Today, market is a bit surprisingly down more than -9points considered that all overseas bourses are up although not much.
Again volume is thin shows that lack of interest in this market currently.

Although today market manages to rebound to before yesterday level, still volume is not convincing enough to show the bull is back.
Until 3.30pm only more than 600mil, not enough to wake up the bull, needs at least more than 1 billion above based on technical aspect with market holds on its current gain. If faded at the end then technically not so good.

This post has been edited by cherroy: May 22 2007, 03:36 PM

As I said before on Transmile, there are still plenty of hidden issues that unknown to the public not as simple as only involved accounting sense.

Personally, until it is clearing up the issues and become 'cleaner', I won't touch the share, too risky for personal liking, you don't know what will happen next.

In the market there are still others that worth to be investing, if others already going higher then stay out and wait.

China market is on 'crazy' bull currently and the bubble keep on inflating, if not cooling down, a big burst is imminent.
In reality, finance wise, if China market burst, it only has minimal real direct impact on US stock market since China market is not freely trade and open up to the foreigners, also its scale is too small to make an impact on US.
The impact will be on sentiment side and psychology. The Feb 28 plunge is due to psychology side and which US stock market take an accuse to take profit also which had long run up without much meaningful correction.

But locally, KLSE, it might take a big hit if China market burst since KLSE currently is not cheap anymore, some index linked counters are trading at forward PERx of more than 20 which is difficult to justify except through significant earning improvement or being taken private at a premium. Currently, it is the massive liquidity and momemtum that drive the market rather than people buying stock because stock is cheap.
Current scenario is like 'too much money chasing too little investment option'.

Personally think that, for those want to sell their holding of Maybulk then use the cash to buy other 'chapalang' stock, better keep your holding. If really want to take profit then keep the cash and wait for the downturn, don't jump back straight away especially into some 'chapalang' one. Anyway, just my personal think.

The worldwide bourses has risen quite awhile and probably is due to some correction in near term.

China Shanghai CI set another new high today, how scary it is.



This post has been edited by cherroy: May 23 2007, 02:06 PM

Almost no (or 99%) analysts dare to say the market is going to crash or predict market will be bearish.
Imagine he/she makes this kind of call then all the company clients redeem the mutual fund, retailers dare not to touch the stock market, instituitional players stay sideline, then probably his/her job goes as well since no business already.

Even when Nasdaq hit 5000 time, still more than 50% of the analysts put a 'buy' rating on those dotcom company.
Even market is high, the most analysts will do is to put on 'hold' rating or 'underpeform', seldom got 'sell' rating, only a handful normally on those sky-rocket share.

I find a bit amusing that some analysts said this year target is 1360-1400. Now the index already or almost in this level, still he/she said the market is bullish ahead and can look for opportunties to go in but isn't it when target is reached, don't buy anymore and take some profit off the table and play more safe? Sounds a bit contrading.

From my long term experience, a lot of analysts (but not all) normally is a 'double head' snake, they tend to follow the trend and said according to it, (to be more safe). When market up, then say market is bullish, blar blar reason even gov servant pay rise also can justify the stock market rise.

But when market crash time, said future uncertain, risky, then give plenty of reason, if the gov servant pay rise come out when market is bearish then analysts will say it will widen the budget deficit, doesn't necessary good for the stock market which means less gov expenditure on project, then give some reason again.

When market is bearish, index at 600-800, not many analysts making 'buy' call on those blue chip like Maxis, IOIcorp, KLK, even MISC. Now when market is good time, then say this is good that is good. All looks bright and good.

Just to share my experience, my intention is not to criticie but just to remind people not to blindly follow. Analysts is making recommendation only, doesn't mean they are surely correct, otherwise, those analysts already become rich like Warren Buffett already.

It is not a day or 2 if it is really burst. If burst it may take several months of downturn before stock become really cheap and also it can take years before market recover. It is not few day frenzy. Don't need to 'sapu' otherwise millions of bullet also not enough, you have the time to buy little by little over time if the bubble burst and the effect spread to regional bourses.

Even dotcom bubble burst time, it still takes more than half a year for Nasdaq composite to drop from 5000 to less than 2000. Just like 1997 financial crisis, it takes months before KLSE CI to drop from 1200 to 200 points. In between, there are still got technical rebound, see saw trading before it reach bottom, not straight line down.

No doubt it is on the bubble state but when stock market turn bearish time, it is not a few day frenzy. It takes time for people to totally lose hope and confident or over bullishnes.

People always make mistake buying too soon in a down market and sell too soon when market bullish time. Patient is important. Even tomorrow China market burst, KLSE the most will drop how many points? 30 points? 50 points? even drop 100 points still at 1200 level, still expensive compared to beginning of the year, not cheap yet.

It depends on market condition, but right now, IPO premium is not impressive as last time. Normally new IPO come with one day frenzy only, up for the first day then faded away like Ogawa, Help etc.

For the theory of selling which batch mentioned, it is basically still the same, just you are 'fooling' or artifically 'cheating' yourself that you are making money. In the end of the day, your total return/loss still the same, nothing change.

As said, you need to look on your average purchase price or cost. It is the basic accounting, and also applied to those fund managers when calculating their return rate which is more fair and practical way to calculate.

For IPO application, it is through balloting so if you are lucky then can get 1 or 2 lot, if not can't get totally, somehow like lucky draw since normally it will get overly subscribed.

Usually, on the first day of listing, the share will have at least some premium on it in order to look good on listing, but now not much about 10-20% maximum. (Last time 100-200% easily)
People talk about buying through IPO not when the first day listing like HELP and Ogawa, price is already up when listing so can't make any money anymore. This kind of share normally faded away on second day onwards and slowly drift lower since fund managers won't buy into this kind of share (low liquidity, small company) unless syndicate behind want to 'goreng' it. But think ahead, people want to 'goreng' it for you to make money? The new listing one, syndicate has no chance to 'collect' share at low price so the most is day trade or short term trade to make money through some differential price.

For those good, big company listing, it is a bit different since if prospect is good for the company, fund will come in to buy it for long term but sadly to say, recently or recent few years there are only a few of those kind of share listing. 80% of the new listing company is either be small scale businesses or Mesdaq type one. Ogawa or Help just isn't fund type of investment target.

There was a history of under-subscribed, famously known one, would be Time Dot Com, issued at Rm3.30, hugely undersubscribe (about 50% only), and listing time, below IPO price at about RM2.+, now only a few ten cents.

When a IPO overly subscribed, normally listing time will have at least some premium but if not fully subsbcribe then surely will open below IPO price.

For Reit listing, I suggest not buying through IPO since normally it will open below IPO price as Reit is not popular in Malaysia, not many people understand how it works, it is not as same as share but alike share. Trading Reit is about its yield and asset worth.

For ESOS, it is for company employee, which its price is normally calculated with a bit discount from the market average price, it is not mean for public.

Another point on IPO, normally instituitional price is a bit higher than retails price, not the other way.

This post has been edited by cherroy: May 26 2007, 02:20 PM

Yup, volume extremely thin, may be because tonight most European bourses and US stock market is closed for Monday.

Market up little with thin volume, technically not so good.

China market is going crazy again, up more than 60 points, another new high 4250, almost everyday up more than 1% with no pull back at all.

Btw, Transmile being suspended today, may be got new development on the accounting issue?

Transmile will be suspended until Thursday which is pending annoucement for the audit account issue. 4 days, kind of quite long.

Today is the lowest volume traded recorded for this year with only 6 hundred + millions shares. Other than that, nothing to talk about today market.

Good luck to you.

But remember 'goreng' basic theory
Buy on rumour, sell on new although got exception, hope this is an exception.

The ranhill news is really good for the company but whether it will materialise or not, another story.

Always earning is not enough , it must earn sufficiently to justify its share price aka simplest way is PE ratio although there are more complex way to evaluate.

But always remember, it is the forward or future PE (earning expectation) that will drive the share price not historical or past earning result. Having said that, histocial data may or can be used as reference how well the company performs or manage it business, the most important in stock market is about future aka 1-2 years ahead that matter.

Do you expect a market that already run up 30-40% still cheap? unless economy is running at full steam with 9-10% GDP growth, otherwise company earning won't able to match the pace the share price with increment of more than 30% per annum in order to stay at 'cheap' level.
The exception is for plantation stock that CPO is sky-rocket which will make the plantation earning improvement of more than 50% which has reflected into the plantation stock price like IOIcorp and KLK which its share had already up more than 50%.

Historically, over long term (20-30 years), stock market average return is about 10-18% per annum.

If PE is high then either the market is fully value or already expensive, you already answer your own question.

For sure, the market isn't cheap anymore but whether it is expensive or not, it depends on how well the economy will be in the next 1-2 year

Watch out today China market.
FKLI already anticipated a down today

It depends on individual risk appetide. Currently risk and reward ratio is not attractive for me personally. For example, another up potential 10%, drop potential 20-30%.

For long term investor that has hold the share for the last few year, continue holding still doing no harm to them since already making quite a lot even a drop of 30% still they are making money (more applicable for some good stock) also if holding some high divdend yield stock, the yield + capital appreciation surpass the interest of FD many many times.

If cannot afford to lose 20-30% or doesn't have plenty of holding power then not wise to invest aggressively in stock market currently, volatility will be high in the near term. Market hasn't got some meaningful correction apart from Feb28 which continously up until now. Be prepared some corrrection in near future.

I think this is one of the main problem or overly optimistic that cause market going crazy high. No doubt Olympics games will boost the domestic economy and also construction industry but whatever the reason it is still can't justify current over-valued China stock market.

Almost all said the market won't go down because of Olympic game, sound not quite logical, if stock price is expensive or over-priced then surely it will correct itself soon or later, just matter of time, it is almost identical excuse with 1997 Commonwealth game in Malaysia.

PS: History always prove that a real bottom only form when people lose hope on stock and less people want to be involved, that is the time stock is really cheap. With people still optimistic, it just means less people want to dump their stock so can't have 'cheap' 'cheap' price to grab.


This post has been edited by cherroy: May 30 2007, 03:55 PM

1Q GDP growth.

Although gov projected of a growth of 6% for the full year but with poor IPI and poor car sales as well as export doesn't grow as expected, a lot of economist projected 1Q will be in the region of 4.5-5.5%.

The news is confirmed or not? if really true, then prepare another round of limit down. How come CEO can on leave at this time? Sound like plenty of issues behind. SC should be at least taking some action on it. Recently, KLSE is full of accounting irregularity company, Transmile, Wimem, Nscom director issue, etc, not a healthy sign especially Transmile which is a foreign investor target, also as index linked (though not as high weight as others still it is about top 30-40).

Currently Transmile issue is more important than GDP issue since if the irregularity is high then it might shatter a lot of investors confident in this market.

For macro-economic issue, most people already expected a much slower growth ahead. Also with more and more big and good company being privatised, macro-economic issue is not as important as last time, since the real economy of Malaysia is no longer best being represented by KLSE performance rather it is the individual company peformance and earning is more important to drive the share price. Look at TM, at 900+ point, TM's price is about 9.10-10.00, now KLSE CI is at 1300+, its share is at 10+ only.

With low volume and low activities in the local market, it much depends how the US closed tonight also tomorrow regional market performance. External factor and Transmile issue are current 2 big mover of the market.