Keppel Limited

[specuvestor]

Hi GreedandFear

I see your logic on the MTM of issued bonds though there are companies that buy back substantial amount of their bonds through a third party so that it is not so obvious. However if inaction means it should not be MTM, then inaction on asset sale should not be MTM either. Why would they be "forced" to sell asset in a distressed market?

If we come to the crux, it's about cashflow and leverage. Net cash companies will never have a run on their credibility. Leveraged companies, even healthy ones, is subject to the whims and mood of the lender. It's a business model issue. Hence it is complicated to apply a standard MTM requirement on all companies cause their models are different

Observable price is only useful for operational trades not assets. For example fuel price loss is very real to the operation of an airline, but aircraft price decline resulting in a MTM loss is not so consequential as long as they continue to use it through their projected period.

And business managers or owners are not the same as investors. Mr Market gives opportunities but Mr Market is not the business itself, unless the business is asset management or traders etc. Business owners look at strategic positioning, long term execution, SWOT etc rather than whether to buy or sell shares tomorrow. The time line and vested interest is as different as a citizen vs a tourist

Frankly I think managers and owners should give due respect to OPMI by explaining their business and why they do what, and to get feedback, as much as we give weight to tourists' feedback; but to formulate long term strategies based on what OPMI demands is actually quite foolhardy and a mistake of Finance 101. In fact I think for years Keppel has been complaining about the ill-timed sale of SPC from shareholder pressure.