We like it’s recent pull back. Any weakness prompted us to buy more SUNREIT.  We loaded some at RM 1.62

We sold Innity, Kawan, Multico and TA mildly and switched to MBSB at RM 1.190.  With anticipation of further weakness in coming weeks before Right issue.  We reserve our purchases to buy lower if opportunity arises.

The entire low oil story has gone and high price of oil may come next 6 months.  Demand and supply is always an issue. However, devaluation of currency I believe is the main reason. 

With most companies reported 10 to 30% dropped in revenues and profits. Some companies even at 40 to 60% lower of its revenues.  Only a handful can still perform better year on year basis.  Although technically it is not a recession but I believe it is already here.

1. We think MBSB in any path will become one of the largest Islamic bank.

2. Currently NPL 80% is recoverable and may re-write back as profit.

3. EPF is the largest holder with CMY holding more than 70%.  If not due to regulation EPF can buy out the whole company easily.

4. Still the best lender for government servants with direct deduction from source.

5. A banking license in progress in merger or direct application.  Cost of funds lower and higher valuation in future.

6. Right issue will be two calls where one will be paid by reserve of company.

We have added MBSB at RM 1.27 today.  We are anticipating right issue in June that will final MBSB route to a banking license, improve profit and reduce NPL.  I called for a hold but after a month of research into the decision of cash call. We reiterate buy call on MBSB. Perhaps heavy buying.

If just MSCI adjustment, China slow data, unstable growth US data are the culprint. We just think it is not enough to cause a major dip.  We think the market is oversold and near term rebound is likely.  However, we will continue to buy if market correct further.

Both CIMB and Maybank may drop further after this adjustment. But we will accumulate if price falling further. It will be good we start tracking if MSCI does has impact or they just don’t understand our market at all. CIMB closed at RM 4.40 and Maybank closed at RM 8.490 as of 13 May 2016.

We have disposed ECOWORLD completely on the basis of continue weaken global markets.  We do not expect any quick recovery for property companies.  We also disposed mildly INNITY and changed to Alliance, MBSB & SUNREIT.

We continue to buying up MBSB on its value leap after become a bank.  Alliance for its strong management and consistent result. Finally any REITS portfolio that with medical center as it portfolio.

We will continue to bargain hunt if market weakness persist as we believe the market is in the path of recovery.   However, mid to long term risk remained.

There are only 2 things we worry that will affect the world markets in short term. Unpredictable climates and US protectionism presidential candidate Donald Trump.