Say NO to Manchester United

Below is a letter by Narayana Narayana to the press appealing against the listing of this IPO in our stock market. I fully agree with his view and how the football racket is robbing the innocent sports fans and investors through their outrageous compensation scheme. This is no different from the thieves in Wall Streets and other financial institutions, turning innocent investors money placed in their hands into their own personal accounts.

Stock exchanges have behaved irresponsibly in many countries by recklessly accepting IPO listings to improve their own bottom lines and leaving the innocent investors clean and dry for failed and dubious companies. The way the football clubs are paying themselves crazy, like the fund managers and bankers of Wall Street tells one thing, their business is not sustainable.

Any institutions, govt agencies, that pay themselves crazy are suspects as they need to find more and more money to do that. The more they pay themselves, the more money they need to patch up the holes.

The Mailbag Editor,
The Business Times,
Singapore.

6th September 2011

Sir,

The projected US$1 billion Manchester United IPO has come in for regular discussion in your columns recently, with a fair
amount of speculation on what the terms of public subscription will likely be. SGX has categorically put to rest the suggestion
of a dual-class share structure.So far so good.

It is obviously premature at this still early stage to comment on how the IPO.will be pitched.

But what seems undeniable is that the pressing purpose of the IPO is to raise US$1 billion, and asap, 'to reduce the club's
debt burden and finance player purchases' (BT 26 Aug 2011) It was also reported that the club had 'successfully raised L504m
just last year and further piled up L478m in debt by March' (this year). That is no small beer. Intending subscribers are likely to
seriously ponder how that money was spent. An adviser on IPOs of other football clubs has offered the insightful explanation of
"(Man U's) massive debt burden, the massive payroll, and the need to replace certain ageing players'.

Against such a background, it would be interesting, and prudent for nvestors to learn what returns &/or investment merits the
IPO.will offer them.

In this context it may be relevant, and instructive, to revisit the history of IPOs in Singapore.

It was 60 years ago that the first of them, Metal Box, came on the scene. It was in fact a private placing by Fraser & Co., then
indubitably Numero Uno among stockbrokers in Singapore/Malaya. Far from a desperate need for capital, the issue, at $1.20,
promised a dividend of 10 cents or a return on capital of 8.33%. Banks then lent money at no more than 5% p.a., and the
premium effectively made up for putting money into equity stocks, then termed 'risk capital'..

Other well-established British companies trickled in, but uniformly and in common, they all promisd, and faithfully delivered,
handsome returns well over what banks offered for deposits, as well as they themselves lent out. By and large, those
early IPOs all offered good Investment opportunities from companies of repute.

In recent years, the tendency however has been to offer 'growth' as pitted against 'return', with IPOs pitched to 'what the
market would comfortably (or even uncomfortably?)' bear'. The focus of subscribers too has changed from 'return on
invested capital' to 'capital appreciation' with that last hopefully fast and large, yield be hanged..Abysmal and historically
low interest rates too have been a catalyst in promoting a 'how much can I lose after all?' mindset.

One could say that public appetite for IPOs has waned appreciably in recent months.In the particular case of Man U and
its IPO, media hype has focused on the club's large 'Asian fan support base' estimated at some 190 million. How mamy of
them are knowledgeble of stocks and the stock market to apply for IPO shares is arguably a separate issue. Sentiment
could no doubt sway some committed fans, but hard-nosed investors are likely to adopt a more sober stance.

There appears to be jubilation in some camps that Singapore has again stolen a march on its arch rival Hongkong.in this issue.

Similar euphoria erupted just a few months back when SGX landed Hutchison Port Holdings' IPO in preference to its home
base of Hongkong. However taking into consideration its subsequent lack-lustre performance, and that its current market
price is languishing one-third below its IPO price (without even factoring in another 5% depreciation through currency loss) it
can only be seen as a Pyrrhic victory.What was then touted as a 'plum catch' has in the event turned out to be a 'sour plum'
at least where the investing public are concerend. But seen from the other side of the fence, it was a veritable coup for the
promoters and all others involved in the IPO, and of course SGX as well.

Given the size of the Man U IPO, it looks as if strong institutional support will be required, as generally 'sentiment' by itself is not
a particularly strong point among retail investors. Whether the magnet behind the brand name of 'Man U' will of itself pull in
sufficient numbers will be seen when the IPO rolls out.

Yours etc.,

Narayana Narayana
Singapore 469297
Tel: 64461342

Notable quote by Dr Yik Keng Yeong

‘Beware of political opportunists online.’ By Dr Yik Keng Yeong

Redbean’s quote.
‘Beware of political opportunists in the main media.’

Still squeezed out of public housing

Lim Chong Wee wrote to the ST that he still could not qualify for Exec Condo when there was another big article claiming that it is so EC to buy Exec Condo now than DBSS. Yes they have raised the ceiling to $12k which technically means that Lim Chong Wee will now qualify. But there is another clause about eligible only after 30 mths from selling a private property.

Lim is one of those poor rich guys who was forced to take a hefty loan to buy private market when his income was deemed to be rich enough to live in private properties. The truth is that with $10k or $12k, and taking a huge loan, these people are finding it a squeeze. Their only usefulness is to help to inflate the prices of private properties to make their owners get richer.

In the mean time they will have to empty every cent in their CPF to afford those ridiculous prices. And these will be the people ended with nothing to withdraw from their CPF savings when they retired. And no body know why they have little savings! One big chunk taken away by the property and another big chunk by minimum sum and Medisave. The candle burns at both ends.

Of course he is complaining. But to the very rich, they want to force this group of people to think they are rich and must feed on caviar and foie gras. Poor buggers, caught in a cruel scheme. The ugly reality is that going to private properties will put a tremendous strain on them. They look good with their private addresses and cars, but not much left for their retirement.

The really rich are those earning $50k or more monthly. Those in the $10k to $20K bracket could live very comfortably if not being forced by the system and some dickheads to spend every cent they earned. They are not supposed to be thrifty, to be prudent, to save for their children and old age. They must spend and spend to help the economy and support the private property market for the dickheads to get richer.

This is the perfect middle class squeeze. Not because they have to support parents and children, but to support the private property market.

The intriguing protocol list

A state’s protocol list is a simple ranking of the seniority of govt officials which will then determine who they meet, where they stand or where they sit. In our case we have the President listed as number one followed by the Prime Minister, the Chief Justice and other ministers. In a way it is also the pecking order of the house and taken very seriously. Don’t mix this with the protocol list coming from Caldecot Hill where Jack Neo can be listed as the President, Mark Lee as the Prime Minister or Zoe Tay as the number one.

With the changing of the guards after the last GE, things started to look a bit complicated and messy with the stepping down of some senior ministers to become officially just an MP. As MPs, their standing in the protocol list will drop several rungs and they will no longer be in the limelight. But this may not be true in our case and how much real political power they wield could only be seen in an official function.

The National Day Celebration was the first public event to see who is the top dog and who are just members of a team. I missed this event and did not witness the changes. Then we have the swearing in of the new President and I managed to catch a few glimpses over the news. I saw MP Lim Boon Heng sitting about 15 or 20 rows behind the ministers. I tried looking for MP Mah Bow Tan and MP Wong Kan Seng but failed to locate them. Probably blocked by other guests. Now where is MP Lee Kuan Yew. I think I did not see him either.

The one that was sitting in the front row together with the senior ministers was MP Goh Chok Tong ESM. So what did it say? His ESM is real, equivalent to a senior minister. So he is a minister and not an MP. So, is he getting paid as a minister too, and carrying out duties like a minister? He is definitely being paid a pension of a minister plus his MP allowance and or ESM appointment. Those who think that he is no longer a minister and will share the protocol ranking of Tin Pei Ling will be mistaken. Boon Heng, Kan Seng and Mah Bow Tan will now rub shoulders with Tin Pei Ling and other new MPs at the National Day Parade stand. But Chok Tong ESM will still rub shoulders with ministers of his ranks.

And his picture is in the ST today, shaking hands with President Lee Myung Bak of South Korea. What would the latter be thinking? Is he shaking the hand of a minister or an MP? Or an honorary minister?

Does our new protocol list say anything about who is really the bosses in our political structure? What is the official title of LKY? Ex or former Mentor Minister or MP? Today the ST addresses him as former Prime Minister.

Notable quote by Leong Kai Yan

‘Serving NS in non combat positions just as taxing.’ By Leong Kai Yan.
This is an article in the ST forum today by a Kaiyan Leong. I didn’t know that Kaiyan is a western word like Tom or Jerry to be placed in front of a Chinese surname, or is this the right way to write Chinese name? I am getting out of touch with the new generation. Anyway, a better version will be ‘Serving NS in non combat positions just as dangerous.’ Ok, this is my version.

How so, sitting in the comfort of aircond offices can be dangerous meh? Why not? He can be electrocuted when typing on the keyboard. Or he could trip over a carpet or a slippery office floor and hit his head against a sharp corner of a furniture.

Or the secretary may pour a cup of hot kopi on his face by accident and burn his whole face. What about a ceiling fan dropping down and chop off his head?

Mine, non combat positions are terrifying and truly dangerous. A jeep or tank can overturn. So can a car on the road. Both equally dangerous. A hand grenade exploding? What about the danger of a letter exploding when opened?

I concede that non combat positions are equally dangerous, and taxing too. No wonder not many PES A NSman were allowed to be in non combat positions. Oops, there are some exceptions to the rule.