I have been buying GENM due to its beaten down price by surrounded theme park issues and new taxes. I always think it is a good worthy stock. But recent decision by major share holder in buying assets from its own pocket did raise question. The point is not long term or short term. Most important is the ethic. That’s set bad example to Malaysian stocks.
If you wish to enter the market. I would advise to buy for long term and especially cash flow healthy company with consistent profit. Personally I will keep buying on beaten down blue-chip with great dividend yield.
From China US trade issue to Iran, S.Korea vs Japan, Brexit, Hong Kong fire point, Taiwan, N. Korea, Russia and US exit mid range missile treaty. Also our local uncertain politics. I think 60% chance can lead to another prolong slow down from any of these fire points.
We sold HHH Corp as we believe recent sentiment is not justified. Though we still like the stock but given 50% gain without fundamental or even real reason for speculation.
It will be great if US-China is able to settle the trade deal fairly. But RM is strengthening and corporate earnings are improving on the ground of most companies are expanding income source outside Malaysia.
We bought CIMB, GENM, OSK, JAKS and MBSB lately. We are on target to rebuild strong cashflow portfolio. If RM is gaining ground and we shall start to buy overseas.
We bought GENM, OSK and SUNREIT mildly. Especially GEN will be our focus buying target.
However, as our strategy is to buy mild but reduce debts in investment with a much bigger ratio. We aren’t buying a lot.
But our strategy will lead to lower borrowings but still capitalize low price with dividend yield target.
Our cashflow investment model remained sound and we are growing gradually as off any situation.
Personally i always think a trade deal is possible unless it is too demanding between the two. There is still a high chance of 80% the deal i feel that will go through during the G20 summit in Japan. However, a slight chance of 20% will trigger a long waited worldwide recession. I am not in favor to bet any of the direction as the risk to trigger a super boom is there. Thus, we will switched to highly defensive from now. Reducing borrowings and debts will be priority and bring down ratio of debt below 0.5 times.
In summary we will not do anything except reducing debt ratio from now possibly until a better picture emerge.
We are a little disappointed to its cause of reduce profit due to again some loan credit losses. They should have improved their risk assessment before issuing loan.
Plan to increase revenue also slower than expected though we do see their progress by technology centric lately.
We will not increase our investment as of now until constructive improvement seen. But we do still have confidence in its strategy and plan for mid to long term. We like the 5 cents yield as it is fair to investor and it is still better than FD and some REITS in the market.
I am positive about the market but may be rather too early. I will maintain buying mildly. But only dividend yield stock.