Nazir engineering a perfect merger? – CIMB, RHBCAP, MBSB & OSK

Stock prices started active particular for MBSB and OSK in recent days. MBSB crossed RM 2.30 and OSK RM 2.00. Since Nazir Razak has been appointed as chairman of CIMB and director of Khazanah. The sudden suspension of three counters CIMB, RHBCAP & MBSB sparking an early unexpected M&A.

It can be potentially CIMB becomes the biggest umbrella to swallow RHBCAP and MBSB. At what price, in what manner and who will be in control will be in focus. We thought MBSB initially will drive towards a bank license before any M&A to take place. This will drastically increase its value back to EPF.

From the active trading of OSK, there can be a potential that OSK will be offered an exit price to this M&A. Alternatively, it can be also offered the final share after M&A.

We are holding RHBCAP, MBSB and OSK shares. We should be benefited if the perfect merger is really to take place. Of course, it can be nothing but we still continue to hold these counters due to its undervalue trading position in the market.

We disposed all Paramount Rights and changed into mother shares

We decided not to pump in fresh capital into Paramount rights as we have bought up to our comfortable level of stock. We sold all Paramount rights at RM 0.370 and exchanged all to its mother share at RM 1.500. We continue to optimistic about Paramount but we will monitor its quarterly result before we adding weight to this stock.

We continuous long on dip for KL futures

We have been taking advantage to long on dip. Sell on rebound trend for KL futures.  As short to mid term we believe KLCI will seriously test 1900.  Giving an opportunity to profit from persistent buying of Bluechip.

KLCI building support to test 1900

We believe the current volume and KLCI character is building a base between 1870 to 1890.  When Worldcup final playoff is done.  We expect more activities return especially even Hari Raya is over.  A strong challenge at 1900 level can be expected and we believe it will happen.  Follow by more mid to smallcap advance after stabilise at 1900 above.

Worldcup semi finalists vs Bluechip investment

This year worldcup event is nothing special with certain unexpected results happened in the early stage.  Italy, Spain and England are the earliest unexpected dropped out from the league.

Some unexpected results like Costa Rico, Columbia, Algeria, Belgium & etc.  However until semi final normally will be the favourite teams likely to be the finalists.  This time is German, Netherlands, Brazil and Argentina.

Similarly in finding a good grow and quality stock.  No matter how much speculative can it be.  End of the day a good stock will only help us to win big and consistent.  Thus, Bluechip and quality growth stock are always our main and save picks for focus investment.

Dow Jones record high after strong job report

Obama said the job grow is fastest since 1999. Unemployment drop the most in 30 years. Everything looks great with interest rate is about to trend higher. Stronger dollar and stronger market. We see the market will push towards 18,000 in the second half. Asia will follow through as China will recover its growth. I think we will see a major bull before a critical pull back in 2014 and 2015.

Will stock markets crash in 2014?

We believe the time will come due to excessive money printing to support recovery with prolonged low interest world wide.  But will it happen  in this year or next? 

We think not so fast.  As the easing monetary policy in US is slowing.  However in other part of the world like Japan and Europe are continuing.  We see the world bull market may extended beyond 2015 to 2016.

However, there may be potential act of God reason that may impact the market earlier than estimated.  We don’t know the degree but this will be two major risks together with above reason.  The climate change is not reversible and will become a major issue in years to come.

While investing hedging inflation. We also recommend asset oriented balanced income portfolio.  This we continuous recommend a gradual shift from equities percentage to REITS,  commodities and solid asset related investment.

We disposed all Mudajaya and switched to MNRB

We have holding Mudajaya sometimes but with its lowering profit and revenue across few quarters.  Together with recent selling pressure from the market.  We decided to dispose all Mudajaya and switched all to our top 5 picks – MNRB.

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