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.
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
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