Subsidy cut the better option

Thursday June 12, 2008

COMMENTBy KHOO KAY PENG
The recent restructuring of fuel subsidies shocked the nation. It seems like a drastic move but it is better than spending RM40bil a year on oil subsidies when there are other pressing socio-economic needs.
LAST Wednesday, Prime Minister Datuk Seri Abdullah Ahmad Badawi shocked the country by announcing subsidy cuts for both petrol and diesel. His main critics slammed the decision as a move to spike whoever would take over from him.
A Pakatan Rakyat leader surprised at the decision reckoned that Abdullah had forfeited his option to call for snap polls should there be crossovers.
From this observation, it is clear that Abdullah did not put politics above the interest of the nation.
It simply does not make economic sense to spend RM40bil a year on oil subsidies when there are other pressing socio-economic needs. Every year, almost half of the fuel subsidies go to private cars, more than 75% of which are single occupant.
If the Government can deliver on its promise to improve and enhance the current sloppy public transport system, this money can be used to fund other more pressing needs such as essential food items, education, affordable housing and healthcare.
Again, the decision made was correct and timely, but the manner in which it was done robbed it of the full credits it deserved. Only weeks ago, Abdullah and his deputy Datuk Seri Najib Tun Razak had given assurances that subsidy cuts would be deferred at least until August.
Flip-flop in the decision making process did not help to consolidate people’s confidence in the government’s management of rising oil prices and inflation.
Considering our current socio-economic condition, a gradual cut of subsidy is a better option. The people and industries need time to adjust to the new environment. These industries have operated in an artificial cost structure supported by subsidies since 1982.
However, I agree with some economists who observed that it would be better for Malaysia in the long run to adjust its subsidy structure now, before we reverse our position to become a net importer by 2014. Moreover, we cannot continue to subsidise the rich and foreigners.
With the subsidies significantly reduced, the Government must now deliver on its promises to reduce wastage and streamline the bureaucracy.
All government expenditures must be made accountable and transparent to the public. Abuses of public funds reported in the Auditor General’s report must be curbed. The Government must show more teeth in fighting corruption.
Ironically, the question is no longer whether the Government can or cannot deliver on its promises. For its own political survival, Barisan Nasional has no other choice but to perform.
Inevitably, the manner in which the cuts were made courted severe criticism from several Pakatan Rakyat (PR) top leaders.
Parti Keadilan Rakyat de facto leader Datuk Seri Anwar Ibrahim described the retail petrol price increase as “wanton in size and callous in effect”. He charged at the way the profits of Petronas were disbursed, and criticised the “wanton waste in government expenditure”.
Touted by the foreign press as the “prime minister in-waiting”, Anwar pledged, “I will resign immediately” if a PR government was unable to roll back the subsidy cuts.
DAP secretary-general and Penang Chief Minister Lim Guan Eng criticised the move as “economically insufficient and socially unjust”. He claimed that the new structure “does not deal with ensuring that fuel subsidies fulfil the intended objective of helping the poor instead of benefiting the rich”.
But surely the Government, including a PR-led one, cannot continue to support a subsidy structure which is unsustainable once the country becomes a net petroleum importer.
The promise to reverse the subsidy cuts is an attractive one. But for how long can the subsidies be maintained before our limited resources are eaten away?
Anwar has to justify why we should continue to pay through our nose so that six million drivers can continue to enjoy the subsidies.
If the increase of 78 sen is too drastic now, can Malaysians accept a RM2 rise by 2014 should the fuel price continue to climb?
By using the money saved from the subsidy cuts on other pressing needs, the Government is addressing the basic needs of the poor. On the contrary, the continuation of the fuel subsidies is detrimental to the interest of the poor, and benefits only the upper echelons.
On this part, the enforcement bodies must work tirelessly to contain unnecessary price increases triggered by the higher retail fuel price, and not merely pay lip service to its intention to manage inflation.
If Anwar wants to position himself as a strong candidate for the premiership, he must prove that he has a plan to do better than merely proposing to reverse the cuts.
It is more productive for his coalition to propose an alternative strategy on how to control retail fuel prices, to prepare for the reverse of position to being a net importer, to improving quality of life, to ensuring finite resources are channelled to food security and public transport rather than to organise and support street protests.
Can the PR do better? We are listening.
Khoo Kay Peng is a corporate consultant and an independent political analyst.

Sold Tenaga at RM8.50

Have sold my Tenaga at RM8.50 today. Is very much lower compare to my target price at RM9.30, however, this just prove that no one can predict future, so long as one don't make losses consider good enough and remember that one got to have patient when dealing with investment. Nothing is come free in this world, you want to make money you got to sacrifice your time and money. You got to sharpen your saw before making an attempt. Anyway, treat this as your own business, deal it with seriousness and be responsible with it. In this instance, every cent that put in is worth the value no matter what it turn out. All the best and may the best price be yours.

Bought Huaan (2739) at RM0.66

After evaluating the result of Huaan and considering the Coke and Coal prices have been up for about 50% to 60%, i expect it 2nd quarter result should be good, since it has already registered a whopping 100% increased in net profit for the 1st quarter.

This time i have to concur with 'toto' about Huaan. Thus, i have bought in Huaan at RM0.66 today. It also declare a T.E 4.55% dividend for this quarter which represent an annual of 3.4% in total. I think is a good dividend overall.

Conservatively, if we calculate based on PE=8 for a fair valuation, Huaan fair value should be around RM0.90. There is an upside of around 40% which i think is worth betting your money in. Giving this counter a medium term till year end, it should be realising it actual value i hope.

The above do not represent a buy recommendation from me, act at your own risk. Till then have a good week end. Bye.

Understanding the stock market rules

Stock Market Rules by Ooi Kok Hwa
In this article, we will highlight a few common and important ‘rules’ that are crucial to most investors.
Your purchase price is irrelevant when you consider selling a stock.
Most people always find it difficult to sell a stock at a price lower than the purchase price because this means making a loss.
For example, if you purchase a stock at 90 sen, you will not sell the stock lower than 90 sen as this means a loss to you.
You will most likely hold on to it until you are able to sell it at higher than 90 sen.
Unfortunately, your stock never remembers how much you have paid for it. You have memory of the purchase price but not the stock.
As a result, some investors end up holding on to lousy stocks with poor fundamentals.
The longer you hold on to these stocks, the higher the losses that you will incur.
Hence, the timing to sell stocks with poor fundamental will depend very much on when you are able to admit that you have made a mistake purchasing them.
Deciding whether to sell when the price is falling or continue to hold on to it with the hope it will recover and break even depends on the fundamentals of the stock.
The target selling price for a stock should be based on the future prospects of the company instead of the price that you paid for the stock.
Thus, you need to “sell the losers and let the winners run”.
For stocks with good value, you should consider holding them for a longer time.
Lately, some second liners with good fundamentals have been hammered down to very low levels. Some of them are even selling at lower than the owner’s cost (lower than book value).
However, not many investors are excited about those stocks although they are currently selling at a very cheap valuation.
Most investors worry that the price will go down further after they have bought it.
It is very hard to predict the market bottom. Based on our observation, certain fundamentally strong stocks may have temporarily found bottom despite the recent market sell down.
We think it is a good time to nibble on some good value stocks and keep them for the long term.
Even though the price will get cheaper than your purchase price tomorrow, we believe the current price should not be too far from the bottom.
Investors need to remember that the returns are based on the selling price. You may purchase the stock at a relatively higher price during a downtrend.
However, if the stock has great potential and you are patient enough to hold on and wait until the market recovers, you can still get higher returns than someone who may be lucky to purchase this stock at the lowest price but sell it too early.
As mentioned earlier, buying before the market reaches bottom is “buy low, sell high”.
However, to a certain group of investors it is safer to buy only when the market has found the bottom and started to recover rather than trying to predict where the market bottom is.
They prefer to buy the stock at a higher price because they believe they can sell it at a higher price. This is “buy high, sell higher”.
For those who prefer the “buy low, sell high” strategy, as you are buying before the market is touches bottom, you need to stagger your purchases so that you have enough bullets to average down your purchase price if the stock price drops further.
For those who prefer to “buy high, sell higher”, they need to prepare themselves mentally to buy at higher stock prices.
This might be a problem to investors as they are not willing to pay for higher stock prices as they always remember the recent lowest prices.
They may end up buying nothing but still hoping the stock price will come down one day.

Received 10sen Dividend From TENAGA

Received 10 sen dividend from Tenaga. There was an announcement make by Tenaga to propose purchasing it own shares up to 10% of the issued and paid-up share capital. The Share Buy-Back will enable the Group to utilise its surplus financial resources to purchase the shares. The Share Buy-Back is expected to stabilise the supply and demand as well as the price of the Company Shares. The improvement in earnings per share (“EPS”), if any, arising from the Share Buy-Back is expected to benefit the shareholders of the Company. The purchased shares can be held as treasury shares and resold on Bursa Securities with the intention of realising a potential gain without affecting the total issued and paid-up share capital of the Company. If the treasury shares are distributed as share dividends, it will serve to reward the shareholders of the Company. Assuming that the Company purchases 433.35 million Shares representing approximately 10% of its share capital as at 31 March 2008 and such shares purchased are cancelled, the Proposed Share Buy-Back will result in the issued and fully-paid up share capital of the Company being reduced from RM4,333.53million comprising of 4,333.53 million Shares to RM3,900.18 million comprising 3,900.18 million Shares. The proposed Share Buy-Back will have no effect on the issued and paid-up capital of the Company if the shares purchased by the Company are held as treasury shares and are not cancelled. The effect of the Proposed Share Buy-Back on the EPS of the Group is dependent on the purchase price of the Shares and the effective funding cost or loss in interest income to the Company. Further, should the Company choose to retain any Shares purchased as treasury shares and subsequently resell the treasury shares on Bursa Securities, depending on the price at which the said Shares are re-sold, the Proposed Share Buy-Back may have a positive effect on the EPS of the Group if a gain on disposal is achieved. However, if a loss on disposal is realised, it may reduce the EPS of the Group.

Genting posts lower Q1 net profit of RM439mil

PETALING JAYA: Genting Bhd, Asia's biggest casino operator, said net profit for the first quarter ended March 31 fell 33% to RM439.4mil despite a 7% rise in revenue to RM2.16bil.
The lower profit was due to less income from its British gaming operations, while profit in the previous corresponding period was boosted by a RM510mil one-off gain from the disposal of shares in its subsidiaries.
“Higher revenue was recorded at the group's non-leisure divisions, particularly the plantation division,'' Genting said in a statement yesterday.
Plantation revenue, via 53.8%-owned Asiatic Development Bhd, amounted to RM249.5mil, or 93% higher versus RM129mil a year earlier.
Genting said the plantation company achieved a higher crude palm oil selling price of RM3,403 per tonne in the January–March period against RM1,927 per tonne a year earlier.
An aerial view of Genting Highlands Resort
Asiatic released its first-quarter results on Wednesday.
Revenue at Genting's core leisure and hospitality division slipped 2% to RM1.44bil despite higher sales at Resorts World Bhd, operator of Genting Highlands Resort.
“The British gaming operations under Genting International Plc were affected by lower business volume, higher net bad debts written off and higher gaming duties,'' it said.
The group's power division delivered a 14% increase in sales to RM408mil, but Genting said rising coal prices “would likely affect” its operations in China.
It expects “satisfactory” group performance for the rest of the year.
In a separate announcement, 30.3%-owned Landmarks Bhd said its first-quarter net profit slumped to RM4.18mil against RM15.89mil a year earlier following the disposal of assets.
The group expects to post a lower profit for the year ending Dec 31 (FY08) compared with FY07, but said it “believes that Treasure Bay Bintan will contribute a significant portion of the group's profit going forward as we embark on our development programme.''
Landmarks has announced plans to develop resorts, condominiums, villas and entertainment facilities that may include gaming activities on 333ha. The project, called Treasure Bay, is on Pulau Bintan in Indonesia.

Is Right Issue Worth subscribing for YUNKONG ?

A little background of Yung Kong :-

Yung Kong Galvanising Industries Berhad engages in the manufacture and sale of galvanized and coated steel products in Malaysia. The company, through its subsidiaries, markets and sells flat steel products, and other building and construction materials; and manufactures and sells furniture hardware and accessories. Yung Kong Galvanising Industries was founded in 1977 and is headquartered in Sarawak, Malaysia.

Yung Kong Galvanising Industries Bhd reported earnings results for the first quarter ended March 31, 2008. The company has registered first quarter pre-tax profit of MYR 6.611 million ($2.1 million), an improvement of 381.9% year-on-year thanks to the surge in steel prices. The steelmaker's revenue rose 23.3% to MYR 121.378 million for the three months ended 31 March 2008 against MYR 98.451 million for the previous corresponding period. Earnings per share rose to 6.77 sen from 1.13 sen previously.

Yeah, what was mentioned by forumer is true, why raising fund ? for a continue sound of business plan ? or paying debt ? Is the below subcription of right issue worth while ?

Renounceable rights issue of 65,178,300 Rights Shares together with 65,178,300free detachable Warrants at an issue price of RM0.50 per Rights Share (of which the first call of RM0.35 is payable in cash on application and the second callof RM0.15 is capitalised from the company’s revaluation reserve account andretained profit account) on the basis of one (1) Rights Share together with one(1) free detachable Warrant for every two (2) existing Shares (“Rights Issue with Warrants”) held at the Entitlement Date.

Lets mathematically the above by below example :-

1) Your holding of 2000 shares @ closing price of 0.64 sen = 640 X 2 = RM1280

2) Get to subscribe the right issue, you pay RM350 + RM10 (stamp duty) = RM360

3) Percentage of discount based on closing price = (0.64 - 0.35)/0.64 X 100 = 45%

4) Plus a free warrant (wonder how much is the listing price when it get listed, just assume this is bonus, since it is given free)

Looks pretty impressive to subscribe with a discount of 45% plus a free warrant but all this subject to the following :-

5) Your eventual holding is 3000 shares, that bring you an overall average price of = (1280 + 360)/3000 = 0.55sen

6) Ex-right will bring the share price adjusted to 0.55sen, if the closing is still 0.64 on 9/6/2008. Do you think at 0.55sen is still a good valuation ?

7) With additional new shares, the paid up capital increases, diluted and liquitity increases as well, these in turn will affect the EPS.

8) Now come to a more concern area, how overwelming is the subscription as mentioned by DoReMe ? If fully subscribed or a high subscription of the rights issue then YK happy and pocket the raised fund and everything stay normal...what if the underwriter has a,

9) undersubscribe shares, then a big problem arise here. They may then left no choice but to try sell the surplus new shares in the market, this will lead to a effective depression of the share price.

With the above you make the judgement. Personally, i think YUNKONG has a healthly BS and profit surge. Is normal for one to raise fund for company expansion unless a bad management has bad intention behind it but this company has been around for 30 years so i doubt it. Therefore should not be a problem subscribing the right issue with a 45% discount but anything can happen. Again this does not represent a BUY, act at you own risk. Bye, happy trading.

Resorts World Q1 profit rises 18% to RM395mil

PETALING JAYA: Resorts World Bhd registered an 18% growth in pre-tax profit to RM395.39mil for its first quarter ended March 31, compared with RM335.42mil in the previous corresponding period.
In a filing with Bursa Malaysia yesterday, Resorts said its revenue increased 3% to RM1.09bil from RM1.06bil earlier, underpinned by improved performance in its leisure and hospitality segments, which saw higher volume of business.
Its earnings per share came in at 5.09 sen against 4.27 sen a year ago.
Meanwhile, Resorts' sister company Asiatic Development Bhd saw its pre-tax profit surge over 120% to RM143.2mil for the first quarter ended March 31 against RM64.26mil in the previous corresponding quarter.
Its revenue jumped 83% to RM273.06mil against RM149.28mil previously. Its earnings per share more than doubled to 15.1 sen against 6.18 sen a year ago.
Asiatic attributed its improved performance to higher palm products selling prices along with a 7% increase in fresh fruit bunch production.

Public Bank profit in Vietnam soars

VIENTIANE: Public Bank Bhd recorded a net profit of US$3mil for the financial year just ended, a 67% increase from the previous year's US$1.8 million.
Country head Zulkiflee Abdullah attributed the better performance to the fast growing economy of Laos which registered an annual average income per capita growth of 7.6%.
“In the last five years we have registered a growth in profit of between 60% and 80% yearly,” he told Bernama yesterday. – Bernama

The story of thief

Once upon a time, there was a man who steals for living.
One day, his son told him: "Daddy, I want to be like you and steal things for living, please teach me for that!"

This man watching his son's appearance and personality, if not thought of stealing, the child’s future may be starved to death, so he agreed.

One night, this man brings his son to a big house, dug a hole on the wall and climbed into the big house. They found a store with valuable things inside, this man persuaded his son to go inside and immediately locks his son inside the store and went to the courtyard screaming at the same time. This act awakened the family, then, this man quickly slipped out through the same hole that they both climbed in.

The family was aware that the thief has escaped himself when the family saw the hole of the wall.

So, the owner decided to check what had gone missing and told the servant to conduct a check in the store.

Meanwhile, the thief's son is overly panicky and curses his father for his unexpected act that causes him to be stranded in the store room. While the servant approaching the store room with a candle, this let the son no choice but to hide himself behind the door.

The moment the servant opened the door, the thief's son come out from behind and blown off the candle and ran out as fast as possible.

The family begins to chase after the thief’s son.

Over the chasing, the thief’s son saw a pond and lighted up an idea where he picked up a stone and thrown into the pond. That deceives the family from mistaken that the thief has jumped into the pond, so the family round the pond and looking for the "body" but this thief’s son is on the safe journey home.

The thief’s son was very mad with his father and would thought of confronting his father but while stepping into the house, his father whispered “son, tell me how did you escape ?”.

After hearing the story of his son, the thief said: "Kid, you have learned how to steal now."

What is the moral of the story that bring a “AHA” to you in term of trading stock ??

Received Final Dividend RM0.075 & Special Dividend RM0.225 from CARLSBERG

Received another dividend from Carlsberg totalling to 30sen. This will bring to a total of 9% dividend yielding base on current price. It is indeed a very high DY when compare to an ordinary FD rate. Still sourcing for more dividend play......till then happy trading.

Received 13sen Dividend from GUINNESS

Received the interim 13sen dividend from GUINNESS (3255). Expecting the next dividend to be declared in November, should be around 30sen final dividend. Anticipating for that. Bye.

A Piece of Advise from elmo1988

in stock market, there is no right or wrong. klse like any marketplace is a mixture of players. rich, the poor, the good, the bad and the ugly. you name it it's there. so a wiseman may think it's the right thing to do but the mad fellas in the market plays a different game. the final winner is the majority's game. not the wise. not the ethicals, everything is unpredictable. i call it my lucky star. or you your lady luck. don't trust anyone here or anywhere. read the biz news. keep up with the world and market news. they are the forces that drives the market. we all are jokers, trying to cari makan here and there. i invest. i don't gamble. i hope you too. chart your game... never, yes, NEVR run out of cash.
you may need that last arrow when the market crashes. that's your (my) golden arrow! good luck...

MAY MARKET COMMENTARY 15 May 2008

Article from a friend. May 2008 Market Commentary for your information. Of cource don't trust 100%.

“Where is that recession?”
The U.S. Federal Reserve has in total made 350 basis points rate cuts since last September to a current Fed rate level of 2% to date. . The Federal Reserve has indicated a stop to the rate cuts for now to prevent a further weakening of the US dollar, which further fuels inflation. The question is now: has the U.S. economy improved?

In late April, the Bureau of Economic Analysis in the U.S. reported the Q1 2008 GDP growth remains at 0.6%, unchanged from the Q4 2007 report, although many economists expected the Q1 GDP to be negative. This is suggesting that the U.S. economy is not ‘falling off the cliff’. However, it is quite obvious that the U.S. housing sector is indeed in recession as residential fixed investment dropped by 26.7%, which made an overall reduction to the U.S. GDP by 1.23 percentage points. In short, GDP growth minus housing is an acceptable 1.8%, which illustrates the strength of the economy.

In our opinion, to take the massive hits from both housing and the credit markets and to be still expanding is quite impressive. Economists are now expecting the 2nd quarter growth to be positive as taxpayers will begin receiving money from the Economic Stimulus Package about $150 billion in total in May. Furthermore, should Mr. Ben Bernake take steps today to strengthen the dollar, lower energy and food prices will help the economy and bring more positive numbers back into their economy.

Asian markets have also been positive as investors responded to a slew of more positive U.S. economic data recently. It is most interesting to note that investors know that the credit crunch problem has not been resolved yet… it's just that optimism has outperformed pessimism lately and sentiments seem to be turning more positive. As for China, the largest engine of growth in the Asian region, cut the stock trading transaction tax to 0.1% from 0.3% on April 25th. This is in line with their efforts to increase acitvity in their stock markets, a long-awaited move that rolls back the so-called stamp tax to the rate it was a year ago when Beijing raised it to cool the overheated market. More in initiatives to pump liquidity back into the Chinese markets are expected to be revealed after 2nd half of 2008.Worries about inflation have been keeping the Chinese Central Bank on its toes. Analysts said the central bank would likely implement more tightening measures to curb inflation which they have been doing many times over the last year such as massive crackdown on merchants or producers who are “fixing prices”, announcing sharp new limits on bank lending, and raising interest rates. Domestic inflation was most recently measured over 8% in Feb 2008, the highest annualized rate since 1995. The real culprit in China is the elevated price of food, which is partly the result of one-time supply shortages. The February CPI food component was up a troubling 23.3%. These measures have a lagging effect on food inflation which is expected to slow later in 2008. Inflation is forecasted to moderate to 6% in the 2nd half of 2008.

As for Bursa Malaysia, the local bourse has staged a full comeback to its eve of the general election-day level of 1296 points. This comeback is a 9.7% climb from KLCI lowest level on 17 March at 1173 points. An important point to note is that although it does seem to be a slow climb up the KLCI stairways, there are opportunities for more rewarding growth as the KLCI is still about 18% below its 11th of January 2008 high of 1516.22 points. A point to note is that in any stock market, there will be intermediate rallies and corrections until the market reaches the peak. It isn’t also easy to state a time when this peak’ will happen (to some you ask, has it peaked already? The answer is ‘no’ as the economy hasn’t seen any signs of economic overheating yet). What we need to do is to try to appreciate such periods of ‘volatility’ such as they are the very windows to capitalize on. However, the funny thing is that most investors dislike volatility and prefer to stay on the sidelines until all is clear and safe, which is most of the time…too late. And the peak may not even be 1516 points. It can be well over that level. The world’s richest and most successful investor, Warren Buffet recently answered everyone’s million dollar question on “When is the BEST time to invest?” to which Buffer’s answer was: “I don’t know because I never time the market, but I price the market”. To sum what he meant, it is far more rewarding for us to invest based on values we see in the market than on timing it. Do remember that market prediction is never ACCURATE but attractive valuations in the market are always ACCURATE indicators of rewarding opportunities….like now.

Profit jump 11 folds on YUNKONG from year 2006 to 2007

As promised, taking a closer look on steel related counter. Here, i am evaluating one named "YUNKONG" a manufacture, sale of galvanised & coated steel products, though this guy is not a major steel player but based on demand of steel product in the industry, i believed no matter big or small, these companies are tend to benefit from the increasing demand of this commodity.

First, let take a look of the Profit & Loss for the past 5 years :-

The sales increasing every years to almost about 20% to 30% range which indeed a healthy growth. Earnings or profits vary but registered the highest net profit in year 2007, this interpret 11 times more than year 2006. Current market with increasing steel demand may last for 2 years at least i believed. Yunkong also reported its 1st quarter net profit report with a whopping 500% increase, that represent a 6.77sen EPS, 30% of year 2007 earnings achieved in just 1st quarter result alone. Conservatively, if we take half of its gross EPS from year 2007, this will represent a gross EPS of 11.05sen for year 2008 which i believed it worth far more than this figure. In this context based on current price at 0.66sen the PE ratio should stand around 6sen is about 30% cheaper than the current valuation. Bear in mind this calculation already a discounted figures, additional bonus of 5sen yearly dividend paid for last financial year indeed looks very attractive. Again, if this discounted figures stay for this year 2008, i think Yunkong should worth around 0.88sen which represent 30% undervalue on current valuation.

As usual, buy and sell is totally on your own risk. The above does not recommend a buy call from me. Take your own responsibilities with your own act. Till then happy trading.

Received MAYBULK 30sen T.E Dividend

Just received 30sen T.E dividend from MAYBULK on 12/5/2008. After this dividend the total dividend yield stay at 9% base on current price. Giving a conservative growth at EPS=50sen, this carrier should worth around RM5, if compare to it peer. Nevertheless, market have yet to reflect the true valuation of it. Lets take note the 1st quarter result which take place around this time in May and see how it turn out to be. Bye.

Public Bank shares hit record high on good figures

Public Bank shares hit record high on good figures
KUALA LUMPUR: Shares in Public Bank Bhd rose to a fresh record yesterday as investors switched from their shareholdings in Malayan Banking Bhd (Maybank).
Analysts said apart from becoming the country's largest bank in terms of market capitalisation, Public Bank's strong balance sheet, impressive capital ratios and high growth numbers were the added attractions to investors.
“Investors may (also) be looking at Public Bank for its dividend angle,'' said one analyst.
The stock closed up 20 sen at RM12.
Public Bank shares have been rising since the middle of March when it was trading at RM9.80 a share. Its uptrend coincided with the time when news of Maybank's interest in Bank Internasional Indonesia (BII) first surfaced.
Confirmation of Maybank's bid for BII towards the end of March and the group's subsequent proposal to buy a 15% stake in Pakistan's MCB Bank Ltd further soured investor appetite for the stock.
Investors were turned off by the high price for the BII bid, and to a lesser extent the purchase of MCB Bank. They also found the prospect of a lower dividend from Maybank difficult to swallow.
The confluence of disappointing news from Maybank has led to its share price sliding from a high of RM9.92 on Feb 14 to RM7.85 yesterday. However, as Maybank's share price fell, Public Bank's shares went in the opposite direction.
Analysts said that apart from Public Bank's dividend of 75 sen a share in the last financial year against 60 sen a year earlier, investors were also pleased with the group's solid fundamentals.
One analyst said Public Bank's loans growth of over 20% on an annualised basis and its strong balance sheet made it a top choice among banking stocks in the country.
“Public Bank's business in Hong Kong, China and Cambodia is growing strongly,'' said one analyst.
The rise in Public Bank's share price has put its valuations at the upper tier in terms of price to book and price to earnings but analysts feel that the growth the stock has been displaying over the years justify such valuations.
Of the 18 analysts polled by Bloomberg, none have a sell call on the stock.

A Good Sharing of Investment

Some interesting chatting below, I find it very true on elmo1988’s comments; the key thing is long term and lock them like FD investment. One would definitely see great return with this kind of investment especially when this giant is trading such a low PE with mitigated risk :-

ET Horse, why has TNB dropped to its lowest point this year?

ET i ve no idea of tnb b4 but when i checked its historical data,it was as high as more than rm12.00!!!!!

elmo1988 et. tnb need fuel to fire up it's generators and you know as of today the price of black gold is well over 124US$ and with the BN at the verge

elmo1988 verge of collapsing, a little push will send the house of cards down. you think our PM will allow tnb to risae the electricity charges? you and i

elmo1988 you and i know the profit is somewhere between the difference of the two variables.

elmo1988 et.different people "play" different games in the market. yours might not be the same as mine. my policy is with this blue chip i will not sell if i d

elmo1988 i will not sell if i do not make some money out of it. so don't expect me to sell when the chips are down. next. as for tnb, it can easily float up t

elmo1988 float up to well over RM10. history has tell us this. i am in for long term, one; two or three years. bet it will go up above 10rm. treat this buy as

elmo1988 buy as a long term f.d. i dare sar it's going to be a very high interest f.d. if only you hold on to it. i have done it before, i will do it again!!

Worth Taking Zhulian In ??

Hi, allow me to state down what a forumer "DoReMe" view on Zhulian. Let me make a mark here for his comments and see how this counter turn out.

On 8/5/2008, DoReMe has commented the following in the chat box after i have bought in this counter at RM1.05 recently :-

"I've taken a deeper look into zhulian when horse bought it at 1.05 and discover these. On paper zhulian looks strong in term of earning, low PE, high dividend n good EPS at round 18sen. First thing is worth looking is it low PE with high growth, they are cash rich with 26mil set aside solely for unit trust investment n strong balance sheet with 120mil cash flow, very healthy indeed. Others like taking cash almost every quarter for div, more profitable than most of its peers like Liqua, high growth with expansion market in Thailand, Singapore n indonasia. If take a look of it business, zhulian offers wider range of product if u notice. Valuation of its conservative PER of 8 times FY2008 forecasted EPS of 16sen, will give a target price of 1.28. Factor the dividend in should be quite attractive. Worth looking & monitoring. "

Beside Zhulian, Maybank is another counter worth looking at for longterm investment after it recent sell down. Till then, happy trading.

Picking stocks with long-term prospects

Picking stocks with long-term prospects
Personal Investing by OOI KOK HWA
This first of a two-part article looks at the criteria for selecting the right stocks
Q: I don’t know how to select the right stocks for long-term investment. Do you have any systematic way for stock selection?
Lately, readers have asked us whether there are basic, systematic ways to select stocks for long-term investment. We find that it’s quite difficult to answer this question as there are many ways to pick stocks. Different fund managers have different methods of picking the right stocks for their funds.
Even though there are no short cuts in screening stocks, we can broadly group our selection according to seven criteria, namely SGPDBHM. “S” stands for sales, “G” – growth, “P” – price-earnings ratio (PER), “D” – dividend yield, “B” – book value, “H” – health and “M” for management.
In this article, we will look at the first four criteria: sales (S), growth (G), PER (P) and dividend yield (D).
S – Annual sales of at least above RM500mil
Our first criterion is to select companies that have total annual sales of RM500mil and above. The main purpose for this is to select big companies for investment. Normally, a company with total sales of above RM500mil is considered well established and is less dependent on its owner.
In most instances, it will be one of the market leaders commanding a certain market share in its industry. Although we are not saying that companies with annual sales of less than RM500mil are not good for investment, less established companies face stiffer competition and have more uncertainties in their future compared with more established companies.
This explains why the majority of our research houses prefer big companies to small companies. At present, if you are holding shares in a lot of small companies (although they have good fundamentals), the majority of them are not performing in terms of stock prices despite the current high stock market valuations.
This may be due to the same worries as well as analysts not paying much attention to those stocks.
G - growth in sales
We need to select stocks with strong sales growth. Higher growth in sales implies that a company is expanding fast.
According to Benjamin Graham in his book entitled “Security Analysis”, a growth company’s business can move faster than its stock price.
Given that our returns depend only on capital gain or dividend income, if a stock never pays any dividend, we need to make sure that we can get capital gains from the stock.
Unless we are able to catch them at cheap prices, we need to make sure that the company has very strong sales growth.
Higher sales will contribute to higher profits and higher stock prices.
P - Low PER stocks
To get a high margin of safety (MOS), we need to find stocks with low PER. For a stock that has a PER of 20 times, you would need to wait 20 years to get back your money, assuming that it can achieve the same earnings per share (EPS) over the next 20 years.
Hence, we should select stocks with low PER, especially lower than the overall stock market or its own industry average.
Given that the current market PER is about 15 times, if you can find a stock that is selling lower than 15 times, we can say that it is selling at a cheaper valuation than that of the overall market.
D- dividend yield of at least equal to fixed deposit rate
A good company needs to pay dividend. We believe this is the best way to rewards shareholders.
There are some listed companies that are making good profits but refuse to reward their shareholders with high dividends as they claim that they need to retain the profits for future expansion.
However, we believe “a bird in the hand is worth two in the bush”.
There are cases where companies are able to generate good returns from every dollar that they retain, but in most cases, some fail in their expansion programmes. To retail investors, there are too many uncertainties over returns from these investments.
We believe that companies that are unable to reward their shareholders with good dividend need to reward them with higher stock prices.
According to Warren Buffett, this is called the one-dollar premise, whereby every dollar that the company retains needs to translate into one dollar in stock price.
Given the present weak stock market, if a company is able to provide a dividend yield that is equal to the fixed deposit rate of 3.7% will attract investors to put their money into their stock instead of in the bank.
>Ooi Kok Hwa is a licensed investment adviser and managing partner of MRR Consulting.

Bought ZHULIAN (5131) at 1.05

Just bought in ZHULIAN this morning at $1.05, considering the overall dividend yield at 15% and PE at 5.8. This really attract me for longterm dividend play. It 1Q net profit 15.315 million (increased 0.37%) look very healthy to me. I expect the EPS to sustain at around 18sen and may continue it generous dividend payout in every quarter.

Recerived Dividend again from BJTOTO

I have received a 8 sen third interim dividend again from BJTOTO. This company is a cash cow company, had never failed delivering her dividend all this while. Every quater sure will one get dividend from it. The 4th qtr dividend is around August in which i expect a minimum of 10 sen this round. At current price RM5 trading at around PE of 17 which i think is relatively high for the present sentiment. Would not adding my holding on this guy as this would not have much surprises on his earning.

Highest Dividend Ever for Year 2007

This month is income tax month for everyone, due date for submission of your income tax is end of April. As usual i compiled my income tax like everyone do and did it almost last minute. I just filed my income tax through e-filling which i started doing so since last year, find it quite convenient. The biggest headache for me is to understand the re-gross thing on my dividends which i have been collected since the whole year of 2007, where the corporate rate for year 2008 has been reduced to 26%. To my surprise when i work out the calculation, the re-gross will in turn to our disadvantage. Last year indeed is my harvest year, i collected the highest dividend that i ever had and is all time high of my investment so far. The dividend collected over my principal investment is approximately about 8% to 9% which indeed is a good return compare to FD rate, this has not factor the appreciation of share price. Certainly will look for more if market permit for year 2008.

Bought Tenaga (5347) at RM6.80

Bought back Tenaga at RM6.80 today. Though, this is not my ideal purchase price but at current price, i think is worth buying in some while waiting for next level of purchase at around RM6 to RM6.50 if it does drop to this range. I must admit that buying this type of stock at current PE is quite a save bet even though it can trade lower but the risk is significantly reduce. One can adopt averaging downward strategy from this level or one can opt to wait further. As i said before, no one can predict future, if one claims that he can know the up and down before hand, then he/she must be God and he/she must have some super natural power beyond human being. No one can buy lowest nor sell the highest, we know that this is the fact of trading. One can only make assumptions like buying when PE is low (a very safe strategy but not necessary guaranty return but at least mitigate risk) or buying when it produce good earning and have good prospect of future earnings or buying when everyone is buying during super bull. Whatever method you adopt, try use the method that always produce you result. In my case, i played dividend stocks, of course pick the good one like PBBANK, MAYBULK, GUINNESS, CARLSBERG, PANAMY, BJTOTO and etc... but when to pick it, is the key and important area one must exercise cleverly. First set your buying conditions and what will that be ?? I think up to individual preferences, i buy when PE reasonably low in bearish or crash market, i buy when there is good earning and sustainable future earning, i buy when dividend payout is good and better than FD rate, i buy when trend is allow me to do so. In this case Tenaga happen to fall in my conditions. Till then, happy trading & may the best price be yours.

Sold my IOICORP

Just sold my IOICORP at RM7.15. There being not much excitement to KLSE lately, temporary ease out this stock and take a profit from the purchase price of RM5.75. Still searching for opportunity to enter the market again but hard to look for one now, my strategy is waiting and waiting until i manage to spot one. For now, US economy is not in good shape and local political tussle causing market uncertainty. Is good to take a step backward and see how the whole thing turns out. Frankly, in such a situation, day trader is hard to find any dime here. What need to be done here is to swing your appetite to dividend play which i think is the best defensive way in dealing current market while waiting for a more clearer picture on the market. I am particularly, eyeing on TENAGA which its has been drifting down from RM12 all the way to a mere RM7 and at current price its PE stood at around 7.3 which is relatively low. Recent announcement by TENAGA where it registered a 1H net profit 2.578 billion (decreased 7.96%), this decrease expected to be sustained in the next half in my opinion, we shall see this giant hovering around this price at the moment. Personally, i think is worth looking into this guy when it fall to the region of RM6 - RM6.5 region. Of course, this does not recommend a buy, it is totally your responsibility while exercising your decision. Happy trading.

Market Jargon

This is funny though :-

Market Jargon

Bull market :
a random market movement causing an investor to mistake himself for a financial genius.

Bear market :
a six- to eight-month period when the kids get no allowance, the wife gets no jewellery and the husband gets no sex.

Momentum investing :
the fine art of buying high and selling low.

Value investing :
the art of buying low and selling lower.

P/E ratio :
the percentage of investors wetting their pants as the market keeps crashing.

Broker :
poorer than you were last year.

Buy, buy :
a flight attendant making market recommendations as you step off the plane.

Standard and Poor (S&P):
your life in a nutshell. [that's me me me!!!]

Stock analyst :
idiot who just downgraded your stock.

Market correction :
the day after you buy stocks. [that's me me me too, Duh!!!]

Cash flow :
the movement your money makes as it disappears down the toilet.

Institutional investor :
past year investor who is now locked up in a nut house.

EBITDA : earnings before I tricked the dumb auditor.
EBIT : earnings before irregularities and tampering.
CEO : chief embezzlement officer.
CFO : chief fraud officer
EPS : eventual prison sentence.

Public Bank is Tops

Friday April 4, 2008
Public Bank is tops
PETALING JAYA: CIMB Equities Research has chosen Public Bank as its top pick among Malaysian banks, beating all its Malaysian peers on most operating aspects, including returns on equity (ROE), asset quality, loan growth and efficiency.
In a research note issued yesterday, it said Public Bank’s ROE was the highest in the sector and still improving. The bank also had the most compelling dividend yield, double-digit earnings growth, highest loan growth and superior asset quality, it added.
Other factors are the strong deposit franchise, greatest efficiency, new growth avenue in bancassurance, increased overseas contributions, and award-winning ability. The research house has raised financial years 2008 to 2010 net earnings by 1% to 4%, primarily for 26% to 38% cuts in loan loss provisioning.
In its dividend discount model (DDM), it raised the assumed dividend growth rate for the interim phase to 7.2% from 6.7%, resulting in a higher target price of RM14.60 compared with RM13.90 before, which is still pegged to a 10% discount to the DDM valuation.
“We continue to rate Public Bank an ‘outperform’, premised on the re-rating catalysts of continuing ROE improvement to one of the highest in Asia, a jump in FY08 dividend payment, stronger-than-expected contributions from Greater China, lower charge-off rates, and new growth avenue in bancassurance.
“Also, with a dividend yield of more than 9%, Public Bank has the best yield among the Malaysian banks,” it added.
CIMB Research said it considered Public Bank’s end-FY08 price/book value of 3.8 times to be reasonable, given its superior ROE and enticing dividend yield.
“In fact, we view its valuation as undemanding as its FY09 price/earnings of 12.7 times is below its five-year average of 14 times and does not fully reflect the improving ROE, dividend yield and asset quality,” it said.

Sold TENAGA

Sold my Tenaga at 7.40 for a small gain. Market looks very uncertain, reduce my holding to seek better opportunity.

Received Dividend from IOICORP, LONBISC & MNRB

Have just gotten my dividend payout of above counters. IOICORP interim 7sen, LONBISC first and final 5% and MNRB of 2nd dividend 5% respectively. Obviously, would expecting more payout in the near future. In the pipeline, BJTOTO, CARLSBG, GUINESS and MAYBULK are also declaring thier dividend payout as well. I particularly like MAYBULK's 30sen tax exempted, this translate to a 7% return of current price, is much higher comparing fixed deposit with mere 4%. The next in line which i expect a good dividend payout is PANAMY, PANAMY has a Nine-month net profit 40.825 million (increased 20.57%) would expect a 4th qtr result in end May and declaring its dividend in around end July. I guess it would be like final dividend of RM1 T.E which translate to a 9% return. Looks very much attractive, just got to wait patiently. Now you know why dividend play is such a boring waiting game, but the reward is slowly and surely. Till then happy trading.

KLCI Chart

MACD crossing, RSI turns up from oversold position and KLCI inching up.

Accept defeat and move on

A very nice article extracted from TheStar.

Accept defeat and move on
SUNDAY WITH T. SELVA
With the right attitude, even losing can make you a better person.
THERE will come a time in every individual’s life when things don’t go our way and this is the reality of life.
One of the most common occurrences is defeat, which comes in various situations in our daily and challenging undertakings and often causes anger, disappointment, depression, unhappiness and discomfort.
At the recent 12th general election, failure was more felt by a greater number of politicians than success and this had left many people with a disturbed mood, shame and pain.
I called two politicians whom I had interviewed during their campaign trail after their defeat was announced and they refused to answer my calls.
Another politician who I went to visit cursed and swore because he lost his seat and was forced to vacate his house hurriedly following the fall of the Selangor government.
A real man is one who can face up to his mistakes and learn something from them so that he never repeats them.
Here credit must be given to former Penang chief minister Tan Sri Dr Koh Tsu Koon who accepted his defeat and the downfall of the state government gracefully and passed on the baton respectfully.
He left with dignity and style and nothing commands respect more than a man who stands up to adversity because respect clears the way to power and success.
Many say this is easily said than done because it is difficult to accept or admit defeat.
One shouldn’t be afraid to acknowledge defeat because an individual who has the ability to stand up tall and admit that he’s wrong or that he’s been bettered in some way is admired and regarded as a gentleman.
This is because with the right attitude, even losing can make you a better person as the entire episode offers us an experience to learn from.
We spend our whole life building on a good character and this is not based on how we win every task we undertake but how we deal with losses and emerge stronger.
People with credible disposition do not fall following a failure but surface greater in the society.
Don’t dwell on your performance which wasn’t the best, instead recognise your defeat. Congratulate the winner and move on with positive thoughts to recover from your setback quickly.
Never hold grudges and take revenge because such thoughts are counterproductive and in fact they will affect your physique and aura.
Swallow your pride and ego and learn from your mistakes and turn your errors to your advantage.
Every loss should be played back in your head again and again to determine exactly why you lost.
This will keep you sharp and focused for the next time you face this particular adversary.
In a defeated situation you often ask why it was him and not you who came out on top. Did he have something that you didn’t?
There’s nothing wrong with admiring those who won and take stock of what it took to come out on top.
Another defeated politician I spoke to attributed his loss to the will of God and has turned to spirituality to heal his body, mind and soul.
Many people turn to the Almighty when in crisis, not realising that they should have done it before so that they have the divine guidance and grace in undertaking challenges in life.
The reality of life is there are super powers above us and all we have to do is give our best in all our undertakings and leave the rest to the unseen supremacy.
T. Selva, The Star’s Sunday Metro Editor, feels that every failure offers a chance to bounce back as a winner the next time.

Bought Tenaga (5347) at RM7.25

Bought Tenaga at RM7.25, not sure this is a right move. I am not a TA guy but i do refer to chart once in a while, to interpret Tenaga's chart now is definitely on the oversold position. This stock plunged to 7.20 from 8.50, is almost 1.30 drop since Monday, there maybe more down side looking at the uncertainty right now. With gross dividend of 5%, PE=7.64 and EPS=94 at current price looks very attractive to me and very near to 4 years support line at around RM6.80. These are the factors draw my interest to Tenaga but this purchase is right or wrong only time will time, judge yourself and execute it with your wisdom. In share trading definitely there is risk involved, one should calculate the risk over reward ratio then you will see the picture clearer, no definite or sure bid of up or down for any counter. Anything will happen, for now Tenaga is under tremendous selling force and may drift lower.........As usual, i must state that the above do not recommend a buy or sell call from me, your execution is of course totally at your own responsibility.

Received PBBANK's Dividend

Today, i received Pbbank's dividend (50sen/1000units). With this it further reduce my average purchase price to approximately 1.50 each. Pbbank's dividend payout has been quite consistent and generous during these few years. I will do nothing with this counter except buying in more if it fall to a reasonable price (i hope so ha.ha i.e PE=8) but this is just fat hope, nevertheless, anything can happen because every dog has its day, of course Pbbank is a blue chip stock not as i described here....ha.ha...just kidding. As you can see buying dividend counters definitely benefit over the long period of time, no matter how market falls you sleep with pace with this kind of counter on hand. Till then, happy trading....

Sold GENTING at RM6.65

Market rebounded strongly today and again i dicided to dispose off my Genting at 6.65 for a quick contra gain. For sure, can't get the highest price as usual but this is sufficient for me as i'm a fast contented person. Opportunity is always there, we just need to wait for the right time, right place and right stock of cource. Hold your bullet, there maybe more excitement to come. Happy trading.

Bought in GENTING (3182) at 6.35

Have managed to purchase Genting at rm6.35 today. Looking at the current market sentiment (slump by 33points), is definitely not a good move to go in but as a longterm investor, this could be the opportunity to catch some of the quality stock. For sure no one can get the lowest price, if you think this is the right move and your instinct tell you so, by all mean, go ahead and execute it without regret. Here i am, additional Genting in my portfolio. Whoever holding cash now is king. Till then, happy trading.

Wealth Sharing Talk ??

Is this for real a true experience of someone how he manages or plans his financial or merely make out a story to lure investor for participating ???? but interesting to read though, does this reflect you in anyway ???

Wealth Sharing Talk

Alex (not his real name) graduated in 1993. He managed to get a job with a MNC two months upon graduation. When he got his first salary, he booked a RM80,000 car. Six months later, he purchased a house for RM270,000.00. In late 1995, he married his long time sweetheart Jenny (not her real name). He spent about RM 30,000 on his wedding.

Due to cash constraints, he spent his honeymoon at a neighboring country (Thailand) where he used his credit cards to cover the expenses, about RM10000 in total. The following year, he got a promotion and his salary increased to about RM4,000 (including claims). Up to now he was paying the minimum payment only on all his monthly credit card balances.

One day in a shopping mall, he was approached by a credit card sales person with a balance transfer offer. He was told that he could transfer all his balances to this bank and have a lower interest rate for a period of two years. On top of that he would be given a gold card of that particular bank. He took up the offer as he thought he could save on the interest charges.

In 1998, Alex and Jenny had a baby boy. Jenny was being seen by a specialist at a private hospital. They also decided that she would quit her RM1800 job to be a full time housewife. Alex paid close to RM10000 in total for the medical bills for the duration of the pregnancy and delivery (via a caesarean). Alex utilized his new gold credit card for this.

From now onwards, Alex’s expenditure was more than 90% of his salary. Hardly anything was left for savings. In 2002, Alex got a job offer which was paying him about RM6000. He took the offer. He had a daughter in the same year. Again, the medical cost was close to RM10000 which he paid by credit card.

In 2003 he enrolled his son in kindergarten which cost him RM250 monthly. The next year, Alex lost his job due to the company’s decision to downsize. He was caught unaware without any savings. He survived by utilizing all his credit cards to their maximum limits. He only found a job eight months later and was offered half of his last drawn salary!

Today, Alex earns RM3200 from his day job and teaches tuition at night seven days a week just to make ends meet, including paying back his credit cards outstanding balances (which are standing at about RM43,000). Lack of financial intelligence coupled with a failure to plan has transformed Alex from a bright graduate into a depressed, disillusioned and de-motivated father and husband.

Contra Gain on LIONDIV

This morning buy in Liondiv at a price of 1.40 and disposing them at 1.43 within the same day, making a quick contra intraday gain on this trade. Some how have been very lucky while dealing with this counter and it never fail me, maybe is pure luck and right timing as somebody claims. Market is drifting down since the beginning of the week, will there be a traditional rally before GE ? Even if it is, the rally won't be long, this act would probably just to make good impression to the "voters", so that many will deceive the wrong impression ?? Just can't predict how it going to be, no matter how during this juncture be cautious with what you trade unless you really know what you trade.........

Completely RISK-FREE Way to Buy Stocks

Interesting Article :-

Completely RISK-FREE Way to Buy Stocks
Let me prove it to you...
By Brian HuntEditor In Chief, S&A Investment Research
Dear Reader,
I want to show you a technique that should change the way you invest, for the rest of your life...
Done right, it's a way to buy stocks that eliminates all of the downside risk. Not some of the risk – all of the risk.
Using this simple technique, you can arrange your portfolio so it will be impossible for you to lose another penny, ever, in stocks. Even better, you’ll still get 100% of the gain.
In other words, if you buy a stock and it drops 50%, you shouldn’t lose a dime. And if it soars to 1,000%, you keep every penny.
It’s kind of like buying an insurance policy for your portfolio. But, it’s even better than that. Because, done right, this “insurance” won’t cost you a thing.
In short, you get a risk-free investment in common stocks – for free.
This is the perfect setup for long-term investors who are seeking capital gains, but can't afford to lose any money.
You can adopt this strategy, buy all of the most promising businesses you find, whether they're risky or not, and never worry, ever again, about losing a single penny.
How is this possible?
Let me explain...
Step 1: Collect the Cash
The key to this technique lies in dividends. This is where it all starts.
To correctly use this strategy – and ensure you don’t lose a single penny on your investment (while keeping 100% of the gain) – you first have to find high quality businesses paying a stable dividend.
Generally speaking, these are not hard to find.
I’m talking about the Coca-Colas of the world. The Microsofts. The Exxon-Mobils.
But there is a catch.
Not every stock – blue chip or otherwise – pays the kind of dividend we’re looking for. In order for this strategy to work, the dividend must cover the “cost” of the investment.
What’s your cost?
The risk you assume by making the trade. Namely, what you’ll lose if the stock goes south.
If you invest $1,000 in a stock, your “cost” in this case is anywhere from zero to $1,000, depending on when you get out. But, believe it or not, there are companies in the market right now that will cover this cost for you – in part with the dividends they pay.
So the first step is finding the right company with the right dividend.

IOI Corp earnings surge 52% in Q2

IOI Corp earnings surge 52% in Q2
By IZWAN IDRIS
PETALING JAYA: IOI Corp Bhd's net income surged 52% in the second quarter ended Dec 31, as soaring palm oil prices boosted profits from plantation and resource-based manufacturing businesses.
The three-month earnings swelled to a record RM581.2mil, or 9.71 sen per share, compared with RM382.6mil, or 6.25 sen per share, a year earlier.
Revenue jumped to RM3.46bil from RM2.26bil before.
IOI Corp released its latest quarterly results during the market's midday break, reflecting a growing trend among big corporations to announce vital corporate development to investors in a more effective manner.
“The stock is pricey at these levels, but the premium could be justified given its size, trading liquidity and probably because most people consider IOI Corp to be the best proxy for rising palm oil prices,'' a local fund manager said.
Last year, IOI Corp bought its first overseas plantation land in Indonesia and acquired a rival refinery in Johor. Last month, the company announced a plan to raise RM600mil in fresh capital to help fund further expansion.
IOI Corp shares closed 20 sen higher at RM8.15 yesterday on volume of 13.3 million.
The stock hit a record RM8.55 a month ago.
IOI Corp's six-month earnings jumped 62% to RM1.03bil against RM638mil a year earlier.
The company said its palm oil fetched RM2,572 a tonne during the six months, up from RM1,560 a tonne in the year before.
“Barring unforeseen circumstances, all business segments are expected to continue to perform well in FY08,'' it told Bursa Malaysia.
The crude palm oil (CPO) futures on Bursa Derivatives, the global benchmark, had risen 80% over the past one year amid fears the global edible oils market was in short supply to meet growing demand worldwide.
The CPO futures contract for April delivery jumped RM91 to RM3,451 a tonne yesterday, its highest closing price.
“We remain upbeat on CPO price prospects as supply deficits for other edible oils will encourage consumers to switch to palm oil,'' CIMB Investment Bank said in an update on the sector yesterday.
Shares in Kuala Lumpur Kepong Bhd (KLK), the third most valuable plantation stocks behind Sime Darby and IOI Corp, hit a record RM19.20 yesterday, up 60 sen.
KLK is due to announce its first quarter ended Dec 31 results on Feb 20.
In a separate statement, IOI Properties Bhd said it posted a net profit of RM91mil on sales of RM191mil for the second quarter. Its six-month net income surged to RM171mil on turnover of RM396.8mil.
The improved performance was attributed to “higher demand for residential properties”, it said.
IOI Properties proposed a gross interim dividend of 60 sen per share for the period.

Bought CARLSBERG

Bought Carlsberg at 4.18 for 1000 units today. Total holding increased to 3,000 units for now. The impending dividend is going to announce someway around this month. Still very much in tact with dividend stocks. PM has just dissolved the parliament this afternoon and the market react negatively on the announcement as to what i've anticipated in my previous post. Many will sell off thier share as many think that is a safer move for the time being. I will foresee uncertainty on the KLSE market till the end of General Election. During this time is best to wait and see how the GE turn out before making an attempt again in KLSE. Till then happy trading....

Wishing All A Happy And Prosperous Chinese New Year 2008

Sold my LIONDIV again

Have sold all my LIONDIV at 1.61 this morning, another quick contra gain, thanks to DJ who rebounded strongly. The timing is just right for me on these two occurences recently. Try not to keep too long as the CNY and GE are both just right the conner. Would like to take this opportunity to wish all 'A PROSPEROUS And HAPPY CHINESE NEW YEAR'. See ya....

Bought Back LIONDIV

Bought back LIONDIV at 1.50 for 5000units, just can't resist the temptation after seeing the price drop below my target price at 1.57. Let see how it work out, obviously this stock is deviate from my focus on dividend stock. This is just could be short term attempt.

Sold RESORT

Tomorrow is Federal Territory Day and is a holiday for Kuala Lumpur and Labuan. Next week is CNY, wow...time flied. Everyone guessing GE is going to be announced after CNY, GE will be held in around March. How is our bources ? KLCI drifting lower and looks like trend is changing. I just sold 1000units of Resort at 3.86 this morning keeping 2000units that was purchased at a lower price for longterm. Looking and waiting KLCI to drift lower before entering into market again for a cheaper price hopefully. Anymore excitement after GE ?? is lifting currency control gonna stimulate KLSE ?? Sorry to tell that, can't predict the future, wait and see loh...

Received 15sen T.E from PANAMY

Just received 15sen tax exempted from PANAMY, i believed the next round of dividend is someway around July and probably is gonna be a good one as well, minimum 1.00 again ? just need to wait and see. Anyway, i still maintain 500units of this Panamy, thinking of buying back when it fall back to my buying target price around 10.70. Till then happay trading.

Sold LIONDIV

Bought LIONDIV on Tuesday for 5000 units at price of 1.57 and now (Thusday) have disposed all of it at a price of 1.70 for a quick contra gain. Not bad huh...thanks to the US rate cut or the DJ rebounce ?? Have you ever ask yourself how long will this going to sustain ? If you are speculator then it would be better for you to reduce your holding, sighting that the General Election is around the corner. Life after GE may seem weary.

Shares Swap

Looking at the current market, really heart sick. Whatever gain previously, has now turned almost zero gain. Take years to build your gains and take days to collapse it. Phew...whatever is it "don't catch the falling dagger" but everything seem to be very expensive before, now you feel dirst cheap. Hard to hide your temptation away, i'm eager to accumulate more quality stocks like Genting, Resort, Tenaga, Maybulk, Carlsbg and Cepat but instead finally, decided to dispose off half of my PANAMY at 11.10 for a swap of LIONDIV share at 1.57 for 5,000 units. Nonetheless, still stay very positive with the market for 1st quarter of year 2008, will try liquidate some and keeping majority of my stocks for very longterm as this is my focus which i'm still very much intact with "dividend stocks"......"if you are an investor, see this as normal cycle. Constant and increasing dividend is what we are looking at". Happy trading.

Received Dividend Again From BJTOTO

I have received dividend again from BJTOTO, this round is 41st & giving 8sen and noticed that the income tax rate has reduced further to 26% instead of 27% last year. This will bring down my total average purchase price of BJTOTO to $2.01 for batch 1 and $4.21 for batch 2 respectively. Overall average price will bring down to $2.56. Other than this, i managed to dispose IOICORP @ 8.15 and grab it back @ 7.90 for a contra gain of 25sen during this sell down, this retain my holding to IOICORP with a cheaper price instead. With this my average price is $5.72. Till then happy trading.

KLSE Top 10 Picks for Year 2008

The 10 picks are:

Sime Darby Bhd. This is the largest player in the must-have sector of plantations.
TA said Sime Darby was an excellent proxy to the plantation sector, given its fairly good sensitivity to the upstream plantation business, which is the most profitable part of the palm oil value chain. “We estimate a RM100 per tonne increase in crude palm oil (CPO) price would boost Sime Darby's earnings per share by 3%,” TA said, adding that any further earnings upgrade could stem from the group's successful extraction of merger synergy.

IOI Corp Bhd. IOI Corp is the second largest plantation counter by market capitalisation after Sime Darby. Half of its operating profit for the financial year ended June 30, 2007 was derived from the upstream plantation business.
“A key catalyst for upgrade in earnings forecast is potential acquisitions. The group has been on a merger and acquisition trail, acquiring land in Sarawak and Indonesia,” said TA.

British American Tobacco (M) Bhd. This stock is on the “buy” list of Citigroup. The consensus 6% to 8% contraction in market is too pessimistic, said Citigroup head of Malaysia research Wai Kee Choong. The counter could surprise from a hike in civil servants' pay.

Public Bank Bhd. In the banking sector, this stock is on the list of Citigroup, Aseambankers and TA.
TA said: “As capital ratios are expected to improve due to the adoption of Basel II (international banking guidelines on capital requirements) by early 2008 and no mandatory transfer of 25% annual earning to statutory reserves, the group will have some leeway to improve its capital management.”
The management has also given its guidance that the bank's risk-weighted capital ratio and capital adequacy ratio are expected to improve by 70- and 50-basis points, respectively.
Citigroup likes the counter for its strong growth in business loans and asset management business as well its dividend yield of 5% to 7%.

SapuraCrest Petroleum Bhd. At the current price, oil and gas services player SapuraCrest still has plenty of upside. While the share price has corrected some 41%, its fundamentals remain intact, said Citigroup. SapuraCrest's order book now stands at more than RM5bil.

Petra Perdana Bhd. This oil and gas sector play looks like good value at the current price.
TA's pick has outperformed earnings expectations in the recent results season due to a higher vessel utilisation of 85% and charter rates that are 10% to 15% higher as the company rolled over spot contracts that have expired.
“This is likely to be the order of the day with demand for vessels shooting up following greater exploration and production activities but hampered by tight supply,” said TA.
Future growth potential is bright, with 17 more new vessels coming on stream by 2010 and most of the vessels tailored for deepwater operations, said the research house.

PLUS Expressways Bhd. In the infrastructure sector, TA likes highway concessionaire PLUS, whose traffic volume could grow greatly with the government-driven domestic development in the next few years.
TA said traffic volume growth of 7% year-on-year to 10.9 billion passenger car units (PCU) for the 10 months to October 2007 “has been encouraging, so far”.
The group's future acquisition of the ELITE and Linkedua highways announced in June last year is also expected to benefit PLUS partly from advantageous pricing from friendly party and parent, UEM Group.

Tenaga Nasional Bhd (TNB). TNB is the choice of Aseambankers and TA. At its current price level of around RM9.80, the stock has plenty of upside to the two brokerages' target prices.
Aseambankers said there could be a “reversion of 'old' bellwethers like TNB”. “We also foresee some resurgence, particularly for TNB, following a lacklustre year for the old 'TMT' bellwethers TNB, Malayan Banking Bhd and Telekom Malaysia Bhd,” it added.
TA said driving the demand growth is the general increase in economic activity, with an expected gross domestic product growth of 6.2% in 2008 and “spillover effect” from the commencement of big-ticket Ninth Malaysia Plan (9MP) projects.

RCE Capital Bhd. For mid-caps, RCE has the largest upside among Aseambankers' picks.
RCE, the brokerage said in a report, could be a “beneficiary of higher consumer spending from the recent civil service salary hike”.

Ann Joo Resources Bhd. This is Aseambankers' favourite counter in the building materials sector, which still has plenty of upside and is trading quite cheaply at the moment.
Ann Joo is an emerging integrated steel player that could benefit from sky-high steel prices. Aseambankers expects “titanic growth” for building materials plays.

Candlestick Patterns for Trading 3

Monthly Portfolio 31-December-2007

Goodbye 2007 and Welcome 2008 !!! My portfolio for the year 2007 !! No movement for my current holding. Have adjusted GUINESS purchase price after receiving 32 sen final dividend. Definitely will continue hunting for more value stock in this new year of 2008. I welcome all reader suggestions and provide me good dividend stock, particularly those stock that giving increasing dividend each year. Till then please find below and happy trading for year 2008 and make abundantly. May your resolutions come true......

Candlestick Patterns for Trading 2

Candlestick Patterns for Trading 1

Net Dividend Collected

Take a look of the net dividend that i collected thus far for my portfolio :-

Remisier Versus Online Trading

Wednesday December 19, 2007
Remisier versus online trading
In this article, we will look into whether we should buy shares online or use our existing remisier’s services to execute trade
COMMISSION rates for Internet trading and cash upfront transactions will be fully negotiable next year.
Although the full details on the actual implementation are not available yet, if the commission on Internet trading drops to a low of 0.15% (it may be even lower for some stockbroking firms), retailers may be tempted to execute the online transactions themselves without going through their remisiers.
Based on the existing structure, most retailers are paying a brokerage fee of about 0.6% per transaction. Assuming some stockbroking companies are willing to offer commission rates of 0.15% for Internet trading, there will be savings of 0.45% for retailers who trade online.
Nevertheless, we need to understand that transaction costs have two main components: explicit cost and implicit cost.
Explicit cost is the direct cost of trading, such as brokerage commission, stamp duties and clearing fees. Implicit costs are indirect trading costs like opportunity cost, market impact and missed trade costs.
Opportunity cost is the loss of opportunities due to the time retailers are required to spend on executing stock transactions instead of focusing on their main business or their work.
If you are working and have limited time to monitor the stock market, you may still need the remisier’s services to execute stock transactions.
I personally feel that it is really not productive to stay in front of the computer just to execute a few stock transactions. Sometimes, it can be quite time consuming getting the best price.
Any retailer who wants to trade online needs the necessary skills to be able to read market movements. He needs to know whether the current price is the best price to buy, or wait for a while because he may get a cheaper price later.
Market impact is the realised profit or loss reflecting the price movement of a share from the price decided on to the execution price.
Since remisiers follow market movements throughout the day, they should be able to read those movements better than we do.
They may not be able to get the best price in every trade but if they are able to save one or two bids lower than your intended purchase price, the cost saving can be quite substantial.
For example, your remisier is able to get one bid lower for you when you want to purchase a stock priced at RM1.50. You will save 1 sen over RM1.50, which is 0.67%.
Assuming your remisier is able to do that in eight out of 10 trades, the average cost saving will be 0.53% (8/10 x 0.67%).
This saving will still be greater than the commission of 0.45% that you would have saved through online trading.
Besides, you have not taken into consideration the time you could have saved and the opportunity loss on your current business if you spend too much time on share trading. The extra 0.45% that you pay is for your remisier’s skills.
As mentioned earlier, besides opportunity costs and market impact, there are other implicit trading costs, like missed trade costs.
Missed trade costs arise from the failure to execute a trade in a timely manner.
If you split a purchase of 20 lots of Stock A into two equal limit orders when the quote for Stock A is RM11.00 to RM11.10, the first order is executed at the buying price of RM11.00, after which the quotation moves up to RM11.10 to RM11.20.
The second order is placed and executed at RM11.10. You are paying an additional 10 sen (or 0.9%) for the remaining 10 lots.
Missed trade will cost you an additional 0.45% (0.5 x 0.9%) as 50% of your remaining stocks were traded at a price that was 0.9% higher.
A good remisier should be able to save you the above implicit costs. In this competitive business environment, remisiers need to continue upgrading their skills in order to give better services to their clients.

How Much is this affecting you with minimum $40 brokerage Fee Next Year?

Is imposing minimum brokerage of $40 create impact to KLSE or otherwise ?

Scenario 1 :- Buying penny stock…..
a) Purchase value 1,000 units @ $1 = 1000.00
b) Brokerage @ 0.42% = 4.20 but minimum is 40.00
c) Clearing Fee @ 0.03% = 0.30
d) Stamp Duty @ 1.00/1000 = 1.00
Total Purchase Cost = 1041.30

You need 9 sen to breakeven, coz, buy + sell will cost you about 82+…..

Compare to old calculation, total purchase cost for above scenario will cost you 1013.30

You need 3 sen to breakeven, your buy+sell is relatively much smaller, about 26+…..

Scenario 2 :- Buying Big Cap…..
a) Purchase value 1,000 units @ $10 = 10000.00
b) Brokerage @ 0.42% = 42.00
c) Clearing Fee @ 0.03% = 0.30
d) Stamp Duty @ 1.00/1000 = 10.00
Total Purchase Cost = 10055.00

You need 12 sen to breakeven, coz, buy + sell will cost you about 110+…..

No change with old calculation as the minimum brokerage ($40) is fully utilized.


So folk, in order to fully utilize your brokerage fee, government is encourage you to buy more instead. Will this affect small timers the most ?? Currently with 9 sen up we can afford to have a profit but with the introduction of minimum $40 charge this 9 sen in turn become your breakeven point unless of course if you can afford to buy in bulk then is a difference scenario. This is bad, imagine, the current lot size is 1 lot = 100 units, if someone thrown 100 units share to you out of the 10,000 units you queued. You will be suffering with minimum of 80+ charge with the mere 100units share that you acquired. I can see that there is no point of buying small on penny stock now because the gain is just too insignificant for one to expect and the gain may just well serve as a subsidy for the brokerage fee unless a jackpot was hit that the counter just rocket high. Thus, folk stay big from now onward, there isn’t much place for small anymore.

Monthly Portfolio 29-November-2007

Added GENTING, MNRB & more RESORT to my portfolio this month. As usual, nothing special to my portfolio except waiting for dividend patiently. Have adjusted YILAI purchase price after receiving 5sen of dividend. One thing to take note is that the trading volume is declining, does this indicate that the hot money is pulling out slowly ? If so how much will this affect KLCI this time round ? Will the "Synergy Drive" listing spur some excitement to KLSE ? I guess only time will tell.....lets wait see...tomorrow....

Dividend Yielding Stocks - PBBANK, PANAMY, MNRB, GUINNESS, BJTOTO & APOLLO

Listed below are some of the high dividend yielding stocks. These stocks have been consistantly paying good dividend without failed. Some DY is as high as 10% based on current price, one can just investing in this type of counter to profit the dividend and still much better off than putting the money in FD for a mere 3.7%.

PBBANK - Dividend Yielding 6%

PANAMY - Dividend Yielding 10%

MNRB - Dividend Yielding 9%

GUINESS - Dividend Yielding 8%

BJTOTO - Dividend Yielding 7%

APOLLO - DIvidend Yielding 8%

EKSONS & LHH

Alicafe, below is for you, hope it help. Obviously you can see LHH is on the uptrend and EKSONS is on the downtrend. There is saying "buy on support and sell at resistance" but is all depend whether the trend is up swing or down swing. Take your judge carefully. Determine the S&R is important as it will help you to execute your trades more accurately.

Disclaimer: The above don't recommend a Buy/Sell. Make your own judgement and be responsible to your own act.

Monthly Portfolio 29-October-2007

This month i have added 2 more stocks in my portfolio. The first one is PANAMY, i have been tempting to buy this stock since many months back and could not get the right time and right price. Eventually decided to settle with RM10.70 and reason buying this is simple, that is none other than "dividend" that i'm looking for. This company has been paying solid dividend for many years back till now and i like this so much as it suit my type. The second stock that i have been ventured in is IOICORP. I believe that there is still room for grow as the commodity prices for oil palm is kept pressing new record high like oil. Thus, plantation stocks in here to play.

Other than the above, i have adjusted the purchase price for BJTOTO, CARLSBG, MAYBULK and RESORTS after receiving dividend of 10 sen, 5 sen, 8 sen and 2.88 sen respectively. Please find below updated of my portfolio. Till then happy trading.

5077-MAYBULK MALAYSIAN BULK CARRIERS BHD

MALAYSIAN BULK CARRIERS BERHAD ("MBC or the Company")
Article Entitled: "Buoyant rates to lift MBC profit"
We refer to the query by Bursa Malaysia Securities Berhad vide its letter dated
6 September 2007, in relation to a news article appearing in The New Straits
Times, Biznews section, page 40 on Thursday, 6 September 2007 and in particular
the following statements:
"MALAYSIAN Bulk Carriers Berhad (MBC) ... said its net profit this year could
rise as much as 17 per cent...."
"... full-year profit could reach between RM360 million and RM365 million...."
In response to the above query, Mr Kuok Khoon Kuan did not give percentage nor
did he give any comparison between the 2006 and expected 2007 performance.
However, as quoted in the Financial Daily of 6th September 2007, Mr Kuok
disclosed that “There is no let up or signs that it (the shipping industry) is
going south-bound anytime soon. For the second half of 2007, the Baltic Dry
Index (“BDI”) has been going up, so there is no doubt that the performance will
be equally strong.”
Mr Kuok commented that in view of the strong drybulk market as indicated by the
BDI, if profit before tax (PBT) for first half 2007 was extrapolated, then the
full year PBT would be about RM360 million to RM365 million.
We wish to clarify that the quoted figures were not intended to refer to any
financial estimate, forecast or projection of our Group.

Public Bank set to sustain record

It plans to go big in China
By ELAINE ANG
PUBLIC Bank Bhd (PBB) has the distinction of being one of the most favoured banking stocks of the investment fraternity – churning out solid earnings each financial year and lining shareholders' pockets with fat dividends.
Its asset quality is the best in the industry with net non-performing loans ratio standing at 1.5% as at end-June. This has not compromised loans growth, which has been sustaining at double-digits for some years.
The bank's prudence has also stood it in good stead, as it was not affected by the US subprime crisis.
The banking group's excellent performance has been recognised industry-wide bagging it many awards throughout the years, enough to fill a trophy cabinet and more.

Tan Sri Teh Hong PiowSuch an outstanding track record raises the question of whether PBB's performance is sustainable in an increasingly competitive industry thus putting much pressure on the banking group to continue to perform.
Chairman and founder Tan Sri Teh Hong Piow is unfazed and is confident PBB would not disappoint its shareholders.
“We intend to sustain our track record of delivering financial performance, enhancing shareholder value and rewarding shareholders with strong dividend policy.
“This will be underpinned by continued adherence to good corporate governance and transparency.
“We also see ourselves as providing more cutting edge, innovative and superior products and services supported by a well-trained and motivated sales team,” he told StarBiz.
Teh's vision is for PBB to remain the premier bank – to be in the forefront of the Malaysian banking industry while expanding its regional presence particularly in the Asia-Pacific region.
“We believe in doing what we do best. Going forward, we will be driving our non-interest income by widening our suite of products and services. We intend to intensify our wealth management business,” he said.
One avenue is via Public Mutual Bhd. Presently, 22.6% of its fund is invested in the fast growing Asia-Pacific region, and 1.2% invested in Europe and the US.
Teh expects Public Mutual to make further inroads to increase its market share backed by its strong distribution network and excellent fund performance track record.
“We will continue to be on the lookout for synergistic opportunities. In this light, we will be forging strategic alliances with the best in their own industries.
“We are in the midst of finalising a tie-up with a global insurance company to customise bancassurance products as unique propositions to our customers,” he said.
As part of its plan to expand its regional presence, PBB has aggressively expanded its branch network since it acquired Asia Commercial Bank Ltd (ACB) in May last year.
ACB was subsequently renamed Public Bank (Hong Kong) Ltd.
The total number of branches has almost doubled to 24 from 13, with 22 branches in Hong Kong and two branches in Shenzhen, China.
“This expansion programme will be continued to enhance our market reach.
“We will also leverage on the existing 40 branches of Public Finance Ltd to cross-sell the bank’s products and services,” Teh said.
He added that PBB was also building its resources especially the sales force to aggressively penetrate the Chinese market to grow its loans.
This was particularly in retail lending with emphasis on consumer financing such as personal loans, motor vehicle financing and mortgage financing.
It will also focus on lending to middle market commercial businesses, particularly to small- and medium-sized enterprises.
Looking ahead, PBB will continue to strengthen its overseas operations in Indochina and look into the feasibility of providing a wider range of financial products.
This would be in in addition to the conventional loans and deposits.
Teh said Indochina was a relatively untapped market with good potential to develop the financial and insurance services.
CampuBank Lonpac, a joint venture between CampuBank, PBB and LPI Insurance Bhd commenced business operations on Aug 30 offering the full suite of general insurance products.
“We are very happy with the volume of business garnered so far in this short period of less than one month.
“Currently, there are no plans for any mergers and acquisitions.
“However, we are always open to financial-related business opportunities which have earnings sustainability and the potential to increase shareholder value,” Teh said.
As OSK Research banking analyst Chan Ken Yew puts it: “PBB is not a sexy stock. It is a bit boring like any low beta (risk) stock.
“It grows slowly but very steadily and investors like it as a dividend cum growth stock.
“I can comfortably say that the group should continue to sustain its performance for the next two to three years at least.
“Its aggressive expansion overseas in Hong Kong, China and Indochina should also help boost the group's future financials.”