Merry Christmas!... have a blessed holiday.

YTL Land a buy and a must...

So many good news and so many reasons to buy stocks but this one stock is a must have for the next 5 months... YTLLand, why?

Simple, here are a few...

1) The launch of "The Capers" in 2011.

2) Impending huge asset reflation

3) KL-Sin bullet train potential

4) More project launches in the pipeline since its acquisition of companies with strategic lands from it parent company YTL Corp.

Lastly, please buy with reserve cash, else don't cry foul if later the stock tanks because of some external shock such as Korean wars and you needed the money ... :)

KLCI Bull vs bear....(DRBHCOM)

In today's situation, both macro and micro economic perspective, most people who follows the financial news will say that the KLCI is trading at a high level... however they also believe it will go higher from here... question is how high and what stock to ride, typical question that none other that ourself will be able to convince and should be convincing ourselves to buy or sell.

So should we be focusing on the potential M&A candidates or perhaps better of on the laggards?
Of late mahy people have came out to comment on the DRBHCOM recent run up and honestly I think this stock is obviously going to have more news in the pipeline (privatisation of subs or spin off, etc) On the potential of more government contracts from defense ministry, I am rather sceptical to that in view of the little material impact even if something along that line does materialize.

Well the stock have rallied close to 40% since Dec 1st and therefore in my opinion its time to take profit and lock in the gain. Sell the stock and buy back when it retreat to ~RM1.70 would be a reasonable way of playing this.

Never get carried away with the sentiment of the bull in today's market....

Boustead, a gold pot?

The company just posted a ~1.5bil revenue for 3rd quarter 2010 results and announced a 12 sen dividend to be paid by mid of Dec. Impressive track record and company's currently finalizing 2 lucrative projects that is the 60 acres Jln Cochrane land and the 245 acres Batu Cantonment army base land. [Consider this done deal. :)]

HDBSVR recently raised the value of the stock by SOP and value it at RM10.35.

While that's one way of calculating the company's value, we also should consider the potential re-rating of the property sector as a results of improving economy and the large amount of hot money inflow that will land in many Asian countries particularly Malaysia inview of the rising ringgit. Property sector in Malaysia will certainly benefit from the growing confidence and thus lower risk aversion as a result of better liquidity financial system and easy financing from banks.

Also the consistent dividend record of the company in 2010 also further convince many of the healthy cash flow of the company. In my opinion, the company should be valued at min of RM8.50 in the next 9 months.

Kstar, another "subprime" in stock?

Well, this is another stock that certainly has many caught in surprise when KStar stock price plunge from the opening price of 89.5 sen to 50 sen day low earlier. As usual our Bursa did their part, that is to issue a query to the company...
Come on certainly bursa can do better than this? This is a matter of public interest, its the people's money we're talking about...Obviously many insider tradings took place.... I pity the honest investors out there who hold the stocks in their portfolio...
Especially when the company just posted a pre tax profit of ~20mil about a weeks ago and today the stock erased ~40% of its market cap?? Don't fucking tell me there is nothing but of course, the company can still say that the board of directors are not aware of any activities and will inform Bursa if there is any new development. :)
Well, Yusli do as you would be done by... do you role.!!

E&O setting up for a rise?

Property laggard?... well, E&O is definitely a name that most people in Penang island is aware of because of the famous hotel by the sea and the many famous projects near Ferringi (Seri Tanjung Pinang, Straights Quay projects). With the relatively large strategic landbank and since the E&O mainly focus on high end residential properties and the fact that the stock has a higher beta and at the same time its a rather liquid stock as well.

Target price remains >RM1.95. Something is brewing in the stock in my opinion.

Happy Thanks Giving!

Mah Sing.... playing catch up?

Of late the property and construction companies surely have been hogging the limelight and I believe we're going to to see a re-rating of the entire sector in the near future and an impending asset reflation (a rather significant one) in the next 5 years.

Today Mah Sing breaking away and even broke the RM2 ceiling with >15mil shares exchanged hands and I would say its likely the stock will extend its upward trend for the next few days.

Trading buy is recommended and for those with high risk appetite, Mahsing-CA looks attractive and offer higher leverage.

Note: At the same time Petro Chemical will debut in the KLCI and that might just stir up the market activity and reduce risk aversion among the retailers in particular.

Trade with care and as a rule of thumb always ensure you have your investment goal in mind and keep your emotion shelved.

Property & construction stocks high on M&A

We have seen lately several companies have been on the spotlight, either being taken over or merging to leverage on each others strength be it capability or branding.

Take over of Sunrise by UEMLand was good for both companies and similarly for Ijmland which has long been under scrutiny by many for being undervalued has finally signed MoU with MRCB to merge into a new entity and take over the listing of both companies.

Another will be the merger of Suncity and Sunway which is probably going to be the last of its kind in these sectors for M&A activities.

While UEMLand is now the largest property counter in a enlarged market capital of ãround RM10bil. While IJMLand and MRCB will now become the 2nd largest with ~7-8bil market cap, its strategic land bank ~in excess of 9000 acres as well as its potential in securing large projects is very promising.

While I personally think RM3.83 would better reflect the value of IJMLand, the price of RM3.65 for IJMLand is about right in my opinion due to the timing and also the huge potential that opens up for the new company.

Salcon.... a good buy?

With the world economy worrying about the China tightening and the possible European economic stability, many are thinking that there is a possibility of a stock market major correction.

Well, I doubt there will be a major correction, honestly.

The most, some knee jerk reaction here and there.. also take all the opportunity to buy into good stocks and another one I thought is worth mentioning here is Salcon.

Cheap, good prospect and growth and timing is certainly right...

I think its a good buy.

One of the key stock for bull market ahead...

Well, from now onward, I believe the stock market will continue to rise and chart new highs at least for the next 18 months... yes, that's 1.5 years at the very least.

Apart from waiting patiently for stock prices to appreciates sector by sector, we need to be aware that the most basic indicator of a bull run is the increasing trading volume and stock broking firms most certainly stand to benefit from the swelling in trading volume...

While OSK is pretty much in the limelight for the "rumour" of Maybank take over, TA is still pretty much below its peers....

with 78 sen as of the point of writing, it obvious the stock is attractive for short term traders to load up in preparation of the impending bull run... bear in mind that Dec holiday season is coming and there will be many more good news to come for the equity market as we end the year 2010 and transition into the year of rabbit. As different it will be the bull run in 2011 will likely consists of small rallies throughout the year....

There are many more good stocks that we can talk about but for a start, I view TA as a must have due to its cheap price and prospect in the short run of 6 months.... a pull back lately may be a good opportunity for buying... TP RM1.15.

Invest in gold or in stock markets of emerging economies?

With all the news of the World Bank president Zoellick calling for gold to be brought back into the global monetary system and with gold prices pushed to above USD1.4k per ounce (record price) is really causing a lot of "excitement" to many people to think whether they should continue to pile their money on gold or the rising stock markets especially the Asia stock markets. At the same time, stock markets continue to chart new highs as well....

Certainly many will think that we can always invest in both gold and stocks...but what's the ratio like?

Like I mentioned previouly stock markets will likely continue to hit new highs for the next 1 year at the very least and with that I would think that investment ratio should be heavily focused on stock with about 20% on gold. Afterall how many chance do we have in our lifetime for us to see through a financial crisis and to ride the recovery? Well, now is the time... :)

Be brave when others are afraid....

QE2, what's the impact...

Well, USD1.7trillion and it is still not enough.... what makes the Fed thinks USD600bil will do the job? Simple, the Fed just wanted to debase the dollar and narrow the gap between the China Yuan and the USD.

The consequences of this QE2 is obviously going to cause a boost in the comodity prices and eventually things are going to get much more expensive (inflation will creep in). While the rise in the equity market will appear to be giving the people more money or ROI for their investment in stocks, the value of the return actually may have shrunk for anyone investing in the US. Couple by the devaluation of the dollar, it makes matter worst for foreign investors like me....

In my personal opinion, the dollar will continue to devalue to the point of about USD:RM of 1:2.78 range and that's basically the level close to the pre-financial crisis that hit the world Asia in particular. Therefore, I believe the emerging markets will benefit emensely from the 600bil of liquidity that may eventually find its way to the stock markets of these countries..

KLCI will likely reach 1650 by Q1 next year.... at the same time, I think property market will also benefit from this extra cash that is floating around with interest rate close zero.

In conclusion, long equity.

Altera hit USD33 as predicted...!!!

Well, Altera made it to USD33 as expected and I just have to say, Morgan Stanley probably should fire the analyst who made the comment on downgrade and making comments of the stock will fall to USD24...

Honestly, this stock made me proud cause it just made my day... >30% gain in less than 1 quarter.

E&O poised to rise

Well, with so many property friendly news recently property counters certainly has not moved abit.... but things are going to be different going forward...In Q4 alone I expect property sector to gain at least 15% from Q3 and just take a look at E&O which certainly look promising from chart perspective and if the stock continue to climb and break above the zero line with volume, i think this will trigger a property rally most certainly.

You can certainly cross check with the heavyweight SP Setia which gain almost 30 sen today.

Immediate recommendation for those with stocks in property...."Let it ride"

Morgan Stanley or S&P 500?

Many people follows what most analyst are reporting blindly but the number is reducing these days... most people review the data and make the decision after some analysis on their own... While it serves as a guidance to some, many falls as victims of confirmation bias.

I personally have review so many analyst reports in the past and one particular guidance that I find rather reliable in the sense that the projection mostly materialize itself is the S&P stock price guidance, in fact I would say most of them are rather conservative in nature.
Here's the link.

http://www.bloomberg.com/news/2010-10-25/s-p-500-analyst-target-price-changes-for-oct-25-table-.html?cmpid=yhoo
A quick snap shot, Altera and Xilinx both from the FPGA industry is targeted to be $33 and $29 respectively... similar to my earlier Oct 18th posting on these 2 companies.
Well you be the judge who to follow...

Altera Q3 net income almost quadruples!

Well the results of Altera 3rd quarter earning is stellar comparing to what the company fares a year ago... the company's net income nearly quadruples mainly driven by strong sales from telecommunication and wireless equipment makers. The company reported earning of $217.5mil or 69 cents per share versus $56.7mil, or 19 cents per share a year ago. Analyst had expected 65 cents per share. Revenue rose 84% to a record 527.5mil.

Altera outlook calls for the 4th quarter revenue to grow 3-6% over the 3rd quarter which implies a maximum of $559.2mil compares to what analyst have in mind that is $512mil..

Surprisingly today Morgan Stanley gave a underweight rating on the company with a target share price of $24. Bear in mind that the share is now trading at $29.13 at the point of writing.
Just why are these so called analysts giving a negative outlook on the company when the results clearly shows the opposite??

My comment is simple, these people could have taken a large short position on Altera and Xilinx and are banking that the stock price will go down after hitting a high of $30.50 a few weeks ago. Or perhaps these analysts have more insider information that the rest of us which makes them believe that the stock price will plummet from here on.

From now to $24 that is almost a 25% market cap reduction. At the same time, at current price with the earnings combined so far from all 3 quarters (~$2 per share), Altera will trade at a PE of barely 15. and that is without Q4 result. Assuming Q4 the earning is conservative 50 cents per share, that woull translate to a $2.5 earning per share. with $29.3, the PE will be 11.8.

Personally, I think the comments givent by these bunch of analysts are pure speculation and without any basis to support, at the same time the target price are definitely questionable and I would call for all investors to look into the integrity such negative calls made by these so called analysts purely based on nothing concrete but speculative in nature and definitely with lots of hidden agenda.
Such calls are irresponsible and definitely a joke especially when they are coming from big financial institutions in the US. It is apparent that these people have yet to learn from the mortgage crisis that hit them a couple of years back... Let us all live to witness if these people are real analysts or just a bunch or crappy anal-ysts.

We shall see....

Upgrades for Altera and Xilinx...

Well, this is just a follow up of what I have posted earlier... today we receives another downgrade on Altera which is a FPGA company which has overtaken its primary rival Xilinx in stock price but keeps getting downgrades from analysts...earlier it was Morgan Stanley, now its RBC Capital.

Reason cited were likely lower orders in China's telecommunication equipment makers. Such expectation are typical ones you expect from analysts since the stocks have rallied more than 15% from the beginning of Q3 this year.

From the chart, fundamental, telecommunication market in Asia, US dollar and the RMB valuation... I think the volume from the chinese companies will increase in 2011.

Therefore with all the above, I declare an upgrade of Altera and Xilinx to outperform Target share price USD33 and USD29 respectively.

Property counters... so what now?

Well, with all the hoo haa about reducing the property loan to value ratio and requiring higher amount of downpayment for property buyer, RGPT, etc... you name it... that's before the Malaysia 2011 budget...

After the budget...
- 100% loan for those with household income of <=RM3000.
- 50% discount on the stamp duty on loan agreements for residential property less than RM350k.

Gee, the opposite of all the rumour and all unnecessary discussion, comments and concerns put up are totally uncalled for... why such a mismatch in expectation.... not like we're talking about NYSE here but KLCI, come on....

well, personally I find it funny when i heard about the plan to build a RM5bil tower... for what? I thought we still have lots of vacant space in petronas twin towers? Anyway, I think overall the budget is "friendly" towards property sector since there is no downside to stop the momentum of the property sales as well as to cap the value of these properties.

L&G, IJMLAND, E&O and Mah Sing are top picks for me.

Malaysia's 2011 Budget,,, "light at the end of the tunnel"?

The highly anticipated announcement of Q4 2011....well as usual there are quite a number of large and heavy projects being lined up for major GLCs to benefit from.... Malaysia PM's noble intention is to bring Malaysia out of the middle income trap towards a high income nation, and certainly if at least 80% these projects materialized and were well executed.... it would likely help the country gain closer to its goal above.

However, being a skeptic since I have been following the budget for years now and let me tell you what, it does not take a lot of brains for us to discover that the problem may not lie in not having the right projects but rather how the governement actually follow through those projects and get the receipients of these big contracts to honour their word and complete the projects on time and within the expectation in terms of quality at the very least (we haven't talk about value add that comes from giving these projects to those GLCs).

Regardless, my opinion is this. Having great projects are essential but not a necessity for success. It requires holistic planning and excellent project managers to really drive these projects and ensure they meet the expected completion timeline. When I say excellent, it means commited, well connected, honest, noble and competent. At the same time, the subcontractors who were assigns to work on the projects are also required to possess these values, integrity, competent and well connected.

In summary, the government needs to really look into those the performance of those contractors in the past projects and evaluate if the country should continue to engage them or source new contractors. Bottomline, we need to build a country with quality people to maintain it if we are to achieve a high income nation and a successful one in the future. There is certainly no point in having 1st class infrastructure in the world but living with a 3rd world human capital and mentality.

Lastly, I think its time to sell the stocks in KLCI that have raked in gains. Not like its going to be a double dip in the world economy but rather simple, whatever that goes up will eventually come down before going up again.

Morgan Stanley are you sure?

While a few among us are guessing Fed's next move... there are many people who are placing high hopes that the Fed will introduce more stimulus package. One interesting comment catch my attention that is Morgan Stanley actually downgraded 2 leaders in FPGA industry.

Well I am not sure how many would concur with that view but personally since I know one of the company relatively well, I am going to say that what Morgan Stanley did was either a great mistake or at least the timing of such report is definitely questionable hence it goes back to the objective of publishing such article and making the downgrade on both Altera and Xilinx.

Reason given are simple: Potential weakness in Asia telecommunication sector. In fact this financial giant actually quote that "visits to telecommunication and original equipment manufacturers in China and India "reveal slower growth in 3G subscribers in China and a much lower profitability in India", which could lead to near term decline in orders from these 2 companies.

Well, first of all in my opinion while the 3G subscribers may decline the infrastructure development will still proceed. When we talk about decline, what's the rate that we are talking about here? Second, how on earth did Morgan Stanley measure the potential decline due to the lower profitability in India? The pressure on gross margin is not so much on Altera but on its customers selling products made from Altera chips to the people of India... similarly goes to Xilinx.

At the same time, allow me to share some of the facts of one of the company, let's take Altera for example.

Stellar financial results for both quarters in 2010 with impressive y-on-y revenue and earning growth, ROE is ~40% and operating margin of close to 37%. Company is on track to gain more market share with its Stratix IVGX family leading the way to market share gain and securing more new sockets from customers who used to be hardcore fans of its main competitor.

In short, it seems that the company is hitting everything right at this point of time, with the chinese government keen on expanding the infrastructure system in China, I don't think the slow down anticipated in China's voracious chip consumption is going to be of any material impact at least not in the short term. When I say short term, that's 3-6 months period.

Chart wise, no matter how pessimistic I could possibly be the stock just appear to be heading north with a target price of USD32.90 at least. That's easily a 3 dollar gain which translate to >10% return. I say BUY since the Q3 earning report is still to be published.

Why England cannot win the World Cup....

Well, 3 days have gone past since the World cup started and I keep wondering at the beginning of the competition whether England can win this time or perhaps reached the last 4?...
After the first match betwen England and USA, I am convince that we are likely not going to see something different this time as well.
Reasons are as below....

1) The players are too filthy rich
- Rich and young and with all the English lifestyle of a footballer going from clubbing, women, and betting.... these guys just don't have the determination that a footballer is suppose to have to succeed at this level. Mental and physical distraction is the main problem.

2) Lack of team spirit
- With every players trying their best to carve a name for themselves and view this as an opportunity to further enhance their fame, the team lack the team player spirit and too many individuals trying to show case their "talent".

3) Ego
- Englishman ego is another whereby they think they are the favourites and thought too highly of themselves. Such attitude will only bring downfall as the pride is too high for comfort.

4) Commitment to succeed
- These players do not have the spirit to come as a team and deliver the goal as witnessed and this has very much to do with the background and foundation of the human side as most of them come from a relatively comfortable background with very little hardship in life to understand the spirit of working hard for success.

Sad but true....

My personal take is the team are unlikely to even reach last 16 if nothing was done to fix all these.

Kenmark's share price movement going forward?..

Well, I have seen this company day in and day out back when I was young and little did I expect that the company would be facing such issues since it is an old company and has been around for quite a while now.... While the company directors try to apply for an extension to the 4th quarterly results, it serves as a question mark to many whether there is going to be another case of accounting issue due to unrevealed financial difficulty or there is a conspiracy behind all the missing in action of the company's top management.

Emergence of Datuk Ishak Ismail who swooped up a wopping 21.41% stake in the company just when the share price hit a all time low is interesting and confusing at the same time.

My take: If indeed the company has financial difficulty to sustain the business operations, the workers would not have been paid their salary at the early month of May 2010. Also Datuk Ishak's emergence does not make sense from financial stand point to throw money into a company that is bound to wound up because of accounting fraud even though the amount spent may be relatively unsubstantial for a him. I quite sure there is a twist to the whole thing Ishak may just be a predator who strike at the "right time"... :p

Also I believe the company will announce the resumption of operation next week as there is basically no critical default as claimed by Kenmark's directors yesterday on the payment to EBB.
Having said that, I would stake a bet that from the data and information shared to me, unless I was fed with wrong information, the stock price are likely to further regain its loss next week.

At the point of writing this, the US market is trading sharply lower and the Euro breaking below the $1.20 level against the dollar (expected to even hit $1.15 in due time), I think this whole market environment is going to put Kenmark's share in focus and provided the new directors deliver the promised to get the financial report straighten and resume operation, things are expected to get better for the stock price.

Have a nice 3-day weekend.

Only in Malaysia, believe it or not.....

I was having a chat the other day about how the market is going to be and all the forecasting actitivities traders are doing in anticipation of the 1H rally and all of a sudden someone mentioned that AEM is picking up and for any normal people in the street, the movement of this stock last Fri was rather surprising since the termination of the MO with Dah Mah Corp over the LCD purchase.

As usual, such activities are deem unusual and as usual Bursa Malaysia issued its SOP of querying the company for the activities and that's going to be all about what Bursa can do.

Has anyone ever remember seeing anyone indicted in the Malaysian soil for insider trading?

Or has anyone lived long enough to tell us whether such thing has ever happened at all?

Well, not that I can recall.

Either all the business and corporate people in this land of possibility (anything ridiculous is all possible) are really damn ethical and professional or there is no bloody body to regulate and monitor the market.

Afterall, only in this land you see selected foreign immigrants who get into the country (legally or illegally) being given citizenship and granted all the special rights almost immediately.

Well, invest wisely as there is always a reason why the currency of this country is still bloody low compared to other developing countries. Time will come when china overtakes in currency superiority and by then, you'll probably see many flocking to china to make money just like how singapore is gaining at the expense of this country.

Well, don't fucking kid me that the 1malaysia thing will work and stem brain drain because i think its doing the exact opposite of its objective. Subtle but real.

First of all, Happy New Year!!! to all the readers of this blog....I know its has been a while since this blog is active with many exchanges, but I have been occupied with other stuffs in my life... but I'm going to try to write more and share whatever I have for the benefit of everyone including myself... :)

Enough of the intro... let's get back to business.

Generally world equity market will rise, that's a no brainer... similarly I can tell you now, KLCI will have the same trend... and if we're talking about KLCI alone, unless you have tons of cash and luck to trade KLCI futures you just can't make enough to live on stock trading alone... sad to say but its true. In typical case, every investment is suppose to make a return... what differentiates an A list investment from mediocre ones are the performance of the return.

We're talking about 30% per year at least... hence with a 500k capital, it will give you a decent amount of money to sustain your lifestyle and at the same time grow your capital base...While not all in the working class have a ready cash pile of 500k at their disposal, given a typical range of 50k savings for a person who worked for 5-10 years, you should at least generate 30% return from that cash pile and grow them to become your retirement fund.

well if you're already trading for a living, you're basically considered retired already... :p

The market is going to boom and the sector that is going to lead the return of the world's greatest investment tool is property. E&O, IJMLand, Mah Sing, SPSetia and hunza are the ones and in that order. E&O is a well managed company as far as I know and their floating shares are large enough to provide the liquidity for trading... also the size of their landbank is the largest there is in terms of RM if they are to be developed. Easily, E&O could fetch RM1.79 from current level...IJMLAnd is banking on their waterfront project The Light in Penang to spearhead their profit, if executed well, this counter could well be RM3.40 in 6 months down the road.

One of Mahsing's key project which is also in Penang if executed well, will increase the profitability and reputation of the company in the northen region of the country and further cement the company as a reputable developer. The project is ~RM1.5bil which is going to provide a handsome return. RM2.55 is not surprising...SP setia is the big brother who are the ones that most fund managers tend to hold some just to make sure they are exposed to this sector and also a stable company with a relatively solid reputation and balance sheet.

Now which one is considered to be the best cash generating machine, it all boils down to the operating income.... you go dig it out yourself.

Like I always prefer, if you think the mother share is going up, why not buy the warrant as well...? E&O, IJMLAnd, SP Setia all have warrants... they provide better leverage and higher return, afterall, if you have no faith in the mother, why even invest in the first place.

Well, enough for today... just don't let opportunity passes by just because of our ignorance... if you dont' know its ok, but if you read this, don't say its not your luck if things turns out to be just what it has been preached.