No One Knows Why Google’s Stock Is Soaring, But Stranger Things Have Happened

 

Yesterday, Google's stock hit a new all-time high. It's up again this morning.

These moves cap an extraordinary run in which Google's stock has surged more than 30% since July, when it traded around $560.
So, what gives?
Why is Google flying?
I did an informal survey via Twitter yesterday, and here's what I heard back (combined with some of my own thoughts):

• Motorola is proving to be less of a disaster than people expected (and Google is selling off some of the really crappy parts)
• Everyone is realizing that Facebook isn't really a threat to Google's core business and that Facebook is not "the next Google."
• The core business, search, is still growing like a weed.
• Android, Google's mobile operating system, is the world leader, and it continues to gain market share at almost everyone's expense.
• Android-based phones are finally as good as Apple phones, and Google's new tablet has also gotten rave reviews.
• Founder and new CEO Larry Page has re-energized the company.
• Stock-market investors are starved for "Growth At A Reasonable Price," and Google's stock provides that
• Money is rotating out of Apple and into Google

Now, none of those reasons alone is enough to drive a big stock like this up 30%, but taken together, they're good news.
The real driver of Google's stock, of course, is the ongoing strength of the company's financial performance.
Five years ago, when Google's stock was on fire for the first time around, I suggested that it could eventually hit $2,000 a share. The "eventually" in that case was defined as "a couple of decades," which is a very long time period (and which actually wouldn't lead to a very compelling long-term return).
In sketching out that analysis, I made some back-of-the-envelope cash flow projections. Five years later, it's interesting to look back and see how things have progressed.
The most surprising thing about Google's performance over the last 5 years is that Google's cash flow is grown even faster than I thought it could. The stock's multiple has compressed, but Google's business has delivered more than most people expected it could, so the stock has done well despite the lower multiple.
In 2007, when Google first crossed $700, the company generated just over $3 billion in free cash flow.
This year, Google should generate at least $12 billion.
That's well ahead of where most people imagined they would be by now.
To put the $12 billion in context, it's more than twice Facebook's revenue (let alone cash flow).
It's also more than all but a handful of companies on earth. And it comes despite Google investing in a bizarre array of projects that have nothing to do with its core business, including self-driving cars and wind power.
So, here's to Google for putting up such extraordinary numbers.
Relative to the ~$12 billion of cash flow, the stock is now a bit pricey--~20X cash flow--but it's within the realm of reasonable.

IJM Corporation; Buy; RM5.11

Price Target: RM7.00; IJM MK
Acquires strategic stake in Scomi
IJM has entered into the following subscription agreements with Scomi Group (Not rated) in relation to the
proposed investment of up to a 35% equity stake for RM149.3m.
(a) subscription of 119.1m new ordinary shares of RM0.10 each representing 10% of the existing issued and
paid-up share capital for a total cash consideration of RM39.3m (or RM0.33 per share); and
(b) subscription of redeemable convertible secured bonds of nominal value of RM110m in cash. Scomi has the
option to redeem the bonds in cash at each anniversary of the issue date where the redemption price will be
the nominal value of the bonds plus 10% yield for each full year that the bonds remain outstanding. IJM has
also the option to convert the bonds into new ordinary shares of Scomi at a conversion price of RM0.365 per
Scomi share (translating to 301m shares or 25% of existing issued share capital).
The total acquisition cost of up to RM149.3m is comfortably financed via IJM’s internally generated funds
given its comfortable net gearing of 0.39x as at 30 June 2012. We think the acquisition price appears fair
which is at a 33% discount to its latest quarterly NTA of RM0.49/share and strong prospects going forward
largely driven by Scomi’s 43%-owned Scomi Marine.
Scomi Group recorded revenue and pretax profit of RM850m and RM44m for 1H12, which is a 8% and 27%
increase y-o-y respectively. This was driven by an increase in EBIT from its oilfield services (+11%) and energy
logistics (+94%) divisions while its transport solutions division was in the red. The losses were due mainly to
forex loss for its monorail projects in Mumbai and Brazil. Scomi Group’s gem is Scomi Marine which focuses
on the energy logistics sector, particularly coal mining in Indonesia. It owns 32 tug-and-barge sets and 11
offshore support vessels to service its RM450m outstanding order book. The Group is also in the midst of a
restructuring where Scomi Marine will acquire Scomi Oilfield Ltd (SOL) from its parent Scomi Group. It
controls close to 50% share of the supply of drilling fluids and drilling waste management services in Malaysia
and has an established footprint overseas. A key catalyst could be potential contracts for marginal oil fields.
All in, we are positive on this deal as it will give the group an immediate entry into the growing oil and gas
sector. There are also synergies to be realised between Scomi’s transport and engineering business with IJM’s
impeccable track record in construction and civil engineering.
We maintain our BUY rating and SOP-derived TP of RM7.00 for IJM.

Colors! Samsung's Galaxy Camera pops at Photokina with vibrant orange and magenta paint jobs

By Zach Honig posted Sep 18th 2012 7:54AM

Hands-On

Another Photokina star is Samsung's Galaxy Camera, which launched to much fanfare several weeks ago at IFA, but dominates the company's photo-themed booth at the biennial photography show in Cologne, Germany. There's not much more to report on the hardware side, apart from confirmation that certain versions of the Android snapper will pack LTE, but there are indeed some very shiny new finishes to gawk at. First up is a bright orange flavor -- if you feared that the Galaxy point-and-shoot's rather large footprint wouldn't attract enough attention on its own in the field, you shouldn't have any such concerns with an orange model. Also of the neon persuasion is a flashy pink version, which like the aforementioned color, should draw many an eye. We were quite pleased with the black and white models we saw at IFA, and while Samsung clearly has a few colorful prototypes in circulation, the company says they're only being considered at this point, with your feedback determining the final options. So, what do you think? Would you buy an orange or pink Galaxy Camera? Let us know in the comments after the break.

Homebuilder confidence surges to 6-year high

Enlarge

Mel Evans, AP

LOS ANGELES (AP) -- Confidence among homebuilders rose this month to its highest level in six years and many expect the housing recovery to strengthen in the next six months.

The National Association of Home Builders/Wells Fargo builder sentiment index increased to 40, from 37 in August. That's the highest reading since June 2006, just before the housing bubble burst.

A reading below 50 indicates negative sentiment about the housing market. The index hasn't topped that level since April 2006, peak of the housing boom.

But a measure of builders' outlook for sales the next six months rose to 51. That's up from 43 in August and also the highest level since June 2006.

The survey is based on responses from 445 builders. It has been trending higher since October.

Fed seen launching fresh stimulus, details in question

September 13, 2012

Bernanke has stated that the Fed will act to cut the US unemployment rate. — Reuters pic

WASHINGTON, Sept 13 — The US Federal Reserve appears set to launch a third round of unconventional monetary stimulus today while signaling that a weak US economy may warrant ultra-low interest rates for at least another three years. Not everyone believes the Fed will embark on another bond- buying spree, and plenty of doubts remain about the likely efficacy of such a move.
But Fed Chairman Ben Bernanke has made clear the central bank will not sit idly by while unemployment, currently at 8.1 per cent, remains so far above levels consistent with a healthy economic recovery.
Many economists are confident the Fed’s policy-setting Federal Open Market Committee will deliver a third round of quantitative easing, or QE3. On median, they see a 60 per cent chance, according to a Reuters poll.
The FOMC will announce its decision at about 1630 GMT at the close of a two-day meeting.
“The market is firmly in the camp that the FOMC will deliver; it’s just a question of how much,” said Brad Bechtel, managing director at Faros Trading in Stamford, Connecticut.
Indeed, the likely details of any decision to purchase bonds — including the size and composition of any new asset purchase plan — are the subject of heated debate.
Many economists see the Fed leaning toward an open-ended bond-buying program that is conditional on the path of the economy, rather than lump-sum amounts with pre-established end dates as done in the past.
This could help carry the economy through the looming risks of a deeper European debt crisis and the looming tax break expirations and government spending cuts known as the US fiscal cliff. Many economists believe businesses have already retrenched out of fear the economy could hit the shoals.
US economic growth cooled in the second quarter, coming in at a tepid 1.7 per cent annual rate, and forecasters do not believe it is doing much better now.
Employment data showed just 96,000 jobs were created last month, less than needed to keep up with population growth, hardening forecasts of an aggressive Fed move.
Growing expectations of further bond purchases have helped support US and global stocks in recent weeks. Markets could be in for a steep sell-off if the Fed stops short of the expected action, while the dollar would probably rally.
Whether or not it buys bonds, economists widely agree the central bank will push back its estimate for when interest rates will finally rise. Since January, it has said it would likely keep borrowing costs near zero through at least late 2014; it is expected to push that date into 2015.
An hour and a half after its decision, the Fed will provide fresh forecasts that could show softer projections for economic growth and higher unemployment, which would help provide a rationale for any policy move.
Fed Chairman Ben Bernanke will discuss the Fed’s decision during a news conference at 1815 GMT.
The Fed’s toolbox is considerably depleted in the wake of the financial crisis and deep recession that caused the central bank to cut official rates to zero and more than triple its balance sheet to US$2.9 trillion (RM9.2 trillion).
But policymakers do have a few tools, additional bond purchases chief among them. Some analysts believe the Fed will opt for mortgage-backed securities purchases, which it conducted during the first round of QE, in an effort to give an extra push to a nascent US housing recovery.
Most likely is a mix of Treasury bond and mortgage debt purchases, which would be aimed at putting downward pressure on already-low long-term borrowing costs. In the process, the Fed may choose to nix its current plan of selling short-term notes to buy long-term bonds, known as Operation Twist, if it feels the new measures supersede the program.
Given that interest rates are already so low, with the yield on the benchmark 10-year Treasury note at just 1.76 per cent, many economists worry such steps would not address a fundamental problem in the economy — weak consumer spending driven by a dismal job market.
Indeed, many Republicans and a number of Fed officials feel the central bank has done more than enough already to try to spur growth. The prospect of a further easing of monetary conditions has put the Fed in an unusually bright political spotlight with less than two months before the presidential election.
Republican presidential nominee Mitt Romney has said he doubts QE3 would do much good.
Fed officials, however, have vowed to ignore politics, and with some consumers and businesses complaining about access to credit, they hope further bond buys prompt banks to lend more freely. — Reuters

Official iPhone 5 Trailer

IPhone 5 Official Ad

iPhone 5 officially announced with 4-inch display, A6 CPU and LTE

By Terrence O'Brien posted Sep 12th 2012 1:13PM

Breaking News

Apple may be notoriously secretive and tight lipped, but the company appears to be getting worse and worse at actually keeping things under wraps. The iPhone 5 appears to be the most leaked handset in existence. Thankfully, the suspense is over, the next-gen iPhone is finally here and it does, in fact, go by the numerical title of 5. Just like the parts that have been circulating this is a glass and aluminum affair and, at 7.6mm it's a full 18 percent thinner than the 4S. It's even a full 20 percent lighter at 112 grams. It's all those amazing things and it packs a larger 4-inch display. The new version of Apple's Retina panel is 1136 x 640, which clocks in at a more than respectable 326ppi. It also sports better color saturation with full sRGB rendering
That new longer screen allows for an extra set of icons to be displayed on the home screen, and first party apps have already been tweaked to take advantage of the additional real estate. The iWork suite, Garage Band and iMovie have all been updated. Older apps will still work too, though they'll be displayed in a letterbox format until an update is issued. The tweaked ratio puts the iPhone 5 display closer to 16:9, but it's not quite there.
The most exciting news is likely the addition of LTE. There's still HSPA+, EV-DO, EDGE and all that jazz on board, but it's the true 4G that is really generating excitement. In the US Sprint, Verizon and AT&T will all be able to take advantage of the single chip data and voice LTE solution inside. And, if you're stuck on one of those tiered data plans, the 802.11 a/b/g/n antenna should help you keep your wireless usage in check.
If the brand new radios weren't enough of a raw spec update to get your geek blood pumping, the new A6 CPU inside should push you over the edge. Apple claims its a full two times faster than the chip inside the 4S, but we'll have to wait and see how accurate that assertion is. The A6 is reportedly 22 percent smaller than its predecessor, which probably helped Cupertino achieve such slim dimension on the iPhone 5 and it's also more energy efficient -- allowing the handset to chug along for 8 hours of talk time, despite the addition of LTE. Keeping your data usage to Wi-Fi will allow you to milk up to 10 hours out of the device.

iPhone 5

Developing...

Analysts: Short-term upside to KNM

KUALA LUMPUR: KNM Group Bhd's shares shot up by 6.1 per cent yesterday after the oil and gas services provider announced plans to list its German unit, Borsig on the Singapore Stock Exchange next year.

"We understand that KNM expects the listing to be launched in mid-2013," an analyst from RHB Research said.

The shares rose by 4 sen to close at 70 sen, off an intra-day high of 71 sen.

Analysts say there is short-term upside to KNM's share price given the positive news flow, but over the long-term, they expect weak sentiment towards the shares to prevail.

Most had either a "hold" or a "sell" call on the stock.

KNM, which reported a net loss of RM83.4 million last year, had said late Thursday in a stock exchange filing that the indicative valuation for Borsig was between RM1.8 billion and RM1.9 billion.

This is just a slight premium to the RM1.7 billion cash that KNM paid to acquire 100 per cent of Borsig in 2008.

OSK noted that if KNM disposes off a stake of between 25 per cent and 30 per cent in Borsig, the listing exercise could fetch it up to RM540 million based on that valuation.

"Hence, the company would turn net cash in the financial year 2013 and the exercise should reduce the intangible assets on KNM's balance sheet as we believe bulk of it was made up of the Borsig acquisition. (It's) positive for the share price in the short term," it said.

OSK has put its recommendation and fair value for KNM's stock under review pending further updates from the group. It had previously pegged a "neutral" call and fair value of 80 sen.

KNM bought Borsig in 2008 to be able to move up the process equipment value chain and get access to the latter's client base in Europe.

It is understood to want to list Borsig to raise capital to be able to further expand the latter's operations. As it stands now, Borsig is responsible for the majority of KNM's high gross margin contracts.

"On top of the new shares, we expect KNM to sell some of its shares in Borsig to raise capital for itself, given its large debt of RM1.14 billion currently," RHB Research said.

However, KNM isn't expected to divest too much of Borsig given that the latter is where it derives all its high-margin projects. Borsig has been KNM's core earnings generator, with net profit of between RM112 million and RM141 million a year over the past three years.

RHB believes KNM may own 70 per cent of Borsig post-listing. It maintained a "market perform" call on KNM, with a fair value of 74 sen.

Maybank Investment Bank Research said the proceeds from the listing would be timely to fund the equity portion of KNM's waste-to-energy power plant venture in Peterborough, the UK.

The build-own-operate project, which will cost about RM2.1 billion, should commence construction in 2013.

It said the Peterborough project, if executed well, would provide KNM with a steady income from 2016 and transform its currently purely cyclical business model.

Read more: Analysts: Short-term upside to KNM http://www.btimes.com.my/Current_News/BTIMES/articles/knmb/Article/index_html#ixzz25tM0xeDY

Food prices jump will hit poor, World Bank warns

 

A severe drought in the US has led to many farmers having to abandon their 2012 harvest

 

 

Global food prices have leapt by 10% in the month of July, raising fears of soaring prices for the planet's poorest, the World Bank has warned.

The bank said that a US heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs.
The price of key grains such as corn, wheat and soybean saw the most dramatic increases, described by the World Bank president as "historic".
The bank warned countries importing grains will be particularly vulnerable.
From June to July this year, corn and wheat prices each rose by 25% while soybean prices increased by 17%, the World Bank said. Only rice prices decreased - by 4%.
In the United States, the most severe, widespread drought in half a century has wreaked havoc on the corn and soybean crops while in Russia, Ukraine and Kazakhstan, wheat crops have been badly damaged.
The World Bank said that the use of corn to produce ethanol biofuel - which represents 40% of US corn production - was also a key factor in the sharp rise in the US maize price.
Overall, the World Bank's Food Price Index - which tracks the price of internationally traded food commodities - was six percent higher than in July of last year, and one percent over its previous peak, in February 2011.
'Lifetime of perils' The organisation is urging governments to bolster programmes to protect their most vulnerable communities from the increase in the cost of food.
"We cannot allow these historic price hikes to turn into a lifetime of perils as families take their children out of school and eat less nutritious food to compensate for the high prices," World Bank President Jim Yong Kim said.

(Versi Penuh HD) Kejadian Serangan Oleh Perkasa Di Masjid Seberang Pumpong

N Suendran: UMNO Is Legalizing Criminal Conduct By Supporters

Apple adds Samsung's Galaxy S III, Galaxy Note and Galaxy Note 10.1 to ongoing patent lawsuit

posted Aug 31st 2012 9:39PM

The Apple v. Samsung patent war that will seemingly never end has taken another turn today, as Apple is asking the court to add newer Samsung Galaxy hardware, including the Galaxy S III, Verizon Galaxy S III, Galaxy Note and Galaxy Note 10.1 to its complaint against the Galaxy Nexus and other related devices. If you thought updated software and designs would keep these newer smartphones and tablets out of the fight -- you were wrong. Just to help you keep things straight, remember this is a separate case from the one that ended exactly a week ago with a decision in Apple's favor to the tune of more than $1 billion in damages.
At issue here are eight of Apple's utility patents that it says Samsung has infringed upon. The headliner patents at issue are '721 which covers slide to unlock, and '604, which could apply to the universal search feature Samsung has been pulling from its phones recently. Another familiar entry is the '647 patent Apple slapped HTC with in 2010, which has a vague description but applies to clicking on a phone number in an email, for example, to call it. You can read the details on each and every one in the PDF linked below, we'll be doing... anything else.

Max Planck Institute sequences genome of Siberian girl from 80,000 years ago, smashes DNA barriers

We've known little of the genetic sequences of our precursors, despite having found many examples of their remains: the requirement for two strands in traditional DNA sequencing isn't much help when we're usually thankful to get just one. The Max Planck Institute has devised a new, single-strand technique that may very well fill in the complete picture. Binding specific molecules to a strand, so enzymes can copy the sequence, has let researchers make at least one pass over 99.9 percent of the genome of a Siberian girl from roughly 80,000 years ago -- giving science the most complete genetic picture of any human ancestor to date, all from the one bone you see above. The gene map tells us that the brown-skinned, brown-eyed, brown-haired girl was part of a splinter population known as the Denisovans that sat in between Neanderthals and ourselves, having forked the family tree hundreds of thousands of years before today. It also shows that there's a small trace of Denisovans and their Neanderthal roots in modern East Asia, which we would never have known just by staring at fossils. Future discoveries could take years to leave an impact, but MPI may have just opened the floodgates of knowledge for our collective history.

Nokia Lumia 920 coming with 8-megapixel FauxView?

posted Sep 3rd 2012 10:15AM

Yes, we want PureView technology in at least one of Nokia's forthcoming Lumias. But let's be specific: it needs to be that same type of PureView that helps the 808 to take such amazing images, with something at least similar to that 41-megapixel sensor. That's why it's slightly perturbing to hear The Verge's suggestion from "sources familiar with the matter" that the Lumia 920 will ship with a paltry 8-megapixel version of PureView, which doesn't sound like it could deliver the same noise reduction or lossless zoom or other powers. With the expected announcement just two days distant, let's hope it ain't so.

Malaysia avoids default with EDL takeover

September 03, 2012

KUALA LUMPUR, Sept 3 — Creditors facing a potential default on the MRCB Southern Link project bonds have been offered a lifeline after the federal government said last Thursday that it would take over the new Eastern Dispersal Link (EDL) in Johor Baru from the troubled concessionaire.
Fears that MRCB Southern Link was heading for a default in as little as four months prompted the government to step forward. The saviour in this case, however, was also the offender: it was the government’s ban on collecting tolls for the new highway project that caused default concerns in the first place.
The fact that the toll ban is legal under a concession agreement highlights the regulatory risks faced in privatised projects in the country.
The timing is not great for such a lack of regulatory clarity. Malaysia is in the middle of ramping up a massive infrastructure development programme that will need billions of dollars from the bond market. The federal government is on a RM230 billion programme to build a host of infrastructure projects, including power plants, toll roads, railways and property projects.
Some of the projects have already been awarded to private operators and tapped the market this year, including Prasarana’s RM2 billionn dual-tranche deal two weeks ago, Tanjung Bin’s RM3.29 billion funding in March and Tenaga Nasional’s RM4.85 billion financing last year.
Infrastructure projects are expected to drive the ringgit bond market to a record RM100 billion in volume this year, surpassing last year’s gross volume of RM67 billion.
But the government has shown in the past that it is not immune to public sentiments. It has interfered and caused concession agreements to seize up. After the global financial crisis, the government halted toll rate hikes in several projects, forcing some bond issuers to restructure debt.
The latest stumble came in March this year. The federal government banned MRCB from implementing toll charges on a newly completed EDL in Johor Baru. That road opened on April 1 and has since then seen no cashflow.
The concessionaire managed to meet its previous interest payment obligations. But investors were not certain the next payment, due in December, would come through. RAM Ratings suggested as much when it reported that MRCB made an unexpected RM40 million payment to its engineering, procurement and construction contractor, despite private assurances that it would keep aside enough funds to pay the interest in December.
This leaves only RM21 million in the company’s cash reserves, hardly sufficient to meet a RM47 million cumulative interest payment due December 21 on its RM1.04 billion senior and junior sukuk, as well as on a RM220 million syndicated bank loan. The shortfall is a reason RAM Ratings downgraded the long-term ratings on the RM845 million senior bond to BB3 from A2 and the RM199 million junior sukuk to C1 from BBB2.
Earlier last week, there was no sign from MRCB that it planned to fund any shortfall in meeting the debt obligations, the RAM report said. The company has not breached any of the technical covenants in the bonds, and the payment to the EPC contractor has not triggered an event-of-default clause for bondholders.
If MRCB defaulted on its payments, it would be one of the first toll road concessionaires to do so.
A default would impinge on an otherwise booming bond market. MRCB had been in talks since March with the federal government about plans for compensation in lieu of the toll revenues. But the discussions had dragged on without any conclusive details until last Thursday.
Officials from the Prime Minister’s Office said the government would take over the project but it was short on details. Final details of the takeover are expected only before the end of December. But the market will expect the government to take on the debt and possibly impose a smaller toll than the proposed RM6.20 under the original concession.
The government’s move was not completely unexpected. It has resolved troubled concessionaires in the past by extending the concession, reducing the toll or water rate, or buying bonds.
In June, the government established Pengurusaan Air, which sold a RM5.8 billion sukuk in June 11 to buy various debt facilities from several water concessionaires.
“Regulatory risks have increased compared with the past, but the government has in general shown that it would treat equitably those concessionaires hurt by its edicts,” said one credit analyst.
But detailed negotiations for MRCB may be impeded by an impending general election that could make decision-makers wary of undertaking any unpopular actions. Elections were expected to take place after September. But preparations for the Haj in October and the annual Umno assembly in the last quarter of the year may further push back the elections to next year.
In the meantime, the company is thought to be seeking creditors’ consent to amend terms on its sukuk, particularly to waive certain covenants such as the finance service reserve account bank guarantees to allow drawdowns for the toll road operations to continue. — Reuters

Waytha: '1Malaysia is a joke'