Jim Roger – Market is going to end badly, sometimes 2-3 years from 2013 but he does not know exact date.

Steve Hawkins – Universe is always inflating and it is quicker then ever. Finanicial market will be the same. You may deflate or stagflate a while. But eventually will pick up inflation again.

Warrant Buffet – Pick the right stock, with the right management and the right mindset. Sit back and see how it grows across time. My ultimate holding time is forever if the stock is good.

Our theory – Slash your debts, stayed invested with dividend yielded stocks, pick a bit of Gold. Wait for the market pull back. Then think again, everything will back to universal law of inflation. Dare to buy back when people are worry. Most important, pick a good stock that will survive the recovery.

As we mentioned, US debt ceiling issue is part of the expected problem. But together with budget to be announced and UMNO and MCA development on going. We feel the market is going to range bound but bias to slightly weaker position. 1800 is a very stubborn resistant if the break is not decisive above 1820-1830. Suggesting go for an exercise and wait for more concrete development.

Since our coverage started on Kawan, we found that there is some persisted buying forces on the stocks. The closing price has reached RM 1.220 and warrant advanced to RM 0.220 as closing.

We do not know whether they are funds, share buy back or owners increasing their position. We feel that Kawan fair value should be traded at 15 times of its PE. On the back of consistent profit growth, right industry as it linked to agricultural down stream and future growth prospect in setting up new halal plant.

We feel that a quarter of profit at RM 5 cents will give Kawan 15 times PE at RM 3.00. Thus, we raise strong buy of Kawan below RM 1.50.

We sold some Sunzen at RM 0.270, Stemlfe at RM 0.505 as we continue to practice reducing position when PE hit 20 and above. We also completely exit the last batch of Gpacket at RM 0.535 in average.

We switched to Kawan at RM 1.180, Multico at RM 1.760 and IGBREIT at RM 1.230. With half of the balance from our disposed as cash resulting as net selling position of the week.

I believe the overall market still very cautious.   Beside of US debt ceiling issue also surrounding my local parties election and coming budget 25th October.  Expected tougher budget creating worry to impact certain industry.   Thus, market is to be traded with caution until budget reading.

Just look at recent cases that out of years of many non-sense cases. IRCB – research house recommended Price target at RM 0.500. Sersol above RM 1.00 and Gpacket takeover rumors hit above RM 0.600. Out of the blue moon suddenly sentiment changed. I have no comment on all these speculative play. But I will advise investor fundamental investment is slow in ROI. But at least you can sleep well at night.

We continue nibbling Kawan and Kawan Warrant as we like the stock is highly undervalued compare to its peer. Our target for Kawan is RM 2.00 in next 12-24 months and its warrant above RM 0.600. With a yield of average 3% while holding of the equity.

We continue to reinvest our fund to Qcapita at RM 1.170, Kawan at RM 1.060 and Teledata at SDG 0.012

Many research houses expect KLCI year end target between 1800 to 1900. Many set its target of 2014 to 1900-1950. We will just ask one question that if earning ratio of KLCI hit 15 and above. Why plenty of mid to small cap has PE below 10 are not so little attention? I believe jewels are in this segment.

While date lines near 17th October when the US will face defaults. USD and all it’s associates currency weaken and create another huge fluctuation in the market. We will start to buy AUD and USD mildly as we expect the debt ceiling deal will be resolved before the date. Slight chance of a continuous shut down but if that happen will trigger a sizable crash in all markets. We won’t welcome that or believe it will happen. If so, we will pick bargain from this.