Ranhill

This stock has been losing steam since Jan this year and current stood at around RM1.50. The possibility of the pipe line project located in the northern region is likely to be a long shot now that all the states involved are control by opposition parties. Truth is even if the government is controling these states, it would not have take off easily let alone the situation Malaysia is currently in.

The Ranhill is therefore likely not to benefit from this "project" in the future given the uncertainty of the policy lead by the fed government. Without this project Ranhill still have plenty of project on hand to keep them busy for the next 5 years. Given the company's historically strong operating margin of ~30%, well diversified business and strong income from it's utility business makes it worth for you to keep this company in your radar.

I do not rule out possibility of privatization yet... ;)

What next?....

Many people has started to question the Malaysian market these days ever since the ruling government lost 4 of its the important states in the peninsular.

Question such as will the NCER, SJER, ECER and other major projects such as the 2nd Penang bridge in Penang state and other government enforced contract such as the the PGCC.

Well first of all, in my opinion the PGCC is doom.... it will never materialize. Realistically, it is not fit for implementation... PORR is another project poised to be scrapped....property buyers in Malaysia, becareful before you sign up for any new property... for you may end up holding it for a very long time...

Mortgage crisis is ending, oil price is hogging the lime light for now... >USD120 a barrel is just obscene...for a limited resource, those suppliers surely know how to squeeze the world consumers dry... credit crisis is not gonna end as quickly as some of us wanted it to be.... it's just gonna get tougher from here on... financial crisis from credit card spending is inevitable... one after another, the world just have to ride this one out... inflation is already here... the question is when it will recover?... banking sector is facing an uphill task in keeping up with the rising expectation of skeptical investors hoping for capital return on their investments...

Shortages of building materials is stifling the construction industry and for a house that needs RM250k to build from scratch a year ago, now needs ~300k on average across the country....

the fed gov has got to do better than this... projects announced in the 9mp have to be continued and supported from all angles to ensure that promises are kept....

US economy is reaping the bad seeds planted since the time Greenspan is in office and Bernanke is just clean up mess... US dollar is not going to recover its value unless they end the Iraq war and stay quietly at home building the new foundation for the country's economy going forward...

China market has retreated quite a big chunk in view of the nearing Olympics...Shanghai stock exchange will be hovering around 4k come the next 6 months... I expect nothing interesting... rather Singapore stock market is one of the best location to invest in for now in view of the good corporate governance and stability of the country in the Asian region....

For traders, I anticipate the Malaysian market will not have any major movement until the UMNO general assembly meeting draws nearer...so if you have been actively trading for quite a while, take a break la... what's the rush?... you won't lose much.... :)

Leader set to rise again...

Leader has been lagging since the down trend a few months ago... will the business be affected in anyway?, personally I don't think so...business is set to get better in the 2nd half even though many projects appears to be vulnerable to the high costs and are likely shelved by the current gov.... cable business is expected to rise at least 15% Q-to-Q... and anything less than that is a sign of a slow down... revenue from power segment is expected to rise slightly even though high cost will offset a big chunk of the profit...

The company's interim dividend payout of 1.5% is timely....psychological impact from this is far more significant than the amount involved....
Not a bad price to accumulate for immediate term... chart wise, the stock price is well supported at current level... 0.965 is a resistant level running out of time... Wimax is another factor not to be forgotten...

Election impact on NCER...

Many people have not expected Barisan rakyat to win 5 states from the 12th election in Malaysia and not even the opposition parties themselves... the government have to sit down and ponder hard and deep before they layout their plans for the country for the next 5 years because this will be the determinant to its survival in the next election to come.
The barisan rakyat is expected to clean up all the "bad sector" in all the previous state governments and honour its promises to give a fair chance to all and to eradicate poverty irregardless of race... now is the chance for them prove to the people that they are the right choice..

Regardless, the federal government on the other hand is expected to continue to work with the state govenments and make the 9mp projects a success. Any act of sabotage will be viewed as immature and will costs them dearly in time to come. NCER in particular is now in question... PGCC is even more questionable... the people don't like it... not because its not good for development but because the gov does accounts for the infrastucture that needs to be available to support the PGCC development. Access to the site is crucial....PORR is not ready, traffic problem is not fixed and after so many years of BN ruling the state is still without a decent public transport like a monorail... is embarrasing for Penang particularly when it has so many foreign investors there and has help the gov rake in billions in taxes...

Questions remained is whether the ruling gov BN will go honour their words or turn their back to Penang....? I personally think there will be changes... and the NCER projects will be continued but am doubting the flow of budget from the federal gov to the state... As of the question of how gentleman the ruling party is, we're here to witness.... stay away from those company affiliated with projects in NCER....for now.... though I don't think it will be scrapped.
There are many reasons why we should be cautious....

Gamuda issue is a classic example of why Malaysia cannot compete with other ASEAN countries... why Datuk Lin sold of his shares at such price?... why at that time? and what's the motive? .... bear in mind he's a main reason why the company is where it is today.... but now he's dumping it?... it's obvious there are powerful people forcing their way into the company... and change in the shareholding structure is imminent... will it benefit Gamuda? you should know by now.... everyone favours prosperity....if were to prosper with chance, why leave?

Well, enough of my Sunday morning gossip... more will come, hold your horses... view it from an eagle's perspective before you act...

Back to square one....

I have written about melewar previously and is still a favourite stock for me because of the high NAV it possess.... the main thing is it's business is profitable.... business model is sustainable and going forward may continue to post slightly higher profit quarter to come... current level is attractive enough, cyclical trend has chance to resume and at this level it's cheap. Think this may be one of the lowest possible for this stock. If you have money, this is where you might wanna consider rather than unit trust. Its time to get out of highly equity based unit trust fund for now as they will only continue to slide....I'm actually in favor of a technical rebound for this stock in the short term...as usual, some may just disagree... its your money, therefore your call...