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As a top 10 analyst in recent stock performance and detailed research and strategy notes in banking, retail, logistics and IT services businesses I would be an ideal partner for most entrepreneurs and large company strategists, sales and marketing teams An accomplished presenter, I get frequent... More
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  • Facebook might be nearer to an offer for sale - How social business would be done..
     “It’s too early to say”. “The jury is still out” and “It’s difficult to tell” because things are not so easy. But in the running popularity wars of Facebook and Twitter, while Twitter catches up on its share of traffic, it has to be said that Facebook is reflecting maturity. Notwithstanding a lot of bull from personal users who have been long time facebook fans, Facebook managed to roll out changes which reduced the functionality gap between itself and twitter and while both have now made their pages more manageable by tweaking ‘lists’ and other such, Facebook’s early advertising revenues have also given it some ‘moral strength’ and some ‘freshness of ideas’.

    Facebook has kicked off the non advertising led era of brand reputation management, product launches and the knowledge era for brands and products everywhere with a very simple proposition. It is going to cost you a packet and you are doing it because you are getting what you want. In effect, you choose your specific segments of Facebook users from healthcare users to premium hotel services user or even mothercare and feminine hygiene product users and instead of just paying for banal advertising , you pay for engaging the consumers. First off, you would pay $10K and $30K for holding contests and while basic pages remain free, Facebook will control both look and performance. More details here Also, all these launches coming without fanfare is a step in the right direction as information economy holds and knowledge is at a premium. Also, as more than 40 million users spend 30 minutes and more on the site, they will soon start allocating more time to stay in touch. All in all, another far thinking proposition which seems to have outlasted its detractors in the last 2-3 years. Are things looking up for Twitter?

    P&G, Pepsi and even those with primarily domestic markets in the USA like Kraft and the sports brands will definitely find this a paying proposition and not to denigrate advertising but at a much more premium and effective brand value than two-bit clicks and CTRs

    This is not a part of the FACEBOOK VS. TWITTER series 19/800 esp. not the part where “facebook wins”, just one of those things we started, socially!

    Nov 16 3:00 AM | Link | Comment!
  • ING's Private Bank Sale complete
     The Discussion on Citi, BofA results, GS bonuses and JPM’s growth is scheduled on the same Diwali weekend as well..

    The ING Sale: Will OCBC grow into a larger Pan Asian role?

    ING has sold the Asian private banking business to OCBC, which was having difficulty in growing in Asia but has made rapid strides in expanding in KL, Taiwan and can now focus again on Singapore. The $1.46 billion price ( Sing $ 2 billion) for assets that are not growing is based on the assumed scalability of the asset base of $15-16 billion. The unit was costed for $1 billion for the bank in its balance sheet. The N11 will thus provide a second chance to OCBC to grow.

    OCBC has a healthy 60-40 split of interest and non interest income from its current assets ( economic assets or people assets in the case of fee based income) and as expected Q2 income went down with decrease in advisory and other fee based income to S$ 466mn or USD 335 million ( EUR 221 m). Also, interestingly OCBC currently has one of the most healthy cost-income ratios of 34% which can equip it with the necessary depth in absorbing any new costs and continue during the lean times where larger competition from US/Europe/India apart from JPM and GS is unlikely to withstand the current cost of business.

    However its Private Banking acquisition may well add to its woes in the region as it has failed to grow beyond Malaysia and Singapore and PB assets may be offshore banking assets domiciled in these other ASEAN countries and even India. OCBC currently earns only 20% of its bank profits or $77 million from Consumer Financial Services where it has been hiding its Private Banking assets presumably. Even in that, as much as $ 10 million is from Islamic Banking in Malaysia (Bank Negara) The transaction adds just about $20 million to OCBC profits and margins may reduce further. However, it looks as if these assets would be lazy and no flight of assets to other competition in the region will ensue whether SocGen or Deutsche Bank

    At this stage let me also reiterate that it is important to know that the final price is closer to the author’s estimation for this deal as well as the UBS captive sale, the Satyam sale , the AIG Investments sale, except for the Nan Shan Insurance unit for Life Insurance, Valuation premium is no longer for the selling brand ( Citi BPO assets for over $505 million just a year back) but for real business and real value delivered to the acquirer..The bear phase as always is a euphemism for the opportunity to deliver justice to buyers of economic value over noise)

    Fortunately, Julius Baer is happy with its progress in Swiss assets from the acquisition as the Swiss pie is a little more localised and protected by Swiss banking law and does not expose the niche bank to new ( see ING sells Private Banking assets) Julius Baer has paid a half a billion dollars for the Swiss Assets

    Oct 17 1:35 AM | Link | Comment!
  • Infrastructure spending is sacred, countries aren't (GII, PBR, EEM, IGF) also (CIC, CNOOC)
     Infrastructure spending is supposed to reach $35 trillion ( that’s 10 China’s or maybe 5 including the future growth) in the next 20 years according to CIBC World Markets and thus the deficit we have been running in infrastructure spending will soon reflect in national deficits and the economic paradigm may shift too! ( more on that later !)

    China has been increasingly activating itself in the last few weeks, what with the $6 billion bid for Nigerian Oil, and the bid for mineral resources in Guinea.

    The Chinese GDP of $3.4 trillion thus has built up at least $44 billion in aid extended by it to others including 28 countries in Africa) Though any attempt to measure it might fail in relating the two figures, it is important that this has been done without jeopardising their debt to GDP ratio and now when that ratio may be in threat after the $8 trillion bubble of new 2009 domestic debt

    However, China has started facing infrastructure financing blockages of its own and this project could well signify a Rubicon given the increasing deficits and inflation which would emerge from such financing off the national GDP of China

    In the meantime Russia has already collapsed from printing money to fund deficits contracting 5% in 2009 and Brazil and Venezuela have gone thru multiple cycles of re-denominating currencies and surrendering debt even as Lehman, IMF and AIG continued extolling the virtues of leverage and printing money. The world hasn’t changed a wee bit but the lessons to learn might be new, whether China or Brazil or Good old USA and India trying deficit financing. The infrastructure spend however, will not suffer this time whether in India, in China or in Kenya.

    Unfortunately, Sovereign Wealth Funds including the CIC, Temasek and Dubai World have already suffered reverses at the break of dawn and the same cultural anathema that broke global banks in 2001 and 2008 is the over riding culture at banks allowing Taiwan over India and Venezuela and Russia over China in economic is the language, it is the global classroom and it is the incapacity to give the deserving a place in the face of an opportunity to screw yourself with leverage instead, as depicted in the Cold War movies and James Bond, in the Gazprom pipeline crossing all Western Europe without a bit to the Eastern padres and in the social catastrophe that was communism.

    Nations like US, India and others have to survive this onslaught of Infrastructure spending in this decade and thus I am no tvery confident in the face of unbridled rise in Infrastructure ETFs at this point, but obviously the long term trend is bullish. South Africa and Brazil are somewhat busy having been in the limeight and having outbid the other contenders. They would need a lot of allied urban infrastructure which would get financed , but none of it can substitute for security and resilience in the face of domestic unrest and the violent repercussions the world has had to face. This is going to be a testing decade.  

    However, that digression apart Private Equity would be an important element after the first flush of Government debt gets tired and PPP and Take-out models are given enough impetus. Given that then these would be again financed by highly leveraged structures, another disaster would look simplistically the only way forward..

    India has already raised INR 60000 Crore ($13 b) of its 100000 Crore ($22 billion)  target for 2009 ( as evinced by Advantage zyaada here) because public funds have shown that success can be achieved with investor funds and returns given. Private Equity can generate even more interest but maybe needs to be told firmly to not leverage up its books in the ‘hot season’

    India’s Aviation infrastructure would be a germane example in this case where Private Enterprise has taken root in such large ticket requirements. However in such Aviation , railroad, lifestyle or urban infrastructure as metros and airports the effect of loss-making operations has also internationally manifested in most cities. Rural and Oil infrastructure has till now been heavily subsidized even in the US and other developed nations, enabling the unholy nexus between war-mongering governments and OIl and Defence companies. The jury is still out and there will be more to write as a quantitative evaluation of these financing models and their results comes out and our children take over from us.


    Oct 17 1:31 AM | Link | Comment!
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  • All this is selling into china though. What is china selling next decade?
    Dec 13, 2010
  • All this is selling into china hough. What is china selling next decade?
    Dec 13, 2010
  • Brazilian miner MMX (MMXMY.PK -3.3%) will invest $2.9B to increase production at existing projects
    Dec 13, 2010
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  1. ING's Private Bank sale (2 Comments)
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