Negative rates are giving negative impacts. The growth of economy will need to focus more on fiscal approach. Yes indeed Fed is also in a learning cycle.
With the price dropped to RM 1.15 and towards downward further. We are buying more aggressive into MBSB. We are very focus on MBSB. Besides also adding SUNREIT as comfortable cash generator.
We longed Brent crude further at USD 48. Resistant level at USD 50 but we believe will be broken soon.
We like it’s recent pull back. Any weakness prompted us to buy more SUNREIT. We loaded some at RM 1.62
We sold Innity, Kawan, Multico and TA mildly and switched to MBSB at RM 1.190. With anticipation of further weakness in coming weeks before Right issue. We reserve our purchases to buy lower if opportunity arises.
The entire low oil story has gone and high price of oil may come next 6 months. Demand and supply is always an issue. However, devaluation of currency I believe is the main reason.
With most companies reported 10 to 30% dropped in revenues and profits. Some companies even at 40 to 60% lower of its revenues. Only a handful can still perform better year on year basis. Although technically it is not a recession but I believe it is already here.
1. We think MBSB in any path will become one of the largest Islamic bank.
2. Currently NPL 80% is recoverable and may re-write back as profit.
3. EPF is the largest holder with CMY holding more than 70%. If not due to regulation EPF can buy out the whole company easily.
4. Still the best lender for government servants with direct deduction from source.
5. A banking license in progress in merger or direct application. Cost of funds lower and higher valuation in future.
6. Right issue will be two calls where one will be paid by reserve of company.
We have added MBSB at RM 1.27 today. We are anticipating right issue in June that will final MBSB route to a banking license, improve profit and reduce NPL. I called for a hold but after a month of research into the decision of cash call. We reiterate buy call on MBSB. Perhaps heavy buying.
If just MSCI adjustment, China slow data, unstable growth US data are the culprint. We just think it is not enough to cause a major dip. We think the market is oversold and near term rebound is likely. However, we will continue to buy if market correct further.