International Donor Market

Well, the market was totally not satisficing. It was weak all over and there was absolutely no confidence to buy.

Yes, we are an international donor market. When shares rise overseas, we oftentimes do not respond. When shares fell overseas, we react. So, as you can see, we cannot benefit from world market rises but we give up billions when overseas stocks goes down. We call such a market-a sucker's market. Bursa is a sucker's market. It has no backbone and it cannot rally. It is no leader as well anywhere, globally, regionally or even in its own backyard.

Started out well by clinching 21 points, it fell by the wayside like a beggar to end 9.08 points higher by the noon close. The CI was 1299.98, a cat's whisker away from 1300. Volume of shares traded was 611 million shares with a total worth of 1.8 billion. Losers were ahead of gainers by 425 to 369.

Gainers were led by Digi; up 40 sen,Pelikan up 22 sen, Tanjong; 20 sen and PetGas; 20 sen and Berjaya Cap;16 sen. Loser were Guthrie going down 30 sen, Stemlife losing 25 sen, and Cima dropping 20 sen.

Except for Genting and BJ Toto which made a gain of 10 sen and 4 sen respectively , the others were at their overnight levels or lower.

Resorts was at its overnight level of RM3.90 and Metronic at 20 sen.

JAKS went down by a sen to 83.5 and RCE by 1.5 sen to 86 sen

Welli lost 3 more sen to RM1.02

Let us see if there are going to be magic moments in the afternoon.

Heartsong

Technical Rebound Expected - Will It Satisfy???

So Dow Jones has recovered dramatically. Upped 286 points. Led by financial stocks that got their best prices ever. Deal making continues. The sub-prime issues seems to recede into the background momentarily.

So what will be in store for Bursa? Can we start at 22 points up just like we started 22 points down yesterday morning? Then we should work our way back to recover the other 22 points throughout the day. Do local funds have the muscles to do it? And the courage?

Let us watch the Bursa Saham KL drama unfolds............

Heartsong

No Bulls, only Bullshit!

The CI went down to 1290.9, down 44.5 points drop. There was no saviour. As generally expected, it free-fell. Volume of traded shares was 1.3 billion worth a value of 2.1 billion. There were only 60 gainers compared to a whopping 1,016 losers. Among gainers were JTInter which gained 26 sen,Carlsberg up 14 sen and Cepco up 12 sen. Among losers were Digi, Muhibbah and Bank of Commerce.

Stocks in the portfolio fare very badly. Genting eased off 25 sen to RM7.50; Resorts World went down 16 sen to RM3.90 and BJ Toto skidded down 4 sen to RM4.80. RCE dropped 6 1/2 sen to 87 1/2 while JAKS lost 9 sen to 84.5 sen. Welli plummeted another 6 sen to RM1.05, about the lowest for the year. Metronic lost a sen to 20 sen.

To bring back the market we need a stampede; be it bulls, wildebeests or pegasuses!

Heartsong

Sub-Prime is the Albatross!

The afternoon session is as dreary as the Sea of Sargaso.

As for the Ancient Mariner,
Instead of the Cross, the Albatross
About His neck was hung

Bursa is in that state and yet it was not Bursa who shot the albatross with the crossbow. As the albatross hung, Bursa bleeds blood. The knock-on effect is going to be tremendous, wiping out billions in ringgit values from the retailers to the mutual funds. That is the way of the world. The world of high fidelity finance. What an oxymoron when domino-like markets fell in tandem due to some greedy sub-prime profiteering and hedge fund leveraging that went wrong i n the US.

At 3.30pm, Bursa is fully mired in red ink, losing some 40 points. There is as yet no indicator of broad-based buying support from international and local funds. There are some indication of bottom fishing but it needs to be sustained to have the desired effect.

We await the closing bell.

Heartsong

Burning Hell

As expected, Bursa fell like tenpins. Greatest rout in a long time, taking the index below 1300 to 1298.01. Lost 37.4 points at the morning close.

The market was marked down a couple of shades because of widespread panic. Almost all counters turned red. Maybank was yellow, supported by some funds, I suppose. Losers included DIGI down 80 sen, BAT; down 75 sen, Commerce down 70 sen and Muhibbah; 60 sen. Gainers were Opus up 14 sen;Merge; 8 sen;Cepco up 6 sen and Ipmuda up 7 sen.

My shadow portfolio was bathing in curry mee. All capitulated and did the limbo rock.

Genting- the house loses 15 sen
Resorts- sailing down by 16 sen
BJ Toto- holding tenaciously at RM4.80, losing 4 sen
Metronic in defensive automode; dropped a sen to 20 sen
RCE lost some 6.5 sen to 87.5
JAKS down 7 sen to 86.5
Welli submerged to RM1.03

Let us see whether market will rebound 50% in the afternoon session.

Heartsong

Expect one of a hellish roller-coaster ride today.

Obvious reaction of the panicky and unschooled in the mechanics of the stock markets-dump shares and buy back again when it falls. Good if you have a re-entry strategy;better if your can rightly time the market.

Today's mood will be sombre. I expect panic selling from the word "Go!" especially from those who had enough and would not want to get their fingers burnt.

If you are saddled with many trading stocks, perhaps it is wise to let go of some. Follow the dictum, "win some and lose some". When market stabilized, bargain in at a cheaper price. Do not chase because no one know what weapons will be unleashed by Wall Street tonight.

If the market fell in reaction to the Bears Stearns conference call, then very likely it will rebound tonight. If more dirt is coming out of the sub-prime hedge fund imbroglio, then expect Dow to go south some more.

Since the world economies continue to be robust and US contribution to it is only 20% while the rest are fetching something between 6 to 10% annual growth rate, we should allay our fears that the world is not heading towards a depression.

There is no bubble as the transformation of the communist bloc into free economies have gobbled up a lot of world commodities. US companies which are global are reaping from this phenomena and this is showing well on their bottom-line. So the world is not in a recession mode yet. The money made on the world bourses are real.

Back home, the only concern is unemployment. Some inflation, perhaps but otherwise it's fair weather. With the pump-priming efforts of the government in the 9MP particularly the 2H of 2007, there should be no cause for alarm that our markets will go into an extended bear phase.

I expect the bulls to be back once the US can see its way out of the current sub-prime milieu.

Heartsong

Like Sheep Being Led to the Slaughter..

Wall Street went into manic selling again last Friday. It was the worst trading day this year, surpassing the February sell-down.

Dow went down 281.42 points again spooked by Bear Stearn's late conference call that "its return on equity in July may be close to the lowest ever and borrowing costs may slow mergers and acquisitions." Almost 12 stocks fell for every one that rose on the New York Stock Exchange as all 24 industry groups in the S&P 500 and all 30 members of the Dow fell.

Briefly; the factors that brought the US market down big time were:

• The continuing sub-prime mortgage debacle
• The continuing poor housing property market
  
• Fall in energy stocks as world oil prices fell
• Lower job creation compared to July forecast
• Slow growth in U.S. service industries
• The highest fall of the dollar against the euro in a month.

The world markets now await to see how disastrous will be its effects on their local markets.

Its definitely going to be a temporary bear season. So do not get into second-level fundamental stocks now. Stay out until the US market regains some semblance of confidence. Let them move up in positive territory for a few trading days on good volume. See whether US bonds has move downwards. Have Asian markets move up, disregarding Wall Street or are they still pups to the mother ship Wall Street? Look for confidence-building write-ups on the business pages.

Strategy:

Watch situational stocks such as oil and gas stocks, water play stocks, IDR and NCER stocks. Buy some if they free-fell and lock them up for a couple of months if the shares don't rebound. If the rebound comes, dump them and take profit.

Heartsong