FGV= UMNO's Con-porate Agenda.

Just when they thought it’s safe to get into the water. The sakmongkol shark is out hunting again. this time it is accompanied by another stealthy hunter, the sea dwelling t-rex walla. This clinical dissection of the scam which UMNO is pulling with the FGV listing is done by Walla.

Here’s Walla on the FGV con-porate listing:-

This IPO is supposed to be the second biggest in the world after Facebook. Yet of all the thousands of investment bank analyst reports out there over the last one year, only three have been published on FGVH and only in this month. The houses are Affin, TA and ECM Libra. Their reports are perfunctory on both the investment risks and value proposition of this listing.

 What about the big investment banks? If the deal is so good, why are they exhibiting a mystifying silence? Perhaps they have concluded as much as Profundo(http://is.gd/UJlsyf).

 In fact, you can search high and low and yet not be able to pin down even one communication by Najib's own Umno propaganda organ on how the listing can really benefit our Felda settlers and their families in the long run. There's no recognition of their effort and sacrifice on land they have worked for generations in the last fifty years. In fact, it looks like they have been bulldozed over. Doesn't that look familiar, if one still remembers all the past big projects?

That is why Sak's series on Felda is very important to both the settlers and their families. His posts have exposed how Najib's Umno government is going about trying to get the rakyats' money for its own cronies and political objectives. Except that this time it is doing so through assets of their state governments and deposits of their pension funds.

The deal is bad. Even before listing, it is announced the overseas downstream operations will be restructured. Why wait until listing to restructure what have been bleeding overseas investments for years now, you can ask next. And how much restructuring can one do until listing day in order to create a sense of positive change that can be translated into investor confidence, your next question is already on your lips even before this sentence is completed.

In fact, the thought would have occurred to you faster but you were already engaged wondering how Najib can only now talk about abolishing taxi license monopoly when our taxi drivers have been enslaved by Umno's cronies for years.

Next. The one thing you can't miss that leaps out at you from the numbers in the prospectus is how disproportionate are the share allocations. The settlers get a pittance while Umno-linked organizations get the mother lode. And Umno has the nerve to say the listing will unlock value. FOR WHO, YOU CAN NOW ASK WITH UNFEIGNED SCORN.

It is also because the share distributions have already been pre-assigned that this listing is standing at the cliff.

 A good listing should have majority free float shares to flex price elasticity. The understanding now is that most of the shares are forced onto the pension funds like the civil service pension fund and the EPF as well as selected state governments, agencies and cornerstone investors.

 It has also been mentioned some of them will be embargoed by a moratorium not to sell their allotted shares for six months after listing.

 So how many free float shares will there be for the market to sell and buy in the weeks after listing?

If one cannot sell, there is no demand to buy. Without demand to buy, the price won't stay up for long. Any euphoria will evaporate very quickly because the pricing momentum of an IPO bull run will fizzle out once buyers realize it's already a wired deal favoring selected shareholders. And just by looking at the size of the wired shares, people will conclude as much.

 So if the share price falls after listing, those pension funds and state governments involved will lose the value of their investments which means the dividends they can afford in years to come that should be given to their own shareholders, namely the rakyat and civil servants, will also be much less, in addition to subpar shares they will be holding that locks in their own liquid and solid assets. With such an opening record, it would take a miracle for the share price to leap up even six months later.

 Share prices leap up in anticipation of gain. For mining companies, announcement of new finds, for banking houses, realization of forecast profits, for construction companies, development of land and large-sized building contracts in burgeoning economies. But for listed plantation companies? Only if the demand for their agro-products is sustainably high that will earn them high profits to reduce their debt overhangs while affording funds for expansion of their production.

In the case of Felda, the market is tepid, the debt is high, the asset needs massive replanting which has a long gestation period to produce yield, new competitors are ramping up with bigger land banks to change the entire market dynamics, and past diversification projects have not derived high profits, only bad losses.

Notice that the state governments and civil servants will also be affected this time from what is considered a federal project.

 Let us close the loop. Let us make a raw assumption that there is no moratorium on the favored shareholders. In other words, let's assume they can sell immediately upon listing. The question then remains - sell to who?

Let's say those Umno-linked organizations unload all the 1,900 million shares onto a market which has 273 million shares held by the public and Felda settlers and staff. In the passive and conservative investment climate, where is one going to find enough buyers to sponge up those 2,173 million shares and avoid the perception there is a run on the listed vehicle which will vertically drop the price?

Therefore, does one honestly think the price won't go into a tailspin? If and when it does, how are our Felda settlers going to service the bank loan they have had to take to pay for their shares now worth peanuts? That RM15,000 payoff will already be consumed by then; the KPF new dividends won't amount to much either.

 So we have a situation that the price is going to be affected by big chunks of Umno-linked shareholders who either can't sell for six months, or can sell but have no buyers. Can the price stay up in such a situation? If the price cannot stay up, what is the worth of those 810 shares to the settler?

 Thus the situation before us is like Umno trying to get the tail to wag the dog. In our local jungle, that's getting the tail to wag the elephant.

It remains to ask whether Najib's Umno knows what it is doing. Looking at Umno's record of running national finances these past few years, a chorus of no's seems imminent.

You can already draw rich hints of palpable window dressing from Refsa's exposure of Pemandu's massaged numbers for ETP. The RM190 Billion of ETP projects is now found out to be only RM13 Billion for 2011; in addition a wafer-fab plant is said to be up when its investor company is already belly-up. That figure of only RM13 Billion looks remarkably like what Miti would have gotten by way of inbound investments a year so it looks like taking credit for other peoples' work. In this case, those inbound investments have gone into the states of Selangor and Penang. Oops.

Thus Umno's spin of numbers cannot be trusted. This political animal is just playing musical chairs with your money. It covers one loss using bonds issued just for the purpose. When those bonds mature, it will issue another bond to pay up the maturity of the previous bond so the net effect is just passing debts to future generations. Debts are a reflection of bad management and leakage. If management has integrity, corruption would not happen.

 The con-porate shareholders of tomorrow's FGVH will be the driver of Felda's operations. Motivated only by profit and growth, they will marginalize our Felda settlers even more. As Sak has clearly pointed out, there are ways those urban shareholders can push policies that affect the livelihood of the settlers, the costs of their purchases, and the conditions under which they have to operate daily. The market is sentiment-agnostic. It doesn't care for people and what they have to go through to eke a living or how much a piece of land they have worked on for fifty years has more than assignable commercial value. They don't care about lifeblood, just what to do to cut a bigger profit for themselves. The settlers will have no voice in the matter. By that time, their cooperative will be made obsolete.

This is not fair. This is unjust. Especially to poor, honest, hardworking and simple folks.