Market is not going to be weak. Ringgit touched below 3 this morning.
Tuesday, February 28, 2012
Wednesday, February 22, 2012
Malaysian Economy Slowdown
Are you worry? News flow could be misleading but funds flow wont lie.
Not sure how many people understand this indicator, how useful is this????China Economy
Are you worry? News flow could be misleading but funds flow wont lie.
China economy faces risk of hard landing, says government economist
February 22, 2012
A worker sweeps water off a street at the Central Business District in Beijing July 16, 2009. — Reuters pic
The economy is not just slowing but is also haunted by over-investment that could constrain Beijing’s options, said Shi Xiaomin, vice president of China Society of Economic Reform (CSER), a Beijing-based think-tank.
“A hard landing of the economy is possible this year as slackening domestic and external demand pushes (full-year) GDP growth below 8 percent, probably even to 6-7 percent,” said Shi.
“More worrying is that such a slowdown is going hand in hand with a sharp decline in the overall economic efficiency.”
The world’s second-largest economy may even slip into a period of deflation late this year or next year, he added.
Shi is an adviser to the government, specialising in reform. His think-tank is under the under the National Development and Reform Commission, China’s top economic planner.
Fears of a hard landing in China have gained traction as a stream of recent data, especially disappointing trade and credit data in January showed the turbo-charged economy is faltering.
China’s manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro area debt crisis, the HSBC flash purchasing managers index showed today.
Shi’s outlook is a contrarian one in China. Most government economists don’t expect a hard landing, which in the Chinese context is typically defined as a sudden dip in quarterly GDP growth below 8 percent, which could lead to big job losses that pose a threat to social stability.
US economist Nouriel Roubini has flagged risks of a China hard landing after 2013, mainly due to over-investment.
China’s leader-in-waiting Xi Jinping said during a visit to the United States last week that China’s economic momentum would not falter as some economists have predicted, and said the economy faces no risk of a hard landing.
The last time the economy showed signs of a sudden slump, during the depths of the global financial crisis in 2008/09, Beijing announced a 4 trillion yuan (RM1.92 trillion) stimulus plan that helped it quickly return to double-digit growth.
But the huge pump-priming sparked unfettered bank lending to local governments, resulting in piles of debt — officially estimated at 10.7 trillion yuan — that analysts fear could destabilise the economy.
China’s property sector has begun to cool, with housing sales in some cities falling sharply as Beijing’s heavy-handed tightening measures unveiled since 2009 start to bite.
But Shi warned that a downturn in property investment, which accounts for an eighth of gross domestic product (GDP), as shrinking land sales hit local government revenues, possibly forcing them to default on loans.
China’s banking regulator has issued guidance to banks to roll over some of their loans made to local governments to ward off a potential wave of defaults.
China cut banks’ required reserves on Saturday to support the economy that is widely expected to slowing this quarter for a fifth consecutive quarter. The market consensus is for full-year 2012 growth to have slipped to 8-9 per cent.
“But monetary policy cannot solve structural problems,” Shi said.
Reforms stalled
China’s reforms were launched by former leader Deng Xiaoping in 1978 and gained steam after China’s entry into the World Trade Organisation in 2001, propelling the country’s break-neck growth in the past three decades, Shi said.
“Unfortunately, reforms have almost come to a standstill in recent years, especially concerning the monopoly,” Shi said.
State-owned firms have staged a come-back as they received the bulk of Beijing’s massive spending, sparking criticism that “the state advances and the private sector retreats”.
“There are growing calls for reforms, but such discussions are restricted to the academic circle,” said Shi, who was among economists who helped draft China’s reform plans in the 1980s to steer its transition from a planned economy.
Shi said “vested interests” — state giants in oil, power, railway and banking — are the biggest obstacle to reforms.
Premier Wen Jiabao has repeatedly called for accelerating reforms to help sustain economic growth, but Shi reckons that “stability” will be the watchword for the Chinese Communist Party ahead of its leadership transition in late 2012.
“If you don’t want to push reforms, the financial crisis may be an excuse to retreat. But if you want to reform, the crisis may well be an opportunity,” Shi said. — Reuters
Tuesday, February 21, 2012
Market Pulse
As mentioned before, traders in Malaysia must track down the USD/MYR. It gives u an indication how much hot/portfolio money is coming onshore. Keep an eye on RM3 level. if it were breached, expect another up-move of market.
Malaysian Economy
A snapshot of how Malaysian has grown from a low income nation to middle income nation for the last 40 years.
Mobile service operators start talks on merger and acquisitions
PETALING JAYA: Consolidation talks have begun in the telecommunication space where as many as nine parties have licences to offer mobile services.
“There are clearly too many operators for a market like Malaysia and it would naturally result in some form of consolidation,” said a telco analyst.
Industry sources said that one of the more active players pursuing a merger and acquisition exercise was the YTL Group which has approached Asiaspace Sdn Bhd and Green Packet Bhd.
Asiaspace chairman Datuk Abdul Ghani Abdullah said that consolidation was the most “logical” thing to do.
Same wavelength: From left: Puan, YTL Communications executive chairman Tan Sri Francis Yeoh, Tan and Abdul Ghani. A telco analyst points out that there are too many operators in a market like Malaysia and it would naturally result in some form of consolidation. “Capital expenditure is so high in this industry that it is impossible for smaller companies to survive,” he told StarBiz when contacted yesterday.
YTL had not answered StarBiz queries at press time while Green Packet officials declined to comment.
Last year, the Malaysian Communications and Multimedia Commission named nine companies as recipients of the 2.6 GHz spectrum, to be used for the roll-out of long-term evolution (LTE) or 4G services.
These are the four 3G players namely DiGi.Com Bhd, Celcom Axiata Bhd, Maxis Bhd and U Mobile Sdn Bhd; and four WiMAX players Asiaspace, Packet One Networks Sdn Bhd or P1 (a subsidiary of Green Packet), REDtone International Bhd and YTL Communications Bhd.
The ninth player named was Puncak Semangat, a company controlled by billionaire Tan Sri Syed Mokhtar Al-Bukhary.
Abdul Ghani said consolidation would enable players to combine their spectrum to offer more efficient services to customers, and hence, help solve the issue of spectrum being spread too thin among too many players.
“However, the (consolidation) talks are still at an early stage,” said one industry source.
Aside from the three incumbents in the telco voice market, namely DiGi, Celcom and Maxis, the other players that have made the most inroads in the 4G industry are YTL Communications, P1 and U Mobile which is controlled by tycoon Tan Sri Vincent Tan.
YTL Communications launched its YES 4G wireless network in November 2010 and as at November last year, the company was said to have a subscriber base of more than 300,000.
It was reported that the company would break even when it had one million subscribers.
Green Packet has also been keeping busy with its investments in the area of broadband.
For the third quarter ended September 2011, Green Packet reported net loss of RM24.3mil compared with net loss of RM13.7mil a year earlier, largely due to such investments.
“But it will be an historic year for P1 this year, as in less than four years it will turn EBITDA (earnings before interest, tax, depreciation and amortisation) positive. You must realise that we are in an industry where the gestation periods are long,” said group managing director C.C. Puan recently.
As for U Mobile's financial position, this cannot be immediately ascertained as it is privately owned.
Meanwhile, amid reports that U Mobile was seeking to be listed, a source said that Green Packet had been approached by investment banks to consider an initial public offering of P1.
“If Green Packet turns EBITDA positive this year, PI should be in a good position for a listing,” said the source.
Monday, February 20, 2012
Saturday, February 18, 2012
Market Topping
As KLCI is highly correlated with portfolio investment - foreign fund. it is beneficial to do so as emerging market is providing higher growth and US is flashed with cheap funds. Typically, the foreign funds will chase KLCI higher as more and more funds is poured into KLCI.Observation:
1. Change of foreign fund direction is determined by the fundamental parameters - GDP growth, interest rate, unemployment rate, G policy, G infrastructure spending, consumer spending, consumer sentiment. Generally, these parameters do not change speedily. A target of KLCI will be determined based on the prevailing macro parameters.
2. Once the foreign funds decided to come-in, it will remain on-shore until the fundamental parameters deteriorate or rather KLCI target is achieved.
3. As the foreign funds coming/existing gradually, their activities are recorded in portfolio investment funds movement.
4. Any spike in net portfolio movement indicate market top or market bottom.
It will be interesting if the chart above overlay with USD/MYR.Observation:
1. Highest net out flow (longest bar below zero) indicate peak of USD strengthening - occurred in Q32008
2. Highest net in flow (longest bar above zero) indicate bottom of USD weakening. - occurred in Q22011.
3. coincidental, highest net inflow has pushed KLCI to the peak and USD is the weakest in Q22011.
Weakeness:
1. portfolio investment funds flow from BNM is lagging indicator - ie available on quarterly basis. - can only be used to verify past action
Usefullness:
1. USD/MYR will provide an almost immediate tracking of the foreign funds movement.
2. Any spike of USD/MYR always give an indication of change of funds direction.
Q4 2011 GDP
Going through the Economic and Financial Developments in the Malaysian Economy in the Fourth Quarter of 2011 downloaded from BNM website.BNM released Q4 GDP figures last a couple of days ago. Q42011 GDP growth slowed to 5.2% vs Q3: 5.8%. Overall still sustainable.
Annual basis
2011: + 5.2% (moderate growth)
2010: +7.1% (high due to G stimulus)
2009: - 1.7%. (Sub-prime crisis)
It is interesting that BNM report does not break down GDP by the common components ie CIGXM.Managed to find a presentation by Dr. Sukhdave Singh, Assistant Governor
Bank Negara Malaysia in Apr 2011. Overall private consumption (C) contribute 53% (2010: 44%) to GDP. Hence, private consumption is getting more and more important to GDP.
What worrying is the growth in private spending was financed by the increasing debt taken by households. House hold debt make-up of 76% of GDP.Wednesday, February 15, 2012
Market Topping
A shot blip should be kicking in before the KLCI advance to 1600 level. It is reported in Q4 GDP results, FDI has net inflow of RM6.5 B vs RM5.2 B Q3. Overall it is inline with the strengthening of RM from Dec 2011 to now.
It seems USDMYR is bottoming with low GDP growth in Q4 (5.2% vs 7.2% Q3). There is always reason for market to sell.
It seems USDMYR is bottoming with low GDP growth in Q4 (5.2% vs 7.2% Q3). There is always reason for market to sell.
Tuesday, February 14, 2012
Xinquan
Following on CIMB report on 9 Feb, Xinquan has shoot up yesterday with a nice shooting star. As trader, you cannot solely rely on day chart for light stock like this. Light stock means stock move fast. Volume on 30 Jan is 2.1 mil with a morobozu vs 14 Feb is 1.6 mil with a shooting star. it seems that 14 Feb is a sell day but less significant than 30 Jan as a buy day. Hence you need hour below to dissect further. Point A - 30 Jan total volume 2.1 mil with up-moved candle
Point B - 14 Feb - single hour with 1.1 mil unit traded - it is a significant sign of weakness from the top as the pro has successfully offloaded huge holding at high price. naturally, without support from the pro, market will retreat.
Wave will emerge only until the Pro take another position again. Stay away for now.
Hibiscus
Probably it is true that "stock market is the biggest casino of all". A company which has no track record (fair enough that track records lie on the founders and management) could be goreng to this level. Is really a game only played by the insiders who know the big plan or pipe line project to be carried out. Stay out.
Monday, February 13, 2012
Sunday, February 12, 2012
Saturday, February 11, 2012
Pelikan
Pelikan is consolidating to form a flag.
Flag signify continuation of previous up-trend. Conventionally, a break-up or down of the symmetry triangle is required to determine the next
trend. Let see.
Ob
servation from hourly chart:1. low volume - supplies dry-up
2. narrow range of price change - stagnant stage
3. higher price is required to draw out supply.
Haio
Observe the rectangle box.
1. Up-surge price is accompany by low volume.
2. Double top at 2.40 level
3. RSI moving south.
4. Up trend shall take a rest now until next high up-surge of price and volume.
Thursday, February 9, 2012
Xinquan
CIMB issued a important bullish buy call report on 9 Feb 2012. But Xinquan share price did not break-out nor close with high volume on the same day. Why? if the news is real, insiders/smart money would have taken the first move. Observe the price and volume surge since end Jan 2012. This report was issued at the point where share price hitting a strong resistant level 0.95. So traders be aware. That is how market is being play up. Remember:
1. Market is driven by emotion in short run, fundamental value is irrelevant. - "Market is voting machine in short-run and weighing machine in long run".
2. Market is manipulated by syndicate and smart money.
3. Market is designed for the benefit of the rich.
4. Research house / Analyst do not work for you, but the rich.
Still finding out how to post a PDF file here. Can someone teach me.
Summary:
1. Two small-cap casual wear stock - China Outfitter (COH) & Active Group Holdings (AGH) listed in HK in Q411 trading at PE of 7-8x Cy12.
2. Xinquan trading at unwarranted PE of 2x
3. Xinquan is piling up cash - two possibility
(i) privatisation
(ii) dividend payment
With the issuance of this report it is interesting to trade as it will generate lots of waves, get ready of your surf board to sail through the tide.
1. Market is driven by emotion in short run, fundamental value is irrelevant. - "Market is voting machine in short-run and weighing machine in long run".
2. Market is manipulated by syndicate and smart money.
3. Market is designed for the benefit of the rich.
4. Research house / Analyst do not work for you, but the rich.
Still finding out how to post a PDF file here. Can someone teach me.
Summary:
1. Two small-cap casual wear stock - China Outfitter (COH) & Active Group Holdings (AGH) listed in HK in Q411 trading at PE of 7-8x Cy12.
2. Xinquan trading at unwarranted PE of 2x
3. Xinquan is piling up cash - two possibility
(i) privatisation
(ii) dividend payment
With the issuance of this report it is interesting to trade as it will generate lots of waves, get ready of your surf board to sail through the tide.
Maybulk
1. Next support level 1.80
2. RSI point south
2. RSI point south
From the day chart above, yesterday and today candles look the same. A closer examination of hourly chart will discover that the fearful atmosphere has diminished after the first hour of trading today. The small doji for the next 6 hours was term as the "test of supply". The smart money is trying to uncover new seller at 2.00 level. Should the volume drys up from this level, reversal shall begin. Let see.Wednesday, February 8, 2012
Kimlun
1. A whopping +20% gain. TAKE!
2. Resistant level @ 1.64
3. Breakout at Extreme high volume - sign of buying climax.
4. RSI - over bought.
Xinquan
1. Meaningful retracement has yet to take place.
2. Resistance 0.95 level
3. RSI - overbought.
Tuesday, February 7, 2012
FnN
F&N
- a blue chip dividend stock
- Market Cap RM6B
- Good brand
- Q4 & Q1 festive seasons usually reflect good results
- Distribution phase starts before good results of Q4 release.
Immediate support is found at 17.49 & 17.28.
Update: 20120208 915am (M'sia time)
Saturday February 4, 2012
F&N Q1 profit falls sharply on loss of Coca-Cola business, Thai floods
By EUGENE MAHALINGAM
PETALING JAYA:Fraser & Neave Holdings Bhd's (F&N) net profit for its first quarter ended Dec 31, 2011 plunged 61% to RM41.75mil from RM107.08mil in the previous corresponding period, mainly due to the loss of the Coca-Cola business and operating losses arising from the Thailand floods last year.
“Following the expiry of the transition agreement with The Coca-Cola Co on Sept 30, the group no longer distributes Coca-Cola products effective this financial year,” F&N told Bursa Malaysia yesterday.
Revenue slipped to RM743.30mil in the first quarter of fiscal year 2012 from RM1.03bil a year earlier, while earnings per share was at RM11.60 versus RM30 previously.
Excluding Coca-Cola's revenue contribution of RM134mil last year, F&N said revenue was down 17% mainly due to the negative impact of the floods in Thailand in spite of an increase of 9% in soft drinks revenue, on account of higher sales of FN Fun Flavours, Redbull, the recently launched Zesta and Clearly Citrus, sales to the additional territory of Brunei and contract packing for export to its related company in Singapore.
An analyst from a local bank-backed brokerage said F&N's first quarter earnings were within expectations.
“The lower earnings were expected as the loss of the Coca-Cola business, which contributed about 30% to F&N's earnings would have an immediate impact on the company,” he said.
Another analyst has similar sentiments about F&N's first quarter earnings, saying that its dairy division has taken a beating due from the disruptions caused by the Thailand floods.
“F&N's flood-hit dairy plant in Rojana, Thailand will only be fully operational by April, hence earnings from its dairy division will only expected after that period,” she said.
According to reports, the company's dairy division accounts for about 40% to its total business, while the bulk of its earnings is from its drinks division.
On the prospects of its outlook, F&N said the regional economy and consumer sentiment over the next few quarters may be negatively impacted by the unfolding financial crisis in the eurozone.
“Any slow down in demand will lead to more intense competition in the market place.
“These external forces coupled with the volatile raw material input costs are expected to continue to exert pressure on operating margin.
“The group's sustained effort and investment to strengthen distribution, brand equity, broaden product range and improve operating efficiency will alleviate the negative impact of these external forces,” it said.
Sunday, February 5, 2012
GENM
GENM - a nice short term trade.Support at MA20
Resistant at MA10.
RSI - down bias
Next Support 3.94 is good level to enter, observe the next selling climax.
Market Topping
Since the last posting in Sep 2011, market has continue to go lower, bottomed at the end of Sep 2011. USD has also strengthening against RM.
As market go higher, USD is weakening again. USD is flowing out of the US to fuel the stock market uptrend again. Based on the market strength now, KLCI should be reaching 1600 level soon. It will be interesting to see whether KLCI will be taken higher from here - an all time high level in the history of KLCI.
As the FX retreating to 2.95 level (end Sep 2011 low), we shall see the KLCI pushing up to 1600 level. Hence it is interesting to trade for the next two months.
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