Is the Christmas equity bull run alive or dead?

Well, things certainly looks rather gloomy with US super committee failure to impress?
No tax hike, 1.2 tril automatic deficit cut.... its a win win for both sides, so what's the problem?
It just goes to show a weak government in my opinion. US14tril deficit is way too much to be indecisive... Republicans and the Democrats need to work together to agree to a bottomline that US needs to do to bring the country back to growth and lead the rest of the world.
Essentially there is no difference in leadership between US leaders and the European leaders in addressing the sovereign debt crisis....

Now with the China's Nov manufacturing purchasing managers' index (PMI) slumping to a level lowest in more than 2 years... is China going to see a hard landing because of China's monetary tightening campaign? Only in Q3 China raised interest rates for the third time this year in a bid to calm rising consumer prices.... so is China currently the world's growth engine is affected by the recent Europe's financial turmoil? Well of course!... its has always been a demand and supply thingy and will continue to be bounded by that.... else who do you think China are selling to??

Well, as for KLCI, I think its a different animal... afterall its backed by EPF, Khazanah and PNB continuously so I think its going to have the year end rally. Well, the moment penny stocks starts losing its glitters then its time the fundamental kicks in... in the mean time, let's punt safely.. :p

Euro Sovereign Debt Crisis averted?...

Well, guess if you use the yesterday's equity market performance to gauge and looking at the whole world response to the news that the European leaders have agreed on the below

1) 50% write down of the Greek govt debt
2) Increased EFSF to 1.4 tril and its bailout mechanism
3) Recapitalization of banks in euro region

Is that all it takes to resolve the problem? No.
Regardless, its at the very least a plan finally from the European leaders despite the cancellation of the Wed finance minster meeting which I think could have happen unofficially nonetheless.
Anyway, the fundamental problem is easy that is the european government and its people spent too much, too fast and produce too little. When you're in such situation, it is as good as you are earning $5k monthly but have a monthly debt commitment of $5k to meet if not more. how to survive? well, first get real and face the reality and embark on a plan to restructure the cost structure. In this case, Greece needs to stimulate earning growth and increase revenue while at the same time reduce expenditure of the government.

The entiutlement mindset of the people have to change, from entitlement to well deserve.
Untill that culture is changed, the sepeople will always find that the government is not doing well for its people. I am not saying the governement is not at fault but I am saying the people is equally at fault for having such expectation (entitlement mentality) from the government.

So back to the the KLCI, stocks are moving well and many blue chips have indeed recorded stellar movement of late. Look at Genting, Mahsing, UEMLand, IJM. I am bringing you back to these 2 counters... MBSB and OSK...

MBSB, still ridiculously undervalued and expected to jump once the company posts its quarterly results.

OSK, a good buy especially when many are expecting a RM2.30-RM2.50 price offer from RHBCap. Personally, if I am Ong Leong Huat, I will not sell unless its RM2.50 and above.

MBSB undervalued...

MBSB has been in the spotlight for the past week due to the budget expectation that will indirectly benefit the company should civil servants' pay are bumped up with adjustment and bonus.

Malaysia Building Society Bhd (MBSB), 2nd quarter results has been very impressive.

The financial institution, which has the Employees Provident Fund as its biggest shareholder with about 66% stake, saw net profit come in at RM78.2 million, which was 58% higher than a year ago and 14.5 higher than the preceding quarter.

First half net profit is RM146.5 million, a 58% increase from a year ago beating analysts' expectations by about 12%.

The strong profit growth was largely driven by a steep rise in Islamic banking income, supported by stronger demand for personal financing among civil servants.

While housing loans used to be the group's traditional area of strength, going foward, areas of growth would be personal loans and corporate loans which are fast catching up.

Personal loans currently accounts for about 40% of MBSB's overall loans, followed by housing loans 34% and corporate loans 25%.

The company plans to launch more new retail products this year, such as hire purchase loans and Islamic credit cards, to diversify its revenue.

MBSB's share price has risen of late and closed at RM1.64 today inline with the global equity recovery in the stock markets.

Enought of the typical report, this stock is definitely under value and I would place a target price of RM2.39 to be achieved in the next 3-6 months down the road.

Re-rating catalysts include but not limited to
1) Higher-than-expected loan growth and margins
2) A sustainably high return on equity of over 20 per cent
3) Confirmation of a dividend payout ratio of at least 35 per cent
4) Potential M&A

MBSB, in which PNB also has ~12% stake, had in last quarter surprised investors with a gross dividend of 5 sen a share. It was the first time in recent years that it declared an interim dividend.
Personally feel that the company could easily be making a full-year net profit in excess of RM275 million.

In short, is the recent run up a sign to buy? Hell yeah....

Private companies being bought over by GLCs...

What's the implication?
Well you can say what you want but I can tell you such exercise which are rampantly happening in the Malaysian soil is what drives foreign investors away from the Malaysian stock market.
This started since Maybank time, when the bank was taken over in a hostile manner by government. The owner of course has since left the country. Robert Kuok sold his sugar business and moved his main core business out of the country.... UEMLand buying Sunrise...Sime Darby buying into E&O and now PNB taking over SP Setia....
As an investors, all I care about is the going concern of the company and whether the company will generate higher values for shareholders over time... We all know GLC's track record!, less than satisfactory given the upperhand they enjoy as GLCs. Hence fuck it, why would I believe that SP Setia is going to get better with PNB taking over?!?

Look at Sime Darby, poorly managed... MAS, do I need to say more? Bottomline there are nothing wrong with the business model of those GLCs but rather the people running them that is the culprit to why these companies are not generating super income for its stakeholders...

So, while the government tries to privatise more entity, GLCs are "deprivatising" companies... just what the fuck is the government trying to do?? have some sense of direction for goodness sake... lack of strategic leadership is the key to the country's problem and lack of FDI.

The undilah video, is so true... this country is full of problem.... you can say which country don't have problem but this one has far more shit than you think. You don't want to wait until it explode and get hit by the shit right on your face.

Property sector of Malaysia

Well, the recent selldown of many property counters is not surprising...
As of today, most housing projects will still be selling like hot cakes in most of the areas in the country. Question is do we have secondary market demand? even those projects that costs around 400k are sold out in hours upon launch especially those from reputable developers....
I think there are so many sellers and so little buyers these days... therefore its buyers market.
Worst, the property sold in Malaysia are not habitable upon completion unlike houses in foreign countries like US, Aus, UK. Developers get good margin from the current model...
E.g. You buy a RM1.2-1.5mil condo in Penang and you still need to renovate at least 150-200k to make it cozy and feels like a home. Most of the materials are cheap parts and there is nothing in the unit for you to move in and stay...
Tell you what,... if you ask do we have a property bubble now?... I would say "fuck yeah, there is one big one", if the Europe thing go worse and Greece is bankcrupt and recession comes in 2012... property prices will drop significantly... that time you will get many houses on fire sale... just look at the supply...