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.