Yellen: Fiscal policy is to take charge

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.

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MBSB and SUNREIT – Strong Buy

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.

Oil will be back to USD 60 above

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. 

We continue to load up MBSB before it’s right issue

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 bought MBSB at RM 1.27

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.

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