Wednesday, February 27, 2019

Whats Up With AZRB

AZRB is going through the perfect storm. The thing is, the so-called storm is more like the aligning of the planets for AZRB. The storm is so perfect AZRB is walking on water.

As with many counters, AZRB is expected to announce its quarterly over the next day or two. If you match it up with Naim (which delivered great results). It came all the way up from 80 sen a few days back to hit 97-98 sen today (up 8 sen for the day). Both are highly comparable.

The government has been putting out soundbites that were so much more conciliatory over High Speed Rail and ECRL. More so on ECRL I think. Even IWCity had a massive volume and jacked up day when the soundbite was pleasing for HSR but died down after a day or two.

Looking at the way both projects are going to be framed. The HSR and ECRL will not be a highly lucrative project for the winners and sub contractors.

AZRB buta-buta has the most to benefit from the ECRL owing to the land and current projects it has.

Go check their annual report. It has:
- nice tracts of land in Setapak, which is about 20km from the all important Gombak station for ECRL
- also nice tracts in Bentong
- the stations of Chukai and Kemasik are very close to Kemaman, and one of the main reason why ECRL is needed is to support and enhance RAPID refinery near Kemaman (the marine base contract by Petronas has been awarded to AZRB for another 5 years / Tok Bali supply base)
- AZRB has 4.5 acres of freehold land in Kemasik
- an even bigger plot of 66 acres in Marang which the ECRL will pass through

Looking at the price movements, AZRB is just discounting the good upcoming results and has not really priced in the ECRL potential. Be careful though, it is still potential, not written in stone.

Besides the upcoming results, Tun Mahathir will be going to China in April, possibly to lock up the ECRL on better terms.

Wednesday, February 20, 2019

Trading Bull Run

The Year of the Piglet scampered off to a brilliant start.  I did expect the uptick to happen in the 1st 2 quarters of 2019, and it looks like there might be some steam left till end April at least.

It is only natural for the small caps to outperform, but also thankfully most of the upswingers had the right stories as well. We have to be cognizant of the fact that many are just coming back from oversold territory as well.

The volatile MYEG and Prestariang have been well documented, and they are more likely to be still volatile according to their corporate newsflow. Hence traders should be more careful when trading these counters.

A sure sign that liquidity has returned was the ability of the market to move even Sapura. That is not an easy counter to move. There are no discernable themes for the moment. Earnings recovery and oversold good stocks would appear closest to what we can consider as themes.

Some of the other stocks that looked good from a trading perspective (in no particular order):


Again, these are not recommendations to buy or sell but a shortlist for readers to do further research. As plenty of stocks will be announcing their QTRs before the end of February, we can safely expect a robust market until then at least.

Sunday, February 17, 2019

New Definition For "Power Couple"

The kucing is literally out of the bag. I am sure all of us wish them well. New definition needed for "power couple".

Yeo's portfolio covers many industries, of which, most pertinent here would be CLIMATE and ENVIRONMENT. IOI Corp is naturally one of the top oil palm players.

At least Yeo did not have the Plantation Ministry, but her current post will overlap somewhat in terms of regulation over palm oil industry.

It wll be interesting to note how the whole situation plays out. Our palm oil producers have been grappling with EU Certification, and many of the clauses involve things such as "replanting", "climate change effects", "sustainability", "protection of wildlife", etc...

As far as I am aware only United Plantations can say most of their plantations can/has been certified properly and compliant. KLK is somewhere there but still way off UP's level of certifications and I think I have read reports that only about 10%-20% of IOI's plantation managed to get the required certification.

Watch this space.

Tuesday, February 12, 2019

Just Saying ... Unsold Units In Perspective

Just how bad is the issue of unsold units of property in Malaysia. We have about 22,000 units valued at RM22.5bn. Now that averages to a pretty high RM1,022,700. Somewhere the logic does not come through. At the upcoming "fair" about a quarter which will be offered for sale will be below RM300,000. Those at RM1m and above may find very few takers. Those below RM500,000 may see the better interest. All up, it would be hard to see a clearance rate of more than 30%.

Meanwhile, a more sobering figure showed that unsold units for the first half of 2018 stood at 29,227... and that is not accounting for the almost 100,000 uncompleted units coming onto the market. Hence we could be looking at around 60,000 unsold units assuming the upcoming uncompleted units were only 70% sold. That being said, the upcoming "fair" while laudable, is still a step too short from solving the issue. The property market should be in the doldrums for at least another 3-4 years minimum.

To put things in perspective, South China Morning Post already put up a huge warning headline for HK property investors owing to unsold units. They are warning a coming glut of unsold properties there. Their figure, wait for it: 3,295.

It is not apples vs apples but still, HK is already shitting bricks with 3,295 unsold units. Plus they have a much larger base of foreign investors. While our population might be much larger, it is certainly not 20x bigger than HK.

Sunday, February 10, 2019

Sunday, February 03, 2019

A Most Meaningful Movie - INSTANT FAMILY

This is a must watch movie for the entire family, great points for discussion. Plus is a damn entertaining movie, chuckles and tears. It is certainly not a romantic comedy. It is based on a true story, and I am sure there are thousands of similar stories.

It is about foster parenting. A realistic look at the perils and joys of parenting. Bring your kids so as to let them figure out how lucky they are. The sad thing is that in the USA alone there are nearly 500,000 kids inside the foster parent/ state care system. In other countries, the situation is worse, with no such system.

Keep a lookout for the very beautiful Isabela Moner, who plays a 15 year old. She is much older than that and is an accomplished actress and singer. Catch her singing during the credits.

The credits at the end showed a long pictogram of lovely real foster parents with their kids. Heart warming indeed.

Friday, February 01, 2019

Empathy and Generosity

Saw this wonderful piece of news. Justo and his family were gifted US$2m by Tong Kooi Onn and The Edge. You can read the rest of the article. I am sure there will be a lot of brickbats and bouquets at the same time for the gesture.

For me, it is a splendid show of empathy and generosity of heart by Tong. When Justo wanted to sell the information a few years back. It was more to get back something he was promised but was delivered. Money is given then would have been a transaction.

Still, even without the promised funds, Justo allowed The Edge and Sarawak Report to blow the whole thing up, providing the deep linkages to the Middle East and various tax-free havens where the accounts resided.

Justo and his family suffered through hell in Thailand. While we are busy reclaiming back 1MDB funds, while we busy profiting from the 1MDB implosion with a stupendous general election victory ... we seemed to have forgotten the people who had to suffer to get us there. Maybe the intention wasn't 100% altruistic on Justo's part, but there was still substantial credence and even more personal sufferings involved.

This is not charity, and I am sure one can say there are 1,000 more people more in need of financial help. We can only "bloom where we are planted", empathize and be cognizant of the roles people have played which improved our situation, financially or on personal matters. 

Things To Do During Lockdown

All local councils, utility companies, construction firms (those with permission) and city planners in Malaysia should take the opportunity...