Wonder why nobody here's talking about this:
For those who rely on so-called analysts' reports or supposed "independent research".... you should really read this week's issue of TheEdge. Then your eyes will be opened.
There is no free lunch in this world.
Long time readers of SG TTI will know that I'm usually very critical of analysts' reports. Nothing against the analyst per say, but I know how this shit works.
Analysts reports are not free. You are paying for it indirectly by volunteering to be the bottom of the pyramid.
The plankton doesn't even know it when it gets swallowed by the whale.
Sucks to be the bottom of the food chain.
Independent analyst reports are never independent.
Think about it, you aren't paying for them, I sure as hell knows how much time and effort it takes to do deep value research that's comprehensive and reliable enough to be used for substantiation for a position, so why should anyone share it for free?
I can't find TheEdge's article, but a summary on Page 8 talks about how former Maybank Kim Eng remisier Kelvin Ang Wee Keng paid a $3000 bribe to an analyst at NRA Capital, Jacky Lee Chee Waiy to expedite a report on the valuation of PetroSaudi Oil Services, which is linked to the whole 1MDB saga.
This supposed "independent" report by supposed independent NRA Capital and the supposed "independent" Kevin Scully, inappropriately valued PetroSaudi at US $2.4bil using totally inappropriate reasons. The main assets for PetroSaudi was last transacted 7 years ago at only about $410mil!
I'll quote the article for this:
"For producing the report, NRA Capital was paid US $300,000 by Bridge Partners Investment Management. NRA Capital then paid US $245,000 of that to Ang as a referral fee"
"At Yeo Jia Wei's behest, Ang ensured that NRA Capital would meet a target valuation of US $2.4bil before giving it the mandate to produce the valuation report"
So here's my simple summary.
Yeo Jiawei (of 1MDB fame) ----> Kelvin Ang the remisier -------> asked NRA Capital to do an "INDEPENDENT" research report (but after your independent research, pls make sure the valuation is $2.4bil or more and in return you get $300k ok?) ----> NRA collects $300k and gives $245k back to Ang the remisier (wow. what a great pay day to be the middleman. Is this what remisiers do?) ---> Ang gives $3k to the analyst Jacky Lee Chee Waiy, to write the report.
Retail investors read the report and nod in unison and come on IN and say HUAT HUAT HUAT, can "jeep" already!
Kevin Scully gets 3 years prohibition order, Ang gets a $9k fine and 6 year prohibition order and Jacky gets 6 years prohibition order.
Too bad TTI doesn't make the laws. These guys should all get jail terms if you ask me.
Many people have gone to jail for stuff that are far less socially damaging than this.