Due to continue weak data from China, equities are under pressure but for ABC.HK, HKD 2.80 below emerge to be bargain. We will start buying from now slowly again. We added Gold as contingency.

Purely on speculative, as after the right issue, the NTAB of the Co. remained higher than its current trading value. We dont like construction company due to its need to continous get fresh project. But the MRT phase 2 at Kota Damansara should given RM 80 Mil profit as minimum 10% margin. Of course can be more or less depending its final management of the project. Given price between RM 0.580 – 0.620 is a good mid term buy. Around 6 – 12 months.

As any fresh new income, we recommend to reduce your loan and buy into commodities. So far, we still favour Gold even there is multiple choices in the market due to liquidity.

As we have always mentioned we believe Jim Rogers’ theory that agriculture will be the next wave. A simple reason he mentioned about the farmer aging. Less and less peole is working in the farm together with severe weather condition increasing. We should see upward price pressure even economy is not good.

We selected Bernas 6 months back and has bought in price range from RM 2.70 – RM 2.90. Today its price reached average of RM 3.40 ex-dividend. We have been looking around the whole KLCI excluding Oil Palm that we think the PE is too high for all Palm related company no matter young tree or old tree.

Lay Hoong, after 2 years of holding some stocks and its performance still in Z mode. Means sometimes good and sometimes bad. But overall, we do like its branding and its balance sheet. Our risk factor remain is bird flu. Otherwise, we should see continuous increase in revenue will one day cross the inflating cost of business. Given the situation is like this now, it is good time to slowly accumulate.

As part of our re-investment strategy, we have bought in OCK, Sunway, Lay Hoong and Tomei. For REIT, we have bought in QCapita. (As part of our re-investment plan from our REITs dividend)

Bingo Hong Kong has proposed a share consolidation of 2 to 1. However it is not capital reduction. We have bought in midly for this price advantage.

Also due to it’s recent result.  We believe PE ratio is down to 10 times.  Innity is doing a great job and we do feel they are transforming. 

We may not be able to cover all but from all above earnings report, only Cheetah appear to be said with a slight increase in revenue and better cost control. Besides, MBSB still delivering a PE of 7-8 times as a financial entity which is still attractive. All others are reporting flat earning. We will not feel hesitate to dispose if earnings are not improving.

Bonia is a particular joke. Fighting of controlling stake or merger between family own and investment group are making joke again. I am not sure why Malaysian successful business need to alwasy defend not from competition but rather government linked investment fund or unfriendly party. The rumours from the edge that the owner is defending against certain funds. I do not know why they intend to control except if they know how to run the company better than the existing owner.

However, we also do not like the way Bonia defending themselves. It is obvious that the defending strategy also did not consider the smaller share holder. This last quarter result is even a further joke in timing of the mandatory take over code of practise.

But who care? If some can be exempted and some must offer take over.  Just look into E&O, i thought Malaysian Insider should be shut down due to recent E&O saga.  No matter right or wrong of the information exposed.  It is definitely violated insider trading rules.  (Simply is our own view!)

Based on Q2 overall corporate earning result and Q1 as an overall. Beside of a few outstanding company in our portfolio. We see a trend of flat revenue with lowering profit due to cost pressure. If there is no special factor involved, we believe the current KLCI level is already fully reflected. It may move up further due to corporate exercise or government announcement of budget. We feel that the upside is not easy to challenge until we have a better earning potential.

Revised strategy
1. Stop fresh investment into KLCI but holding current portfolio or re-investing if disposal
2. Stop M-REITs investment as overall average yield is between 5-6%
3. Diversifying cash into foreign currency and foreign stocks