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9 Dec 13:
The NAV of the Apollo Asia Fund rose 0.8% in November, to US$1,964.93; charts.

Burma's famous forests are being rapidly logged and deforested on the pretext of plantation development, with concessions granted mainly in conflict areas, according to this account in the Irrawaddy of a report from Forest Trends.

Maritime archaeology disrupted as China flexes muscle - a new twist to the clashes in the South China Sea. The New York Times recently published an atmospheric multimedia account of the Filipino front line, with excellent maps: 'A game of shark and minnow'.

1 Nov 13:
The NAV of the Apollo Asia Fund rose 2.8% in October, to US$1,949.83; charts.

28 Oct 13:
This account of a Pacific voyage reports a frightening loss of fauna, and pollution on a scale I had never imagined: 'The ocean is broken'.

3 Oct 13:
The 3Q report discusses overcomplexity and dysfunctionality; also why we have been selling some of our longstanding holdings, and the resilience we are seeking.

2 Oct 13:
The NAV of the Apollo Asia Fund rose 3.9% in September, to US$1,896.80, 5.3% below the May peak; charts.

6 Sep 13:
Petronas has added financial statements to its annual reports, back to y/e Mar08, and published them on its website. (We don't know when, but the website used to provide just the text.) Its revenue in 2012 was RM291bn, and capex RM46bn. It contributed RM80bn to federal and state governments, plus RM2bn to the National Trust Fund: together, 45% of consolidated government revenue. Income foregone due to the controlled price of gas was RM18.4bn, with this subsidy split between the power sector (RM10.3bn) and industrial users. The impact of the oil and gas windfall on the Malaysian economy over the last few decades is immense - and the energy surplus is now dwindling. A fully-informed debate on national priorities is long overdue, and reporting a welcome first step.

3 Sep 13:
The NAV of the Apollo Asia Fund fell 5.1% in August, to US$1,824.90; charts. The big hits came in Thailand, where the US$ value of our holdings fell 16%, with individual stocks down by between 14% and 21%; Malaysia (-7%); and Japan (-9%). The worst-affected stocks included some of the high-quality consumer stocks and high-growth consumer finance plays which have been popular in recent years.

2 Sep 13:
Two excellent postings on http://cgmalaysia.blogspot.com summarise the current debate on China Minzhong, the latest S-chip to tumble on publication of short-seller research. Lots of good reading in the Glaucus report and links - and in the Wikipedia entry on Glaucus atlanticus.

2 Aug 13:
The NAV of the Apollo Asia Fund rose 0.6% in July, to US$1,922.43; charts.

29 Jul 13:
'KL Kepong implicated in horrific allegations in Indonesian plantations' notes CG Malaysia: do also read the underlying report by Bloomberg Businessweek, 'Indonesia's palm oil industry rife with human-rights abuses'. The latter reports attempts by KLK over the last three years to tighten its supply chain and move to direct hiring: it would be good to hear from the company on the progress and challenges. There are many questions here for discussion with the managers of plantation and mining groups.

7 Jul 13:
The 2Q report has been posted.

2 Jul 13:
The NAV of the Apollo Asia Fund fell 4.5% in June, to US$1,911.46; charts.

10 Jun 13:
Gail Tverberg has noticed a flattening of per-capita oil consumption in China and India over the last two years: 'High oil prices are starting to affect China and India'. The figures for China may reflect its huge investment in gas pipelines (some splendid charts have been assembled by Phil Ebersole in 'The geography of pipelinistan)', and in nuclear and renewables, as well as the rising percentage of coal in its energy mix (shown in this chart from the useful Energy Export Databrowser). However, the statistics are interesting, and both articles recommended.

4 Jun 13:
The NAV of the Apollo Asia Fund rose 2.1% in May, to US$2,002.54; a glance at the charts should warn our investors to be prepared for significant retracement.

27 May 13:
In the 1Q report we wrote about Aeon Stores (HK), now facing competition from its Japanese parent in its home territory of Guangdong, after decades of investment in that market. Meanwhile, the listed company is apparently unable to find good uses for its growing cash balance, which at year-end exceeded shareholders' funds. Given all the efforts by minority shareholders to engage, we hoped to hear a clearly articulated strategy and appropriate discussion at the AGM - but the chairman did not bother to attend, no formal time was allotted for discussion or questions, and the independent directors said that their interest was only in compliance with HKEX rules. Such apparent lack of concern for minority shareholders may be one reason why the shares have fallen 26% since the competing investment was announced in January.

25 May 13:
'Walking Beijing's Waterways', a series of short videos by D J Clark for China Daily, is also on YouTube (maybe easier to view), with maps here. Building on the excellent website 'Beijing's Forgotten Waterways' (www.hultengren.com/beijing/Rivers/welcome.html with more detail at www.hultengren.com - Beijing rivers), it's a great introduction to the lakes, rivers and canals that are key to the history and geography of the city - and to the contrasts of life in modern Beijing.

20 May 13:
Extraordinary reading from Fortune magazine: 'Dirty medicine: the epic inside story of long-term criminal fraud at Ranbaxy'. The author appears to have been following the industry, and this story, for a long time: see katherineeban.com. An earlier article discusses increasing questions over the efficacy of some generic drugs.

6 May 13:
The Malaysian public is to be congratulated on the 80% turnout in yesterday's General Election. Electoral irregularities have been a feature in past elections, but never previously documented in such detail, and never before in an election which has been so closely fought. Despite the huge advantages and biases of incumbency, the opposition coalition appears to have won the popular vote - so the impact of additional votes could well have tipped the balance. Bersih, the Coalition for Clean and Fair Elections, is protesting many alleged irregularities. Clean and fair elections are a reasonable expectation, not to be confused with sedition, and would free up energy to focus on the real policy challenges of the future.

A tale of two very different reports, and the preference of the international community for the palatable version (see penultimate paragraph): 'Myanmar whitewashes ethnic cleansing'. The Human Rights Watch report is available here.

2 May 13:
The NAV of the Apollo Asia Fund rose 1.4% in April, to US$1,961.78; charts.

12 Apr 13:
Sarawak Report has been down for two days after a major cyber-attack. Distributed denial of service (DDoS) attacks have reached unprecedented scale recently. We found cached versions of Sarawak Report articles using Tor Browser.

9 Apr 13:
Gail Tverberg examines how oil exporters reach financial collapse with reference to Egypt, Syria, Yemen, Argentina, Venezuela, the USSR, and in the comments Bahrain. One country not mentioned is Malaysia. This chart from the Energy Export Databrowser has been shown before: the picture of rising consumption overtaking declining domestic production was discussed in our 2Q12 report. Like the other countries mentioned, Malaysia has other resources, but the oil windfall has been a major contributor to its recent prosperity and government finances. The same is true of the UK, so Malaysians buying London property may not be diversifying as effectively as they think.

6 Apr 13:
The 1Q report has been posted.

4 Apr 13:
Last year the strange bond issue for 1MDB Energy caused us to wonder about Malaysia's off-balance-sheet debt. Kinibiz has written a series of articles about 1Malaysia Development Berhad, concluding that '1MDB’s cloak and dagger style of operation with many unanswered questions and dubious dealing is very unbecoming of a sovereign fund that is supposed to to make strategic investments that will be of value to the country', and posing 10 pressing questions for 1MDB.

2 Apr 13:
The NAV of the Apollo Asia Fund rose 0.7% in March, to US$1,935.60; charts.

29 Mar 13:
Efficient capital allocation is so important that stock exchanges should be run in the public interest. In practice, ownership by member brokers often worked quite well. Running stock exchanges for profit sets up huge conflicts of interest. I have noted some of these in the past. Others are clearly explained in this article on Bursa CEO pay and lack of retail investors. Stock exchanges are too important to be listed companies!

8 Mar 13:
Fascinating insights into the conflicts of interest in business programming for western television accompany the exposure of the Malaysian government's payments for positive coverage. More here (and much more in that site's archives).

4 Mar 13:
The NAV of the Apollo Asia Fund rose 3.6% in February, to US$1,922.49; charts.

16 Feb 13:
Webb-site's HKID Index service has been suspended; David Webb explains why this is a dark day day for transparency in Hong Kong.

7 Feb 13:
Asia Pulp & Paper (APP) has announced a new forest conservation policy suspending all clearance of natural forest by APP and its suppliers. This would be an extraordinary turnaround given the group's history. According to the company: 'Recent independent assessments of the growth and yields of APP suppliers' plantation areas confirms that the company has sufficient plantation resources to meet the long term forecast demand for its pulp mills.' We call for all relevant data to be periodically published, to allow independent verification by parties other than company-appointed consultants.

6 Feb 13:
The NAV of the Apollo Asia Fund rose 2.8% in January, to US$1,855.67; charts.

ACSA withdrew the proposal to make a large loan to its parent. The group wishes to expand rapidly in China; if this is now belatedly permitted, the opportunities there could be large in relation to the mature profitable Hong Kong business. The company tells us that it intended to allow the ACSA investors to participate without over-burdening the P&L, and is now considering structures to bring greater clarity to the allocation of new investments while avoiding conflicts of interest.

23 Jan 13:
A helpful investor has noted that unless Aeon Credit Service Asia (ACSA) could rely on unanimous shareholder approval (which it clearly cannot, as we object strongly), its proposal appears to be in breach of section 168A of the Companies Ordinance in Hong Kong, as the loan would be financing a competitor. We have written further to the company, urging it to withdraw the proposal, and to rethink its plans in China to avoid conflicts of interest and ensure fair treatment of minority shareholders.

Michiel Wind has commented on the Aeon Credit case and the case of Panasonic Manufacturing Malaysia, which has 70% of shareholders' funds lent out to a related company. He says 'lending money to a related company is a no-no' and that 'Japanese companies should welcome good, internationally accepted, corporate governance practices, it is long overdue.'

22 Jan 13:
Another formerly-reputable multinational is behaving badly, and this time we own it. David Webb asks shareholders to veto Aeon Credit loan to parent. We have written to the company to support his call to withdraw the proposal, pay a special dividend, and remove conflicts of interest. We told them that we were astonished to read the proposal for ACH (the parent) to develop its own China business in competition with ACSA (the listed company), and appalled to read that it proposes to fund this with ACSA's money. We noted that many of ACSA's minority shareholders stuck with ACSA shares over the years despite recurrent disappointments over more than a decade as to the timing of China business development, in the expectation of an eventual reward for their patience. Minority shareholders deserve better than this! All Hong Kong investors should read the webb-site article - and all shareholders, please vote.

A Global Witness report in 2012 highlighted HSBC's ongoing relationships with several companies whose reputations sit very oddly with HSBC's professed environmental policy. (See post of 21Nov.) Masya Spek explains why HSBC's forest policy is not working, and suggests how to tighten it, including disclosure-based principles that may also be helpful to other stakeholders: Gaps in the canopy: suggestions for HSBC's forest policy.

21 Jan 13:
Energy is a huge issue for Malaysia. Like the UK and Egypt, Malaysia has benefitted from an enormous energy windfall, which has recently appeared to be dwindling fast - but the challenges are barely discussed. Petronas publishes no proper accounts, and its quarterly reports omit mention of key strategic and operational issues. Petronas is apparently 'accountable only to the prime minister of the day, not even to Parliament'. Friday's announcement by Petronas of an oil and gas discovery onshore Sarawak occasioned jubilant press coverage, with talk of a socio-economic boom for Miri. Given the history of development and resource theft in Sarawak, suspicions that the people will see little benefit are all too plausible. Calls for transparent accounting, and accountability, by Petronas, state and federal authorities are highly relevant to long-term investors.

Latest in a series on the role of the press in facilitating rumour-driven moves in Malaysian shares: 'Do you think there's honesty and integrity in our financial news?'

16 Jan 13:
The 4Q report has been posted.

4 Jan 13:
The NAV of the Apollo Asia Fund rose 1.8% in December, to US$1,805.72; charts.

Claire Barnes

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