Australia unmasking its racist face

Just listen to the polemics made by the opposition to SGX acquiring ASX and you can see the truth behind the noise. As a business transaction, it is a great deal where both parties will benefit. The Australian investors are the first to benefit in a big way, they could actually cash out and still own a big chunk of the new ASX-SGX which I thought should be renamed SAX, short for Singapore Australia Xchange. It also sounds more sexy. For all the accusations, which is the standard tactics employed by the West against Asians or their enemies, to point the finger first and let the victim to defend himself can Australia hike from its true nature? In the process the victim will forget about the accuser's own imperfections. For a country that prospers after centuries of racist policies, abuses and discriminations against the local natives, Australia should be shameful of itself to talk about human rights and freedom. This is a smaller version of the Americans. The biggest arms merchant in the world, the most highly armed nation, the greatest currency manipulator, the biggest violator of human rights, not just the past in the form of genocide and slavery. Just think Guantanamo, Abu Graib, Afghanistan, Pakistan will do. If one still did not get the picture, go to Wikileaks. The Americans are the worst warmongers in modern history, starting wars and fighting wars and with a huge industry that thrives on wars, providing employments to its own people and soldiering. What else does it possess and do that is anti humanity and against world peace? But it keeps pointing its finger at China and other countries for all the above violations when it is the number one culprit. All the wars and tension in the world today is caused by the Americans. Yes BSE, blame somebody else, and think that the world will be stupid enough to believe them. It is always other people's faults.

World highest home price appreciation

According to a report by Knight Frank, Singapore's home price appreciation is the highest in the world at 37%. China came close at 36.8% and Hongkong was a far third at 24.9%. This is the best news for property owners and property speculators. It is time for celebration. Singaporeans are getting richer by the day, with their properties hitting new highs. Many public housing owners are really millionaires in their own right. Don't be surprised the taxi driver driving the maids and foreign workers around is a millionaire himself. This will be another first for Singapore with millionaire taxi drivers. More important is to go out and grab another property fast. Property prices here can only go one way, up and up and away. And there is no fear of a property bubble forming. Singaporeans are wealthy, and according to all the reports, the properties they bought are all affordable and within their means. So there is no fear of bankruptcies and foreclosures. And those foreigners buying properties here are filthy rich and mostly paying cash. So very little risk of loan defaults. What else, even land for public housing are only awarded to the highest bidder, which means new housing can only be more expensive. And with land so scarce, and with the population going to increase further, one thing is guaranteed, higher property prices. And more than 80% of Singaporeans will be resting on their laurels, as they are all property owners. They are waiting for their eggs to turn into gold, literary. There will be millionaires all around, not only taxi drivers, but many of those taking public transport too. Basically looking right and left one is likely to bump into a Singaporean millionaire.

ERP rate hike

23 ERP gantry points will hike its rate by $1 come 1 Nov. Ford Road exit from ECP and Kallang Paya Lebar Expressways will now charge $4 instead of $3 for each crossing. Other gantries will increase from $2 to $3 and $1 to $2. With the hike, travelling in the expressways will be smoother and faster. The only problem is that the minor roads will be more congested as drivers trying to avoid paying the higher fees will be diverted to them. And once these roads become jammed, motorists will complain again and there is a high possibility that gantries will be erected in the minor roads to alleviate the traffic conditions there. This is a never ending musical chair game.

A buy out, sell out or a merger?

In very simplistic terms that a layman can understand, a buy out is done when one company pays another company, normally with a premium, and take over the other company, lock stock and barrel. In a sell out it is just the reverse. In the SGX/ASX case, SGX pays ASX shareholders a sum plus X premium dollars, and it ended up in a merger. So it is not a buy out and SGX does not take over ASX, or does it? In the case of a merger, normally both parties will make a valuation of the shares and use that as a basis to determine the number of shares each owns in the merged company. You don’t normally over value one against the other or pay a huge premium. Premium only applies to a buy out. The monetary consideration goes as follows. SGX values the ASX shares at A$48 a share, inclusive of a 37% premium. This will be paid in SGX shares at around 3.5 SGX shares for each ASX shares and another $22 in cash. That is what an ASX shareholders will end up with. After paying these shares and money, does SGX owns the new company and all of ASX? No? It is reported that the market cap of SGX is $7.86b while ASX is worth $6b. This deal is touted as a merger. An ASX shareholder will now own 3.5 SGX shares and still getting a cash of $22 or a total equivalent of 45% of the $8.2b payout. (Today it is reported as $11b based on the same A$8.4b) If this is so, this amount is enough to buy over half of the existing SGX shares in the SGX, which only has a market cap of $7.86b with some to spare. And the Australian share holders could own half of all the shares in SGX plus all the SGX shares in ASX. Am I wrong? What does SGX owns eventually after the payout, and what is the benefit to a SGX shareholder? If it is only a merger, then there is no need to pay a hefty 37% premium. If it is a buy out, I can agree to a premium though how big is the premium depends on many factors. So, is it a buyout or a merger?

Red Dot buying over Australia

This is perhaps the biggest taking over in history. A tiny Red Dot buying over Australia...well almost. SGX is buying over the Australian Stock Exchange and paying cash! All $8.2b to take over the Australian Exchange. What is $8.2b? This is chicken feed knowing the war chest in our hands. This is only the beginning. Next destination, New York Stock Exchange. Let's buy over all the major Exchanges around the world. I will consider this a major strategic move, like the buying over of some of the biggest banks a couple of years ago. Just make sure this time round the exchanges are not rotten apples like the banks, that were infallible but fell like coconuts. If the homework is done properly, and no cans of worms, this is a giant step forward for a little Red Dot. And it is good to think big. I have always been advocating the buying over of the whole of Australia, starting with North Western Australia, the nearest state to home. We are making a difference, eh. Matilah, you can't run away from little Red Dot. We will call Australia the Red Continent! And you can call yourself Singaporean once more. : )