A Bargain Hunter's Paradise

After four days of fall, the Bursa made a half-hearted response to add only 3.66 points propping up the index to 1,354.38. Trading was absurdly dull and lacklustre. Some blue chips moved up signaling the return of fund managers. Trading was range-bound on most counters. Today is definitely a bargain hunter's paradise.

On the whole, 1.05 bilion shares were traded with a value of RM2 billion. Losers trounced gainers 463 to 434. Among gainers, we have MMCCorp which jumped 50 sen; IOIProp which upped 40 sen and Petronas Dagangan which climbed 30 sen. Losing its trousers was Dataprep which gave up 70 sen and Maybank and Dutch Lady which lost 20 sen each to RM12.00 and RM11.50.

"'Pilih mana yang suka'', sang Sharifah Aini in her Selamat Hari Raya song. Therefore, chose and pick the good ones that have fallen. Even the ''golden goose'' KPS went down to RM1.71 in spite of the news that the Pahang Water Transfer Project will see action in mid-July. It's volume also shrunk to 5.8 million shares. JAKS, which is also on the war wagon of the water play, traded listlessly to end unchanged at 74.5 sen. However, since Salcon went up, it may mean that there is rotational play on the water counters. RCE was 98 sen while AMDB lost 3 sen to 38 sen. Metronic added half a sen to 42 sen.

Genting saw a flurry of buying to end up 20 sen better at RM8.25. Resorts was the most traded counter (45.3 million shares) moving up to RM3.60 at one time before last minute profit-taking brought it down to RM3.46 for a 10 sen gain. I think both these 2 counters are becoming the darlings of the market once more because of the Genting International rights issue. So, you see there is still magic in the Genting Group!

Welli, our focussed stock was yoyoing all day long between RM1.14 and RM1.24, levelling off to end at RM1.13. Some huge block deals up to half a million shares were done but sadly no magic. So, anticipate action next week.

Meanwhile BJ Sports Toto which disappointed the market big time on its poor dividend payout got the big stick from investors which send the stock reeling down 25 sen to RM5.05 at one time. It closed at RM5.25 at noon for a loss of 5 sen.

I believe the Chinese markets are slowly being disciplined by "smart financial wizards". The latest rumour that they intend to lift taxes on savings accounts as well as increase interest rates may dampen the furor of transfering savings into stocks. Good show!

Heartsong

Welli-Multi Corporation (WMC): The Saga Continues...

I thought all was clear for WMC to move up a notch this morning. It tried all morning. Went up to RM1.24 and then fall back to RM1.14. The trading pattern was marked by many small buyers and sellers. When the stock moved back above the overnight level particularly at RM1.20, there were big block deals done,ranging from 100 lots to 500 lots. I believed this is triggered by programmed buying.There were also many blocks of 100 lots and some between 200-300 lots. Some 1.9 million shares changed hands.

Friday is not a friendly day for the stock market as somehow, investors do not like to hold shares over the week-end. So, I do not expect any action on WMC today. Next week is a better window.

Heartsong

Tracking WMC ...........

Bursa continued its downward trend finishing 6.7 points down to 1,350.72. Overall market was dull. Most shares were down. The few that gained were outsiders. On the whole, the blues were not to be seen. Th global scenario - Wall Street was up and so were the Chinese bourses. I think Bursa will go up tomorrow!

Let us look at how WMC was traded today. Nothing was done until about 10 A.M. Lacklustre retail trading by those who wanted to sell this morning. So after an apparent yoyo around the overnight level, bargain hunters brought WMC to its low for the second day at RM1.06; two sen higher than yesterdays's low. No volume buying for sure. There was, however, a block or two of 100-120 lots being traded buying up the sellers. Stuck out like a sore thumb. Was that an indicator? Can we expect something untoward in the afternoon trading session or tomorrow?

As expected the big boys came in the afternoon. Close to 3 million shares were done. Block trading was evident now. Two blocks were 500 lots and above with many in the intermediate size of 300 to 400 lots. At the next level were the 100-300 lots. With intermittent profit-taking, WMC moved up to RM1.20. Last minute selling by weak holders brought the counter down to close at RM1.19 for an 8 sen gain.

My friend, this is definitely heavy collection. No indication of any hurried buying. They just take off the sellers all afternoon at a leisurely pace; bargaining sometimes to get a better price for big blocks.

This is also no technical rebound because if it is, then WMC should have gone back to the RM1.50-RM1.70 level. Anyway, today is no day to do a stunt-suicidal! Tomorrow is a better day because the heavy buying today and the 8 sen gain will make would-be sellers to think twice before letting go of their soon to be "golden goose".

Happy punting WMC!

Heartsong

Tread carefully lest........

Taking the cue from Wall Street, Bursa crept up 2.9 points in the morning. By the noon close,the index went down 6.4 points to hover at 1,351.05. Then, by day's end the index was 1,350.72; down 6.7 points. Counters which made early gains were forced by market pressure to give back.

KPS started running again moving up to RM1.78 before settling down at RM1.73 for a sen gain. Volume was 11.6 million shares. Resorts added 10 sen to RM3.28 on a volume of 9.7 million shares.Genting was down 10 sen to RM8.05. BJ Sports Toto remained unchanged at RM5.30. Meanwhile, RCE took the brunt, giving up 2.5 sen to finish at 98.5 sen while JAKS was lower by 0.5 sen to 74.5. Metronic added 1/2 sen to 41.5 sen ahead of its bonus issue to be traded ex on 9 July 2007.

And now, ladies and gentlemen, my favourite underdog. WMC which initially went down to a low of RM1.06 recovered to close at RM1.19 for an 8 sen gain. Volume traded was close to 3 million shares with heavy intermittent block buying. It should spring into action tomorrow! Let us see whether those big boys can churn this counter up....

Heartsong

Metronic and Its Overseas Foray

Like it's name, Metronic is becoming truly global. It has over the years developed strategic alliances and opened offices in strategic locations in both the Middle-east and in Asia. It's ambition is to enlarge overseas revenue contribution from the current 20 % to 60 % by next year.

As such, to date, it has bide for more than RM600 million worth of projects overseas,chiefly in India and in the Middle-east. One of these projects is to set up a building automation system for an airport in India. This is additional to the current RM10.5 million contract with the Airports Authority of India to set up a building system for a cargo complex in Kolkata. Imagine there are 32 airports in India and they can all be potential customers of Metronic.

It's current order book of RM300 million worth of projects will last the company for two years. This include the manufacturing of key security systems as an OEM for General Electric.

Metronic is also in new business ventures after acquiring Newtronics, a high-volume printed circuit company in China. This company in Hangzhou also manufactures celullar phones and other mobile electronic components. About RM6 million will be invested soon to increase its production lines.

In order to increase its success rate in overseas projects, Metronics has started to work with local Malaysian companies having a presence in those countries.

Metronic will be transferred to Bursa's Main board in mid-July.

At the current price of 40 sen, Metronic should trade ex-bonus at 21 sen on 12 July 2007.

Heartsong

WMC: An Anatomy of a Sell-down

At 9.00 A.M., as the market opened, many Joe Sahams, in panic stations, were ready to dump their WMC shares after reading the Business Section of THE STAR or THE NEW STRAITS TIMES. They collectively offered them to the greedy buyers at RM1.30; 18 sen below the closing price of WMC yesterday. It was snapped up immediately. Some 382 lots changed hands. Then the next buyer appeared at RM1.21. They gave him all he wanted. This panic selling lasted for half an hour and abated only after 9.30 A.M. Then, the see-saw price movement took over.

More sellers came out from the woodwork and bargain hunters came out in strength. The tug of war began. Most blocks traded were below 100 lots though there were some in the 300-380 region. Finally buyers won hands down; pushing WMC to its knee as it fell on its butt at the RM1.04 level.

After some firming up, it rebounded to touch RM1.23. However, like the proverbial crabs, bargain hunters again pulled down the prices back to RM1.07. Basement price hunting won the day. After hovering at the RM1.09 to RM1.11 level it finally ended the day at RM1.11 for a 37 sen loss.

Volume was heavy. Some 5 million shares were traded.

So, let us see how long this fear factor will reign supreme. Once the smart "in the know " investors have bought their ''lion share'', WMC will be pole-vaulted up again. I think this will happen soon.

In case WMC continues to fall the next few days and dip below 84 sen, start collecting....

Heartsong.

Day Three : Continuing Consolidation

Yes, as predicted the CI went down further losing a good 9.6 points to 1,357.43. More healthy correction. Some 697 counters went south. Gainers stood at only 224 with volume of shares traded at 1.2 billion shares. The value was RM 17.5 billion.

Counters that made gains wew generally outsiders such Majuperak with a huge 47 sen jump, Bonia; 28 sen and KNM; 20 sen. The losers were SP Setia knocking off 65 sen while Jernih lost 56 sen. CIMA and Kramat both shedded 45 sen. DIGI and Shell lost 40 sen while Petronas Gas fell 30 sen. My favourite counter Welli (WMC) went into a black hole and lost 37 sen to RM1.11 after SC sanctioned it not to release its quarterly reports until they are further scrutinised.

Metronic which will ex its bonus shares on 11 July for trading on 12 July added 1/2 sen t0 41 sen on a volume of 4.3 million shares. KPS, which went ex-dividend, maintained its price at RM1.72 on a volume of 4.6 million shares.RCE which weakened to 98 sen at one time closed at its overnight level on renewed buying support to close unchanged at RM1.01 on a volume of 7.4 million shares.Without the excitement of the water play, JAKS slumped to 75 sen, losing 2 sen on a volume of 4.5 million shares. BJ Toto, Resorts and Genting lost from 5 to 10 sen. AMDB was at its overnight level of 41.5 sen on a heavy volume of 10.3 million shares traded.

Global fears are in the air. Will Wall street continue its southerly bias? Will the Fed increase interest rate? Rumours are also afoot that the Japanese might increase interest rates. Meanwhile the Chinese authorities are tightening further market trading rules to prevent overheating. This has caused a dampener to the appetite of Chinese investors causing their markets to fell. Most Asian markets were in minus territory as well from Taiwan to South Korea.

Our market has shed 35 points to date. Another 10 points drop will caused itchy fingers to want to come into the market to grab at undervalued shares. Will that happen on Friday?

Let us see.

Heartsong

A Kick in the Groin...

I wrote the earlier post on Welli-Multi Corporation (WMC) less than 24 hours ago; praising it to high heaven.

Look what a difference a day makes. On opening bell, it lost 18 sen to RM1.30 and from thence, WMC went down 44 sen (sei-sei!) to RM1.04. Finding its bottom, it rebounded to RM1.19. The dumping of WMC shares was an expected reaction to the SC sanction. Good buying opportunity.

Do you think the worse is over? What has Moore Stephens, the newly appointed auditors discover that is not pleasing to the eyes of SC? SC apparently needs more time to authenticate trade receivables of RM113 million out of the total of RM135 million of WMC and to explore the propensity of its recoverability. So, they will be getting together with WMC shortly to pore over the accounts to safeguard shareholders' interests. The new CEO has also indicated that all trade receivables owing to WMC will be collected by March 2008 or else these parties will be hauled to court! So we will leave SC to do its job.

Meanwhile, let us look at the speed WMC is moving on with its gelatine project. I believe the new management is giving the highest priority since its is a flagship World Halal Hub project of Malaysia for the OIC and the entire Muslim world to see. Nothing must go wrong as far as the Malaysian authorities are concerned. Licences will be given by fiat by MITI,MIDA and JAKIM. Also the banks will be lining up to the door of WMC to give loans to it. Being associated with the project will be most important especially for Bank Pembangunan and CIMB.

There is no doubt that the expert machine fabricator from China will be taking a stake in WMC. I think the price of RM4.00 for a meaningful stake is credible. WMC is definitely being taken over by powerful parties. From the looks of it, crystal ball gazing, WMC will most likely undergo a name change to reflect its new business in agro-technology in time.

Do not for a moment think that Hadhari Cattle Industry cannot take over WMC via a share swap and then restructure the capital to involve even Khazanah and the EPF. It certainly can especially with the new no-nonsense management team which I believe is mission and market driven. Bearing unforseen circumstances, the project will come on stream.

I will stick my guns out for WMC and still sing my praises until such time it loses its lustre.

Heartsong

Brokeback Market?

The market slided another 10.1 points to finish easier at 1,366.99. This trend, though unnerving is good. Bitter medicine, once swallowed, brings much needed relief.

The way those 30 to 50 gilt edged blues have been manipulated to push up the CI and to make monkeys out of genuine investors is so artificial and had to be stop sometime. The losses yesterday and today are just refreshingly welcomed. I am happy to be contrarian for once. I hope the market will go down further tomorrow by another 10 points or so. Then, I believe buyers will come in.

The number of shares traded was 1.5 billion with a value of RM 18.53 billion. Losers thumped gainers 651 to 282. Gainers saw the likes of Kramat, BAT and SP Setia while losers included Equine,Bursa, DIGI and Transmile which lost 52 sen. The volume-value indicator, though on the lower side, is reflective of the market i.e. the lower the market, the lower the volume trade and the lower the value. My reading is the market remains healthy.

Let us look at how the stocks performed. Interestingly, Genting stuck up like a sore thumb by picking up 15 sen to RM8.20 on a volume of 7.6 million shares. Metronic Global, true to form,added 2 sen a day before the AGM/EGM tomorrow. The rest of the stocks headed south. KPS lost 4 sen to RM1.72; RCE gave up 3 sen to RM1.01, Resorts dipped 6 sen to RM3.32 while BJ Toto was down 10 sen to RM5.40. Jaks was piped down the river and lost 3.5 sen to 77 sen. AMDB lost its groundswell and gave up 2 sen while Welli lost 9 sen to RM1.48.

Some remarks. Welli will fluctuate in price in a similar fashion to Equine. Until the rumours die down, it will spike up and down. So these shares are not for short term speculation. They are for holding until their true value are realized when the rumours of corporate takeovers or restructuring becomes fact.

Heartsong

Welli is well on its way….

From a small-time food and beverage company doing an assortment of mumbo-jumbo trading activities, Welli-Multi Corporation Berhad (WMB) is on its way to become a new goliath in the Malaysian industrial and corporate landscape. Taking over the former Four Seasons listing, WMB is slowly being transformed, beginning 2008 into an integrated agro-industry player specialising in animal farming, animal feed, plantation and gelatin manufacturing in line with the country’s re-emphasis in agriculture chiefly in the value-added sector. On top of that, it has position itself well to be able to play a big role in the government’s World Halal Hub project.

The new Board members are well connected, in almost every way; and can bring their respective forte to nurture WMB into a global player particularly to serve the OIC countries.

The feverish trading of WMB shares from 21 May 2007 onwards is an indicator of the kind of rumours driving up and driving own the counter. There is immense speculation in the market on just who exactly is behind WMB. The shares shot up in price from a low of 88 sen to RM3.32 before falling like a stone to RM 1.79 on 14 June for a 73 sen loss in a single day.

It is trading today at RM1.48, a good bargain price. However, the SC's direction to Welli not to release its latest annual report may put a dampener on its price tomorrow. Be that as it may, the new management is continuing its quest to rebrand WMC as the world's largest halal gelatine producer. They have just signed an MOU with Erawat, an Indian machinery supplier in the gelatine capsule business.

In 6 month’s time, the gelatine plant should get off the drawing board and financing will be needed to put up the plant. Let us see how resourceful WMB is in getting finance without affecting its internal cash flow. They have said that Bank Pembangunan and CIMB are just awaiting details before they offer loans to them. Hope they are right. We know for a fact that no money will be spent in the strategic alliance with Hadhari Cattle. However for the Hagecap halal gelatin capsule buy-in, it will use internal resources. I believe Hadhari Cattle will take a stake in the newly WMB. It is a matter of time.

WMB is the counter to watch out for in the 9MP. It is that new darling that you have been waiting for. The counter would surely move upwards after all the annual account of 2005 and 2006 have been externally auditied to the satisfaction of the SC.

Heartsong

Danger Diabolic

Some blue chips are edging skyward in the morning. That may explain the minuscule up-tick on the CI this morning. There is some buying of second board counters by retailers perhaps from the pull of the competitive PER of good second boarders.

To the layman,the market looks like it is fully valued. There are some retailers scrapping the barrel like dulang washers; re-looking at counters that may be re-rated because these have turned around like AMDB;are targets of takeovers like Equine or under potential new shareholders like Welli-Multi Corporation.

Trading will continue to be on a two-tiered format. Market will be good if retailers can come in now to broaden the market. With a positive economic outlook for the next 12 months, fund managers will buy more into Bursa for the long-haul. As long as there are no unforeseen turbulence in world markets particularly from Wall Street and the Chinese markets; the local market should amble along happily. The expected strengthening of the ringgit should bring in the foreign funds.

As the index goes higher,with overpriced blue chips, we will only be courting danger if we take position and do not have an exit strategy. Danger Diabolik... that is the Bursa for you... Getting your fingersburnt is easier with each new record set by Bursa!

Let us look at the stocks this morning.

CI went down 6 points to 1,371.16 on a turnover of 863 million shares. Losers thumped gainers 560 to 287. Losers include the big boys Bursa, DIGI, Equine and Transmil which dropped further by 44 sen to RM4.32. Poor chaps. No high fliers these, they are now doing the limbo rock---how low can you go? Broader market---boring!!

KPS is free-falling;dropping to RM1.73 for a three sen loss;JAKS lost its jacking power and went down 1.5 sen. Meanwhile, Metronic is better by 2 sen to 40.5 on a volume of 2.8 million shares. Elsewhere, Genting and BJ Toto are at its overnight level of RM8.05 and RM5.40 respectively. RCE dropped 3 sen to RM1.01 and Resorts lost 4 sen. AMDB was 2 sen down at 43 sen on a turnover of 16 million shares. Welli was 3 sen off to RM1.52.

By the looks of it, a no fun market. Hope things will turn for the better in the afternoon.

Heartsong

A Healthy Pull-back

That much welcomed break is finally here. Bursa was off by 14.4 points to close lower at 1,377.13. As widely speculated, the two tier trading pattern is getting more obvious. As the blue-chips falter on the way up, losing much momentum on the weight of higher prices, penny stocks like AMDB shot out like a rabbit on heat with bloodhounds pushing up the price to a new high of 45 sen for an 8 sen gain. Good follow-through buying in the afternoon. Appears to be a change in market perception that AMDB is now worth much more than the 37 sen done last Friday.

Gainers led losers evenly by 454 to 451 .Volume was 1.5 billion shares .Fundamentally, by volume analysis, market remains intact. There is no sign of a reversal trend yet.

Equine shot up out the blue to add RM1.14 to end at RM5.00 and Keladi added 37 sen. Losers bringing down the CI included Tanjong. IOIProp and TM. So it may be true after all that EPF is going big into properties and may be buying Equine through MRCB. After all, they have just bought over Queensbay in Penang and beneficially own the majority of the Giant outlets throughout the nation.

Let us review the stocks that is being tracked. How did they fare?

KPS is still flying high like Pegasus on the water theme play. Something imminent is going to take place in KPS as the buying is almost continuous since it left the RM1.37 price band. It went up 9 sen to finish at RM1.76 on the back of 17.07 million shares. At this price, it is 40 sen up from the earlier benchmark. RCE added a sen but JAKS gave up a sen to 80.5 sen.

The gaming counters somehow did not perform as well. Genting was off by 5 sen but BJ Toto tacked on 5 sen to RM5.50. Resorts was the whipping boy taking a solid beating to lose 20 sen to RM3.38. The intra-day low was RM3.30. What is happening to Resorts? Accorded solid waste status?

Metronic seems to be moribund at 38.5 sen inspite of the impending AGM on 27 June. Should see some action soon. Otherwise it's gonna be a goner........

From today onwards, I will track AMDB as well as Welli-Multi, the second boarder which should be the next share counter to morph into a phoenix! Welli added 2 sen on a volume of 4.2 million shares.

Let us see how the market will perform tomorrow. We need to closely watch AMDB, KPS and Welli and how they will perform. If the market is lower, and these stocks continue their climb with volume it means more retail play is coming into the market. Expect retailers to chase after shares in the construction and property sector as well as counters that will feature prominently in 9MP tenders.

Heartsong

Imagine the Rush.....

Why is there this mad rush for AMDB shares when the market opened at 9 A. M. ? Is there something imminent that will bring the price up another two fold in a jiffy? Remember the counter has gone up almost 150% from the low of the year.

Last year's results could be the key to all this madness but it will only go up if there is solid collection and not mere retail play. Also, the general market is losing big time - double digit this morning.

I hope once the euphoria has settled down after the morning session, perhaps better sense will prevail.

At the noon close, AMBD was the most active counter closing up 6.5 sen to 43.5 on a volume of 44.1 million shares. Will it hold up in the afternoon session since there is this good profit margin to cash out?

PS: It held on well in the afternoon session and finished off with an 8 sen gain to 45 sen on a huge volume of 59 million shares.

Heartsong

Stock Watch : AMDB

The flurry of buying activities on AMDB for the last couple of days has piqued my curiosity.

I used to like the stock way back in the Seventies. It was a darling of a stock and as many had made moola on it, many ''died financially'' holding on to it during the market reversals when Iraq attacked Kuwait during the First Gulf War and then during the currency melt-down in 1997.

There are plus signs to look at this counter more closely. A more low-key counter in the Azman Hashim stable of companies, it is mainly involved in property development and engineering.

After swimming in red ink, at long last it made profits in 2006. For year ending March 2007, it made 26 million net on a revenue of RM285 million. According to Jose Barrock of THE STAR , this constitutes a sharp turnaround from the previous year where they took a loss of RM178 million. AMDB has further projected that the current year will see better perforamnce.

Property stocks should move up further because of anticipated further budget incentives for the property market. As it is a 50 sen counter, there is little downside picking it up at the 40 sen level.

Chart-wise, KM Lee, again of THE STAR is of the opinion that AMDB should go beyond 44 sen in the immediate future. If it can break through this price band, then the next level would be 60 sen. In the event of a pull-back, floor support will firstly be at 34 sen and then at 30 sen

Let me do a little more research on this counter .

Heartsong

Friday Follies

Seamless trading pattern from yesterday. The bulls have inadvertently gone out grazing with the cows. The bears are not exactly swarming the market but not many counters are making a breakthrough in prices. All are retreating, ignoring the call of the commander of the Light Brigade! Most Asian markets were also down except for Hang Seng.

Market ended up 3.6 points to 1,391.57 for another sky-high bursa benchmark. Bld Plantations, Tradewinds and Transmil were among the chief gainers while cement stocks took the fall along with BAT and DIGI. CIMA was down 50 sen.

Let us look at our tracked stock portfolio.

KPS did reasonably well touching a intra-day high of RM1.70 before falling back to RM1.67 for a 5 sen gain. Total volume traded was 11.3 million shares. BJ Toto added 10 sen to RM5.45 on a volume of 2.1 million shares. Genting was up 5 sen to RM8.10. Metronic stayed at its overnight level of 38.5 sen on a higher volume of 1.2 million shares. Looks like it is gathering interest as the days get closer to its AGM.


The downside. JAKS lost 2 sen to 81.5 sen on a lower volume of 4.49 million shares, RCE dropped a sen to RM1.03 on a volume of 3.2 million shares. Meanwhile, Resorts gave up 2 sen to RM3.48 on a volume of 8.02 million shares.

Monday should see the real relative strength of the market viz its other Asian markets. If it can hold steady, in spite of the falls in the greater Chinese markets, then we should be ready for another slow but steady trudge up the index. Do you feel lucky?

Heartsong

Time to Take a Breather

Yesterday was one big historic climb. So today is a day of rest. At the end of trading, CI edged up 1.69 points to 1,387.96. Another all-time high.

Hogging the limelight were Petra which ''shot to the moon'' increasing a humongous RM6.52; followed by DIGI which jumped RM1.20. Cima added 80 sen and Petronas Gas upped 30 sen. Losers included Transmil which dropped to RM4.54 with a 40 sen loss.

Fallen angel, PSH went down to RM4.08 for an 12 sen drop. I believe the ''unseen hand'' is busy propping this counter up as it is a GLC. Let us see who wins - gravity of public investor opinion or hard cash support? Maybe a Pyrrhic victory for some is good for their ego...

Resorts went down 8 sen to RM3.50 on a volume of 123 million shares. Genting, however, added 5 sen to RM8.10. BJ Toto took a breather and a 5 sen loss to RM5.35; trading on a volume of close to 40 million shares. Metronic and KPS were at their overnight levels of 38.5 sen and RM1.62 each (66 million shares traded). RCE gave up a sen to RM1.04 on a volume of 80 million shares. Meanwhile, JAKS added 2 sen to 83 sen on heavy volume of a dramatic 123 million shares.

If world markets perform well tonight, I believe Bursa will be better tomorrow.

Heartsong

PSH IN PERIL

THE STAR’s article today is tolling a death knell for shareholders of POS Malaysia Holdings (PSH). According to Kathy Fong, PSH is now in the cross-hair of the special audit covering the Transmile imbroglio .

If you peruse the Annual Reports of PSH, scant attention is paid to CEN in spite of PSH holding some 42.5% stake in it. To add flavour to it, the other player is Konsortium Logistik Bhd with a 20% holding. Transmile held the other 37.5 %.

Strangely when confronted by StarBiz, PSH said it was unaware that CEN Worldwide owed Transmile RM103 million in spite of having a representative on the Board of CEN. This was before the release of the final report of the special audit by Moores Rowland Risk Management Sdn Bhd on Transmile.

CEN Worldwide is Transmile’s major customer. Sales to CEN Worldwide totaled RM604 million in the past three years. In the final report, Moores Rowland warned Transmile of the possibility of “under-billing or non-billing of genuine sales to CEN Worldwide.”

The report said it had been a loss-making entity in the past three years. As at Dec 31, 2005, the company’s shareholders’ funds were in deficit of RM22.5 million.

PSH retorted that it will review its position in CEN after the completion of two new special audits to be conducted at CEN and CEN Worldwide. It further added that POS had already absorbed the losses in CEN up to the cost of investment of RM4.25million in 2004 via subsidiary Pos Malaysia Bhd. Does that mean it has written off all of its investment n CEN?

Konsortium Logistik also said that the company had written off the investment in CEN a long time ago. A company spokesmen said Transmile never did give them any audited accounts and that they desired to sell their stake to Transmile some time back.

I see worms coming out from Transmile into the other two partners' accounts and accounting practices. What has PSH to say to this since they had board representation? Guy sleeping on the job?

Let us backtrack a bit.

CEN was formed as a marketing arm for Transmile. There were synergistic benefits among the three original shareholders. The company was expected to bring cargo for Transmile from PSH and Konsortium Logistik.

Something definitely went wrong in CEN. Whose fault is it?

PSH shareholders are now in a quandary. The share of PSH has been falling like a rotting durian from the RM4.70 level. Just this morning it lost another 10 sen to RM4.10. As the saga unfolds, expect POS to get similar treatment from the market as Transmile,albeit less harshly. Even though big brother Khazanah is there to mop up shares dumped by aggrieved shareholders, will it stem the gravitational downgrade?

It looks like PSH is definitely not been benchmarked to global standards.Why?

Heartsong

My, My ! Sky High!

Historical day for the Bursa as the index added 9.5 points to touch a new high of 1,386.27 in tandem with world market performance. Winners included CIMA which put on RM1.05;Equine which climbed 60 sen; BAT which notched up 50 sen and Ranhill which reversed its two day loses to add 46 sen. Chief among loser were Transmile which sunk to RM4.94 for an 81 sen loss. The other notable losers were IOICorp and IOIProp which lost 20 sen each.

BJ Toto went up 35 sen to RM5.40 on a volume of 6.8 million shares. Is Vincent taking it private? Or is it going to give a super final dividend or special dividend to reward loyal shareholders? Either way, this counter will finally see new heights.

KPS seems to have lost steam after being the ''water darling'' for the last week or so. It went down 3 sen to RM1.62. Good development to flush out weak holders. KPS should maintain this price level before moving up to the next level which I suppose would be the RM1.75-RM 1.80 level. KPS gets more enticing as the months go by because of the imminent Langat 2 tender.

It looks likes JAKS will be come the next ''water darling'' after KPS. It is the front-runner for sub-contracting work in the Langat 2 as well as new water projects in Kedah and Malacca. Moreover it is the sole producer of large diameter pipes in Malaysia. With RM16 billion worth of water projects in the 9th MP, JAKS will score big in pipe replacement projects throughout the nation! It went up 2.5 sen to 81 sen on a volume of 8.06 million shares today.

Resorts World is finally moving up with vigour and volume. It chalked up 14 sen to RM3.58 on a volume of 10.5 million shares. I believe most of the notes have been converted. As Resorts World has also been used as covered warrants; some of its shares will be taken off the market by issuing institutions for the purpose of share exchange. Smart move on the part of CIMB as the strike price for their covered warrants is RM3.20.

RCE is set to scale new heights as well, finishing 5.5 sen at 1.05 today. Volume traded was 15 million shares. I believe more shares are amassed by fund managers as RCE is a clear winner for consumer finance. With the new pay revision effective in July, civil servants will have more loan repayment capability as they go shopping. If Goldman Sachs, General Electric, Public Mutual and HSBC Hong-Kong can invest in RCE, so can you.

DRB-Hicom was 7 sen better at RM1.89 while Genting was 5 sen better at RM8.00. Its share volume was 6.8 million. Meanwhile, Metronic was flat at 38.5 sen.

So there you have it, folks-one helluva record breaking day. I think punters are generally happy. Assuming there are no glitches in the near horizon, the index may retreat a wee bit before going up further. It all depends how far the Chinese markets will go!

Heartsong

ING - Asset Manager Extraordinaire?

Not many can claim the moniker ''local presence and global experience''. So, we have Prudential, Public Mutual, CIMB, UOB, Arab-Malaysia, PHEIM and other mutual funds competing for the small man's ringgits.

I know PHEIM has done remarkably well. Apart from that, we see ING and two funds under Public Mutual doing alright. Others are merely also runs. Mediocre returns at best.

Let us look at the Asiapac Capital Guaranteed Fund launced in May last year. Believe me, after 13 months, it is now worth 15.15 % more. If this is maintainable, it is three times better than the current fixed deposit interest rate. I can still see much upside for this guaranteed fund. It has a year and 11 months to go.

ING Baraka Syariah Protected Fund will close its subscription in two day's time and trading should start next week. Let us see the combined skill and prowess of ING and SGAM. Will they spin magic together?

Will ING's funds break the record set by PHEIM? Let us see how Father Time will tell us.

Heartsong

JAKS-From Pupa to Butterfly

I was just looking at the history of JAKS after it took over the listing status of Wing Tiek. Very colourful development and plenty of promises afoot. A player in is own league manufacturing large diameter pipes, it is poised to play a very prominent role in the supply of pipes for the 9^th Malaysia Plan billion dollar water projects. This augurs well for its bottom line.

There is a big free float of JAKS shares; thus ensuring no “cornering’’ of the stock. The company is doing well at the company level. At the group level, it should be profitable with the tendering of the Pahang Water Transfer Project and the tendering of the Langat 2 project soon. JAKS is also an experienced water sector sub-contractor. Another plus point for the group. JAKS's potential joint ventures with the various state governments, both in new water projects and pipe replacement will ring in the mother lode of profits for JAKS.

Besides producing and marketing steel pipes, JAKS is now in the oil and gas industry, supplying 100% for export pipes and pipe fittings for the oil and gas industry of Canada and the U.S. JAK's jewel in the crown would be the world-class seamless steel pipe fittings it maufactures! Great promise here as an oil and gas player. Also it allows JAKS to increase its range of multi-sectoral pipe products as it ventures overseas.

I believe 2008 will be a bountiful year for JAKS and its shares should go up in tandem with its potential performance. Once big boys like Goldman Sachs and Templeton Funds comes in, you will surely see JAKS coming out of its box springing wildly into action. A diamond in the raw, I think the worse is behind JAKS.

JAKS is certainly moving in the right direction!

As such, I am revising my earlier view. Start buying some JAKS shares at the 80 sen price band. You can average down if the market falls.

Prospect as you pun. All the best.

Heartsong

Doldrum Trading Day

After a night of fun, you get up with a hang-over. Today is that hang-over day. The Composite Index is hardly up, adding 4.5 points to 1,376.79.

Let us look at the tracked stocks. I have decided not to track POS Malaysia because of the Transmile imbroglio which wis such an albatross around the neck of this stock reducing its upside even with the capital pay-back of RM1.50. My guess is POS will definitely dump its 15% stake in Transmile the first chance it gets to protect its investment value before more worms should come out of Transmile. It closed at RM4.2o.

BJ Toto went up to RM5.05 today for an 13 sen gain. Volume was huge at 7.6 million shares. KPS continued its ascent to RM1.65 for a 2 sen gain. It did touch an intra-day high of RM1.70. Meanwhile RCE lost 0.5 sen to 99.5 sen.Resorts was good,adding 12 sen to RM3.44. Genting was flat at RM7.95 and JAKS was a sen lower at 78.5. Good price to stabilise at since it has been moving non-stop from the 60 sen level. A likely ''shadow'' KPS in the making? Yes, and much, much more as it moves overseas as an oil and gas player. Metronic was flat at 38.5 sen but with good volume.

A so so day at the stocks. Hopefully tomorrow will see the market lifting itself from its stupor and lethargy .

Heartsong

JAKS and the Water Transfer Project

With the impending tender of the Langat 2 project in the second half of 2007, besides KPS which will benefit in terms of engineering design and project implementation, the other company could well be JAKS Resources.

The tunnel will be undertaken by Japanese engineering firms and contractors since a soft loan from Japan will be used to finance this project. However, the project will require three meter diameter sized pipes to siphon water into the tunnel in the Main Range on the Pahang side and after exiting the tunnel, the water needs to be transported by pipes to the Langat 2 Scheme in Selangor. Right now, there is no company in Malaysia which is producing such pipes due to the lack of demand.

However, if there is a project that requires such pipes, JAKS is poised to supply them. All it need to do is to modify its production machinery and voila! you get the pipes. JAKS has in fact supplied steel pipes up to 2 meters before to SPLASH. JAKS's steel pipes are coated on the outside with cement, fiber-glass tissue and bitumen on the outside to prevent rust.

JAKS is not only a supplier of pipes. It is also a sub-contractor for water work projects. SPLASH's reservoir was actually constructed by JAKS and they laid all the pipes there as well. As such JAKS intends to bid for sub-contractor works under the Langat 2 project. It is also involved in a water project proposal in Kedah and Malacca.

On top of that, it is venturing into the oil and gas sector with its buying over of a company, Empire Deluxe Sdn. Bhd. that will be supplying seamless steel pipe fittings to markets in Canada and the U.S.

JAKS's share prices moved up vigorously all morning and settled down finally to close at 79.5 sen up 4 sen from last Friday's close of 75.5 sen. The intra-day high was 83 sen. The lowest price this year was 47.5 sen on 22 March 2007 and the highest;94.5 sen on 23 April 2007.

As a company, JAKS made RM 2.632 million in 2006 but as a group, the losses amounted to RM5.98 million.

I believe JAKS is a good company to buy on a longer term because of the water and oil play. I will recommend a buy at any price below 70 sen when the market pulls back.

Heartsong

Metronic's Delayed Transfer to the Main Board

By the looks of it, the transfer of Metronic-Global (MGB) to the main board will be delayed further as it may not be completed by the end of July which was originally the target period. The Securities Commission (SC) has approved all the modifications and variations sought.

• The transfer can now be implemented any time before 13 August 2007

• Listing and quotation for 12,250,000 new ordinary shares has been approved.

The SC's approval will be subject to the condition that HWANG DBS Investment Bank and MGB submit to the SC an undertaking to complete the placement of the remaining 7,500,000 MGB Shares by 17 August 2007, as proposed.

So, until all these new measures are undertaken, there will very unlikely be any vigorous market action on this counter until after July 2007.

Heartsong

Great Day at the Bursa

Well, what do you know? Today is about one of the best market days in months. It had direction and it had strength all day. Index touched a good high of 1,372.28 for a 11.6 points gain. Gainers led losers. IOICorp put on 40 sen;Ranhill 37 sen and SP Setia; 35 sen. Losers were BAT, KNM and LCL.

Tracked stocks faired generally well today. KPS performed splendidly putting on 12 sen to RM1.63 after touching an intra-day high of RM1.65. RCE finished off best at RM1.00 ad BJ Toto added 14 sen to RM4.92. Resorts World came out of its cocoon to notched up 8 sen to RM3.32. Metronic added 1/2 sen. POS, however, lost 4 sen.

A good counter to watch from now on is JAKS Resources, the pipe manufacturer which may feature well with the Pahang Water Transfer Project since they produced pipes of almost the right size for the project. It went up to 85.5 sen on an intra-day high before finishing off at 79.5 sen. I hope to track JAKS and blog it soon.

A good trading day for many.

Heartsong

Hopefully this is a Good Day

Market ended the morning session with a 9.3 points gain to push the index to 1,369.93 points. Gainers outpaced losers. Market leaders were Ranhill, Tanjong and DIGI and losers included BAT, KNM and RCI.

Of the tracked stocks, there was much interest in RCE which went up 6.5 sen to RM1.03 on a trading volume of 12.25 million shares and KPS which garnered 5 sen to RM1.56 on a trading volume of 8 million shares.. Genting was off 5 sen but Metronic added a sen to 39 sen and BJ Toto; 2 sen to RM4.80.

Heartsong

KPS-No Pretender, Solid Global Utilities Player

KPS's AGM yesterday was a real eye opener.

Rumours have somehow become potential news and there's more in the offing.

There is no further doubt. KPS is the Selangor State government's vehicle to take on the Langat 2 water scheme project. It has been involved in this project since 1999 and to date had spent some RM5 million on preliminary and feasibility studies on it. Chairman Karim Munisar explained that KPS is a GLC with the expertise and financial clout to undertake this project and it is putting all efforts to get the project. Langat 2 which will cost RM2.5 billion to develop, is a treatment and storage facility for raw water that will be transferred from Pahang. The tender will open in the second half of 2007.

KPS controls Konsortium Abass, a teated water supplier as well as holds a 30% stake in SPLASH, the holder for the Sg. Selangor Phase 1 and 3 concession. Moreover, KPS aslo has a 20% stake in Taliworks, a sub-contractor to water concessionaires including that of Langkawi.

Prospect-wise, KPS is looking seriously to be involved abroad through its strategic alliance partners. It's first foray is the likely RM150 million independent power producing project and a RM600 million toll road in Sumatra. This will be followed by a water project in China. To top it up, KPS is actively talking to some states on mining projects.

For the year ended December 31,2006, KPS posted a pre-tax profit of RM28.3 million compared to a pre-tax loss of RM123 million in 2005. A dividend of 4% minus 27% tax will be paid to shareholders.

So it looks like the phoenix is certainly rising up in KPS. Let us see this state-level GLC operate benchmarked against Khazanah as well as global standards and performance criteria.

Viva KPS!

Heartsong

RCE-The Direct Indirect Beneficiary

I liked the two articles featured in the Bizweek Section of THE STAR today. One is by Jose Barrock and the other by K.M. Lee.

Good angle-as the civil servant start spending real money in August, RCE will definitely be guffawing all the way to its parent bank for the next few years. True, it may face competition in places where you will find Court Mammoth stores. However, if Courts allow financing from RCE, it will certainly be a boon for both.

RCE's mainstay at the moment is playing chettiar (money lender) to government servants, the majority of whom are Malays. Together with bank credit, credit cards and the regular tontin funds, Malay civil servants may see their new salary hike as a magic gateway to new mobile phones, LCD televisions, notebooks and the whole smorgasboard of house-hold white goods. Itchy fingers can do wonders! Personal loans will help as well.

According to research house, Aseambanker, RCE's loans have dramatically grown in the last few years since 2002. As of March 2007, total loans forked out was RM500 million compared to the paltry amount of RM70 million in 2002. Furthermore, Aseambanker is of the opinion that since the regulated personal loan and consumption credit market amounts to something like RM25 billion, the opportunity for RCE to grow its market share and loans book are stupendous. The driving factor of the pay-hike will no doubt underpin RCE's revenue and profit profile in the ensuing years.

The Technical Analysis provided by K.K. Lee is worthwhile looking at. The past months had seen RCE climbing steeply on good momentum buying. RCE shares have gone into unknown territory touching RM1.01 on an intra day high before closing at 96.5 sen on Friday. The major outbreak for RCE was 52 sen in February. According the Lee, he believes there are more investors getting on board with longer term holders prevailing over punters and speculators. For now, better profits on the longer haul is much preferred to short-term gains. This is his take.

Technically, a short term buy signal triggered the Thursday's buying and all signs point to a bullish price stance. He expects the price to move to RM1.20 in the short term with the next upside projection to RM1.40-RM1.50 band. For downside, initial support will be 95 sen and the next support level would be 90 sen.

Since RCE closed only 2.5 sen up on Friday, expect RCE to go up next week possibly to touch RM1.00 and beyond (just like what Toy Story's Buzz's battle cry). And that is... if global markets perform as usual without glitches.

To end, let's give three cheers to the happy and extravagant government servants for they make stockholders of RCE happy too.

Heartsong

KPS and the Langat 2 Project

KPS and its potential involvement in the water transfer project brought interest into the counter lately. The news was in THE STAR today. KPS will likely get the Langat 2 Water Treatment Plant as it is the state government's vehicle involved in the water project. The project will be tendered in the second half of 2007. There was some heavy buying but the counter ended at its overnight level of RM1.51. Volume was high at 67 million shares. RCE also perked up 2.5 sen to 96.5 sen on sustained volume buying of 23 million shares. It touched an intra-day high of RM1.01 before succumbing to selling pressure.

The rest of the tracked stocks ended dull and uneventful. Resorts and BJ Toto added 6 sen each to RM3.24 and RM4.78 each. Metronic upped 0.5 sen and Genting was 5 sen better. Composite Index ended up 3.5 points to 1,360.65

Heartsong

Does KPS stands for...?

After the last hour hectic burst of buying yesterday, KPS went up 7 sen to RM1.65 this morning before closing the day at RM1.51 for a 7 sen loss. Could not lekat....Viagra-deficient?

Is this the start again of the on-and-off yoyoing KPS's Kepala Pening Sindrom? Hope not. Surely, there must be some fuel out there fanning the prices heavenward for both KPS and KHSB.

Market ended at 1,357.18 up 4.2 points. Gainers included DIGI which upped RM1.20, BAT which gained 75 sen and Aeon which put on 50 sen. Losers were Welli with a loss of 73 sen; and KNM which lost 50 sen.

Tracked stocks gave a mixed performance. RCE put on 4.5 sen to move up to 94 sen while BJ Toto lost 6 sen to RM4.72. POS was better 2 sen but Metronic lost 0.5 sen. Genting gave up 15 sen while Resorts was flat at RM3.18.

Metronic has announced that its bonus share exercise should be completed by July 2007. I expect the shares to go up as a tranche of new shares will be traded before the transfer and bonus issue exercise.

Heartsong

Thunderclap KPS

The market was almost fainting. Losses swarmed the board. There were some signs of movement in KPS at the start of trading. Soon, its gains were trimmed to only two sen. The same took place in the afternoon.

And then.....

Along with the heavy rain and thunderclap in KL and PJ, KPS started shooting up at the final trading hour with buyers galore snapping up all the stocks on offer until the final bell. KPS ended 22 sen higher at RM1.58; a record high. 13.34 million shares were traded. What gives?

Hope there will be a strong follow-through tomorrow. If the rumour that KPS will be taken private is true, then it will shoot to the next galaxy in stock prices in the near term.

We await with baited breath....

Heartsong

Dull, Dull, Dull

Three little words as above will likely sum up the mood of the market today.

After a slightly better opening, it started slumping almost within the first half hour. CI went down 2 points and all counters started looking for the Antartic. By the end of the fist hour only tracked stocks, BJ Toto and RCE put on some gains. BJ Toto added 2 sen to RM4.82 and RCE added a sen to 89 sen. The rest were either overnight or experiencing marginal losses.

After the announcement of Goldman Sachs additional investment in SAAG, the stock added 35 sen. Deleum added 25 sen and Proton; upped 20 sen after news of a positive meeting with VW. Another follow-up meeting in Bangkok to look further into strategic alliance has been proposed.

The strange biggest loser continues to be AHB which went down further by another 42 sen. It lost over a ringgit yesterday. Wonder how it will impact RCE which has about 8% of the stock. IOI Corp dropped 10 sen and so did Bursa.

Market ended down 7.5 points to 1,353.03. As predicted most counters were at overnight levels or suffered marginal losses.

I expect the market to go a yoyo for the next few days. There will be intra-day highs and lows and a couple of random walk counters.

Generally, more money is leaving Malaysian shores as mutual funds destined for overseas market like those managed by ING, CIMB and PBB mopped up liquid fixed deposits that are moving out to take advantage of recently launched protected funds. Local mutuals will suffer and so will second-level blue chips. So our local Bursa will possibly be driven only by local gilt-edged blues. That will possibly see Genting and Resorts back in the lime-light after sometime.

Pray hard this privatisation trend will end soon as it is really making the market shallower and depriving it such darlings like MAXIS, Magnum 4D and the like. Otherwise Bursa can surely go down!

Heartsong