MTQ Corporation Limited

[kennynah]

in not so many words, you are then saying that it is fine by you, for your invested company to engage in shares speculation when its core business is not? yes?

again, another simplified example; your best friend happens to own St James club and seeing that his business is flourishing agreed to invest $100K to hold a % stake in his business. later, your friend uses company funds to purchase shares via IPOs and through open market...he doesn't tell you about it...

and abruptly, he offers you a handsome bonus payout saying the company made money from some shares transactions recently...and you are saying that's fine by you? yes?

[Musicwhiz]

In not so many words, I would at least look for an explanation on where the gains are coming from. If a company was investing money in ways which I find objectionable, then of course as a shareholder I would make some noise. If the noise is not effective, then I would sell my stake.

If a company was legitimately investing in another company (not share speculation, as I do differentiate between investment and speculation); then to me it is an acceptable method for delivering returns to shareholders. Say these investments pay dividends to the mother company, the dividends will flow back to their cash coffers and be paid out as dividends to shareholders. Essentially, this is the same as a retail investor investing in those companies himself.

The question you should perhaps ask is how do you separate share speculation from share investment. For that, I recommend Benjamin Graham's seminal text "The Intelligent Investor".

[kennynah]

since it is your opinion that investment and speculation are 2 different affairs, then let me rephrase my questions above...

what i am trying to learn from this exchanges, is your unequivocal and clarity of thoughts measured by the simplicity of your answers...

in not so many words, you are then saying that it is fine by you, for your invested company to engage in shares investment when its core business is not?

yes/no?

again, another simplified example; your best friend happens to own St James club and seeing that his business is flourishing agreed to invest $100K to hold a % stake in his business. later, your friend uses company funds to purchase shares via IPOs and through open market as a form of investment...he doesn't tell you about it...

and abruptly, he offers you a handsome bonus payout saying the company made money from some shares transactions recently...and you are saying that's fine by you?

yes/no?

[Musicwhiz]

Short and sweet eh? Yes for the first one. For second one - since it's an individual, maybe. But since I will have a chance to confront, I will ask as much as I can before I say "yes".

Thanks.

[kennynah]

kam sia... your time and thoughts appreciated...i mean it...

[Musicwhiz]

kam sia... your time and thoughts appreciated...i mean it...

You're most welcome, Kenny. I do hope I've made sense.

[kennynah]

my objective of these exchanges was to clearly understand your stand vis-a-vis using company funds for shares investment ...to this end, i have attained.

although, respectfully, i cannot bring myself to agree with your stand on this matter.

nevertheless, it was useful to me (in my own warped way) having engaged you in this discussion.

again...thanks...

[Musicwhiz]

Thinking about this issue a little more, perhaps I can offer a little more insights.

Many companies I know of have more than 1 arm, and some of these arms (i.e. either subsidiaries or associates) do engage in share investment as their core activity. For example, for MTQ Violetbloom is their investment arm and they use it to hold shares of investee companies; whereas MTQES is their Engine Systems arm, and so on. Even for Boustead, they do have companies which invest in other companies; while other divisions support their real estate arms, O&G arms and wastewater arms. These examples are just to illustrate that it's pretty common as the Companies are large and have many divisions (e.g. even Conglomerates like Keppel have such divisions for investment analysis).

Hence, a Group's use of funds should not be merely limited to "core activities", which may be defined in annual reports in a more stringent manner. If one scans through an Annual Report, under Principal Activities of Subsidiaries and/or Associates (in the Notes to Accounts), each company under the Group has its own defined set of core acitivities. You would notice that more than a few state "Investment Holding Company". So it may not be altogether so clear-cut as to whether a company is engaging in core activities or using funds for share investment, as long as the overall mandate is to enhance shareholders' value, then it is still under the purview of the CEO and Management Team.

Regards.

[ichew]

thanks for the exchange, guys.

i guess there is no right n wrong
white cat, black cat, can catch mouse is good cat
the key thing is as investor/ speculator, we need to go in with our eyes wide open

key qn is am i able to sleep well knowing my money is invested in MTQ?
ie can i trust in MTQ mgt investing coy's money in non-core biz or shld i be the one investing in other biz myself?
would i prefer to invest in a coy tat FOCUS on their core biz only?
whether there r other coys tat have investing divisions or not is not of concern

[Musicwhiz]

Good news, Bosch is opening its HQ in Bishan, and hopefully the sales growth will have a spillover effect on MTQ's Bosch Superstores!

May 13, 2010
Bosch opens $92m Bishan headquarters
It is able to house 1,000 staff and its R&D will focus on solar energy
By Marissa Lee

GERMAN conglomerate Bosch Group has opened a $92 million South-east Asian headquarters in Singapore, where it will sink €15 million (S$26 million) into solar technology research over the next five years.

Located at Bishan Street 21, the new facility takes up almost 21,000 sq m, and is able to house at least 1,000 staff. It currently houses all 500 of its local staff, and has enabled activities previously carried out at six different locations around the island to be brought under one roof.

'As you can see, we have left room for further growth...and we are ready for this growth,' Mr Franz Fehrenbach, chairman of the Bosch board of management, said in a speech at yesterday's opening.

Singapore is the regional hub for Bosch's Security Systems and Automotive Aftermarket divisions, as well as the first Asian site for Bosch Solar Energy.

The focus of the research centre here is organic photovoltaics, which can generate electricity from solar radiation.

Unlike their inorganic counterparts, organic photovoltaics use carbon compounds instead of silicon, resulting in lower material costs and less energy consumption during manufacture.

Bosch aims to produce organic photovoltaics with efficiencies of above 10 per cent, up from the 5 per cent it is at now, and has partnered the Nanyang Technological University for this endeavour.

A photovoltaic system costing over €600,000 has been installed on the Bosch building's roof, covering a surface area of more than 700 sq m and consisting of three different types of solar panels.

Produced by Bosch, the different systems are used for research purposes, but they also generate roughly 140 megawatt hours of electricity per year.

This, along with other green features, will mean the Bosch building consumes roughly 32 per cent less energy than the average industrial building, making it a showcase in green building technology, said Mr Fehrenbach.

Bosch is also eyeing opportunities for clean diesel with Bosch injection systems. It has been involved in a biodiesel field test here for the past two years, with results that saw emissions of test vehicles at least 95 per cent below the maximum limits permitted here.

Yesterday's opening was officiated by Trade and Industry Minister Lim Hng Kiang, who said that rapid urbanisation in Asia has spurred demand for urban solutions like clean energy, green building solutions, traffic management and security.

'Bosch invests over 45 per cent of its R&D budget in products that conserve resources and thus protect the environment,' said Mr Lim. 'It also generates one-third of its sales from these eco-friendly products.'

Mr Fehrenbach has a bright outlook for the region, despite sales in the Asia-Pacific last year being down 6 per cent from 2008.

'Asia-Pacific accounted for 20 per cent of Bosch Group's total sales in 2009, making it the second most important region for sales after Europe,' he said.

'We expect sales in Asia-Pacific to grow to 30 per cent by 2015.'