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Patient's Condition

Nurse, pass me the anal thermometer .... two straight days of hammering, now everyone who was cheering "Malaysia Boleh" last week has turned cynical. Some gleefully shorting the index waiting for a pickup at 1,050.

Prognosis: The selldown on Tuesday and Wednesday was good for the patient, he had gorged on durian and stout, plus two packets of nasi lemak. Needed to do a body cleansing you know, detoxification ... now, nurse, did the patient vomit blood??

I see, no cold sweat on his forehead also, nothing to worry about.

Seriously, the Tuesday and Wednesday activity was largely due to contra plays, just check the volume late last week. It couldn't continue as the contra plays would just get bigger and bigger. The huge buys on Sime and PNB companies was not due to the Credit Suisse report, it was just the prop trading desk of Credit Suisse buying a huge position in those stocks - which is still a very good sign, the play is on for Malaysia stocks.

How can it be bad, we have a strong platform for the index with the merger to be passed for Sime and the related counters. Banks are still very attractive. Tenaga and Telekom have their favours. Plantations still going strong. If Typhoon Durian gets worse or any kind of natural disasters hit plantations, CPO prices would go through the roof even more. Some funds exited US stocks in favour of Asian exposure, just look at the liquidity surges in HK and Japan. Its swishing in Asia.

The contra plays got hit. but there are buyers and it looks solid. I don't think the index will even go anywhere near 1,050. Too many corporate exercises in the pipeline. Accumulation in Proton-C is just too obvious, with or without market weakness. Kuok's merger plans looks very good for PPB. Even the higher tolls have a positive spin on it for the related stocks, not heavy enough to derail the local economy. Ringgit looking for further headway, no way funds are leaving local shores just yet. Its December, time to play till March at least, baby...

ooh... nurse, take the thermometer out from the patient ...


sopskysalat said…

given the many investment theme being played, going into 2007, oil and commodities may continue to be in focus. looking into the domestic scene, the boom in property sector happening in singapore and malaysia may well put the construction into the limelight with many const. co. being badly battled down for the past 4 years or so. infrastructure deal are popping everywhere. therefore, isn't it time to seriously consider const. co. again? my view is yes. what's yours?

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