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Showing posts from 2018

In Case You Haven't Noticed, We Have Been In A Bear Market For The Past 6 Months

What is a Bear Market 
A bear market is a condition in which securities prices fall and widespread pessimism causes the stock market's downward spiral to be self-sustaining. Investors anticipate losses as pessimism and selling increases. Although figures vary, a downturn of 20 percent or more from a peak in multiple broad market indexes.


52 WEEK RANGE
1,626.93-1,896.03 Taking the low-high for the past 52 weeks for FBM KLCI, the differential was just -15%.
52 WEEK RANGE11,060.34 - 13,143.89
The slightly broader FBM100 differential was -16%.




52 WEEK RANGE11,150.18 - 13,449.68
The very much broader EMAS index differential was -18%.



52 WEEK RANGE10,910.52 - 18,230.59
The small-cap index (similar to ACE index) was in a totally different hellhole, the differential was -41%.


KHAZANAH



As a broad-stroke, Khazanah's main holdings did look pretty awful for supposedly be chips.

Let's look at the major industries for Malaysia:

PLANTATION


Two Notable Corporate Announcements - Prestariang, Watta

The fall of Prestariang is now clear. It was margin call forced-selling of 117 million shares. Coincidentally, Affin-Hwang Asset Fund picked up 40,000,000 - probably bargain hunting. However, it seems flukey to bargain hunt when a major portion of Prestariang's outlook and prospects were diminished with the announcement over SKIN. We would understand better if the buying was an average down exercise, but the announcement showed that it was a new position, which is surprising. But I am not a fund manager.













Watta Holdings, a relatively clean Main Board, which had earlier announced its exit from their main car battery business, saw the emergence of a new substantial shareholder. Just the name might not make much sense except that he is the current Group CEO for Serba Dinamik (the only consistently profitable oil & gas outfit left in the country I guess, making around RM100m PBT per quarter for the last five quarters and counting).







My E.G. - Unexplainable Drop?

Investors, traders and fund managers have been scratching their heads over the past week over MyEG's share price. Just have a look:























“The company wishes to inform that to the best of its knowledge after making due enquiry with the board of directors and major shareholders of the company seeking the cause of the unusual market activity in the company’s securities, the company is not aware of any factor which may have contributed to the unusual market activity, which led to the sharp fall in share price and increase in volume recently,” it said.
Read more at https://www.thestar.com.my/business/business-news/2018/12/12/my-eg-falls-in-heavy-trade/#5V4hMkcGk4IJr6JL.99



Generally i wouldn't bat an eyelid over stock volatility, especially in the present trying market conditions. What was galling was that the official statement from the company itself that they did not know why the stock price got hammered over the past few days.

Let's look at the developments over the past few days:

























a) …

Low PER & Low P/B Ratio - Privatisation/Investing Candidates

The Edge did a marvellous compilation on stocks with low PER and low P/B, citing considerations that there may be plenty of opportunities for privatisation. Let's look at the low PER first.

Granted the equity markets have been in the doldrums for sometime now, hence as a collective group PER valuations would move down. It has to do with what we call "earnings visibility".

Privatisation is seemingly easy to suggests but the reality for most listed companies, even when their PER or PB are low, they needed the access to capital markets via their listing vehicle. Hence to take them private be it the owners themselves or PE funds, they probably have to tag another extra 30% as capital needs as each privatisation will need to wait it out maybe 3-5 years before relisting.

PER SECTION

a) PER refers to the earnings ratio. Hence there are a few assumptions, PER is only a valid reading if its a "going concern". PER has to do with earnings predictability. How low is deemed as …

Khazanah's Portfolio Assessed

Khazanah's portfolio makes for a very interesting read, but probably not for the reasons you are thinking. Yes, the markets have been bad. It would have been a very cheap shot to snap a portfolio's performance at ONE specific date and try to "shame" the managers. That is not my intent and I don't think Star Biz wanted to do that at all.

a) Performance - It is in line with the rout in global equity markets, more so for emerging or developing markets. The trade war exacerbated the situation.

b) Key Holdings - Mind you, these are key holdings, or substantive holdings of the said company, hence it is not like you can trade in and out easily.

c) Blame - Well, even in a rout you have losers and real outsized losers. Could Khazanah have known or impacted on those companies. We are talking about Axiata, Telekom and Astro in particular? They could only make their input at board level. Failing which, they could have initiated a replacement of the CEO with someone with a bette…

China - That's Bullying

This happens about 2 to 3 times a year, in China. It is always either the Koreans or Japanese. Sometimes its the Americans, now its Dolce & Gabbana. Every time something is not right or not nice happens to China, usually corporate wise, the said country's products will be boycotted. Sometimes it can happen via tourism where they vote with their feet. You get angry at MAS, you will stop coming to Malaysia. You did not do rescue operations well in Thailand, I will not go there.

Its like a belligerent child getting his/her way with the parents' approval.

China needs to understand and its citizens need to understand - people make mistakes, companies make mistakes ...how would you like it if a Chinese citizen in Hubei ranted off on FB racist comments about "pick any country". Does it make sense then to boycott all Chinese products? Come on, grow up.

Deal with each instance properly. Just because you are the world's biggest consumer group does not mean you use that as…

RPGT Should Not Be Calculated From Year 2000 But 2013

Our Finance Minister clarified that RPGT would only be calculated from year 2000 onwards. We also have to remember that, in 2007-2009 the property market needed stabilisation and PM Badawi suspended RPGT from April 2007 till December 2009.

The move, was it to allow people to sell at a profit without RPGT??!! NO!!! It was to encourage people to buy then. Hence to say that all RPGT will be calculated from year 2000 is grossly unfair. 

Here we are only arguing over the just implemented 5% RPGT for properties held for more than 5 years. Hence the more than 5 years should be worked back from 2018, which is for properties bought on or after 2013.



YESTERDAY
By Hidir Reduan Abdul Rashid - November 21, 2018 @ 11:06pm KUALA LUMPUR: The Real Property Gains Tax (RPGT) valuation on property would only be calculated from the year 2000 onwards, says Finance Minister Lim Guan Eng. He said that this is done to give clarity on the issue following feedback from concerned property owners who have bought and …