Tasco roaring revenue and profit earned our call from hold to buy

Revenue increased close to 30% and profit almost double. With EPS almost 10 cents per quarter. A consistent result will bring Tasco fair value to almost RM 6.00 with 15 times PE. We re-rate our our hold to buy call with a review target of RM 4.00. But we do not suggest a strong buy instead a gradual reward buying style. We will mildly add some into our portfolio. If result consistent we will add more quarter by quarter basis.

KLCI – Market facing temporily weakness but we believe still a long in 2014

Greenspan, Jim Roger & many increasingly forecasted a crash in the market sometimes soon. However, FED is confidence that things are in control and continuous reduced its bond purchase further. We are always a firm believer that too much money printed. Things not looking good but is not this year.

We believe the bull has not stopped and will go further from here to at least mid of next year if there is no unforeseen circumstances. On KLCI front, we have been long on dip and covered back with 5 to 10 ticks profit. We will continue to take this opportunity to buy if market pressured and long spot month contract. But we try not keep any contract open to next day. Immediate support at 1850 to 1860 and strong resistance at 1890.

KAWAN on target to cross RM 2.50 – Hold

One of our top pick has done RM 2.40 even at a difficult day when Argentina defaulted and Dow Jones has some earnings missed. It has faster than we expected for the price trading at this level. In long term we still optimistic about Kawan and we expect a 15 times PE with improve EPS to RM 0.20 per year in 2016 if not 2015. Thus, mid to long term target to cross RM 3.00.

Argentina default – a man made opportunity to buy stocks

The default is due to the disagreement between Argentina and the creditors. Market will not crash due to known problem. This will be a good opportunity to buy into the market if you have missed some boats lately. We will buy into the market and long a contract on August today. If there is first to default is always US.

We continue to like L&G, MNRB, MBSB, KAWAN and buy on any dip. We maintain our view that no major crashed is expected in 2014 with known issue unless otherwise.

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