I3investor most experienced investors, traders, punters gather to exchange their views on current stocks! Beware! Most of their views may not be suitable for those under 90s!
Joe grew up in a small town, then moved away to attend college and law school. He decided to come back to the small town because he could be a big man in this small town. He really wanted to impress everyone. So he returned and opened his new law office.
The first day, he saw a man coming up the sidewalk. He decided to make a big impression on this new client when he arrived. As the man came to the door, Joe picked up the phone. He motioned the man in, all the while talking.
"No. Absolutely not. You tell those clowns in New York that I won't settle this case for less than one million. Yes. The Appeals Court has agreed to hear that case next week. I'll be handling the primary argument and the other members of my team will provide support. Okay. Tell the DA that I'll meet with him next week to discuss the details."
This sort of thing went on for almost five minutes. All the while the man sat patiently as Joe rattled instructions. Finally, Joe put down the phone and turned to the man.
"I'm sorry for the delay, but as you can see, I'm very busy. What can I do for you?"
The man replied, "I'm from the Phone Company. I came to hook up your telephone.
Investors should be selective in stock picking this year
KUALA LUMPUR: Stock selection is crucial in 2016 given the FBM KLCI’s current fairly priced-in valuation, and ongoing cautious market sentiments.
JF Apex Research said investors should adopt a combination of defensive and active investment strategy by investing in value stocks, which are trading at lower price relative to their book value and earnings.
The focus should also be on growth stocks yielding better earnings prospects; high-yielding stocks with resilient business models; and thematic plays which are expected to benefit from the upcoming positive newsflow.
The FBM KLCI is currently trading at 15x 2016 consensus PE, which is close to its historical mean PE of 15.2x, the second highest PE after the Philippines Composite Index and on par with Jakarta Composite Index.
This indicates that the FBM KLCI is trading at 17% PER premium to other major Asian indices. Furthermore, the yield of the local market looks unappealing for long term investors, rendering a mere 3.5% for 2016, which is lower than Singaporean, Taiwanese, HK and Thai bourses.
“At this junction, we deem the current valuation as fully valued in the absence of any positive catalyst whilse immediate market outlook remains bleak, which is mired by prevailing weakness in crude oil prices and ringgit,” it said.
The research house targets for year-end 2016 FBM KLCI to reach 1,770 points, with market EPS growth of 5% in 2016 and 8% in 2017.
Casino operator may gain from share in drug company
PETALING JAYA: The potential listing of Genting Bhd’s 20.7%-owned Alzheimer’s drugs company on Nasdaq could provide a catalyst to the share price of the Malaysian conglomerate.
At a valuation of US$15bil (RM65.9bil), the initial public offering (IPO) of Singapore-based TauRx Pharmaceuticals Ltd could potentially add RM10.4bil, or 40%, to the sum-of-parts (SOP) for Genting based on Maybank Investment Bank (IB) Research analysis.
“This implies a 40% upside from this one listing alone,” Maybank IB Research said in its report.
“If TauRx is valued at RM15bil, our SOP-target price surges to RM11.35, implying a whopping 60% upside,” the brokerage explained.
Citing Genting as one of its top “buy” picks, Maybank IB Research pointed out that even without the listing of TauRx, its target price of RM9.05 for Genting would already imply a 27% upside.
SKPRES (TP: RM1.76) is our only OUTPERFORM stock for now, with investment merits being its: (i) resilient earnings prospect (at a 2-year NP CAGR of 93%) backed by its on-hand long-term contracts from the topnotch home appliance maker, Dyson as well as (ii) strong Balance Sheet and healthy Operating Cash Flow, which will support its generous Dividend Payout Policy of no less than 50% of PATAMI (translating into decent dividend yield of 2.9%-5.0%). Valuation-wise, it is also trading at an undemanding 10.8x FY17E PER, which is at an unjustified 10% discount from the industry average PER of 12x; all against its superb 2-year NP CAGR of 93% as well as the higher-than-industry (yet sustainable) margins backed by its cost pass through mechanism - Kenanga Research 7 Jan 2016 http://klse.i3investor.com/blogs/kenangaresearch/89346.jsp
Bank Negara international reserves at RM409 bil end-2015
KUALA LUMPUR: Bank Negara Malaysia’s (BNM) saw an increase in its international reserves at end-2015 which rose to RM409.1bil from RM405.4bil at end-2014.
The central bank said on Thursday that in US dollar terms, the forex reserves fell to US$95.3bil from US$115.9bil.
“The reserves level as at Dec 31, 2015 has taken into account the adjustment for foreign exchange revaluation changes,” it said. The ringgit weakened by about 18% against the US dollar in 2015.
BNM said the level of reserves during 2015 remained supported by the current account surplus and inflows of foreign direct investment in an environment of reversal of flows.
“These outflows reflected the reversal of non-resident portfolio investments due to adverse sentiment arising from the moderating growth momentum in a number of major and emerging economies, the uncertainty surrounding commodity prices as well as the possible disorderly market conditions arising from policy adjustments in major economies,” it said.
BNM added that continued direct investment abroad by Malaysian companies and the acquisition of foreign portfolio assets by resident institutional investors during the year also contributed to the outflows.
It pointed out the international reserves were ample to facilitate international transactions.
As at Dec 31, 2015, the reserves were sufficient to finance 8.5 months of retained imports, significantly higher than the three-month international threshold.
BNM also noted the reserves level was also adequate to meet external obligations with a reserves to short-term external debt coverage of 1.1 times.
“It is important to note that not all short-term external debt creates an immediate claim on reserves given the external assets and export earnings of borrowers,” it added.
Exports increase by 6.3pc year-on-year in November: MITI
KUALA LUMPUR: Exports in November rose by an annualised 6.3 per cent to RM67.63 billion, driven by higher demand for manufactured goods.
The International Trade and Industry Ministry said imports expanded by 9.1 per cent to RM57.39 billion while the trade surplus decreased by 6.9 per cent to RM10.23 billion.
"Overall, export performance in January to November 2015 was driven mainly by higher exports of manufactured goods, in particular, electrical and electronic (E&E) products which cushioned the contraction in exports of both agricultural and mining goods, “said MITI.
For November, significant increases in exports of manufactured goods were recorded for manufactures of metal, petroleum products, machinery, appliances and parts, optical and scientific equipment, chemicals and chemical products as well as processed food.
It added that growth in exports of agricultural goods was mainly supported by increased exports of palm oil and palm-based products, by 7.2 per cent (exports of palm oil in increased by 4.3 per cent contributed mainly by higher quantity).
Lower exports of mining goods in November were affected mainly by contraction in exports of LNG by 20.5 per cent caused by lower AUV (average unit value).
Meanwhile, Malaysia's trade strengthened in the first eleven months of 2015 to record a growth of 1.1 per cent to RM1.337 trillion compared with the same period of 2014.
MITI said expansion in trade with China, the US, Asean, European Union (EU), Turkey, India and Taiwan were the main contributors to the increase.
The achievement was also supported by improved export performance recorded since June 2015 which resulted in a cumulative expansion of 1.9 per cent to RM711.65 billion for the period of January to November 2015.
Imports during January to November 2015 was valued at RM625.34 billion compared with RM624.48 billion registered in the same period of 2014 while trade surplus surged by 17.3 per cent to RM86.31 billion.
This may seem like a joke, but it really does make a lot of sense... business sense, horse sense and common sense ~~~~
An old Native American wanted a loan for $500.
The banker pulled out the loan application. "What are you going to do with the money?" he asks the Indian.
"Buy Silver, make jewelry, and sell it," was the response.
"What have you got for collateral?"
"Don't know collateral," replied the Indian
"Well that's something of value that would cover the cost of the loan. "Have you got any vehicles?"
"Yes. 1949 Chevy pickup," replied the Indian
The banker shook his head, "How about livestock?"
"Yes, I have a horse," replied the Indian
"How old is it?" the banker asks.
"Don't know, has no teeth," replies the Indian
Finally the banker decided to make the $500 loan.
Several weeks later the old man was back in the bank. He pulled out a roll of bills, "Here to pay." he said. He then handed the banker the money to pay his loan off.
"What are you going to do with the rest of that money?" the banker asks.
"Put in hogan", replied the Indian
"Why don't you deposit it in my bank," the banker asked.
"Don't know deposit," replied the Indian
"You put the money in our bank and we take care of it for you. Whenever you want to use it, you can withdraw it."
The old Indian leaned across the desk and asks the banker... "What you got for collateral?"
Pfizer hikes U.S. prices for over 100 drugs on January 1
Pfizer Inc (PFE.N), which plans a $160 billion merger with Ireland-based Allergan Plc (AGN.N) to slash its U.S. tax bill, on Jan. 1 raised U.S. prices for more than 100 of its drugs, some by as much as 20 percent, according to statistics compiled by global information services company Wolters Kluwer.
Pfizer confirmed a 9.4 percent increase for heavily advertised pain drug Lyrica, which generated $2.3 billion in 2014 U.S. sales; a 12.9 percent increase for erectile dysfunction drug Viagra, which had 2014 U.S. sales of $1.1 billion; and a 5 percent increase for Ibrance, a novel breast cancer drug launched last year at a list price of $9,850 per month, or $118,200 per year.
Piling and foundation companies ride on construction boom
PILING and foundation companies such as Ikhmas Jaya Group Bhd and Econpile Holdings Bhd started the year with a bang after announcing a slew of contract wins within the first week of the year.
This has happened even as the broader market expectations continue to remain subdued heading into the new year.
Despite announcing further contract wins, their share prices have continued to be stuck in trading range, indicating that the bulls have not been too keen to take prices higher at this point in time although there is a fundamentally strong case to do so.
But notwithstanding the tense external sentiments, piling companies have continued to advance in terms of their future earnings prospects as they will see additions to their orderbooks in the longer run.
Earlier in the week, Ikhmas Jaya received a letter of award to undertake the construction of a RM166.4mil serviced apartments project for Bina Puri Holdings’s property unit Star Effort Sdn Bhd.
For Ikhmas Jaya, AmResearch’s analyst Max Koh says the contract win makes up 51% of its order book replenishment of RM330mil for the financial year 2016 ending Dec 31 compared with RM206mil in the year before.
This contract is expected to boost its outstanding orderbook to about RM280mil.
For Econpile, its unit Econpile (M) Sdn Bhd had been appointed to carry out RM20.3mil piling and sub-structure works from Ahmad Zaki Sdn Bhd.
Koh estimates that with this latest job, Econpile has secured RM236mil worth of jobs for FY16 ending June 30 – making up 74% of his replenishment expectations of RM320mil compared to RM490mil in FY15.
“We assume Econpile’s outstanding order book to amount to about RM620mil, which will support earnings over FY16 till FY17 forecasted,” he says.
Notably, Econpile has a good exposure to the strong construction industry, with a strong tenderbook of around RM1bil.
Both companies, which are operating in the niche area of piling and foundation works, are a proxy to the broader property and construction industry.
AWC gets nearly RM62m plumbing job for KL 118 Tower
KUALA LUMPUR: AWC Bhd has secured a RM61.95mil contract for the plumbing works of the KL 118 Tower Project, which will be a mixed development project.
AWC said on Monday its unit Qudotech Sdn Bhd was awarded the plumbing contract by Samsung C&T Corporation UEM Construction JV Sdn Bhd. The owner of the project is PNB Merdeka Ventures Sdn Bhd.
It said the contract would be on Nov 2, 2015 and completion date by December 2019.
According to AWC, the KL 118 Tower Project is a mixed development project comprising residential, hotel and commercial space. It would be at the existing Stadium Merdeka and Stadium Negara site and once completed, it was expected to be the tallest building in Malaysia at over 500 metres high. - The Star Biz 11 Jan 2016
Moody's cuts Malaysia's rating outlook due to growth risks
Moody's cut Malaysia's sovereign rating outlook to stable from positive on Monday due to the negative impact of changes in the external environment on the Southeast Asian economy's growth.
The ratings agency said the change in outlook reflects a deterioration in Malaysia's growth and external credit metrics due to external pressures over the past year.
It affirmed Malaysia's issuer and senior unsecured bond ratings at A3.
Moody's said the changes in the external environment have reduced government revenues over the period.
"Those environmental changes have also undermined Malaysia's external position, with large capital outflows, a falling current account surplus, sharp exchange rate depreciation and falling reserves," the ratings house said in a report.
Alongside a worsening external environment, material domestic imbalances continue to pose a risk to growth and household debt levels remain high, it added.
Despite progress in relation to fiscal consolidation, Moody's expects Malaysia's public debt burden and debt affordability will see only limited improvement.
On Monday, Malaysia's November industrial production slowed to its weakest pace in 16 months, hurt by weaker global demand and a decline in mining production.
Kim Teck Cheong aims to double revenue by acquiring competitor
KUALA LUMPUR: Kim Teck Cheong Consolidated Bhd (KTC), already one of the largest consumer packaged goods distributors in Sabah and Sarawak, expects to double its revenue with the proposed acquisition of Sibu-based distributor and wholesaler Popular Trading (Borneo) Corp Sdn Bhd.
The company, which made its listing debut last November, told Bursa Malaysia that it had signed a memorandum of understanding (MoU) to acquire 100% equity interest in Popular Trading.
It said the purchase price would be a sum equal to 100% of Popular Trading’s net assets value as at Dec 31, 2015 and a sum equivalent to twice the average net after-tax profit for the financial years ended Dec 31, 2013 to 2015.
According to KTC, Popular Trading is a prominent household name in Sarawak with 48 years of experience in the line of distribution, wholesale trading and food manufacturing covering Sarawak, Sabah and Labuan.
KTC group executive director Dexter Lau said in a press statement that KTC entered the Sarawak market two years ago and the business in the state had grown by a strong double digits.
The proposed acquisition, he said, “will expand our trading business, network, infrastructure and also increase our human resource by three times our present capacity in order to meet with the huge expansion plans we have targetted and planned. We shall further leverage on their human capital and asset, bringing with them a wealth of experience and years of relationship built over the years within their highly influential network.”
KTC shares fell half a sen to close at 44.5 sen on Monday, with 12.73 million shares changing hands.
HeveaBoard Bhd ( Valuation: 1.10, Fundamental: 2.70)'s MD Yoong Hau Chun said the allegations on the investor blog i3investor.com were non-fundamental and frivolous.
According to CIMB Investment Bank ( Valuation: 1.65, Fundamental: 0.55)'s research report issued today, Yoong had explained via a conference call that a civil suit, which had been filed against the company's MD over the non-payment of dividends, was indeed instituted by HeveaWood Industries Sdn Bhd's (HW) minority shareholders against the Yoong family for the non-payment of dividends at HW.
HW is HeveaBoard's largest shareholder with a 27% stake.
HW was not in a position to pay dividends from 2009 to 2012 as HeveaBoard's financials were stretched following the collapse in the particleboard industry, and the High Court had decided in favour of the defendant in the suit.
HeveaBoard's management also said the allegations that its containers held up by Korean customs due to non-conformance to quality standards was "untrue".
On the discrepancy in its inter-company loan, the management said HW had made other inter-company loans to other related parties in addition to HeveaBoard and hence, the amounts would differ. Furthermore, all of HeveaBoard's debts will be repaid by mid-2016, according to management.
On Our Radar – Furniture Manufacturers Riding on the USD Bandwagon
We view the Malaysian furniture industry as a potentially undervalued sector which is poised for re-rating, driven by: (i) their high proportion of export sales, (ii) margin expansion on strengthening USD, (iii) sector-wide capacity expansion, (iv) long-term growth riding on the TPPA, and (v) healthy balance sheets. We peg the sector valuation at an average of 10.6x Fwd. PER, which is at a premium to board makers' average Fwd. PER of 9.5x as the sector shares similar positives (consistent EPS growth, steady margin expansion) but enjoys better fundamentals (higher dividend yields, stronger balance sheet positions). Our valuation is applied to annualised latest quarters' EPS, with adjustments for growth and seasonality. The resulting fair values indicate strong return potential for furniture makers averaging +15%. Among the furniture players, we see above-average return potential for: LATITUD (Fair Value: RM9.55; Total Return: 20%), LIIHEN (FV: RM4.01; TR: 55%), POHUAT (FV: RM2.54, TR: 34%) and SHH (FV: RM3.09, TR: 35%).
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by Fortunebull > 2013-12-03 20:12 | Report Abuse
I3investor most experienced investors, traders, punters gather to exchange their views on current stocks! Beware! Most of their views may not be suitable for those under 90s!