BIMB and HLFG have quite high ROE and reasonable PE. Was cheaper (lower PE) previously. now slightly above PE 8 (based on CY21 NP forecast)

This post has been edited by HereToLearn: Oct 22 2020, 12:24 PM

Why cannot buy banks at PE 8 (from forecasted CY2021 NP)? I mean even if 2021 underperform the forecast by 20%, PE also go to about 10. Still wont be too high.

Good sharing, EPF has been accumulating it for quite sometime

Very true, not so simple. Price can only rise when the sentiment/trend is there (when there are more buyers than sellers). This is a very good method to make quick money, just have to sell it higher to the next buyer.

Buying based on financial indicator when no one else is buying doesnt have this privilege to sell it higher to the next buyer lo. This method will have less emphasis on cap appreciation, but more on div yield.

I think there wont be any surprises from vaccine news, most people already know that first doses of Covid vaccine could be available in late 2020 or early 2021 and could reach all Americans by June 2021 IF politics don’t slow uptake.
https://www.fiercepharma.com/pharma/cdc-wor...e-plan-official
Maybe all Malaysian could be vaccinated by early 2022?

Nevertheless, a very good news to everyone: US gives full approval to antiviral remdesivir to treat Covid-19. We now have a treatment for Covid-19 (Still waiting for the prevention from vaccine)
https://www.nst.com.my/world/world/2020/10/...-treat-covid-19

This post has been edited by HereToLearn: Oct 24 2020, 12:36 AM

Just summarizing the long article for all investors here

PETALING JAYA: Institutional investors are positioning for potential changes in FBM KLCI constituents, with foreign institutional investors going for stocks with potential corporate exercise and thematics; while local retail investors are placing increasing bets on laggards and Covid-19 recovery plays.

Last week
Institutional investors
bought Top Glove Corp Bhd, Supermax Corp Bhd and Hartalega Holdings Bhd
sold Genting Bhd and Genting Malaysia Bhd

Foreign fund
bought PPB Group Bhd, Lotte Chemical Titan Holding Bhd and Supermax
sold Genting, Hartalega and Tenaga Nasional Bhd (TNB)

Retailers
bought Genting, TNB and CIMB
sold Top Glove, Supermax and VS Industry Bhd

Year to date until Oct 16, 2020, the top five casualties of foreign net selling were Public Bank Bhd, TNB, CIMB Group Holdings Bhd, Malayan Banking Bhd and Top Glove.

Also here are some important dates in the near future
Nov 3 - US election, BNM MPC meeting
Nov 6 - Malaysia Budget 2021

China's economy expanded by 4.9% in the third quarter - China's economy continued its rapid rebound last quarter, with the recovery broadening out and becoming less reliant on investment-led stimulus,
https://edition.cnn.com/2020/10/19/investin...ding/index.html

China’s banking shares head for ‘V-shaped turnaround’, to rise 60 per cent - China’s strengthening economic recovery has already spurred the buying of abandoned banking stocks
https://www.scmp.com/business/markets/artic...se-60-cent-cicc

Banks are having their best month in nearly four years - up more than 17% in October
https://www.cnbc.com/2020/10/23/banks-are-h...ut-winners.html

SG banks are also on uptrend since early Oct

XXX
Are these the reasons retailers started buying CIMB? Lets hope bank shares can drop on Monday due to
1. Uncertainty of economic emergency declaration
2. Resurgence of covid cases
So that everyone would be able to collect cheap at the price that they like

https://www.theedgemarkets.com/article/capi...le-big-cap-2020

Based on CY2021 forecast,
Only HLFG, RHB, CIMB and Gen have the single digit PE currently
HLFG, RHB, CIMB - PE 8
Gen - PE 9

Topglov almost has a single digit PE, PE as of CY2021 is still considered low IMO when compared to KLCI avg PE. Calculations are provided below.

CY2021 NP forecast (also it is expected that CY2022 NP will be lower than CY2021)
Topglov - 6632.38 mil
Harta - 1777.68 mil

Market cap as of 25 Oct
Topglov - 71.28 bil (at Rm8.70) Do keep in mind that ESOS will increase NOSH, and subsequently increase market cap and reduce PE
Harta - 59.27 bil (at RM17.32) Do keep in mind that ESOS will increase NOSH, and subsequently increase market cap and reduce PE

PE as of 25 Oct based on CY2021 forecast
Topglov - 10.7
Harta - 33.3

XX
KLCI average PE 17 as of Sept 2020, KLCI highest ever PE is about 23 in 2019 and lowest ever PE is about 11 in 2011

This post has been edited by HereToLearn: Oct 25 2020, 10:43 AM

Queue TG below PE 8 based on forecasted CY2021 NP? So that even if/when the hype is over and you cant sell, it is still cheap and good for long term?
Now ~ PE 10

It hit below PE 8 on Sept 10, anything is possible

This post has been edited by HereToLearn: Oct 26 2020, 09:39 AM

Retailers dumped gloves and bought CIMB, Tenaga and Genting (last week data)

TG now PE is stil higher than Genting and CIMB based on CY2021 forecasted NP

Price per share/Earnings per share
Or
Market cap/Net profit (assuming that there is no share dilution)

https://edition.cnn.com/2020/10/25/us/covid...auci/index.html
We will know whether a vaccine is safe and effective by the end of November, beginning of December," the director of the US National Institute of Allergy and Infectious Diseases said. "The amount of doses that will be available in December will not certainly be enough to vaccinate everybody -- you'll have to wait several months into 2021.

So I m guessing world economy will only start recovering starting in 2021 (except China)

All recovery plays (banks and gentings except PBB) super strong support, almost 0 losses.

Still I think its too early to buy despite a lot of booster coming.
- vaccine news
- 2021Q2 travel restriction lifted
- 2021Q3 theme park reopening
I think should hold horses at least until vaccine news is out

This post has been edited by HereToLearn: Oct 26 2020, 12:46 PM

Maybe banking sector NPL might not be as bad as worried.

https://www.nst.com.my/business/2020/10/635...ce-june-30-2021
For BIMB (lowest PE among highest ROE counters), 98% already repaying loan

https://www.thestar.com.my/business/busines...ayment-aid-plan
For CIMB (KLCI lowest P/B), 85% already repaying loan.

Cant find data for RHB, PBB, MBB

This post has been edited by HereToLearn: Oct 26 2020, 01:24 PM

Burnt money, 100% loss

LOL true. 15% havent start paying.

Smart investors should sell CIMB and buy BIMB

https://themalaysianreserve.com/2020/10/26/...-to-40-of-klci/
KLCI welcomes gloves and sends off gentings. Hope to see gentings back in KLCI in 2022 after ASP stabilization.

https://www.nst.com.my/business/2020/10/632...4-2020-cgs-cimb
NPL to start rising in Q42020, but the front-loaded loan loss provision (LLP) would catalyse a recovery in banks' net profit growth to 14.8 per cent in 2021. Pre-loaded LLP helps to improve earnings in 2021 despite the NPL spike. This explains why some banks have lower forecasted PE than gloves in 2021 despite the NPL spike.

Impaired loan > NPL, so NPL would be smaller than 4.1% at Dec 2021. But taking lets just take NPL 4.1%, almost going back to 2008-2009 NPL%.

This post has been edited by HereToLearn: Oct 26 2020, 02:37 PM

Topglov is actually cheaper than MBB in terms of PE based on CY2021 forecast, so maybe someday before end of 2021, TG might temporarily be largest cap stock in bursa until MBB taking back the throne in 2022 because
1. In CY2022, MBB will be doing better.
2. Div yield of MBB is higher if the dividend payout ratio is maintained after pandemic