The Most Likely Golden Boot Winner

The injuries to key players so near to the start of the World Cup were disheartening. Though many of them are fabulously rich already, many of them would have dreamed of being in the World Cup from the very start. That was what drove their passion, money kind of got in the way. You cannot buy a position to be playing in a World Cup tournament.



One of the more interesting betting schemes would be predicting the likely Golden Boot winner.

2010 World Cup Top Goal Scorer Odds

Villa, D	9	8	9	8	9.8	8	15/2
Messi, L	10	9	10	9	11	10	9
Rooney, W	11	8	10	10	12	10	10
Fabiano, L	12	11	12	12	15	12	10
Torres, F	12	12	12	12	16	12	12
Higuain, G	18	16	16	16	23	16	16
Ronaldo, C	18	16	16	18	19	14	16
Van Persie, R	-	25	22	20	23	20	25
Drogba, D	25	25	28	22	38	33	25
Nilmar	25	-	28	25	-	-	-
Milito, D	28	33	20	33	40	33	28
Klose, M	25	25	28	25	46	33	25
Negredo, A	-	-	33	-	-	-	-
Aguero, S	25	33	22	25	65	40	25
Benzema, K	-	-	-	-	450	-	40
Pato, A	-	-	-	-	370	-	40
Kaka	33	40	33	33	55	40	33
Tevez, C	40	33	33	33	44	33	33
Robinho	33	40	40	40	60	40	40
Podolski, L	50	40	50	50	80	50	40
Akale, K	-	-	-	-	590	-	50
Adriano	-	-	-	-	-	-	-
Mueller, T	-	-	-	50	-	-	-
Huntelaar, K	40	50	50	40	85	50	40
Gilardino, A	33	50	40	33	50	40	40
di Natale, A	50	66	66	50	60	50	50
Defoe, J	33	33	33	33	90	50	33
Eto`o, S	40	40	40	33	95	50	40
Guiza, D	-	-	66	25	1000	-	-
Robben, A	66	66	50	50	70	40	-
Pedro León, S	-	-	-	-	-	-	-
Henry, T	33	40	33	25	85	50	33

I totally agree with the odds as I do think David Villa is way under-rated when compared to the more popular Messi and the over-hyped Rooney (even though he is a Red Devil). I think Torres is a bit of a prima donna and plays like a woman, in that he has his period days and can get moody. Messi is a near God, no doubt about that, but he will be heavily marked in every game and that might free up his team mates to do the scoring rather than seeing him on the score sheet. That is why Gonzalo Higuain might be a decent bet at good odds. However, the consideration is that the poorly qualified coach that is Maradona, only called up Higuain in the last 2 qualifying matches, and that was after a lot of pressure from the media. Maradona may only use him sparingly.



To be a Golden Boot winner, we have to look at the teams they will be facing, and then how far down to the finals they will be playing. To that end, I still think Gonzalo Higuain is a good bet, with a smaller cover bet on Robin van Persie. Robin would have been more popular but Holland is likely to meet Brazil in the quarter finals, and that may limit the actual number of games one can play in the end.

What is your take?

After Greece and Portugal, We Have Hungary and Spain

This is like a Euro Soccer Championship gone very bad. We have Greece and Portugal is teetering as well. The EMU stepped in and markets were calmed ... for a while, now the unthinkable is happening, Spain is treading murky waters. It used to be that Spain and Italy were considered much like AIG ... too big to fail. Now we are all not so sure. Spain may still have some time and size on its side, but Hungary looks doomed now and should see fresh funds from somewhere before the end of June.



Sovereign debt worries in Europe have been elevated for a couple of months now, and today Hungary moved into the crosshairs. Sovereign debt default risk as measured by 5-year CDS prices has spiked for Hungary and the countries surrounding it today, but default risk for this region still remains well below levels seen in late 2008 and early 2009.

The first two charts below of 5-year CDS for Austria and Hungary since 2008 highlights this. Greece and Portugal default risk remains elevated as well, but at the moment it is still down from its recent peaks. France also remains elevated, but it is still below highs seen in early 2009.

The same can't be said for Spain, however. Spain default risk reached a new crisis high today, taking out levels seen prior to the trillion Euro bailout. And Spain matters much more than Hungary.

Hungary's fiscal position has improved in recent years, but the public debt burden, at just under 80% of GDP, remains hefty by regional standards. Hungarians overwhelmingly voted for the center-right Fidesz party in April 2010 elections, but questions remain over the new government's fiscal policy agenda. In early June, Hungarian markets reeled amid comments from Fidesz officials that the budget deficit would be much wider than the current 3.8% of GDP target for 2010, leading some to draw parallels with the situation in Greece. However, officials later backtracked on the comments.



On June 3, markets in Hungary came under pressure after State Secretary Mihaly Varga said he expected a budget deficit of 7-7.5% of GDP in 2010. Meanwhile, Lajos Kosa, deputy head of the ruling Fidesz party, said public finances in Hungary were such that Hungary only had a slim chance of avoiding a Greek-style fiscal crisis. In 2009, Hungary narrowly missed meeting the 3.9% of GDP budget deficit target set out under the terms of its US$25.5 billion EU/IMF-led loan agreement. The 2010 budget deficit target is 3.8% of GDP, but it is expected to be renegotiated under the new government.

The European Commission notes that Hungary almost met its budget deficit target of 3.9% of GDP in 2009. Parliament adopted the 2010 budget on November 30, 2009 that complies with the 3.8% of GDP deficit target for 2010 under the country's EU/IMF-led loan program (although the Fidesz government plans to renegotiate this target). Specific measures in the 2010 budget include: "a freeze of the public sector wage bill, reform in the pension system, saving measures in the area of social benefits as well as reduction in the level of housing subsidies and gas- and district-heating supports."

On May 21, 2010, the newly-elected Fidesz government warned that the budget deficit will increase in 2010 due to the discovery of additional debts in the outgoing government's budget. Fidesz officials stated that debts of 170 billion forints (US$757 million) have been uncovered so far, which represent 0.7% of Hungary's GDP, and that additional "skeletons" are likely to be found.

Cartoon For Our Era

Wonderings

How do you view this? Goldman Sachs International now has a 11.5% stake in Berjaya Corp. No matter what your views are of Vincent Tan or his Berjaya group of companies, you have to salute him in getting GSI onboard. If you ask all the analysts covering Malaysian stocks to recommend 3 counters for GSI to take up substantial stakes in, I can safely say that Berjaya Corp would probably not make the list at all. Its a wonderment, its probably the only time you can shake your head in disbelief but had to clap at the same time.



Goldman Sachs International ("GSI")
Peterborough Court, 133 Fleet Street, London EC4A 2BB, United Kingdom

Indirect/deemed interest (%)	:	11.5
Total no of securities after change	:	464,685,800
Date of notice	:	28/05/2010

GSI is a subsidiary of Goldman Sachs Holdings (U.K.), which is a subsidiary of Goldman Sachs Group Holdings (U.K.), which is in turn a subsidiary of Goldman Sachs (UK) L.L.C. The Goldman Sachs Group, Inc. is the direct holding company of Goldman Sachs (UK) L.L.C. and the ultimate holding company of the other aforementioned entities.

As if thats not enough, he still managed to get Temasek to pour billions into U-Mobile ... another round of head shaking and you just had to clap some more.



Next, lets look at Sime Darby's Annual Report 2009, in the first few lines of the Chairman's Message: "I am pleased to announce that the Group has reported a net profit after tax and minority interests of RM2.3 billion and a Return on Average Shareholders’ Funds (ROA SF) of 10.6 percent, exceeding our Key Performance Indicators (KPI) for FY 2008/09 of RM1.9 billion and ROA SF of 8.8 percent."

This was the headline of Ahmad Zubir's message as CEO: "On behalf of the Board of Directors, I am pleased to report that the Sime Darby Group has exceeded our Key Performance Indicators (KPI) for FY 2008/2009 despite the challenging operating environment during the year. The Group recorded RM2.3 billion in profit after tax and minority interests and Return on Average Shareholders’ Funds (ROA SF) of 10.6 percent, exceeding our Key Performance Indicators (KPI) for the year, of RM1.9 billion and 8.8 percent."

Just wondering whether KPIs are the best management tool we have, or are KPIs really effective after all??!! Don't shoot the messenger ....

JZ8 Gets Solid Reviews

Taiwan's top hifi magazine Audio Art posted a wonderful review of JZ8's album:

Click on link for high resolution pdf version:

http://www.poppop-music.com/jz8review.pdf














Article in Oriental Daily:

http://www2.orientaldaily.com.my/read//2JS40bU418090D8l01i56lOd0nVd23M7

Article in Sin Chew:

http://ent.sinchew-i.com/node/20984

Fiscal Deficits, Current Account Surplus & Asset Class Returns As At May 31, 2010

Wow, May was THE month alright. Look at the returns for May. Everything were red except for US bonds. May was the worst month for the major asset classes since the dark days of February 2009. Virtually everything suffered with more than trivial losses. Treasuries were the exception, thanks to the revived rush to safety.

Stocks around the world led the decline, with foreign developed markets posting the biggest loss among the major asset classes. What changed the sentiment so sharply in May? A renewed fear of deflation was one catalyst. Investors are increasingly focusing on the growing burden of debt that weighs on the global economy, particularly in the mature countries of Europe, Japan and the U.S.

It was inevitable that the surge in asset prices across the board would come to an end. That doesn’t mean that expected risk premiums are nil or negative. But the investment landscape ahead is set to become more complicated. In the spring of 2009, as it became clear that the global economy wasn't going to implode after all, the markets repriced assets accordingly. Markets are no longer trading in anticipation of another Great Depression.



We may have avoided another Great Depression but we now have the The Winter of Euro-Discontent. To a large extent, we can say that this is more localised than the subprime mess. In another angle, the Eurozone crisis is a different version of the US/UK subprime mess as well.

The US and UK governments acted swiftly to contain the mess, by rescuing dubious companies that cannot be allowed to fail. The US government can print money liberally and even with an enlarged debt, the US is still the US. Not so for many of the governments in the Eurozone. If Greece was the US, Greece would not have been under such a spotlight. It would have been able to print its way out of its troubles.

What is real is we are going to see a long period of deflation within Eurozone, with equally weighty weights on the Euro currency, and other independent European currencies. Public debt or sovereign debt inhibits movements in or grandiose monetary policies. While they have to placate foreign buyers of the attractiveness of their bonds, they are hamstrung by not being able to do deficit-stimulus. Unemployment and social unrest will only climb.



All this will mean that other countries may be wanting to delay tightening, such as the US, China and a host of more vibrant emerging markets. When investors compare the EU with the rest of the world, its obvious. Then you STILL have a low interest rate regime everywhere, in fact a prolonged low interest rate environment - that will cause funds (now on the sidelines) to pour into the US and other emerging markets. The more EU plays out the cards they were dealt with, the more optimistic I am of a strong equity market for the US and emerging markets in 3Q and 4Q.

Technically, Japan is in a more difficult position with a huge fiscal deficit but they still have a current account surplus, and that should be the key in estimating the probable recovery by EU countries in crisis. Watch their current account movements and signs of improvement will mean they are on the mend. Well, we all know that that is not going to happen till 4Q2010 if not later.

As a side note, Malaysia looks impressive with its strong current account surplus, and owing to our deficit-stimulus funding, our fiscal deficit is a bit high but not exceedingly so. Being an emerging market economy, it would be wise to bring the fiscal deficit down gradually over the next 3 years.

Strategists Still Bullish On Year End Targets

Despite the volatility in the markets, most market strategists are still bullish. In fact a number of them have upped their forecasts for year end targets. My view is still the same, we will end the year near the highs, but I still see the best time to re-enter is after the World Cup season. Call it topical or market timing, I don't think anyone in their right mind would want to be holding stocks in May and June.

Bespoke: Bloomberg surveys sell-side Wall Street strategists on a weekly basis for their year-end S&P 500 price targets. At the start of 2010, the average year-end S&P 500 price target was 1,225, which would have been a gain of just about 10%. As markets moved higher in the first quarter, strategists upped their year-end targets, and the current average target stands at 1,268. (In the table below, green shaded price targets are ones that have been increased so far this year. No strategists have lowered their targets since the start of the year.) A target of 1,268 translates into a gain of 13.68% for the year and 16.48% from current S&P 500 levels.

There are no strategists with year-end targets that are lower than the index's current levels. Deutsche Bank currently has the most bullish year-end price target at 1,375, followed by UBS at 1,350, and JP Morgan, Oppenheimer, HSBC, and Bank of America. Citigroup is the least bullish at 1,175, which would still be a gain of 7.97% from here.