Countdown WMC

Looks like I have to eat every word and punctuation mark that I wrote on the earlier WMC blog. After rush hour, WMC has settled down at its overnight level. There was no limit up at all. What a letdown. The news item of the Chi Feng purchase drew no waves. Buying was sporadic and no huge block deals were done .By the end of the day it glided in tempo with the market to close at RM1.67 for a 4 sen drop.So you really cannot read the investor's mind nowadays. They cannot be suckered in anymore.They have become matured and savvy. In short, they are more discerning market players.

Whatever the case, my gut feelings is WMC will go ballistic soon. So; let me start a countdown until WMC's price goes up again. I suspect it should go up ahead of the launch of NCER on 31 July.

Let us look at how the market performed today. General impressions. Very weak and tired market. The index was pulled down by Public Bank and Genting. For the first time, there is subdued buying for both the lower liners and the blue chips. Only situational counters which won tenders got the limelight. Except for KNM and Transmile which went up convincingly, one just cannot even remember what the others are.

The CI was down double digit most of the day but closed off its low; ending at 1371.45 for a 7.2 points loss. The number of shares traded was RM144 million with a value of RM213 million.

Let us look at our portfolio of stocks. Genting lost big time to close at RM8.45 for a 25 sen loss;followed by Resorts dropping 8 sen. BJ Sports Toto lost 5 sen while WMC lost 4 sen. KPS lost 3 sen to RM1.72. However, there was sustained buying of Metronic and the counter added 1.5 sen to 23.5 sen. AMDB held well by adding 0.5 sen to 41.5 sen. JAKS and RCE were at their overnight levels of 81.5 sen and RM1.10 respectively.

Comments:

KPS continue to be strong despite some liquidation. Should move in the next 2 weeks on speculative water theme play.Next level-beyond RM1.80.

JAKS-along with KPS, it should go up to the 90 sen level . A counter favoured by the syndicates, it should go up in the same time window as KPS.

Metronic-should go up once those weak holders throw out their bonus shares. A good achievable price level on the immediate term basis, would be about 26 to 27 sen.

RCE-time to consolidate at the RM1.10 - RM1.12 level before moving up strongly to the RM1.20 level by the end of the month. Could go up further if there is massive collection by interested parties seeking joint management control of RCE such as GE or Goldman Sachs picking up more shares for investment purposes.

Genting-may go up if there are news on possible plans to list its oil and gas arm or if there are good news on the Integrated Resorts World project at Sentosa.

Resorts World-may see action if there are news of its disposal of NCL or if new casino opportunities open up in the Philippines and Japan.

BJ Toto-more migration of investors from Magnum may cause its price to rise. This counter continues to be the a generous giver of good dividends in spite of the reduced dividend pay-out for fiscal year 2005 due to a RM59 million tax write-back.

Welli-there is much cleaning up of the company to be done particularly the amount of its questionable receivables since 2004. The early release of its annual and quarterly reports should generate immediate buying support. Apart from that, the value of the impending purchase of the Chi Feng shares will become clearer as Welli is earmarked to play a pivotal role in the North Region Global Halal Hub project, the brainchild of the Prime Minister himself. The Northern Corridor Economic Region masterplan will be unveiled and launched on 31st July by the Prime Minister himself. Note that the purchase of Chi Feng will be from internal resources. The possible way to raise such funds will be through a rights issue with some sweeteners thrown in. For that to be successful, Welli 's share price must move up quickly to reflect its underlying strength, given the new projects that it will be involved especially the halal gelatin project.

AMDB-it will moved in tandem with the expectation of new perks for the property market. A penny stock, it will move albeit slowly at least to 50 sen in the immediate term

I am less hopeful these days. Let us see how the price scenario will be in the next few days.

Heartsong