Tuesday, June 29, 2010

Small stocks, big yields

SOME of the high dividend yielding stocks can be found in the small capitalised (small cap) stocks universe. A good number boasted steady earnings over the past year, and have built up a reputation as generous paymasters with regular distributions to shareholders.

They are decent defensive bets in an unpredictable environment, although investors have to be prepared to stomach volatile price swings, often amplified by the lack of tradable shares in the market.

A stockbroker recently took 13 small and mid-cap companies for a roadshow to meet fund managers. There were a few interesting soundbites from a report by conference organiser CIMB Research.

For instance, it noted that the event provided the opportunity for some fund managers to meet the management of CI Holdings Bhd (CIH) for the first time. The maker and distributor of soft drink and fruit juices has had a long relationship with PepsiCo that started in 1973.

It has moved on from its torrid years in the early part of the decade. Over the past three years, profits have been on a rising trend.

CIMB Research analyst Norziana Mohd Inon has forecast that CIH’s earnings will hit a new high of RM35mil in fiscal year ended June 30, 2010.

A projected 10 sen dividend payout would give a decent yield of 4.3%. This will match the 12-month yield of Nestle (M) Bhd, which has a market value of RM8bil. CIH’s market capitalisation stands at RM340mil.

Another company, Daibochi Plastics & Packaging Bhd, offers an interesting mix of earnings growth and a steady dividend rate that comes at a relatively cheap entry price, particularly after a recent decline in its share price. Records show that the company has been paying dividends twice a year for over a decade.

At RM3.08 a share, the stock offered a hefty dividend yield of 7% and good upside potential for capital appreciation.

Daibochi’s current market value is about RM235mil, but average daily volume transacted is less than 100,000 shares.
High payouts

Meanwhile, a quick search on the Bloomberg terminal revealed that a number of recently listed companies are already promising high payouts.

Telco giant Maxis Bhd and computer hard disk maker JCY International Bhd are the big companies with decent yields, but these are actually mature businesses that recently went public.

A small firm with a big dividend yield is rubber hose maker Wellcall Holdings Bhd. The Ipoh-based firm went public in 2006 and had been paying dividends to shareholders every year since.

At the current market price and based on analyst estimates, its total dividend payout for this year will be a massive 12%. That is triple the return compared to putting cash in the safety of fixed deposits.

Investing in small cap stocks, however, can be treacherous. But companies with healthy track records are investors’ best bet in navigating for bargains in the small cap universe.

To help investors make informed investment decisions, the exchange provides free investment research on certain listed companies under its CMDF-Bursa Research Scheme. The research coverage is paid for by Bursa Malaysia and the listed company itself.

A stockbroker that is big on promoting small-cap stocks is OSK Research. For the past five years, it had published an annual book compiling write-ups on a selection of small-cap companies. This is on top of regular updates issued to clients.

This year’s edition was launched in May and featured a list of 50 companies dubbed the “50 Jewels.’’ It is a gold mine for investors looking to invest in so-called undiscovered gems.

Meanwhile, CIMB Research issues its Small Cap Monitor to clients on a regular basis, which provides reviews on selected companies that usually fly below the radar of most investors.

Saturday, June 26, 2010

Sunway REIT IPO may be fully covered

Applying IPO just became much more easier nowaday. I used to do it over the ATM machine but not any more until i decided to apply for Sunway REIT IPO via M2U. By just merely clicking some buttons and my application just went through without much hassle in seconds i believe, everything done electronically, no form, money order or bank draft required. This is just ease so much comparing previously where we have to grab forms for good IPO. Not any more. :) Thanks God that Technology help to fasten the process, tighten the security and easing the application.

The institutional segment of the initial public offering of Malaysia’s largest real estate investment trust, Sunway REIT, has been “fully covered" at above 90 sen per unit, two sources with direct knowledge of the matter said.
But Sunway REIT may have to price its IPO at the lower end of its indicated range because of deteriorating market conditions, the sources told Reuters on Thursday.
“The book is fully covered. It’s oversubscribed by about 1.2 times now. It’s quite an achievement given the current market conditions,” said one of the sources, who asked not to be named because he is not authorised to speak to the media.
The company last week set the indicative price range for the sale of 1.6 billion units of the REIT at between 90 sen and 98 sen per unit.
This means the IPO could raise between RM1.44 billion to RM1.57 billion.

Thursday, June 24, 2010

BJTOTO - Issuance of Medium Term Notes

Saw below announcement, an issuance of MTN by BJTOTO's subsidiary STMSB. The drawdown from MTN will be used to facilitate BJTOTO Groups existing bank borrowings and for working capital. I would expect more dividend to be given in future...hahaha. That's how VT used to play his game using others people money to fund his companies and his own pocket. Way to go, my firends. HAHAHA



The Board of Directors of Berjaya Sports Toto Berhad (B-Toto) is pleased to announce that STMSB proposes to undertake a MTN Programme of up to RM800.0 million in nominal value (the MTN Programme) and has received the approval of the Securities Commission. STMSB has appointed Maybank Investment Bank Berhad as the Principal Adviser, Lead Arranger and Joint Lead Managers together with AmInvestment Bank Berhad.

The MTN Programme is akin to a revolving credit facility where-in the tenure for the MTNs shall be above one (1) year and up to ten (10) years as STMSB may select in consultation with the Joint Lead Managers.

The anticipated initial drawdown of the MTNs is expected to be sized approximately RM500.0 million, the proceeds of which will be principally utilized towards the refinancing of the B-Toto Groups existing bank borrowings and for working capital.

The MTN Programme is an efficient and cost effective avenue to manage the B-Toto Groups funding requirements.

Malaysian Rating Corporation Berhad, had in its press announcement dated 14 June 2010, assigned a AA rating with stable outlook on the MTN Programme.

Saturday, June 19, 2010

Bought More KFIMA

Bought more Kfima at a price of RM0.92 after disposing Genting at RM7.27 the other day. This purchase happen when i manage to salvage some extra money out of the disposal of Genting. I believe there will be more upside for Kfima especially when time draw nearer for its 5sen dividend around August or so. This definitely serve as an attractive catalyst beside the good earnings that they have garner so far.

Low valuation is where making Kfima attractive, with EPS of 22.32sen with just price at RM0.95 currently is some how quite safe to buy in. Of course many good financial figures recently should somehow justified that Kfima would at least trading at PE of 5 and above. I maintain my target price of RM1.10 in short term of 3 months time. We will just have to wait patiently and accumulate more if it dip and we are playing around dividend time which i think is a safe heaven period to buy as the dividend of 5% or more is good enough to serve as a cushion after all.

Again, this of course does not represent a buy call from me. Buy at your own risk.

Wednesday, June 16, 2010

GENTING - Sold at RM7.27

Finally, gotten rid of my Genting all at RM7.27. As mentioned earlier, needed some money for early settle of car loan and to foot some operation medical bills :( 

Things just come unexpectedly, so, have to dispose some to raise those fund, as i am almost 80% invested and Genting being the heavyweight that can realise my fund instantly. Thus, have decided to dispose all of them. Nevertheless, I still retain most of my other shares for dividend.

Recently, have added some high dividend yielding counters in my watchlist. You can probably take a look of them as follows:-

I believed those counters mentioned above are very solid, strong in fundamental, aiming for growth, dividend and long term keeping. Till then happy trading. :)

Wednesday, June 9, 2010

Good Bye ! My Friend.

Have not been getting a real sweat for the past 3 weeks ever since i injured my leg during one of the badminton session. Still limping a bit when walking even though has been recovered quite a lot though not fully. Probably age is catching up so recovery process is a bit slow just like stock market, still feeling dizzy and floating cause did not get a proper sweat out through exercise. Hmmmm…

Human is just too weak, when I got home from work last Thursday, I’ve been told that one of my friends just passed away after coming back for a business trip from south Africa, suspected due to either H1N1 or malaria. Real sad after hearing that, he is still in his prime of 36 years of age and just too bad his life journey came to an end in such a way, leaving loves one behind. No one would know why this happened to him but we trust that God has His purpose when such a thing showered. May God bless his family. Amen.

Friday, June 4, 2010

Trading Idea : Berjaya Sports Toto Bhd 3 June 2010

Recommendation: BUY ON WEAKNESS

Current Price: RM4.24 (Issued shares: 1351.03m; Marketcap: RM1.41bn)

Technical Target: RM4.68 (3-month)


(1) Defensive play amid external volatility;

(2) Although only getting a small boost from the agent fees (rather than running the book), the sports betting business is a risk-free revenue straight to bottom-line. Malaysia’s sports betting revenue may reach RM20b, based on 1.5% GDP (as seen in Singapore and Hong Kong);

(3) Potential Vietnam NFO licence may be next earnings growth drivers;

(4) Agency fees from sports betting to partly mitigate 4D’s matured growth and loss of lotto market share to Magnum; and

(5) There is a possibility that BJTOTO may declare higher or special dividends to help BJLAND fund redemption of the latter’s RM711m bonds maturing in Aug 11. Major risk is the recent ban on sports betting by three states.

A defensive and high yield play

Source : HLG Research
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