Always there are both sides of the stories with bets.  Protectionism economy is growing whether you like it or not. Isn’t EU already suppose to be a economy body by itself?  You may see some shocks but we don’t see it is a problem at all. If compare to worldwide debts.

All markets are going to have a larger volatility due to uncertainty and stronger position of speculators.  However, if you can take a slight advantage of buying during a subdued time. You got a better opportunity of achieving buy low sell high. The crucial point is whether you know the worth of the asset price.

We exited KTC and Poh Kong as profits. Sold London biscuits warrants and sizable Kawan.  We use all balance switched to MBSB. 

We continuous rationalize our portfolio to focus into MBSB.

We repeatedly and will continue our stand that Malaysia will not crash due to 1MDB.  1MDB is a problem with cash flow, investment, leadership and etc.  The issue must be investigated till the end to bring our the root cause of the problem.

However, will Malaysia crash due to 1MDB?  Will credit rating down grade Malaysia create a crash?  2 weeks ago we said MSCI suggesting to reduce CIMB and Maybank. The price is at RM 4.4 and once dropped to RM 4.31.  But CIMB trading above RM 4.5 as of today. 

We sold all Poh Kong for the past 1 week and switched to MBSB. Poh Kong still a very good counter but the current retail sentiment may not favour it’s short to mid term performance. We rather sell it off and switch to MBSB with catalyst in near future.

1. Revenue increased with profits lowered due to NPL adjustment to 3 months. The move to align themselves compliance to be a bank.

2. NPL 80% recoverable and adjustment may write back as profit in 2017. Share price currently already lowered to reflect this.

3. Vision to become a regional Islamic banking player.

4. Strong share holders from EPF to CMY. Especially the later that have strong financial merger knowledge. 70% shares are tightly hold by a few major shareholders.

5. Strong unique loan model that deduct from source for repayment. (Government servant)

6. Strong state government relationship as depositors.

7. Target to bring down NPL to 2%

8. Potentially obtain banking license by BNM or merger with Bank Islam in radar.

9. Strong management team with the right people in the right position. Personally I like the CEO and CFO.

10. Strong messages from both MBSB and EPF CEOs on bad debts are not the main reason for the price drop.

11. Warrant expired on 31st May which may be a reason due to major share holders conversion.

12. 2 calls right issues that is under way. Partly will.be pay by the company using reserve.

13. NTA above 1.7 and if EPS regularised back to 20 cents a year after right issue. A merger or a banking license may give them 15 times PE at RM 3.00.

After all, how can anyone make EPF investment fail in this scenario. No matter BN or PR. All must make them a success. As it belongs to people.  We like the current price and we would like to continue to buy into our portfolio.

Stepping into year 2016 with an initial skeptical of its right issue plan.  Now MBSB has become our largest holding of all times. 

Our stocks selection criteria on undervalued, sound management, reasonable dividend yield, unique market segment, higher safe factor, more liquid and catalyst (2 call right issues, banking license and merger) pointed to only MBSB. 

We have also switched a lot of under performed stocks into MBSB.  We will continue to increase our holding before it’s 2 call right issue.

Even though a small amount but we have been consistent.  Gold spiked up from USD 1200 low for months to USD 1240 after US employment report suggest a possibly delay in rate hike.

We are not sure why speculators are thinking this relationship even Yellen clearly stated the need to raise rate for regularisation.  Low rates has negative implications. If the economy is going to weak again.  Fiscal policies will be the future tools.

However, no matter if both direction. Gold is still subject to rally and we believe it will go back to 1500 and above.  We don’t really invest Gold but we believe if there is a major crash under way.  You will have full fire power to buy into the market.   Be it financial crash due to recession or even climate changes disaster.

Mixed results announced in our portfolio.  Particularly MNRB has reported losses in continuous quarter.  The one main thing we don’t like this company is its transparency.   But we are not selling nor adding any in near term.

However, we focused into MBSB in the past week. We have reduced some other portfolios including Kawan, TunePro, Innity and switched only to MBSB and SUNREIT. 

MBSB has not become our biggest invested company in our fund history.