Since our coverage started on Kawan, we found that there is some persisted buying forces on the stocks. The closing price has reached RM 1.220 and warrant advanced to RM 0.220 as closing.

We do not know whether they are funds, share buy back or owners increasing their position. We feel that Kawan fair value should be traded at 15 times of its PE. On the back of consistent profit growth, right industry as it linked to agricultural down stream and future growth prospect in setting up new halal plant.

We feel that a quarter of profit at RM 5 cents will give Kawan 15 times PE at RM 3.00. Thus, we raise strong buy of Kawan below RM 1.50.

We sold some Sunzen at RM 0.270, Stemlfe at RM 0.505 as we continue to practice reducing position when PE hit 20 and above. We also completely exit the last batch of Gpacket at RM 0.535 in average.

We switched to Kawan at RM 1.180, Multico at RM 1.760 and IGBREIT at RM 1.230. With half of the balance from our disposed as cash resulting as net selling position of the week.

I believe the overall market still very cautious.   Beside of US debt ceiling issue also surrounding my local parties election and coming budget 25th October.  Expected tougher budget creating worry to impact certain industry.   Thus, market is to be traded with caution until budget reading.

Just look at recent cases that out of years of many non-sense cases. IRCB – research house recommended Price target at RM 0.500. Sersol above RM 1.00 and Gpacket takeover rumors hit above RM 0.600. Out of the blue moon suddenly sentiment changed. I have no comment on all these speculative play. But I will advise investor fundamental investment is slow in ROI. But at least you can sleep well at night.

We continue nibbling Kawan and Kawan Warrant as we like the stock is highly undervalued compare to its peer. Our target for Kawan is RM 2.00 in next 12-24 months and its warrant above RM 0.600. With a yield of average 3% while holding of the equity.

We continue to reinvest our fund to Qcapita at RM 1.170, Kawan at RM 1.060 and Teledata at SDG 0.012

Many research houses expect KLCI year end target between 1800 to 1900. Many set its target of 2014 to 1900-1950. We will just ask one question that if earning ratio of KLCI hit 15 and above. Why plenty of mid to small cap has PE below 10 are not so little attention? I believe jewels are in this segment.

While date lines near 17th October when the US will face defaults. USD and all it’s associates currency weaken and create another huge fluctuation in the market. We will start to buy AUD and USD mildly as we expect the debt ceiling deal will be resolved before the date. Slight chance of a continuous shut down but if that happen will trigger a sizable crash in all markets. We won’t welcome that or believe it will happen. If so, we will pick bargain from this.

It is not the first year. I do agree it is not easy to stop it. I also know the government is doing something. But don’t you think is too little for a big problem?

So what’s now? Malaysia already has this culture, face the reality.

1. Why someone can do it and can get away?
2. Why we need to pay tax as the money drained with silly reasons?
3. Why need to responsible to country as even many politicians spoken wrong facts do not need to apologize?
4. Why follow the rules and park your car properly when no one border?
5. Why I need to do it if no one is doing it?

The realty continue….

The culture is not just slowly cooking the already bad people but I believe now almost to every corner infected many good people as well.  No matter you are opposition or government. No matter you are Malay, Chinese or Indian or minority. No matter you are rich or poor. Don’t you think everyone needs to do a part to make things right?  When everyone should put down their own benchmark themselves.  Do the right thing, not what you think is right or wrong anymore.

In a financial blog like here. Even as 123 also knows it is going to be problem when resources run flat.  Back to basis, it is a choice that is always available.

We disposed another 20% of our Gpacket at RM 0.625 in average and left 40% of our original holding in total.

On the other hand, we switched to Kawan and its warrant today. But we faced tremendous buying disturbance from some big players. But base on our calculation of PE 15 times of Kawan. We think Kawan worth more than RM 2.10 before even its future halal plant contribution.

As for its warrant with a conversion price at RM 1.400. if base on our target of RM 2.10 and the warrant should worth 4 times from current value at least. We will continue to increase our holding and even convert its warrant if the market is in bad mood in 2016.