FBM SmallCap Index

Many might have got jolted from yesterday selldown. Majority of the selldown happened on small cap stocks. What exactly small cap stock is and particularly in relation to Bursa's SmallCap Index? The following are some references.

Closing data for 28.04.2014

SmallCap Index has risen some 49% from the low of 11,800 points on 03.05.2013, the day before GE13, to the high of 17,930 points on 23.04.2014. In the nutshell, some correction is quite natural. Actually, it is quite normal for SmallCap Index to swing  +100 points from previous close. However, yesterday's drop was significant as the index dropped 241 points which cross the 200 point mark since 03.03.2014 when the index had dropped 220 points. What added to the pain was that a day earlier 28.04.2014 the SmallCap Index had dropped 140 points. All in for 2 consecutive days, the total point dropped was 381 points.

The list above is the stocks component that constitute the SmallCap Index. There are 148 of them.

Some interest information on main KLCI 30 Index, Mid 70 Index, Top 100 Index, EMAS Index, SmallCap Index as well as Fledgling Index.

 

The other day, I asked my friend whether he knows how many stocks component stock are there in KLCI Index. He thought it was still constitute of 100 stocks!

Truth be said, we seldom bother about the Indexes other than the main KLCI Index. Even then, KLCI Index is not so significant to ordinary folks nowadays. It could be due to the fact that the main KLCI Index is now only constitutes of 30 stocks rather than 100 stocks as previously was. This is less representative to the broader market as market barometer. After all, retail players seldom play heavy weight stocks.

Let start small with this one

Let start small with this one. Like a child growing up slowly to become a successful adult later.

I foresee the dividend yield will be a decent one for FYE2014 and may well match the dividend yield of Presbhd. PE wise, lets the experts tell you. I see values in this stock in the long run.

More on Hovid in my next post particularly my experience with the older version of Hovid.

Its price closed at RM0.370 on 24.04.2014.

The time has come

Everything has its first time and everything has its end too. But most important, a new beginning has been chartered for more better things to come. With that, trust him we must. We stand-by to support him.

The staffs organised a farewell party in his honour last weekend. It was a very emotional day not only for the man himself but also for the staffs. The feeling was so genuine that I can see through their eyes and actions how much they loved him as their boss, mentor and leader. He has given many opportunities to his staffs and many of them are millionaire now simply because he believes everyone has to grow together. How could you describe a man that willing to nurture his personal driver to become one of his right-hand man helping to run the company. How many will there be in this part of the world that you could find such a boss. He has done his best and he has meticulously ensure the succession plans are in place. The staffs will going to miss the man even more come 01.05.2014.

I give you a bow with respect, Kee Sin.

 

To you, it is Bye-bye SPSetia, Hello Ecoworld.

Its price (EcoWorld) RM5.35 on 23.04.2014.

Its price (SpSetia) RM2.93 on 23.04.2014.

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News report:

Liew's 2.76% stake in S P Setia traded off-market at RM3.95 per share.

PETALING JAYA: A block of 67.79 million S P Setia Bhd shares, believed to be owned by outgoing president and chief executive officer (CEO) Tan Sri Liew Kee Sin (pic), was transacted yesterday, finally rendering Liew with zero shares in the company.

The disposal coincides with Liew’s upcoming last day in S P Setia, which will be on April 30.
Stock market data showed the 2.76% stake in the property development company was traded off-market at RM3.95 a share. S P Setia ended the day one sen lower at RM2.91 on a value of 288,000 shares.

Last month, Liew had exercised his option to sell the remaining 67.79 million shares he held in the company to Permodalan Nasional Bhd (PNB).

In a filing with Bursa Malaysia on March 21, S P Setia said it had received a notice from Liew about exercising the shares under the put option dated Jan 20, 2012, requiring PNB to purchase from him 67.8 million shares, or three-sevenths of the shares he had held then.

S P Setia’s current deputy president and chief operating officer Datuk Voon Tin Yow will assume the post of acting president and CEO from May 1, 2014 to April 20, 2015, upon Liew’s exit.
There has been talk that Liew’s departure from S P Setia could pave the way for PNB, which owns a 64.13% stake in the company, to inject more property assets into S P Setia.

These would include PNB’s property assets held under Sime Darby Bhd and I&P Group Sdn Bhd.
PNB is also said to be looking for a successor to drive S P Setia forward.

There has also been much talk about Liew joining his son, Tian Xiong, who owns the majority shares in Eco World Development Group Bhd. Liew has so far kept mum on the subject.

Eco World is a relatively new property company that is headed by former S P Setia lieutenants.
Liew will remain chairman of Battersea Project Holding Co Ltd (BPHC) until September 2015. The £8bil (RM43.96bil) Battersea project is slated for completion in 2022.

BPHC is controlled by S P Setia and Sime Darby Bhd, with a 40% stake each, and the Employees Provident Fund with 20%.

Liew is also the managing director of Qinzhou Development (M) Consortium Sdn Bhd, a Sino-foreign joint-venture company to develop the China-Malaysia Qinzhou Industrial Park.

For the first quarter to Jan 31, 2014, S P Setia’s net profit was up 3.85% to RM96.78mil on the back of a 1.82% decrease in revenue to RM721.56mil. For the four months ended Feb 28, 2014, S P Setia’s total group sales stood at RM1.83bil. It currently has total unbilled sales of RM9.64bil

- The Star April 23, 2014

http://www.thestar.com.my/Business/Business-News/2014/04/23/Liews-block-of-shares-crossed-The-276-stake-in-S-P-Setia-traded-offmarket-at-RM395-per-share/

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S P Setia confirms Liew transferred 67.79m shares to PNB

KUALA LUMPUR: S P Setia Bhd has confirmed its former president and chief executive officer (CEO) Tan Sri Liew Kee Sin had disposed of his 67.79 million shares in the property company.

SP Setia said on Wednesday Liew had transferred the shares, representing a 2.75% stake, to Permodalan Nasional Bhd on Tuesday.

The transfer of the shares at RM3.95 each was pursuant to the exercise of three seventh of the S P Setia shares under the put option in the management agreement dated Jan 20, 2012.

StarBiz reported the block of shares was transferred at RM3.95 at midday on Tuesday, which was RM1.03 above the market price of RM2.92 then.

- The Star April 23, 2014

http://www.thestar.com.my/Business/Business-News/2014/04/23/SP-Setia-confirms-Liew-transferred-67pt79m-shares-to-PNB/

Never lose sight on property investment

We should never lose sight on property investment. While stock market could give you instant gratification, but property investment could give you long term security and satisfaction. It was said that property values will doubled every 7 years or so. I would say there are some true in it.

 

Stock market is just an entertainment and hobby to me but property investment is the serious making money machine. I have to treat stock market as an entertainment and hobby so that I could take it easy and casual. Too serious in it will affect my body health.

 

Property has better certainty, well maybe not 100%, to make money in the long term. Say 10 years cycle. On the other hand, stock market gives no guarantee even if you think of long term. Sound contradicting isn't it coming from someone who has been advocating long term investment in stock market. Let me explain. How many stock in Bursa that can withstand the test of time? Not many. I could only think of Public Bank, Genting and probably a few more. It is not a problem to keep these stocks for another generation and you will see your investment grows even if you closed one eye. Even if you closed two eyes, it is also not a problem. I have heard story of parents handed over these stocks to their children after the parents passed on. But for the rest of other stocks, more efforts to understand them are required.

 

But how many of us could afford to invest heavily in stocks like Genting and Public Bank and for long term of 10 years on top of that? I believe very very few would happily do it. Even for people like me coming from the dinosaur era would find it difficult to do it as well.

 

What I am trying to drive at is that long term view in stock market should be looked at something that have many stages or definitions, atleast to me, unlike property investment. For young and promising companies, one should take the long term view as 3 years. One has to re-evaluate the company after 3-4 years. Many things could have changed after 3 years. Take for example, the management team could have changed, the attractiveness of the business they are in could have changed, political equation could have changed, the business trends as well as business competition. On this investment principle of mine, I will re-evaluate Presbhd at end of this year when the 3-years cycle completes. If I decided to sell, I will sell all and that's my weakness. But by looking at the rates things are happening with company, I might take my bet for another 3-years cycle.

To side track a bit. Few of us decided to pool our money to start a stock portfolio. Each of us fork out RM75,000. With one pulled out recently, there are only 3 of us now. Thus, we have now a total fund of RM225,000 to start off the portfolio. I named this portfolio as PZJA14M04. I have just made one stock purchase recently and will discuss about it in due course. We intend to keep this portfolio up until end of next year even though I am mindful of 2015. Anyway, there are still plenty of gems to look at. Let's see how we fare by then. Will talk about this later.

I swear will never touch this stock again

Today I had my regular golf outing with my regular golf buddies. One of them, J, was not his usual self of the talkative type which we all so used to. Without need for me to guess further, it must be something to do with stock market. But I didn't crack the topic until I noticed he was about to warm up for the topic. I try not to rub salt onto the wound. I know that all of them had played the much talked about stock in town. Yes. Datasonic. My favourite old flame story.

 

 

"I swear will never touch this stock again !" was his immediate response the moment I touched on the topic. Apparently he had sold all his stocks when the share price hit the second limit down on the 15.4.2014. What added to the pain was that he had bought again when the share price hit limit down for the first time on 04.04.2014. But when the 2nd limit down came, he panicked and sold everything. He held quite substantial amount of shares before this. I realised that he was quite badly hit.

 

On the other hand, M who is quite a conservative investor has only invested 10,000 shares. He had sold half of his holdings. In fact, M did called me to solicit my advice whether to sell or keep. I told him that if he is not in need of those money then just do nothing for the time being. I supposed he only took 50% of my advice.

 

The whole datasonic saga had prompted me to think whether the general behaviour of investors are alike. Does it matters whether you are a wealthy businessman, savvy investor, conservation investor or simply a retail player, are they all have the same behaviour when confronting such an incident in stock market? My friends case tells me they are.

 

So, if you have sold your stock before it re-bounced during the last 2 days, perhaps you ought to ask yourself these questions:-

i) "Will I sell the stock if the stock is only constitute 20% of my total portfolio?"

ii) "If I stand firm to my original belief that the company's fundamental has not changed despite all the rumours, will I still sell?"

iii) "Have I been influenced by the rumours?"

iv) "Will I sell if I have bought this stock much earlier at much lower price?"

 

I have no specific answer for you to the above questions simply because each of us have different investment strategy and plan as well as tolerance profile. For example, some may think 20% profit is hell of a big thing while some may think 50% profit is nothing. Some look for short term and some look for long term. Some can take 30% correction and some could not even take 10% correction. Some have limited fund to invest and some have big portfolio to spread over. As for me, i have not sell but bought-in additional approx. 20% units at around RM3.70 on 07.04.2014, the next trading day after the first limit down on 04.04.2014.

 

Food for thought. Is the strategy of sell now and buy back later when price is lower is a good strategy? But how many of us can attest that one could confidently buy when the share price dropped lower? How low is lower will always a question in our mind, don't you agree? Chances are, most of us will have difficulty to decide when to buy back until we missed the re-bounce. But one thing for sure, most of us will confidently just buy when the price went higher.

I made the following comment a month ago and I should reproduced here to remind ourselves - Now my fear is that the new found magic stock has gives the false sense to those new in the market to think that it is so easy to make money in the stock market in quick time. One the other hand, there are people whom have invested for long term, only able to reap the fruit because of their persistent patience and perseverance.

Its price closed at RM3.62 on 18.04.2014.

News report:-

Datasonic bags two contracts from Home Ministry to supply MyKad

April 18, 2014
Datasonic Group Bhd's wholly-owned unit, Datasonic Technologies Sdn Bhd (DTSB), has accepted letters of awards from the Home Ministry for the supply of new raw MyKad with 100% polycarbonate material and new security features.

In a filing to Bursa Malaysia, Datasonic said the first job, worth RM72 million, was for the supply of four million new raw MyKad to the National Registration Department (NRD) for a period of six months from January 1 to June 30, 2014.

Datasonic's second contract was for the supply of additional 10 million new raw MyKad together with 10 million consumables to the NRD, a job worth RM220.20 million for a period of two years from July 1,2014 to June 30, 2016.

 

DTSB was also required to supply printing systems and information technology equipment valued at RM16.89 million.


Datasonic said the contract were expected to contribute positively towards the future earnings and net assets per share of the group for the financial year ending March 31, 2015. – Bernama

Why must they do that

When UMA failed to do its job, media was used to do the trick. The exchange is to regulate for fair and orderly market but who is to regulate them? If they know that it has been manipulated, then why still allow for the listing of the call warrant. If the main share is already deemed too explosive and manipulative, don't they know that the call warrant will further fuel the situation? The birth of the call warrant had prompted the company management to quickly come out to deny their involvement. They already smell some sinister acts has been played by someone but little did the management knows the worst has yet to come - using the media carrying such a news with an unfair news title without confirmed answer. The media is just speculating and trying to seal people's fate at the expense of people's misery.

This news article itself is speculation at best or manipulation at worst.

I was asked whether I have sell my holding. My answer is no. Why I did not sell is because 1) no fundamental change to the company, atleast from official channel, except that the share price had risen quite substantially. 2) To sell when the company fundamental has not changed is not my investment strategy despite there is panic selling in the market. 3) The strategy to sell first and buy back later is not how I advocate value investing principle. Yes. The paper gain has reduced substantially but if things are viewed at the longer horizon, this panic selling is just a blip along the prosperous journey.

 

Having said that, one should regularly review his/her investment plan and tolerance profile. If one has limited investment fund, one would get a rude shock when confronting with such a situation and naturally panic will set in. Thus, one must look at the broader picture. Buy at time when things are less excited and be vigilant when everyone gets excited. What I mean by vigilant here is not necessary you should sell or buy but to take stock of the situation cognisance with your investment plan and tolerance profile.

I only have 10 grands to invest

I had an interesting conversation with my friend's young son over the last weekend. He asked me what to invest. I told him to buy a property when he is still young. He said it is out of question at the moment. He just started to work not too long. Then I told him to save enough and prepare to buy property as soon as he could afford it. He complained this is boring, not that save money itself is not important but the amount he could manage to save every month is so paltry that it just doesn't motivate him. It is a plausible reason by a 20-plus young man in view of current cost of living environment.

 

He shyly told me that he has 10 grands in his fixed deposit account and he wanted to maximise the returns. He wanted to invest in the stock market. The conversation goes something like this:-

 

Boy : UncleZ, do you have any good shares to recommend?

UncleZ : No need any recommendation. Now the stock market is so positive. Chances are, any stock you pick will go up.

 

Boy : My friends said the same thing too. They told me they had made many rounds of pocket money. But they got burnt by Dsonic recently. Now I am a bit sceptical.  Any advice from you, UncleZ?

 

UncleZ : Did you ask them why they got burnt in the first place?

Boy : They quickly cut loss when the share dropped so drastically.

 

UncleZ : That's the problem. Anyway, before I tell you what to invest, tell me your expectation of capital returns?

 

Boy : I hope could double my capital. My 10 grands become 20 grands.

 

UncleZ : That is 100% ! How long would you like it to happen?

 

Boy : Maybe in half a year's time. oh no, it would be nice in 3 months.

 

UncleZ : Young man, why don't you look at it this way. Bank interest for FD is 3% - 4% per year. So, your investment in stock market should give you returns higher than that in FD. It has to be. Because of higher risk in stock market, the returns must be 10% at the minimum. So,  why not take 10% as a start instead of 100%.

 

Boy : What? 10% only? that means only 1 grand profit in a year's time? That doesn't sound interesting, UncleZ.

 

UncleZ : You have to manage your expectation mindset first before you put your foot into the stock market. It is a jungle out there. A merciless one on top of that.

 

Boy : I heard people make money by just making few phone calls a day. Few hundreds, some few thousands a day easily.

 

UncleZ : True. It is possible. But you are not them. In fact, probably you won't hear when they are making losses. You only hear when they are making profits. Look young man, of course making 10% from stock market is no brainer. You should target to make 100% profit but with a different mindset. Your mindset must be that of long term view. It may takes you 2 years to realise the 100% profit. If you are good in this game, 100% profit in 1 year is possible. If you managed to get 100% profit in half a year's time, that's bonus!

 

But to set a expectation of 100% profit within few months right from the start is dangerous. You could not manage your emotion if your have such expectation. Greed will take over you. Greed is emotion.

 

Boy : What shares can I buy with just 10 grands? Presbhd is already close to 4. I only can buy 2.5 lots the most. With just 2.5 lots, I cannot earn much even if the share price fly.

 

UncleZ : You are right and wrong. Right is that just 2.5 lots won't make a lot of money for you. Wrong is that if it fly, you still good gain in percentage term. The bottom line is, you are still making money and not losing money.

 

Boy : I never thought of that. I am thinking to buy cheap shares because it has higher chance to increase by 100% or 200%.

 

UncleZ : There is no such thing as cheap stock. The stock market would not readily wait for you to pick up the cheap stock.  There is only affordable stock but not necessary cheap. For example, a 50 cents stock is not necessary cheap. In fact, it may be more expensive than a RM5.00 stock in valuation terms. But 50 cents stock is certainly considered an affordable stock, never mind whether it is expensive or cheap. Speculators do not differentiate that anyway.

 

Boy : My brain started to jam already. Any affordable shares to play, oh no, to invest?

 

UncleZ : Invest in this one. It is only 34 cents. It fits your current financial situation for investment. Keep for 2 years or atleast a year. My only worry is, along the way, you may tempted to exit because there will always be temptation of greener pasture over the other side. But don't get distracted. Take this as your first investment training ground. Investment skill is not learnt over night. Anyway, your 10 grands won't get you anywhere if you hop in and out everywhere.

Boy : Alright. Thank you so much. I have one question. DSonic still can buy?

 

UncleZ : Nahhh..... Not for you. You sure will hop in and hop out the moment the price recovers. You may make little bit money here and there but that is all you will get. No point.

 

The above is more or less our conversation on stock market. Admittedly, the stock that I mentioned above is not exciting at the moment but I see values in it in the long run. The company's net gearing is in nett cash position. ROI is 13%. Its long term prospect remains intact and the company is also aggressively looking for new overseas market opportunities. This stock is suitable for those who has the similar financial situation like my friend's son. I made my very first RM50k through this way when I started off with my one-and-only capital of just RM13,500 many many years ago. Along the way I rolled it using the same principle and before I made my first 100k in two and half years. I could not afford to speculate stocks every other days because I just don't have the luck.

Good Luck.

OCK - the oldman comes knocking Part 3

Today 09.04.2014 OCK hit another high note. Closed at all-time high of RM1.42, up 4 cents from the previous day close and 2 cents short of reclaiming its all-time intraday high of RM1.44 recorded on 08.04.2014. OCK was actively traded since 11.03.2014 with daily turnover volume was above two millions since then.

 

Some claimed that the stock has joined the group of speculative stocks. I offer a different view. All stocks are speculative in nature. It depends on the news flow which can be either authentic news or the rumour news. Some may attract less attention and others may attract excessive attention. Any authentic news could have been leaked long before it becomes public and someone could have taken advantage of it and speculate the stock. On the other hand, the rumour news, as the words implied, a news that has yet to be authentic will attract its own believers. Either way, people will speculate the stock upon hearing any type of news.

 

What about those stocks that do not have news flow? I think nobody will be interested to invest in such a stock. No news flow means the listed company is not doing their job. It is either the company is not bothered about its own profile or the company has no interesting business preposition to excite the market. I, for one, would not be interested to invest in such company.

Back to the observation of increased of daily volume turnover since 11.03.2014. This stock was not actively traded prior to 11.03.2014 and it even has the nickname of oldman stock. Could it be just pure speculation play on the stock without any real development coming from the company? Everything happens for a reason.

 

Its price closed at all-time high of RM1.42 on 09.04.2014.

When You Believe

Let's wish him all the best for his new beginning comes May 2014.

 

After it was hit by UMA two and half months ago, it has recovered and come back stronger and more determined. No amount of tricks or deceptions can stop the rising of a true fighter and genuine entrepreneur.

 

Is it two and half months is too long to keep since it was hit by UMA? Only the faithful and long term investor will keep, and certainly when you believe this man will bring the company to new heights. This will, in return, surely be reflected in the company's stock price. Mark my words.

A New Language of Eco Development is Beginning.

When you believe

http://www.youtube.com/watch?v=DyoPZQ-1ZxU

Its price closed at all-time high RM5.19 on 8.04.2014.

After A Storm Comes A Calm

After A Storm Comes A Calm

 



 

http://www.youtube.com/watch?v=n7yWWNHMVao

Rewinding the old records

Today (31.03.2014) is last trading day for the month of March 2014. Nothing new to say today. It is just for my own reference.

 

OCK, the oldman comes knocking, nearly breaks down the door today. It recorded another all-time intraday high at RM1.29 before it closed at RM1.25. Up with an impressive 9 cents for the day.

 

   

 

 

DSonic, my old flame companion is ever as hot and eloquent. It also recorded another all-time intraday high at RM4.52. Today it closed at RM4.47, up 32 cents. DSonic also claimed the second spot on the Top Gainers chart. The top spot was taken by Takaful. To put things in perspective, Takaful has RM1.9 billion market capitalisation whereas DSonic has RM3.0 billion market capitalisation.

 

For the sake of rewinding the old records, RM4.52 is actually RM22.60 before the split exercise. This is very nostalgic journey for those who has been following DSonic since September last year. It is indeed fun when talk about comparing the prices before and after the split exercise.

How many of us could able to time our stock purchase to catch DSonic before the price surged today? Very few could, but majority of us could not. Therefore, stay focus, invest for long term. This is especially so if you have limited and small capital. Yes I know, it sounds unorthodox. Think about it.

The other day, I explored another stock with my close associate. As expected, he is not so keen. Most important to him now is the stock must be a strong performing stock. How he knows that particular stock is a strong performing stock is something puzzled me. Of course, he claimed to have tips on that particular stock. He prefers to put aside long term stock for the moment. I wish him luck though. And I believe many of us may be thinking the same. Anyhow, do enjoy. The party has just begun.

 

Its price (OCK) closed at RM1.25 on 31.03.2014.

Its price (DSonic) closed at RM4.47 on 31.03.2014.