Business

Saturday October 31, 2009

A long Halloween for some

SIDEWAYS By ANITA GABRIEL


The latest positive data – trick or treat?

I WAS at a mall earlier in the week to get some treats for Brandon’s Halloween parade in school. Skull lollipops, pirate garb, fake blood capsules, stretchy eyeballs to green monsters doused in sour gummies – I got them all. Baby Shane was delighted by the spooky paraphernalia. His favourite – the green-eyed witch rotating on the ground with a sweeping broom and of course, her trademark wicked chuckle. (I admit, I got a little carried away).

That’s Halloween, a secular celebration, as most of us know it.

But for many, this recession-wrecked year has been one long Halloween; job losses, pay cuts, haemorrhaging businesses, mounting bills, wealth destruction – and some.

It is ironic then, that on the eve of Halloween, the United States, the biggest culprit for the financial mess that has unfolded this year across the world – revealed data that for the first time in over a year, was not scary.

The US economy, in the third quarter of this year, showed a return to growth, ending a long painful streak of four consecutive negative quarters. Indeed, the strongest signal so far that the worst could be over.

But is it?

There appears to be more sceptics than believers who think the latest data is more of a trick than a treat, and caution that this may just be a “joyless recovery”. According to them, the GDP statistics is sending too rosy a message and that the economy for real people is still fragile. On the other hand, the optimists highlight several key elements in the latest data which they say strongly “reflect the dynamics of a genuine recovery.”

Could it be that the largest financial shock since the Great Depression in the ‘30s has tapered off after 13 months? Could it be that the downward spiral that begun two Christmases ago will turn to glad tidings during this year’s Holiday Season? Sweet thought (from goblins to Santa?) but one which not many would dare to bet on – just yet. Did you know that the Malaysian stock market too has had its fair share of Halloween moments this year? Disguised in the cloak of unlocking shareholder value or widening the revenue base or adding synergistic benefits, there are, I’m sure, many corporate vampires who view the stock market as their candy bar.

From takeover exercises, asset injections, related party transactions, shareholder tussles, shareholding changes to accounting anomalies – we’ve had our fair share of transactions that will continue to haunt our market, unless we have minority shareholders who are more discerning and questioning. For example, why would a listed entity take over another listed entity whose sole business hinges on a concession that will end in less than a year, you think? Also, why would a major shareholder sell his shares to another party only to buy them back a few weeks later at double the price?

Let’s also not forget, the blood-thirsty predators who ramp up share prices of counters for no rhyme or reason, creating a false market and getting gullible retail investors to jump on the bandwagon; many of these retail investors have watched with horror the value of their investments tank.

We’ve also heard of parties keen to take over assets belonging to the Government at mind-boggling prices and promises. But just because these interested parties are not foreigners, should we take the risk of handing over such strategic assets?

The possibility of these mammoth projects failing (and we’ve had a few of them already) should send shivers down the spine of any Malaysian.

Do you also recall the ambitious setting up of a state-owned sovereign wealth fund earlier in the year, which had high-flying plans and ambitions and promised that priority will be placed on the people of the state over politics or self interest?

The plan fell flat as soon as the kitty was plumped up and thankfully showed that common sense prevailed, when it morphed into a national fund.

Spooky enough for you?

Happy Halloween.

● Business editor Anita Gabriel is not easily spooked but she admits, she’s way over the trick-or-treat hill.

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