Its December

The Hang Seng Theory did not really happen, i am predicting on November Crash but it did not happen but only a major correction about 20%.

No panic sell, no cheap stocks, and the most impressive things is klse did not follow the trend to go down.

So, i guess i just need to keep most of the cash and finding good stocks for trading purpose.

As i mentioned before, Maybulk at 4.50 is definitely attracting me. I am still waiting for that price. When it will come? i believe soon, klse seems like do not lost the link with outside world, seem very weird..

A funny News

This Article was written and posted at Sin Chew:


風光一時的大馬電子電器業，近來表現疲弱，因向來賴以生存的美國市場因經濟放緩而減少需求，加上全球電子和電器領域還未走出下跌循環期，前景不樂觀。
電子電器業今日競爭激烈，業者如果不積極為產品增值，會導致長期競爭力削弱，在國際市場更難出頭。

對研發產品冷淡是競爭力下跌的致命傷，打進國際的大馬品牌，想讓人叫出口的名字都沒有。日本和韓國不用說，連中國都憑聯想、海爾和TCL等大品牌在國際打響知名度。
中國雙電產品上世紀90年代起步，目前已發展至數碼化和智能化，產品的技術顯著提升，國際競爭力後起直追起，這樣的成就，離不開業者的研發。

大馬經濟目前有雙油支撐，近期雙油價格飆至歷史新高，抵銷了雙電出口低迷的部份衝擊。但任何產品都有下跌循環期，研發提升附加價值才是王道。

研發農基原產品計劃，仍然由政府主導，例如原棕油附加產品研發由大馬棕油局撐起。儘管研發成績不俗，但產品打入國際市場能力仍有待加強。

This portion worth a look:

一位大馬商家前往中國南寧參觀東盟博覽會，大馬館場面冷清，人氣明顯不如其他成員。大馬館由原棕油加工製成的日常食品和用品打頭陣，即健康更符合環保理念，何況中國是原棕油進口大國，怎會落得門可羅雀的冷清場面，原來問題出在大馬館職員不懂華語，只能用英語溝通。

反觀泰國、越南和寮國館以民俗產品掛帥，但肯花錢聘請當地學生促銷，消除了語言上的障礙，產品看頭雖然不如大馬，卻吸引了大批參觀人潮。
大馬人以多語言能力見稱，但到消費力強大的中國參展，竟派出不諳華語的職員，試問大馬原棕油加工產品再好，又怎吸引消費者和買家，不只產品要增值，業者和負責促銷的部門更要增值。

Malaysia Chinese normally can communicate in Chinese, and when Malaysia government send people there to explore some business opportunity , they sent those people who do not understand Chinese and cannot communicate in Chinese as well. This seems like a joke. Even Thailand, Vietnam and Laos know this simple theory.

Maybulk Latest Quarter Report

Maybulk Performance review: ( from quarter report)

Group revenue for the nine months to September 2007 is RM417.2million. This is a 25% increase compared to the previousyear’s nine month revenue of RM333.6million.

On a segmental basis, revenue from the dry bulk segment for the period ending 30 September 2007 is up RM59.8 millionshowing a 23% improvement against the corresponding period in 2006. Whilst total hire days are reduced due to disposal of vessels, the strong freight market has more than compensated for the reduced hire days. The revenue for the tanker segment is up RM21.7million reflecting a 31% improvement compared to that of September 2006 boosted by increased hire days due to the delivery of 3 new tankers in 2007.

Profit after tax for the nine months to September 2007 is RM417.9 million - a 94% increase compared to the nine months ofSeptember 2006. This is due to strong dry bulk market, the addition of the new tankers and the RM133.5 million gains (last yearnone) on disposal of vessels.

From above statement, i am assuming that Maybulk management has been doing terrific job as they have sold another ship and netting a gain of RM28M, the price of the ship has been going up due to the increase of BDI.(Sold during price of ship going high and buy back again durng price of ship going down). After BDI hitting high on November with more than 11000, it has drop to 9897 for now. ( As speculator starts taking profit).

This has trigger the fall of Maybulk price from 5.20 high to 4.76 currently. Some of the Equity research firm has set a TP for Maybulk with RM4. Although the earning has been improved, but the profit earning did not meet their forecast, so they trigger sold for this counter. Current EPS stood at 54sen, with price at 4.76, PE = 8, excluding profit for the sales of ship, which is around RM133.5 million gains. Stripping this gain off, the net profit would be only 255millions, divided by 1000 m shares, leading to 36.6sen core profit from shipping line, Thus the Pe would be around 13. ( Please be reminded that they cannot always sell ship to earn so it would consider a one off gain and should not be calculated in the net PE )

a PE 13 would be a fair value to me considering the cash that Maybulk contains now. A good dividend yield as high as 7.2% can be expected with current price. A RM4.50 is definitely a buy. I will wait for that price. ( i have sold maybulk at price 4.6, 4.78 and 5.05 last time )

New Planning

After analysis STI (Straits Time Index , Singapore market), i have thinking to switch large portion of my capital to invest in overseas.

This is because:
I would like to set a fund with 10k ringgit wth 10k sing dollar ( aka 23k ringgit) and i would want them to compete each other.

Singapore has been a popular market for foreign fund manager and the counter listed there deserve higher PE. Thats while Robert Kuok decided to merge the plantation into the Wilmar and now Wilmar has been doubled since then.

Wish me luck. I am thinking Singapore dollar will appreciating again in future against ringgit. Not quite confident with Malaysia economy outlook in future, maybe our briliant government will do something to improve the economic in future.

I will try to make this happen at the beginning of year 2008 and new portfolio will be prepared again.

Pjdev Latest Quarter Report analysis

End of month November is definitely busiest month since the quarter report of companies have come out.

I have gone through the Pjdev Quarter report and here is some of the analysis:

Net profit 14.63 milllions compare to 2007 Q1 6.44 millions is definetely a improvement. But compare to previous quarter , 16.48millions, is still consider ok without much drop. Property development cost has gone up to 260 millions compare to previous quarter 208 millions will be a good sign as i assume they are having more projects going on. ( Not cost incremental please).

However, for long term debt has gone from 93.8 millions to 341.30 millions which is the setback as this means company is taking more loans for more aggresive expansion. As this company has not really much cash (only 42.47 millions) , so this means the finance cost will be going up in future and affecting the net profit.

For current account payable has been going down to 16.65 millions from 166.98millions previous quarter as they have been shifting to the long term payment.

With dividend 5 sen less tax going to be paid on January, translating to the 4.2% of net dividend yield, this counter seems like a very "good deal" to me. However, i still prefer with price below 0.8 as this counter did not serve as a defensive counter during volatile market.

Eyes on property : Pjdev, Plenitude, Mahsing
Property stock been analysis: Pjdev, Keladi, Plenitude
Next one: Mahsing, Sunway, Hunza Property, Metrok.

Magnum Shareholder - Sell or Not Sell?

PROPOSED PRIVATISATION OF MAGNUM CORPORATION BERHAD (“MCB”)

Check here for more details:

http://www.klse.com.my/website/bm/listed_companies/company_announcements/announcements/index.jsp

The price offer is RM3.45, wow, dam cheap if compare to the current market price RM3.08, another Maxis privatisation case.

So, Magnum shareholder, you want sell or not?

Plenitude

Talking about property stock, cheap and good, one stock appear on my mind - Plenitude.

The latest quarter report Q1 2008 has been released :

the net profit is 12millions out of 53.33millions sales, compared to the Q1 2007 millions 9.82millions from 42.52 millions sales , which is 22% improvement. ( Compare to Q4 is a major setback as Q4 net profit is 21.34millions)

Take a look on the Property Development Projects - current portion which is 140.8 millions, compare to previous quarter 131.50 millions, which means there is still projects going on, nothing much to worry.

while for long term Property Development Projects is 132 millions compare to the previous quarter 175.30millions, where we can see there is 40 millions gone, as they have been the current portion parts of project, seems we can see that they did not announce other major project recently, so it is normal to see such a drop.

The one that attract my eyes is the cash on hand, which stood at 107 millions, translate into 80 sen cash per share. At current price 2.92, thats consider alot.

By seeing the their project , we have much more confidence as they have project at Sg Petani, Johor IDN , and also kl prime land. ( visit their website http://www.plenitude.com.my/),
we can see that their managing director is the kind of slow but steady as company is having lots of cash 107 millions! and barely little long term debt 8.25millions .

And most importantly, the company is valued at PE ( 2.93/0.42 = 7) , which is obviously very low PE. With NTA RM4, and dividend of 0.115sen, translate to net dividend yield 2.86%, this counter seems like a very value buy. 0.115sen will cause the company to pay 15.5 millions, stripped off a small portion of 107millions.

The reason why this counter is valued at such low PE is due to the slow but steady net profit since 2004, which is 47.34millions on 2004, 49 millions on 2005, 52.4 millions on 2006, 56.46 millions on 2007. Without any major project going on, or any aggresive development, this counter is fairly value at around 8-10. Just hope that the management can pay more dividend if they cannot accumulate any cheap but quality land.

But not forgeting was this counter ever hit RM3.60 at July before retreat to current level RM2.93. I am still searching for property that better than this, maybe Mahsing? you like the picture below? Thats Plenitude Chart.

MPHB privatize Magnum?

MPHB call for suspended trading this morning together with the Magnum. Rumours saying that the MPHB is going to privatize the magnum / or sell the share they have on magnum.

Privitasing Magnum will be a very good benefit for MPHB since they can enjoying the high dividend / special dividend pay out by Magnum.

Theedgedaily has mentioned on one things which is very interesting on last week the edge weekly:

Even though MPHB's share price has appreciated by 17% in the past two months, it appears that the stock is still undervalued. Based on MPHB's closing price last Wednesday of RM2.36 and 954.58 million MPHB shares issued, its market capitalisation is RM2.25 billion. Based on Magnum's closing price of RM3.02 last Wednesday, the market is valuing the company at RM4.37 billion. This means that MPHB's 55.54% stake in Magnum is worth RM2.41 billion, which is more than the market capitalisation of MPHB. This could be another reason investors are keen on MPHB shares — its market value is less than what its stake in Magnum is worth.

So, at that time, if you have purchase MPHB shares, that means you are purchasing all the shares in the magnum and for other business they have you will get for *free*. You are valuing MPHB other business / assets / property as *zero* value.

Lets take a look on the MPHB other business besides Magnum:

On year 2006, MPHB got 24.7 millions net profit from Gaming and leisure, property investment 11millions net profit , securities and broking and dealing 33millions net profit, financial services 25.2 millions and finally is Magnum 118.4 millions. After deducting the finance cost, the profit they earn besides Magnum is 76.2 millions.

So, market is valuing that 118.4 millions net profit but forgot about the 76.2millions net profit they earn from their own business.

Wow, let see what is the share price for MPHB and Magnum when they resume trading.

What to do when market crash?

Here are some history we can take a look:

The crash on October 19, 1987, a date that is also known as Black Monday, was the climactic culmination of a market decline that had begun five days before on October 14th. The DJIA fell 3.81 percent on October 14, followed by another 4.60 percent drop on Friday October 16th. But this was nothing compared to what lay ahead when markets opened on the subsequent Monday. On Black Monday, the Dow Jones Industrials Average plummeted 508 points, losing 22.6% of its value in one day. The S&P 500 dropped 20.4%, falling from 282.7 to 225.06

Despite fears of a repeat of the 1930s Depression, the market rallied immediately after the crash, posting a record one-day gain of 102.27 the very next day and 186.64 points on Thursday October 22. It took only two years for the Dow to recover completely; by September of 1989, the market had regained all of the value it had lost in the 1987 crash.

hmm, don't catch the falling knife but you can try your luck after the first few days of market crash? they will recover? maybe can try that.

This was not the first time the market had massive losses followed by a sharp recovery. Here are a few other instances:

Stock Market Crash of 1929 - The Dow falls a total of 23% for October 28 and 29; then makes a sharp 12.84% rebound on the 30th. However, over the next several years the stock market fell dramatically.

October 13 and 16, 1989 - The Dow plunges 190.50 points, or 6.9% on October 13, 1989 then rebounds 88 points on the 16th.

Black Monday, October 19, 1987 and October 20 - The Dow suffers the biggest percentage loss in recorded stock market history on October 19 and initially continues its plunge on the 20th. The markets rally sharply in the afternoon and the Dow posts its first triple-digit gain in its history.

Once market oversold, i think we can go in to catch some cheap fish, the problem is, when is market oversold? Only exp can tell.

China's inflation rate hits 11-year high

October's rate increases to 6.5%, despite efforts to restrain price increases.

BEIJING (AP) -- China's consumer prices rose sharply in October, tying a decade-high monthly inflation rate of 6.5 percent, the government reported Tuesday, adding to pressure for measures to cool a politically sensitive surge in food prices.
Food prices jumped 17.6 percent in October over the same month last year, while the price of pork, China's staple meat, soared 54.9 percent, according to the National Bureau of Statistics.

The overall October inflation rate was higher than the 6.2 percent reported in September and matched August's 6.5 percent, the highest rate in 11 years.

"We expect more monetary tightening to rein in inflation, including further rate hikes," Lehman Bros. economist Mingchun Sun said in a report to clients.

Inflation has surged in recent months due to double-digit increases in food prices blamed on shortages of pork and other basic goods

More news from here:
http://money.cnn.com/2007/11/13/news/international/china_inflation.ap/index.htm

Wow, what will China government do to curb this inflation, is 11 years peak. Sorry to say that, it is now the end of Bull run there, i don't think China will allow the bull continue to run, whereby worsen the inflation rate.

The only way is to raise interest rate (or Whatever kind of rate), which will hurt share market badly,

Better stay away from Market for a while first, and after the collapse , then it is time for fishing.

Tomorrow Hang Seng

（香港11日讯）对于中国人民银行昨天突然宣布再度上调人民币存款准备金率零点五个百分点，香港银行界认为，中国为压抑股市及房市过热，相信人行今年内会继续升息及上调存款准备金率。

瑞士EFG私人银行副行政总裁赵善铨认为，由于市场普遍预期在中共十七大后，中国政府会加强宏观调控措施的力度，所以市场不会对人民银行再度上调存款准备金率作出过度反应。 -->-->他又说，由于中国流动资金过剩，加上人民币未能自由浮动，市场未能自然调节，以致宏观调控措施短期未能冷却过热的经济。 他预料今年年底前，人行还会升息一至两次，以遏抑股市及房市的过热情况。

星展银行高级经济师梁兆基表示，目前中国外汇储备及贸易顺差大，人行提高存款准备金是意料中事。 港股料暴跌 不过，香港讯汇证券董事总经理沈振盈认为，这次人行再调高存款准备金率，会对香港及中国股市构成较大的压力，

由于中港股市已进入调整波，估计12日中港股市会借调高准备金率的消息出现恐慌性抛售。 他预期，恆生指数初步支持位于2万7千200点的50天平均线。若以恆指9日收盘报2万8千783.41，估计明天港股会暴跌近1千500点。 中国人民银行昨天下午宣布将于11月26日起，上调存款类金融机构人民币存款准备金率零点5个百分点，至13.5％的历史最高水平，这是人行今年以来第九次调高存款准备金率。

According to above news, it is telling that Hang Seng going down for another 5-6% tomorrow. We shall see, if it is fall below 20000, it will be the time to go for cheap stock.

TamCorp giving 50 sen special dividend

One of investment banking tell below STORY:

Tamco said planning to pay special dividendTAMCO Corporate Holdings, a unit of Ancom, plans to return as much as 50 sen a share to shareholders,sources close to the company said last week. Business Times understands that a decision on the special dividend was made last Wednesday at a board meeting. Company officials were not immediately available forcomment but an announcement is due to be made soon. Tamco is in the process of selling its switch gearbusiness to India's largest engineering firm Larsen & Toubro Ltd for RM378m. A dividend payment of any kindwould benefit Ancom as it directly owns 40% of Tamco, the source said. Ancom, could raise a further RM100m,via the sale of its industrial chemical unit, housed under Nylex (M). (BT)

hmm, take a look on latest news:
TAMCO CORPORATE HOLDINGS reported that SIEW KA WEI, Director had on Oct 16, 2007 disposed 850,000 shares in the Company at RM1.06 per share.

TAMCO CORPORATE HOLDINGS reported that SIEW KA WEI, Director had on Oct 19, 2007 disposed 496,500 shares in the Company at 93.83 sen per share.

TAMCO CORPORATE HOLDINGS reported that SIEW KA WEI, Director had on Oct 18, 2007 disposed 510,900 shares in the Company at 97.02 sen per share.

What do you think? :)

Hang Seng Down -5%

Today Hang Seng Down -1526 aka 5%. (not crash yet!)

If tonight US want to have fun with Asia stocks, they can just choose to let the DJ down -2% maybe, then we shall see another wave sending Hang Seng further down.

November Crash?

We shall see.

My 100% cash status is enough for me to buy cheap stocks.

中资企业高估值所从何来？

目前中国石油已是中国最大的上市公司，其总市值已达4,400亿美元左右，较其今年盛夏时的水平增长了一倍左右。中国石油在全球上市公司中的排名已升至第二，仅次于排名第一的埃克森美孚(ExxonMobil Corp.)(5,080亿美元)，双方的差距正在迅速收窄。中国石油基于2007年预期每股收益的市盈率超出了20倍，是历史水平的两倍多；相比之下，埃克森美孚的市盈率仅为13倍，而雪佛龙公司(Chevron Corp.)和康菲石油公司(ConocoPhillips)等西方石油企业的市盈率仅为10倍左右。一些分析师和投资者认为，中国石油的股票不应较西方同类企业拥有溢价，他们相信该股被高估了50%甚至更多。

而中国石油这样的高市值中资企业并非绝无仅有。中国最大的煤炭企业中国神华(China Shenhua Energy Co. Ltd.)市值约2,000亿美元，远远超出了全球最大的非国有煤炭生产商Peabody Energy。而中国大型钢铁生产企业宝钢股份(Baoshan Iron & Steel Co.)的市值是U.S.Steel的三倍多，虽然它们的年产量差不多。韩国浦项综合制铁公司 (Posco))钢材产量比U.S. Steel还多30%，但浦项制铁的市值只有600亿美元。而且，中、美企业市值存在明显差距不只是资源领域才有的现象。

以金融业为例：中国人寿(China Life Insurance)的市值为2,450亿美元，是大都会保险(MetLife)和保德信金融集团(Prudential Financial)市值的五倍。实在很难为中美资源类公司如此大的市值差距找到合理解释，因为石油不仅是一种可替代的全球性商品，而且煤炭和钢铁也在逐渐朝这个方向演变。

More story can read from here:

http://chinese.wsj.com/gb/20071029/fea163600.asp?source=channel

This is another warning, China Company has been overvalued. With their PE stood at around 65, which is in past history, the peak before bubble burst. November will be a historical month to be noted.

Today Trading

Sold Masteel 4000 shares @ 1.53 and sold pjdev 6500 shares @ 0.85, has occured some loss on pjdev.

This is to keep the promise of selling before November ( although i sell on 2 Nov ).

The market has been very volatile and i can see market is not strong as previous.

With 100% cash, i am extremely comfortable with the situation right now.

Why i want to sell so urgently?

Because Hang Seng open at 10am, you never know what are their respose with their market on the Dow Jones Plunges nearly 3%, Their market valued at PE 24, which is quite high, as long as foreign investor decide to pull out, you see huge correction/crash on their market.

I do not want to take the bet, The Hang Seng Curse with dividend less than 2% and the PE more than 22? Let's see.

Hang Seng Latest Update - October Month

October Month:
PE -24.26
Dividend yield - 1.77

Remember the previous post i mentioned? according to the theory, the market crash shall happen on November month.

Let's see, i am going to sell Masteel and Pjdev as long as masteel > 1.6 and Pjdev > 0.925, just hope there is some one willing to paid that price.

Previous post:
I have notice one IMPORTANT things, with PE more than 20 and dividend yield less than or equal 2% at certain month, then market will be collapse/ or having big correction after that particular months.

This rules have been proven on 1973, 1987, 1994, 2000 year where they only have big bull run with low dividend yield.

Hang Seng has enter into November with October month PE more than 20 and and dividend yield less than 2%.

This is a WARNING.Plan : Sell all shares at next week.( Good day on 31 October )

1973 Feb PE 38.1 Dividend yield 1.87
March PE 31.69 Dividend yield 2.23

1987 September PE 22.35 Dividend yield 1.93
October PE 12.31 Dividend yield 3.48

1994 Jan PE 21.82 Dividend yield 2.07
Feb PE 19.68 Dividend yield 2.28
March PE 15.08 Dividend yield 2.89

2000 Feb PE 26.18 Dividend yield 1.88
March PE 12.33 Dividend yield 2.05

2007 September PE 21.18 Dividend yield 2.04
October PE >21 ( 资料还没出来。不过肯定高过 21 ) Dividend yield < 2.04% ( 资料还没出来。不过肯定底过2%)
November PE ? Dividend yield ?