Shrugging off the Chinese Bugbears

The Chinese market went down on news that stamp duties on stock transactions was increased by 0.2% to 0.3%. Shanghai market index went down by 280 points and the China benchmark CSI300 index took a 6.5% fall. Most overseas market has factored this in and so there was little panic. Moreover only Chinese nationals were affected as foreigners cannot buy those shares that went down.

On the local front, Bank Negara kept the interest rate for the ninth time. The GDP report released was also fair. News that the US Federal Reserve may bring down interest rate was also welcomed.

The composite index went up 7.7 points to 1,347. Gentings went up 5 sen to RM7.90; Resorts World closed at its overnight level of RM3.22 and Metronic added 1 sen to 85 sen. RCE also perked up 1 sen to 81 sen. However, BJ Toto moved up 12 sen to RM4.88.

The biggest loser has to be POS Holdings which lost 24 sen because of the forensic accounting done at Transmile. I hope those responsible for cooking the numbers will rot in jail for CBT. Actually with POS and Kuok Brothers in the company, Transmile will be a good buy. At the current price, POS is also an opportune buy!

With the Chinese bug-bears being relegated to the background, shares should go up gradually. Good time for bargain hunters.

Heartsong

Metronic-Global Poser

Metronic-Global Berhad (MGB),a specialist in telemetry applications for buildings and external urban infrastructure has got approval to move onto the Main Board. It is also giving a bonus issue of six new shares for every 7 shares held. No dates have yet been set for the bonus issue nor for the board transfer from MESDAQ.

MGB is a profit making company. For the year ending December 2005, it gave out a dividend of 3 sen for shares held on July 2005. The latest unaudited quarterly results is assuring as it is anticipated that the performance for MGB will be as expected at year end 2007. Net asset per share this quarter is better at 0.2226 sen as compared to the same period for year of 2006 at 0.2166.

If all things remain equal, MGB should be announcing another dividend pay-out shortly for fiscal year 2006. I guess this should be soon before the issuance of the bonus issue.

Lately,the shares were pushed up to beyond 50 sen to help determine the price of 15% of its current shares for a private placement exercise. The price that was arrived at came to 42 sen.

Since then, MGB shares have been heading southwards. It touched 33 sen today.

To take full advantage of the bonus issue, an investor has to buy 7 lots of MGB. At 33 sen per share, it will cost him RM2,310 for this investment. If you pro-rate this with the new bonus issues, this will come to approximately 18 sen per share.

Assuming nothing serious and untoward happens at the bourses worldwide (The China bugbears?), this is a good buy. Ascending to the Main Board should fetch some premium.


Heartsong

Dull Moments at Bursa

O what a day! Absolute boredom. All day long it was like that.

Index went down about 3 points to 1339. Major stocks slumped. KPS was down to RM1.15 on a volume of 2.6 million; RCE to 80 sen on a volume of 3.46 million, Genting went down to RM7.85 and Resorts World is at RM 3.26. Metronic Global was trading at a low of 34 sen at the close.

It is a field day for bargain hunters and they will reap a good harvest when the market rebounds.

Quote of the Day:

"As we express our gratitude,we must never forget that the highest appreciation is not to utter words but to live by them." John F. Kennedy

Heartsong

Another Listless Day

Yes, I can understand the fear of the impending market bubble burst in China especially when the Shanghai market has broken through the 4,000 point psychological barrier.

There is much caution in the local market. The index is down by 0.3 points and I think volume will be very thin today and in the days to come. Bargain hunters can be seen nibbling here and there meanwhile to dollar average. Not a good strategy for all times but in most cases, it helps.

Genting did not attract much interest in spite of buying the 30% share of the Singapore resort project from Resorts World. It closed up 10 sen at RM8.10. There was also not much interest in Tanjong after it announced buying a slew of power plants world-wide.

KPS moved a bit in the morning. It went up 3 sen to RM1.18 on a volume of 1.3 million lots. RCE is at its overnight level of 83.5 sen and so is Metronic Global at 35.5 sen. However, BJ Toto moved up 8 sen to RM4.82. I believe this is due to treasury buy-backs.

With the news of Kuok Brothers and POS Malaysia taking the helm for the day to day running of Transmile, things should look better for Transmile and POS Holdings. Hopefully, the market can leave the episode behind.

The morning market is equivalent to watching grass grow. Hope the afternoon can be more exciting.

Heartsong

Another Uneventful Day

So the index is up by another 8 points in spite of the doom-sayers cry that we are in a major correction mode. The counters helming the rise are relatively unknown. A random walk, I suppose.

Genting went up 5 sen in spite all the good re-rating by fund analysts. Resorts was about 6 sen better while KPS chalked up 2 sen. RCE was 1/2 sen better at 85.5 sen. Altogether, another dull day at the bourse.

Quote of the Day:

"Don't talk unless you can improve the silence." Unknown

Heartsong

The Potential China Bubble and its Issues

One million trading accounts are opened every week. Money deposited in banks are flowing into the Shanghai and Shenzhen stock markets. Share prices are spiraling ever upwards. Since May 2006, Shenzhen's index had doubled, surging 122% to 1,215 points by the third week of May 2007. Similarly, Shanghai's index has moved up 55% to 4,151 points.

Then, Greespan prickd the so-called 'bubble' by pointing out that this was just unsustainable! He was quoted by Bloomberg as saying, "a dramatic correction" is a-coming. Prior to this, Hong-Kong tycoon Li Ka-Shing also cautioned that these two markets are overvalued with price-earnings ratio of 60 times over!

The reaction?

Shanghai's index only dropped a mere 22.6 points or 5.4 percent. Shenzhen was even tougher! It only shed 8.8 points or 0.72 percent.

Most players expect a correction but believed that the trend remains intact and are continuing to position themselves on these two markets. To the investing masses, the stock markets are just playing catch-up after a four-year delay when the Chinese economy was powering forward.

The coninuing scenario-people are just taking their money out of banks because the value of their money viz-a-viz interest is lower than the inflation rate. They are taking the risk by converting into property acquisition or going into stocks. Also there continues to be a lot of liquidity all around to continue the stocks upward momentum.

"If the market in China should fall, it will affect emerging markets like Malaysia when fund managers reduce their exposure over here." said OSK Investment Bank economist, Sia Ket Ee.

As of now, the Chinese retail market seems to be driven by short term speculators who will dump their shares when they have made their profits. The general impression is the Chinese market is irrational and will undergo a meaningful correction before it can go up further.

There must be a big shake-down so that the weak monkeys will let go!


Quote of the Day:

"The wise person understands that his own happiness must include the happiness of others." Dennis Weaver

Heartsong

Greenspan's Advice and Asian Markets

Governments can shore up the markets by coming up with market-sensitive news about projects. However, an old hand like Alan Greenspan can take a swipe at world markets by a simple statement. All he said was that China's stock markets were overvalued by some 20 percent. so, bang the market went shooting down across Asia. There are some who disagreed saying only some stocks are of that valuation and the market is still good by world standard. But no... the market went tumbling down two days in a row.

Genting announced double the earnings per share and KPS announced it would give a 4 percent dividend for year ending 2006. Resorts announced lower profits. Market did not respond and went down 13 points.

As today is Friday, do not expect turn around. Best if they can reduce losses.

Heartsong

Will this be a better day?

I think the Macquarie's report disputing the number of serviceable planes of Transmile blew the whistle for speculators and weak holders to drop the share like a bomb. A huge loss of RM1.20; even though it gained twenty sen today on the opening bell. Now the ball is at Transmile to disprove the contentious report.

Macquarie similarly upgraded Genting with potential news that it will soon lists its oil business The shares have been re-rated to RM11.00. The market is not taking the bait. After losing 20 sen yesterday, it only managed a meagre 5 sen increase this morning. Maybe it takes sometime for fund managers to digest this before appropriate action is taken.

Generally the index is down taking the cue from Wall Street.


Quote of the Day:

"You will discover that you have two hands. One is for helping yourself, and the other to help others."Audrey Hepburn

Heartsong

Dumbo Day at the Stocks

Well it has gone back to dullsville right from the start. Composite index is down almost 7 points. Nothing is really moving and most are southerly bound. Genting went south once more losing 20 sen. KPS was in uncertain territory losing one sen after the Cashband announcement. Only RCE perked up to 88 sen with improved results and paying a dividend of 1 sen.

The afternoon session opened up as dull and the index went down 14 points with Transmil and IOICorp losing RM1.00 and beyond. I guess Transmile is the one that spooked the market this time around.

I expect the market to finish just as bad unless bargain hunters sppear in the last hour or so.

Heartsong

Better Opening Today

After a horrid trading day yesterday, Bursa started hesitantly better. The last two days' losses were slowly recouped. KPS was better at 3 sen at RM1.16 and RCE at 1 1/2 sen better at 85.5 sen. Genting perked up 15 sen while Resorts was at its overnight level. BJ Toto was down 2 sen to RM4.80.

News in the market said the KFC may be taken private. It added 20 sen.

Afternoon session saw follow-through and the market put on another 10 points. At the close,Resorts moved up to RM3.48 and Genting was at RM8.25 while KPS was 3 sen better at RM1.16. Meanwhile RCE notched up 1 1/2 cents to 85.5. Pos Malaysia and BJ Toto did well chalking handsome gains.

Market finished at 1,367 up a 20 good points. Hope market will continue to be good tomorrow.

Heartsong

A Sick Market Day!

I thought today would be a good day for the market to move. But as they say, "Man proposes but God disposes!" and so the market went down 9 points amidst expectations in the rise of crude oil prices. Genting went down 30 sen after the rumours of the Asiatic sale to IOI fizzled out. IOICorp went down 50 sen. All other stocks went south except for Transmile which managed to put on 20 sen. BJ Toto managed to go up a few sen to RM4.80.

I think the afternoon will be as boring.....

Market in Mayhem

The Malaysian stock market is like Janus, the two-faced god. It is neither going forward nor backward. Rumours aplenty spur the market on as well as shape the trading pattern. Share prices rise and fall according to the euphoria and fears of the investors or should we called them speculators.

The market looks oversold on some counters like KPS which should stabilised and move upwards. KPS went up in the afternoon on heavy volume and ended up 5 sen better at RM1.18. KPS should move up on Monday.

Quote of the Day:

"Put you heart,mind, intellect and soul even to your smallest acts. This is the secret of success." Swami Sivananda

Heartsong

Blog Action

As my blogs Heartsong and Family of Four are reaching 200 postings, I will cease posting on them.

All entries of the stock market will now be on Magic Moments and others will be on Godot's Way.

Do have a wonderful time visiting my blogs.

Quote of the Day:

"Kind words can be short and easy to speak,but their echoes are truly endless." Mother Theresa

Heartsong