Chinese property spree

Over the last 24 hours, there were 2 articles or news that possibly points to where the property direction is heading.

The first: Tropicana sold a piece of very prime land in Bukit Bintang to Agile Property (Chinese owned and Hong Kong listed) for RM3280 sq ft - much higher than previous book valuation in 2012. This pretty much value that area very highly, although I do not know what was valuation in an adjacent area in previous transactions. The interesting thing is that it is a Chinese company which has footprint in 40 cities in China and Agile does have property launches in Iskandar as well. This shows that there are demand coming from China nationals into buying overseas property. That was what I read happened to Australia as well - especially Perth and Melbourne.

Then another story: in US. Apparently, the last quarter, there was a huge jump in cash transactions for properties in US. This story says that interest are shown in nice holiday areas in US and much more transactions were in the form of cash (compared to before), partly to do with interest rates charged by banks have increased and many banks are quite stringent in terms of lending. The story did not mention who were the foreign buyers but I would guess that many could be Chinese (non Malaysian) and Russian.

At the same time, there is this jittery feeling among stocks investors especially on China's properties. Some of these developers - Agile Property inclusive whose bond ratings are being monitored. Their bonds issuance are no longer hot properties.

We know that there many rich ones which have cash to buy, but yet property prices are probably not holding well, and the feeling is that it can be very soft moving forward.

I am just not able to piece things together in this. Is China facing the Japan syndrome of the 1980s? When Japanese were buying properties and assets offshore while its properties at home was collapsing.

Jobstreet's dividend

For those whom have enquired about Jobstreet's dividend from the sale of the core business to Seek.com, here is a little clue - estimated to be RM2.40.

As for the Net Asset value of the shares, post dividend distribution - RM0.3572 per share.

Why selling Talam is a good thing for Keuro

As mentioned before, Keuro has 3 main assets - the West Coast Expressway, Rimbayu project in Selangor and a 30% shareholding in Talam. I would rate the value of the assets in a descending order i.e. WCE would worth a lot assuming the highway is widely used after the completion as it is the other alternative to PLUS between Klang Valley to Taiping. Rimbayu would be a very large project with now Keuro holding an associate stake with IJM developing it, while Talam is just an investment, although it may be worth more than what it is today (in my mind) as some of the assets are at book value which was not revalued for a long time.

Given the analogy of a sports team, if you are a team with some very good players, and some fringe, supporting players and the team will need to sell to grow, what do you think is the best way to go about it. Selling the supporting players, of course as the team would still need to grow around their very best players - and that is the case with Keuro.

It needs the money to grow. Talam will be worth some good money. The issue is how much would Keuro be selling them for assuming it is doing the right thing for its shareholders?

Talam and KEURO

Recently, we are seeing some interests in Talam Transform as it continues to reduce its debt by selling assets. In the process of selling its assets, it is realised that many of its assets are undervalued in its books. At as now the NA per share is about RM0.14 to RM0.15 per share (that is book value) and may not be real value.

I am sure after its cleaning of its books, we will be seeing some real projects, but probably not using the Talam brand.

Why am I interested in Talam? Keuro holds 30% (controlling) of the company.

SP Setia and TRC

Sometimes a slight change in management would make you think. The first thing that you would want to follow through is what would the changes be. In a recent announcement, SP has just awarded contracts to TRC Synergy for its project next to Mid Valley, named KL Eco City.

To me and many, SP Setia is the most prominent Malaysian developer and sometimes, you do not want to associate with not so good names. If you noticed two mishaps last year, TRC was in both.

Is there anything within SP Setia that we do not know of?