George Soros is short $1.1 billion in the S&P 500

Should we be afraid?

There are still no clear indication of when will the Fed raise interest rates and now George Soros is betting against the markets.
Source: http://www.marketwatch.com/story/george-soros-goes-short-with-mutual-funds-and-etfs-as-the-sp-500-goes-1400-days-without-a-10-correction-opines-lowriskmutualfundsnet-2015-06-18

Apart from shorting the markets, George Soros also calls for supplying of lethal arms to Ukraine and secret training in Romania to avoid direct NATO presence in Ukraine. In a release by hacker group CyberBerkut, it explained that George Soros collaborated with the US government with an intent win over Ukrainian assets if successful.
Source: http://www.mintpressnews.com/leaked-george-soros-puppet-master-behind-ukrainian-regime/206574/

Coincidently this month, George Soros also bought some speculative stocks like clinical-stage biotechs Juno Therapeutics (NASDAQ: JUNO  ), Kite Pharma (NASDAQ: KITE) and Sarepta Therapeutics (NASDAQ: SRPT).

He also bought communication technology company MaxLinear, Inc. (NYSE:MXL)

These stocks are mid to small cap stocks that are loss making with little or no debts in their balance sheets. It is indeed odd for him to make such acquisitions unless he is short of the markets or funds buying into these stocks, therefore fuelling a temporary rise in their share price to profit from a market correction.

Source:

• http://www.fool.com/investing/general/2015/05/31/billionaire-george-soros-just-bought-this-highly-s.aspx
• http://www.fool.com/investing/general/2015/05/24/uh-oh-billionaire-george-soros-just-stepped-on-ano.aspx
• http://www.insidermonkey.com/blog/soros-piling-up-maxlinear-inc-mxl-as-stocks-rally-continues-352117/

Jardine Cycle and Carriage: Why did it dilute share value

Jardine raised a $772 million through a rights issue to fund its previous acquisition of Siam City Cement. Why dilute so much share value because of a cement company?

The group structure as a whole, a lot of subsidiaries residing within the Jardine Group have property development businesses and thus, it makes good sense to acquire stakes in Thai's second largest cement maker.

Jardine Cycle and Carriage also owns 50% of Astra International in Indonesia. Its diversity in core business services are a key to managing costs better than other firms.

The dilution of share value will enable the Jardine group to better manage costs in the construction sector throughout its property development subsidiaries.

This rights issue could be due to an anticipation of a possible Fed's interest rate hike later this year, However, it also allows Jardine Cycle and Carriage to reduce costs on funding.

Source: http://www.dealstreetasia.com/stories/jardine-cycle-carriage-to-raise-772m-via-rights-issue-8063/

Why buying index is good

2 available index funds to buy in SGX

• STI ETF
• Nikko AM STI ETF

These indexes act as benchmarks to the Singapore stock exchange and hold a variety of stocks that mimics the performance of the Straits Times Index.

Diagram 1 below shows a list of stocks that Nikko is holding. The chart indicates a variety of sectors of stocks the fund represents, which is attractive because it is well diversified. A retail investor might not have enough funds to construct a portfolio like this, and therefore Nikko and STI ETF are good index funds to consider investing.

Diagram 1 (Nikko AM STI ETF)

Benefits of Index

• Well diversified portfolio
• Low management fees
• Easy to understand
• Safer than aggressive stock picking/trading

Alan Greenspan, an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006 shared his thoughts on investments "The best strategy for equity investment has always been: Buy and hold and forget it,” he said. “Once you start to try and trade the market – I don’t care how good you are, how smart you are — you will not beat an index fund."

Let's all look forward to index funds :)

Noble group, attractive vs not attractive

Noble group has been one of the very 'glamorous' favoured by retail investors. Its share price dropped to 6 year low on 3 Jun 15. Despite its accounting discrepancies, investors are still positive of a rebound.

Below is the summary of findings by Iceberg-Research

Summary of Findings:

Noble exploits the accounting treatment of its associates to avoid large impairments and fabricate profit.-

Yancoal is the most representative example, with a gap of $600m between the carrying and market values. However, the accounting technique has been used for other companies.-

Contrary to what Noble’s management claims, the misfortunes of these associates have a
substantial cash impact on Noble.-

The proclaimed recovery of the Agri business in 2014 was manufactured through the use ofquestionable methods such as subsidies from the group or depreciation cuts.-

We believe the final price for the new associate Agri will be much lower than the provisional $1.5b payment; and/or that Noble will have substantial remaining financial commitments to its new associate. Noble may once again use the accounting for associates to hide the impairment.-

Selling the palm oil business will be very difficult for Noble since the licence of one of its subsidiaries has been revoked by the local government.

Source: Iceberg-Research

The person behind Iceberg isn't someone normal but rather an account or an auditor. He or her understanding of financial statements have shown accounting background.  Carey Wong, an analyst in OCBC investment research in Singapore believes that the person who wrote Iceberg has an accounts background with good understanding of financial statements. Without the report, it is not easy for retail investors to learn about such information. The person could probably be a former employee in Noble in order to understand such detailed accounts engineering.

Even with share price uncertainty, it is not easy to know the actual valuation and how low it could get unless we get some perspective from somewhere. I happened to chance upon Iceberg's third report which gave a hint of how low Noble's price can go."After impairments and using a price-to-book valuation method, we find a valuation of S$0.1 per share." 

Attractive or not attractive?

What's behind IMF asking the Fed to delay interest rates hikes till 2016?

IMF had asked the Fed to delay interest rates hike till 2016. However, is there a reason behind this?

Source: http://money.cnn.com/2015/06/04/news/economy/imf-federal-reserve-rate-hike-2016/

Recently, George Soros, the legendary investor had called on the U.S to provide advanced weapons to aid Ukraine against a Russian aggression. However, Ukraine is broke and therefore if U.S were to go ahead to supply weapons, it will have to be financed through their own pockets.

George Soros advised the Ukrainian leadership to regain control of the markets, in which he could push for the Federal Reserve to extend  a $15 billion three months swap arrangement with the National Bank of Ukraine. Soros told Poroshenko that the IMF would need to come through with a $15 billion package, which was confident would lead the Fed to also come through with more money. This move would reassure the markets to avoid a panic.

Source:
http://english.pravda.ru/news/world/08-06-2015/130910-soros_usa_weapons_poroshenko-0/
http://www.marketoracle.co.uk/Article50995.html

Is this one of the factors that led to the IMF asking for a delay in interest rates hike?

Personal View
I think that with such big political intention out there, interest rates hike could be set for a delay till 2016. US weapons manufacturer will benefit from this. Equity markets in US will continue to rally in a low interest rates environment.

If the war situation between Russia and Ukraine tightened, oil price could go up as well. Inflation rates will not be spared as the cost of living increase around the world.

Investors who hold equities and properties will continue to ride the inflation wave. With so much outflow in US, investment in US treasury bonds may not bean attractive option.

The low ringgit in Malaysia is unusual because oil price recovered to $58-62 per barrel from previously a low of $40 a barrel, but yet the ringgit is not strengthening. There is more to be discovered on the weakening of the ringgit.

I'm heading to bed now, so i'll end my blog post here. Good night!

5 articles that hint a oil price crash

These articles were search between May to Jul 2014, a start of the plunge in oil prices. These were some of the indicators that were overlooked by investors like myself, who currently hold on to a substantial stockpile of oil stocks.

Although it was a painful lesson, it was important to know the reason for such events to impact the global financial markets.

Below are a list of interesting reads before the plunging of oil price:

9 Reasons Why Oil Prices May Be Headed For A Bust (9 June 2014)
http://www.forbes.com/sites/jessecolombo/2014/06/09/9-reasons-why-oil-prices-may-be-headed-for-a-bust/

North American Oil Glut to Keep Prices Low, IMF says (9 Apr 2014) 
http://oilprice.com/Energy/Oil-Prices/North-American-Oil-Glut-to-Keep-Prices-Low-IMF-says.html

Obama aims oil weapon at Putin but will he pull the trigger? (11 May 2014)
http://www.telegraph.co.uk/finance/commodities/10823349/Obama-aims-oil-weapon-at-Putin-but-will-he-pull-the-trigger.html

EU, U.S. announce new sanctions on Russia over Ukraine (29 Jul 2014)
Obama Takes Step Toward US Oil Exports, And Maybe New US Energy Policy For 21st Centuryhttp://www.forbes.com/sites/lorensteffy/2014/06/25/oil-exports-a-step-toward-21st-century-energy-policy/