We feel that this wave of Censof temp come to a halt. We decided to sold all and switched to Gadang. Not very good price indeed from RM 0.620 Censof to RM 1.000 for Gadang.
I do agree the act of printing money is definitely a problem. I don’t know when but in short term the overall market will be supported by these liquidity. But we recommend anyone to reduce debt while staying invested. The pop of the bubble may come anytime. But I really don’t know when. So I will reduce debt, keep some cash and stay invested. Especially asset related and in 2014 focus more into climate change portfolios.
We did applied for thr Ipo as we like it’s business and industry. At 15 times its IPO reference PE is reasonable. But after its post listing run up. Unless something we don’t know behind. These two stocks are far more expensive as of now to me. It is like buying a Honda Civic paying a Honda NSX price. I remember Stemlfe IPO rocketed to RM 4 above and the CEO even said is because of people positive outlook to its industry. However, eventually it dropped back to below RM 0.30 for sometimes.
Karex is above RM 3.1 and Caring above RM 2.1.
Here you go another example of undervalued investment. We started invest in KHIND around RM 1.35. Across years it has provide reasonable Dividend yield. This year it has awaken. We are now in 100‰ returned excluding Dividend. I hope I will smart enough to identify more and buy more counter like this. As of current last done price, KHIND traded at RM 2.90. We will continue to hold if the PE is not above 20 but we will dispose slightly as discipline.
Haiyan Typhoon comes in mass destructive manner. Are we doing enough for the ever changing damaging climate problems? Almost all scientists and associations warned non stop. We all know the problem but because of capitalism. No one want to back step and take more initiative to do more for earth. We strongly believe there will be more cost needed to fix it. All climate changed related industries will benefit from it.
We favour 3 Malaysian based climate changed related companies under our portfolio and we will increase our holding further in 2014.
1) Cypark – Business in renewable energy and waste management
2) Analabs – Waste management, water treatment and Recycling
3) HHHCorp – Waste oil management
We have disposed up to almost 80% of our holding for Censof. We added on Multico and TWREIT as part of the asset related investment strategy.
From its initial IPO price of USD 26 to a moment crossing USD 50. That’s not the surprise as 2012 financial year reported a loss of USD 79 Million. with a turnover of USD 317 Millions. As reported in 2013, revenue at USD 422 Millions and increased loss of USD 134 Millions for first nine months. It has a very huge grow story. Personally, I think is a bit over. Perhaps is the branding that keep a strong hope for future development. But it is not our cup of tea at all.
Deflation has not pick up steam. However, some data shown provoke ECB to reduce rate again to avoid deflation. ECB promised further movement if fail to stimulate the economy further. In short, we should have another 6 months to 12 of good stock market before it rationalize, pull back or crash. Whatever…. the market is flood with money and we remind everyone asset oriented investment strategy as well.
As planned, we disposed some Censof at average of RM 0.635 and switched to Gadang at RM 0.940. We start to re-look into Gadang due to its plan to switch its business to recurring rather than project based. We will power plant acquisition is positive even thought is minor. We like this business concept. Further, order book on hands are good enough for Gadang to be busy for the next few years.
Last week, foreign investors net selling amounting to RM 127.30 millions. The week before recorded selling of RM 480 Millions. Total of four weeks is RM 1.1 Billion. We are not sure the data is net selling or gross. But local funds should be the buyers to support the market. This explained why we thought the market should be weak after a prudent budget in short term. However the market move upwards with support on KLCI component stocks.