Oil at USD 60 to 80 is a sweet spot

As we expected, the price of oil has recovering since then. With bunch of analyst forecasting it at USD 25 and below per barrel.

We believe crude oil will continue to climb but the sweet spot to maintain a balance and healthy worldwide economy should be at USD 60 to USD 80 per barrel.

Anything more than this will create impact on the other hand.

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Bitcoin above 9,000 is irrational

This is one of the classic bull which gone irrational. I still remember the second board those days when a stocks worth RM 1 shoot up to RM 100. There will be still reason to move up further.

Fundamental is dead these days as a lose making digital disrupt company can worth billions of dollars. Bitcoin is suppose to be a currency that avoid world financial policies influence and stay fair play. But today is highly speculative. If the of major countries to allow this to happened. It will have a long term effect to all economies.

If you think a PE of 40 times of some Nasdaq is ridiculous. You will rethink when bitcoins up from 450 a year to two ago until above 9,000.

Fundamental is dead and digital economy is wrongly valued due to no governance. It becomes a biggest loop hole of speculation that may involved illegal activities.

I may be wrong because there may be a major crash ahead that I don’t foresee. That’s why all money are moving into digital currencies.

We may initiate a short time to time. But the current irrational bullish can go further as no one perhaps can understand it.

MBSB – a simple target

If anyone would follow the history of this bank in the last 3 years. Profit is about back to its normalization. When impairment end this year. Per quarter profit should be around 150 – 200 Mil. That will be approximately 2.5 to 3.5 cents. Annual profit around 10 to 14 cents. The current price PE will be 8 to 10 times.

Via a new banking license, cost of fund become cheaper and more products can be launched. A syariah based credit card and etc? Even a normal loan growth of 6 to 8% on current 70/30% portfolio will be good enough to drive profit to above 15 cents in 2018.

A potential or write back of impairment as mentioned by its CEO that 80% us recoverable. That can be a great surprise.

I don’t kno2 why the stock performance still lack of interest when 75% still hold by EPF and CMY. To me it is a simple mathematics this stock price must grow except unexpected event not related to financial happened.

It is a growth stock, it is stable, it is objective oriented, it is a dividend stock if maintain 3 cents payout.

3Q at 6.2% growth positive

If nothing wrong with the figure and finance companies will do well as the development will bring growth to banks as well. RM is going stronger as we expected as moving back to its fair value. We believe RM fair value at RM 3.8 vs 1 USD.

Positive figure and we have bought into the market again.

Valuation is reasonable at KLSE

Looking at most of our top picks with both healthy NTA and PE. It is comfortable for us to continue invest into the market. There is definitely lack of activities in the market but we believe the current values are reasonable.

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