another example:

Time: Feb 14th 2004:

Fountain View in talks to buy Kurnia Setia stake

BY JOSE BARROCK

FOUNTAIN View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd. It is believed that talks between both parties have just commenced and therefore, details are not forthcoming.
Kurnia Setia – a little known main board plantation counter with a market capitalisation of only about RM69.32 million – has some 11,522 ha of oil palm and rubber plantation, and is controlled by the Agricultural Development Board of Pahang with a 45.41 per cent stake in the company.
It is believed that Fountain View Development is looking to increase its presence in the plantation business, especially in oil palm cultivation, capitalising on high crude palm oil (CPO) prices to boost its earnings. The company has been suffering losses since financial years 2001 and 2002.
The financial year just ended may not bring much cheer to Fountain View Development shareholders as well. The company, for the nine months ended September 2003, posted a net loss of RM3.84 million on the back of RM56.32 million in sales.
CPO prices have been on an upward trend since September last year, gaining some 35 per cent to close at RM1,892.50 on Thursday.
“The problem is with the company's property development arm which is based in Johor. A focus on plantations will boost earnings, especially with the current high CPO prices,” the source says.
Fountain View has about 11, 570 ha of plantation land, of which almost 70 per cent is cultivated with oil palm while the remaining are planted with rubber and cocoa. Previously known as Plantation and Development (Malaysia) Bhd, Fountain View was a PN4 counter. Under a restructuring scheme, Plantation and Development became a wholly owned subsidiary of Fountain View after a share swap, capital reduction exercise, issuing of irredeemable convertible unsecured loan stocks and debt compromise.
News of Fountain View's interest in Kurnia Setia has yet to hit the market. Kurnia Setia shares closed at RM1.11, down three sen from its close on Wednesday. It hit its 52-week high of RM1.25 on Dec 8 last year while its low of 63 sen was on Feb 27 last year.
Fountain View shares have risen six fold, since listing at RM1 on Nov 18 last year. The counter closed at RM5.80 on Thursday.

here is fountain's reply..

Company Name
:
FOUNTAIN VIEW DEVELOPMENT BERHAD

Stock Name
:
FOUTAIN

Date Announced
:
16/02/2004

Type
:
Reply to query

Reply to Query Letter by KLSE reference ID
:
NM-040216-35009

Subject
:
ARTICLE ENTITLED : "Fountain View in talks to buy Kurnia Setia Stake"
Contents :

Your letter dated 16 February, 2004 refers.

The Board of Directors wish to inform that the Company has never been involved in any talks to acquire a stake in Kurnia Setia Berhad and as such wish to deny the following statement :

"Fountain View Development Bhd is eyeing a stake in plantation counter Kurnia Setia Bhd."

In addition, the board have no knowledge as to the sources on the publication of the above-mentioned article.

And of course Kurnia states the same thingy...

We refer to your letter dated 16 February 2004 regarding the news articles appearing in The Star, Bizweek, page 4, on Saturday, 14 February 2004 entitled "Fountain View in talks to buy Kurnia Setia stake".

Upon due inquiry, we wish to inform the Exchange that the Company and also the Directors are not aware and have not been notified of the said news regarding Fountain View Development Berhad eyeing a stake in Kurnia Setia Berhad.

Can someone please give him a ................



Btw regarding Kurnia. Go have a look at how Kurnia share price JUMPED on Feb 16th?

Again... all the handywork of one pen!!!!!!

=========================

Today, 2nd Dec 2006, the same reporter has another article.

• TM eyes Time dotComTHE board of Telekom Malaysia Bhd (TM) is expected to deliberate on a proposal this week, one that it has been mulling for some time now. Sources say the state controlled telecommunication giant is considering a plan to acquire a 42.7% stake in Time dotCom Bhd from its parent Time Engineering Bhd.

Incredible a lot of folks knew that this article was going to be published today!!!! (look at the nice run Time dotCom had on yesterday!)

Same style, same shenanigans from the journalist.

• THE board of Telekom Malaysia Bhd (TM) is expected to deliberate on a proposal this week, one that it has been mulling for some time now. Sources say the state controlled telecommunication giant is considering a plan to acquire a 42.7% stake in Time dotCom Bhd from its parent Time Engineering Bhd.

Expected? Sources say?

These aren't factual reporting is it?

Again where is the integrity of OUR financial presss?

• BizWeek understands that the offer price for some 1.1 billion Time dotCom shares, although yet to be finalised, may be in the region of RM1 and RM1.20 per share. A decision is expected to be made soon.

Woah!!!!

BizWeek understands?

Is the journalist now saying that the entire Star BizWeek knew about this deal?

Are we talking about Insider news here?

And for what it is worth, it states that BizWeek understands. Understanding that there is an offer...

but....

nothing is being finalised yet...

how nice... it leaves an escape hatch for the journalist to wriggle himself out of any tricky situation that arises from writing this incredible financial article based on nothing but heresay!!!

My say?

Can someone please give him a ................