Oil spike 8% after OPEC agreed cut of production. A reasonable oil price at USD 60 above does support growth in oil production company like Malaysia. If oil price is fixed and US the largest Economy grow. Isn’t It will lead the world Emerging markets towards recovery as well?
We are always supporting USD is over valued. For an expected 25 basis points hike is not justify for a strong run. Even Trump won is yet to show a total revolutionary package for US economy. More important Emerging market currencies are not weak as declared by some punters.
However, the trend of the force is towards weak Emerging market currencies. We think the strong US dollar may be near it’s peak again.
New improved earnings will invite fresh buyers for the counter. With a persistent support at RM 0.500 and we suggest that new support should be above RM 0.600. We are still holding 50% Balance of our previous investment. We will dispose if price is right continuously.
It is a evidence that there is a force behind all these. It is immense and powerful that can defy the actual investment rules. That’s why the market will always kill the smarties. Balancing yourself and rip profit from any trend is the only long term approach. We think a quick bubble is forming. But will it burst is a question hard to call.
Third quarter with slight improve in both pretax and revenue is on target. Impairment ratio at 2.91% and corporate ratio over retail is improved at 19:81. On target to 30:70. Overall registered a noticeable margin across all segment. We hereby continue our buy Call below RM 1.00 with a target of RM 2.00 above.
We are not a so free market anywhere. Why not we packed it at RM 3.80 again? This only create problem for short sellers but benefits majority. Although I am not a fan of Protectionism but in certain time. This can be a good solution.
We bought more MBSB at 925 and also exchange further with L&G also at 925. We decided to dispose L&G as we do not like it’s excessive corporate exercise. MBSB at the current price vs our targeted price above RM 1.80. We believe it is a good deal.
24th Nov will be the date MBSB announce quarterly result. We hope there will be a surprise or we shall wait further until it’s alignment of NPL to 3 months as same standard as bank.
Rumour from the Star that MBSB may merge with AFB. However, we are more supportive to MBSB directly apply for a banking license rather than buying a not so performing Islamic bank just for its license.
We have our strategies defined in 2011 https://joepoh35.com/2011/08/25/5-ways-to-select-a-good-value-stock/
However, we found that it is imperative to add on 3 more values on top of our top 5:
* Catalyst in coming 6 to 12 months (will be priority)
* Holding time depending on yearly review.
* Cut losses and switched to new picks if wrong
1. Company Business (Does it got a brand? Are they competitive? Their industrial outlook – Growth)
2. 1-3 Years Earnings per Share (EPS) / PE Ratio (Preferable below 10, if higher, you need to justify to yourself)
3. Governance / Management (You may likely not to know, but put at least surface analysis whether do they have a system)
4. Dividend Yield (It is preferred to beat current interest rate to ensure that you will continue improve investment cash flow)
5. NTAV (Understand its current asset values)
It is always our view that USD is not supposed to be strong. For whatever reason even if FED is going to raise rates few times which is impossible in short to mid term. The rate is still ultra low as of now.
We still believe RM fair value at RM 3.50 vs 1 USD is a fair value. Crude oil at USD 60 is a fair value and Gold above USD 1300 is a fair value and KLSE should be above 1700 as of now.
However, money flows in and out not just Malaysia but the world market in large scale that affected the sentiment. As of short term, the current trend will persist. But we will be in contra position. just like when we buy overseas currencies when RM is strong.
RM and market may still be weak. However we believe certain fundamentalists may enter the market to take advantage of the recent Fall. We will buy next week as well.