The uptrend remains very much in force, as evidenced by the still-rising moving averages. Quarterly momentum has lost steam and has been forming a series of negative divergences with price. The breakdown point for momentum is likely to be its equilibrium line. As long as this indicator remains above its equilibrium line, the uptrend is likely to stay intact. There is, however, a shooting star that formed on Aug 22. The shadow of the shooting star, at 70 cents, has yet to be bettered. Support has been established at 65 cents.
Monday, September 1, 2014
Prices are retesting their June high. Volume has expanded and quarterly momentum has turned up from its equilibrium line. Directional movement indicators are positively placed and 21-day RSI has moved up, off a mildly oversold level. At 68.5 cents, prices have actually made a new one-year high, which constitutes a breakout. Whether this can be sustained remains to be seen. The breakout indicates a target of 80 cents. The stop-loss level is at 60 cents, below which the breakout fails.
Stocks: STATS ChipPAC
The spotlight remained on United Engineers for most of the week. Analysts have been going back to their spreadsheets to recalculate UE’s revalued net asset value (RNAV). As at June 30, its book value was $2.79. Following the intention to divest UE subsidiary WBL Corp’s luxury auto business to a Malaysian company for $455 million, CIMB has raised UE’s RNAV from $3.17 to $3.57. On Aug 28, Churchill Capital suggested that UE could be at the centre of a tussle between its current owners, a consortium consisting of companies related to the Lee family, and Straits Trading, controlled by Chew Gek Khim, granddaughter of Tan Chin Tuan, a former managing director of Oversea-Chinese Banking Corp. While analysts reckon this is unlikely, if there are any hints of a tussle, UE could well meet its RNAV. Interest in OCBC continued, although the stock traded down to its theoretical ex-rights price by Aug 28. Speculative interest in STATS ChipPAC revived, following a rehash of an old story. In the end, the Straits Times Index was displaying signs of fatigue, closing near the low of the day on Aug 28. The CBOE Market Volatility Index has met with support and could attempt a rebound. If so, equity markets are likely to turn volatile, and signs are already emerging that the Hang Seng Index and the STI are set to ease. The Hang Seng Index (24,990) is on the retreat after testing 25,166, a level now viewed as resistance. The index is likely to ease further, following a series of negative divergences between it and both quarterly ROC and 21-day RSI. Support is initially at 24,700. The 50-day moving average is at 24,071, a level that coincides with more meaningful support at 24,000. However, a target of 25,738, indicated from an earlier breakout, would no longer be valid should the Hang Seng Index fall below 24,700. VIX meets support The Volatility Index (11.78) has encountered support just ahead of the 10.8 level. In addition, short-term stochastics appears to have bottomed, along with quarterly ROC and 21- day RSI. A rebound is likely to materialise, with the index rising to 14.4. US markets to consolidate The Dow Jones Industrial Average (17,122) has been inching higher and is now in a resistance area. Quarterly ROC and 21-day RSI have flattened, limiting the upside. In addition, if the VIX rallies, the Dow may correct. Support is at 16,600. The uptrend remains intact for now, and the target of 17,847 is still valid. The Standard & Poor’s 500 (2,000) is likely to experience a temporary correction, as it has moved into a resistance zone and both it and its indicators are losing steam. Quarterly ROC and 21-day RSI are beginning to turn down from resistance highs. Immediate support is at the 50-day moving average at 1,964. There is an upside of 2,072, which could still be attained eventually.>
Twitter Inc decided last year to make images more prominent on its site. Now, the social network is finding itself caught between being an open forum and patrolling for inappropriate content. The pattern goes like this: A major public death spreads graphic images across Twitter. Users express outrage, forcing the company to decide what to remove. Two recent incidents illustrate the difficulty of the choice. While Twitter is taking pains to remove images of the death of James Foley, the journalist who was beheaded by Islamic militants, some photos of the body of Michael Brown, the teenager who was killed by police in Ferguson, Missouri, remains on users’ streams. To many on Twitter, images of violence against Foley can be seen as spreading a terrorist’s message, while publicising Brown’s death shines a light on a perceived injustice. “They’re letting the masses decide what should be up and what should not be up,” says Ken Light, a professor of photojournalism at the University of California, Berkeley. “When it’s discovered, it needs to be dealt with promptly. The beheading video should never go viral.” The dilemma faced by Twitter, a proponent of free speech and distributor of real-time information, is not much different from that of a newspaper or broadcaster, according to Bruce Shapiro, executive director of the Dart Center for Journalism & Trauma at Columbia Journalism School. “Twitter’s situation is exactly like that of a news organisation,” Shapiro says. “Freedom of the press and freedom of expression doesn’t mean that you should publish every video no matter how brutal and violent.” The incidents also happened just after Robin Williams’ daughter Zelda said she was quitting Twitter after receiving abusive messages following his death. “In order to respect the wishes of loved ones, Twitter will remove imagery of deceased individuals in certain circumstances,” the San Francisco-based company said in a policy that was enacted two weeks ago. “When reviewing such media removal requests, Twitter considers public interest factors such as the news worthiness of the content and may not be able to honour every request.” Twitter’s software is not designed to automatically filter all inappropriate content. The company’s Trust and Safety team works in all time zones to stamp out issues once they are discovered, according to Nu Wexler, a spokesman for the company. Twitter uses image-analysis technology to track and report child exploitation images, Wexler says. Twitter does not specifically prohibit violent or graphic content on its site — only “direct, specific threats of violence” and “obscene or pornographic images”, according to its terms of service. It may need to go further, if Facebook Inc’s experience is any guide. In October, around the time Twitter started displaying images automatically in people’s timelines, Facebook was dealing with an uproar over a separate beheading video that was spreading around its site. The company resisted taking it down until user complaints intensified, including from UK Prime Minister David Cameron. Then, Facebook changed its policies. “When we review content that is reported to us, we will take a more holistic look at the context surrounding a violent image or video,” the Menlo Park, California-based company said at the time. Facebook said it would “remove content that celebrates violence”. Now that Twitter is encouraging images and video, it will also need to take another look at its rules, says Columbia’s Shapiro. “I don’t think a blanket rule is the point,” Shapiro says. “You do need a company policy that recognises that violent images can have an impact on viewers, can have an impact on those connected to the images, and can have an impact on the staff that have to screen this stuff. You can’t ignore Twitter’s role in spreading these images.”
Big-name CEOs commanding outsized remuneration packages were once thought to be the best type of leaders to drive the performance of their companies, lifting the numbers along by sheer force of their equally outsized personalities. Yet, all that perception was turned on its head when the global financial crisis of 2008 struck. “Many people were panicking. They didn’t know why the crisis was happening,” says Amy Ou Yi, assistant professor of management and organisation at the National University of Singapore Business School, in an interview with Enterprise. “Many of the bigego CEOs of Lehman Brothers and other Wall Street firms were blamed. They were drawing lots of compensation even though their companies were doing badly.” Overnight, some of these big names became the object of scrutiny and disdain by the public, the media as well as business school researchers and management gurus as they tried to analyse what made these CEOs behave the way they did. They also blamed the CEOs for the collapse of their companies, associating them with negative terms such as “narcissism”, “hubris” and “overconfidence”. Surveying the debris from the financial crisis, Ou wondered whether there were other CEO leadership characteristics that could have a more positive impact on their organisations. This led to her formulating her hypothesis and conducting a multi-stage research based on the other extreme: the impact of CEOs who show humility in their companies, demonstrating traits such as being virtuous, moral, ethical, participative, empowering, and a servant leader. The result was her thesis “Humble CEOs’ connections to top management team integration and middlem managers’ responses”. This paper, published recently in the journal Administrative Science Quarterly, concludes that CEO humility has a positive impact on the management hierarchy among of dozens of privately held China-based companies. Specifically, a humble CEO will result in the top management team’s working more tightly together, which in turn creates the perception among the next layer down — the middle managers — of empowerment as part of company culture. This leads to work engagement, effective commitment and job performance. Not omnipotent To be sure, the concept of the “humble CEO” is not new and has been studied by top management gurus such as Peter Drucker and Jim Collins. But what Ou did in her study was to find out how CEO humility affected the performance of the company. Such a study is important because a humble CEO might be better suited for the current business environment, which is uncertain and complex like never before and sometimes described with the acronym Vuca, or “volatile, uncertain, complex and ambiguous”. Thus, instead of saying, “I know everything”, CEOs should recognise that they are not omnipotent and say, “I need to work with my associates so that we can figure out what’s going on”. In the meantime, they should respect them and empower them to work better, says Ou, who holds a doctorate from the University of Arizona and worked in companies such as Swire Properties Ltd in Hong Kong before moving to academia. Ou says current and former CEOs who do not belong to the “big ego” category include John Mackey of organic produce retailer Whole Foods Market Inc, Eric Schmidt of Internet giant Google Inc and Jeff Bezos of Amazon.com Inc, the world’s largest online retailer. “If you look at their conversation with other people on how they manage companies, they come across as humble,” she says. While it is tempting to draw a link between a humble CEO and financial performance, Ou’s paper focuses on the dynamics within privately held mainland Chinese companies. A related, but separate, study is being drafted and has established positive links between the level of humility of CEOs of American IT companies and their return on assets, she adds. For the present study, a total of 63 CEOs, 328 top management team members, and 645 middle managers were surveyed. Ou explains that while large, listed corporations, which tend to be state-owned giants, would offer more quantifiable data that can be linked to performance, she chose to focus on privately held companies that are relatively smaller, as state owned enterprises (SOEs) have various other levels of governance and regulation, which can dilute the results of CEOs’ decisions. More than half of the companies are in service or trading industries, while 41% are manufacturers. The headcount of the companies vary from less than 100 to 12,000, with most about 1,000. The companies have been in business for as few as six years to as long as 56 years. The CEOs’ average age is 41.7 years, perhaps reflecting the fact that 71% of them are the companies’ founders; their average tenure as CEOs is just under eight years.
CapitaLand today announced that Jason Leow, currently CEO of CapitaLand China (CL China), will be appointed as CEO of CapitaMalls Asia (CMA) with effect from 15 September 2014. He will take over from Lim Beng Chee, who has decided to take a personal sabbatical and will leave CapitaLand by 31 December 2014. With Leow taking over as CEO of CMA, Lucas Loh, currently Deputy CEO of CL China, will succeed him as CEO, CL China, with effect from 15 September 2014. Both Leow and Loh will report to CapitaLand’s President & Group CEO, Lim Ming Yan. Leow started his career with the CapitaLand Group in 1994 and has been based in China for the last 13 years. He was appointed CEO, CL China in 2009. He has since led the China teams in streamlining as well as growing the residential and integrated development businesses including the development and operations of the eight Raffles City projects in China. Loh joined the Group in September 2001 and has been based in China since August 2004. He held various appointments including Regional General Manager, South China from 2007 and as Chief Investment Officer of CL China since 2009. He was appointed Deputy CEO of CL China in 2012.
Global Yellow Pages said the company’s indirect wholly-owned subsidiary, Global Food Retail Group, has agreed to acquire all the intellectual property rights including recipes and formulas held Wendy’s Supa Sundaes (WSS) and Innovation Ice Cream (IIC) for a consideration A$10 million ($11.67 million). Wendy’s Supa Sundaes is an iconic brand of desserts and treats with a store network of 209 stores (both corporate and franchised stores) across Australia and 35 stores across New Zealand. The IIC recipes are used to manufacture high quality cold dessert products such as ice-cream, slushy, powder products, frozen yoghurt and sugar infused fruit products. The seller WSS owns the iconic brand of Wendy’s Supa Sundaes and is in the retail franchisor business of desserts and treats with a store network in Australia and New Zealand. IIC owns the IIC recipes and is in the business of the manufacturing, production and supplying of high quality cold dessert products to the retail franchise business and other third party customers. The sellers are ultimately owned substantially by Navis Capital Partners who acquired the business in July 2006. Global Yellow Pages said it has been striving to diversify the company’s business so as to expand its operating base and enhance shareholders’ value. In this regard, the company has been actively looking at new business opportunities outside of its existing businesses such as the areas of real estate and food and beverage. As part of this strategy the company invested in Yamada Green Resources which operates one of the largest mushroom cultivation bases in Fujian Province in China last year. Wendy’s Supa Sundaes is a major retailer of ice-cream, drinks and snacks with over 240 stores across Australia and New Zealand. The brand of Wendy’s Supa Sundaes is well-established in Australia and New Zealand and the company believes there is significant potential for further expansion of the ice-cream retail business in Asia, especially China.