The continuous weakness on AUD against RM due to improve speculation that BNM may raise OPR further before year end. Vice versa, Australia economy have mixed pictures with pressure on its central bank to keep rate on hold. We expect AUD weakness to continue with a potential break to below RM 2.80 vs. AUD 1.00 However, we take this opportunity to buy further as we are confident AUD has plenty of legs.
KLCI and global markets sentiment to be improved
We believe KLCI will reduce net selling from foreign investors with local buyers will be improved. As the Selangor MB saga is going to be ended very soon. There is no significant uncertainty and speculation on budget may attracted some buying activities. World markets will also improve except HSI with its uncertainty of the protest towards Chinese government. We will long KLCI October 2014 fore pre-budget speculation for next two weeks.
Multicode and Cypark result update
Multicode has a flat result announced whereas Cypark improved its revenue and profit more than 15% year on year. Both closing on target to delivery PE 10 times in 2014. We believe their fair value is at least 15 times. Our bet will be more on Cypark with our consistent target of RM 4.00 as of its current trend.
Our top picks remained with 2 added into the list – Q4 2014
6. TA (New)
9. Heveaboard (New)
QL Resources VGO at RM 3.50 to Layhong can be antagonized
We are not sure which side is right or wrong. But the VGO at RM 3.50 can be antagonized. We believe price of Layhong may surpass RM 3.50 when resume trading. Layhong current share holders may reverse another higher VGO. Alternatively, they will increase its holding share by further buying from the open market. However, a great chance to continue to dispose our remaining shares at higher price.
Layhong surged to day limit high on potential corporate exercise
We suspect a corporate exercise that involved controlling competition may have emerged. It is within our speculation months ago. However, we are contented with our profit. We sold 80% of Layhong today at average above RM 3.300.
We bought MNRB, MBSB, Success, Hevaboard, TA, Cypark and Qcapita.
We reviewed on June 2014
Alibaba IPO shown it is still technology in control but only in US
Alibaba market capitalization surged close to 40% with 2nd most valued stock after Google. Once again, it shown technology business is the only way to leap frog in a short period of time. Of course it must be also in US to demand such high valuation. Funds I’m US is much appreciating technology business than any part of the world. Alibaba strong debut will also drive Dow Jones sentiment higher.
We will see also more Chinese tech firm will be inspired by Alibaba for more similar development path in both China and international market.
Buying will further improve for KLCI
We see some buying interest is back and we expect it is going to be improve further this week. There are not much fresh leads locally for a major rebound. We believe a range bound to a higher close is likely. We will buy on value for our top picks if there is an opportunity for discounted pricing.
IPhone 6 a catalyst for Apple
As usual that IPhone 6 has packed with features when it first announced. Everything to me are still an enhancement from the previous version. Except screen size above 5″ is a killing to many dominant big screen players in the market. For now we believe Apple hit the right button for its fans and also those that shifted away due to screen size. Thus Apple should earn an re – rate of its stock value soon.
Fed and BNM – Same tone on interest rate – keep it low
Even EU central bank, Australia central bank, Central bank of Japan all having the same tones. Interest rate is to be low for long. We see at least a strong last quarter in 2014 and early 2015 for equities market.
Local GST kick start in April 2015. We will see a strong activities in last quarter of 2014. As more transactions on all angles will be done before April 2015. Strong retail sales results especially will be recorded.