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 Q&A, General question on stock market

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plumberly
post Nov 8 2012, 03:04 PM

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What are the criteria used in splitting listed companies into tier 1 and tier 2 groups ?

Market value ?

Years in successful operation ?

??

Overall performance of our tier 2 companies ? Can consider or better stay with tier 1 ?

Many thanks.

Many thanks.
plumberly
post Jan 8 2013, 06:48 PM

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In the past, my only updates from the companies I bought some shares in were via the annual reports.

Like to know how do companies inform the shareholders and public on their quarterly results.

Via KLSE website, newspapers or company's website ?

Understand that a better than expected earning or dividend will naik the price.

Thanks.
plumberly
post Jan 8 2013, 07:59 PM

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QUOTE(gark @ Jan 8 2013, 07:33 PM)
Via Bursa website under announcements, it is the fastest result posting, keeps updating every 10 mins or so for the whole day.

Newspaper can be 1-2 days late and company website up to 1-2 weeks later. Annual report up to 1 year late ... tongue.gif

You cannot be faster than insider... before the result is made public you can see insider already start buying or throwing... so no point trying to chase/dump when result announced. You can rarely profit in this unless the counter has low interest/liquidity...
*
gark,

Noted and thanks.

Was trying to see a link between P increases with quarterly annoucements.

Cheerio.
plumberly
post Jan 9 2013, 09:27 AM

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QUOTE(gark @ Jan 8 2013, 08:22 PM)
Of course better announcement will lead to better prices and vice versa. The trick is not to see Q on Q as most business have fluctuations. You need to see the overall picture and future prospects. Investing in equity is not about looking at past performance but making a judgement on the future growth performance. A stock can keep on going up for ages and then hit a speed bump and then diminish. Also the market is not rational, good stock can be under priced and bad stocks can be over priced. The market has it's own sentiments and emotions. Never let those get in the way in your investments.

Basically you need to look at future prospects and researching past performance can never tell the picture accurately...
*
gark,

Noted and thanks.

Will add another criterion (future growth) to my list of parameters to assess a stock before buying.

Cheerio.

plumberly
post Jan 9 2013, 02:50 PM

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Noted in Bursa website the following on EPF & PPB:
Attached Image


Why sell and then buy the next day ?

The prices on the 2 days were 12.4 and 12.5. No margin in there to play with.

Some pocket money for the reminsers for the selling & buying ? Just kidding.

Thanks.
plumberly
post Jan 9 2013, 05:05 PM

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QUOTE(rayng18 @ Jan 9 2013, 04:07 PM)
EPF is considered Institutional clients and nowadays brokerage is fully negotiable and if you buy yesterday and sell today doesnt mean that they will not make money, they will look at the overall pic. they might have bought at a much cheaper price a week or a month ago.
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rayng18,

Noted and thanks.

I can see the gain if they bought it at a lower price earlier and then selling them on 3 Jan. I am still at a lost why did they buy some more the next day when the price was higher.

Thinking aloud, maybe they sold more than intended and have to buy some the next day to meet the target ? Ha.

I will not lose night over this minor item. Asking as it is illogical and I thought I may learn something common people do not know of.


Cheerio.
plumberly
post Jan 9 2013, 07:50 PM

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felixmask & gark,

Thanks.

Had a look in the Edge. Surprised that EPF is doing what Edge has reported especially for a govt body with our retirement $$$. Good and bad - improving the market but only artificially. May burst at the wrong time.

Have been looking at SPG and wonder why does EPF invest in some companies which have been performing badly over the past 10 years. I thought their task is to grow our money for retirement. I know the govt can pull chains in EPF in the direction the govt wants. My take is, about 1/3 of the companies EPF has invested in KLSE should be stopped (so black and white even to a lay-person like me that the companies have not and are not making money). They should have continual improval mechanism in there to elimnate poor performing investments. Yes, easier said than done, unfortunately. Maybe I will write to EPF and ask why are they hanging on to these non performing companies. I have been contributing to EPF for many years now. Wishful thinking ? Ha.

Cheerio.

This post has been edited by plumberly: Jan 9 2013, 08:36 PM
plumberly
post Jan 11 2013, 04:33 PM

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QUOTE(gark @ Jan 11 2013, 03:39 PM)
For not so interesting company, just read the Quater reports. For interesting company and to see more info on thier activities, then I read for cover to cover. Particularly on the company progress updates, CEO salary, shareholder and assets.
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gark,

Out of interest, why CEO salary ? Underpaid or overpaid w.r.t his performance ?

Any company in M'sia where the top guys' bonuses are tied to company's dividends ?Then that is the company to look for w.r.t dividend yield.

Cheerio.
plumberly
post Jan 11 2013, 07:06 PM

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QUOTE(gark @ Jan 11 2013, 05:10 PM)
I always see the CEO salary and board of directors first especially the CEO is the owner. If the CEO salary is extremely high compared to profits/revenue, then it is a sign that the company is not shareholder centric and is milking the company for personal gains. Most probally this company will not be minority shareholder friendly. Also this means the board of directors is not really that independent.

Warren Buffett only draws USD 100K a year as CEO....now you see why he is well liked by investors.

If a company earn 5 mil a year and the CEO salary is 15 mil, what does that tell you? If even the company is not performing well, yet the CEO get multi million bonus then how? Also he pay himself with lots and lots of cheap options.? All this is on the expense of the shareholder.  rolleyes.gif

To value a company you MUST think like an OWNER (indeed you are since you are a SHAREHOLDER). If you are the owner and yet you pay salary to those highly paid under performance CEO, what do you think?  Worth it? tongue.gif

No there are no CEO salary in Malaysia which tie to dividend if you are asking...
*
gark,

Noted and thanks.

Cheerio.
plumberly
post Jan 23 2013, 12:30 PM

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Do we have option trading for KLSE shares ?

Heard of option trading for CPO. But KLSE shares ?

Thanks.

This post has been edited by plumberly: Jan 23 2013, 12:44 PM
plumberly
post Jan 26 2013, 09:29 AM

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Attached Image
(Today's The Star)

Hope that you can help me with this.

Which company is this ? Then we better avoid such shareholder unfriendly parent company.

Thanks.


P/S With no feedback on this, decided to do another search. Found one case but in India. See link.

http://smartinvestor.in/market/Compnews-15...ld_shoulder.htm

We don't have Unilever in KLSE, right ?


This post has been edited by plumberly: Jan 29 2013, 08:25 PM
plumberly
post Feb 4 2013, 04:50 PM

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3 main players in KLSE - institutional, retailers and foreigners.

Out of curiousity, roughly how many foreigners are there and who are the biggest 3 (e.g.,Aberdeen?)?

Are they based in M'sia or do they trade via wire overseas?

Thanks.

This post has been edited by plumberly: Feb 4 2013, 05:36 PM
plumberly
post Feb 5 2013, 11:14 AM

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QUOTE(rayng18 @ Feb 5 2013, 10:09 AM)
there are a few foreign brokers here in malaysia namely CLSA, Nomura,McQuarie,JPMorgan,Credit Suisse and UBS operating in Malaysia, most foreign will trade thru these brokers
*
Noted and thanks.
plumberly
post Feb 6 2013, 05:40 PM

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Need your help here.

Like to know whether there is any M'sian tax on selling UK and Holland shares and remitting the money to M'sia?

Thanks.
plumberly
post Feb 6 2013, 08:24 PM

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QUOTE(gark @ Feb 6 2013, 06:42 PM)
There is no capital gain tax for foreign derived income/profits in Malaysia.
*
Thanks.

What about tax (in the UK or Holland) resulting from selling shares in the UK and Holland while back in M'sia?

Anyone here who has sold shares in the UK or Holland while in M'sia?

Thanks.
plumberly
post Feb 7 2013, 03:17 PM

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QUOTE(gark @ Feb 7 2013, 12:16 PM)
Unless you are resident local income tax does not apply to you. However you must check on local country withholding taxes for foreigner income.

For example if you get dividend from USA, you are subject to 30% witholding tax.
*
Thanks, gark.
plumberly
post Feb 7 2013, 04:47 PM

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Attached Image

Saw this in today's The Star.

Can understand the impact of forex as it is mainly an exporter. Can someone help me with derivative hedging for this company? Simple explanation on the what and how will do with respect to Harta line of business.

Many thanks.
plumberly
post Feb 18 2013, 04:10 PM

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QUOTE(gark @ Feb 18 2013, 10:51 AM)
Derivative hedging means making a bet on the future movement of currency, either up or down.

Ie. USD is currently 3.05. The company expect the currency to go lower to USD 3.00. The company have 6-month sales target of 10 mil usd.

They hedge RM/USD exchange rate in the future at 3.05 by setting up contract to sell let says 10 mil USD to be delivered in 6 months time + about 1% contract fees.

If at end of 6 months average USD is now 3.01, they lose money from their sales (10 mil x (3.05-3.01) = -400K USD.

However they also earn from their derivative contract (10mil x (3.05-3.01)) - (100K contract fees)= +300k USD
If at end of 6 months average USD is now 3.08, they make money from their sales (10 mil x (3.08-3.05) = +300k usd

However they will lose from their derivative contract (10mil x (3.05-3.08) - 100k contract fees = -400k usd

In both scenario they minimize their gain/loss

However if sales drop and currency goes out of control, they will suffer huge losses...from derivative play wink.gif

Example sales drop to 5 mil and USD shoot up to 3.20

Sales gain is 5mil x (3.20-3.050 = + 750K usd
Derivative = 10 mil x (3.05-3.20) = - 1500K usd
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gark,

Many thanks, can always get an excellent reply from you!

A company should just focus on their main business in jmy view. This hedging is like gambling to me. But if their main income is from exports, I guess they want to maximise the gains (but with risk of loosing). Heard that MAS was hedging on the jet fuel price during Idris time and they profited from it. Lucky speculation? Ha.

I guess one way to find out whether a company has the required skill in hedging is to look at their past hedging performance. Right ? Any other ways?

Cheerio.
plumberly
post Feb 19 2013, 09:36 AM

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QUOTE(gark @ Feb 18 2013, 05:33 PM)
Proper hedging is part of managing the company as in risk management. Without hedging the profits can swing wildly. However one must differentiate between hedging and speculating. Usually those with big profit/loss due to derivatives is due to speculation. Hedging attempts to maintain the risk.

Air Asia/Mas hedge against fuel oil increase.

Manufacturer hedge against raw material price like tin, steel, latex etc etc

Most palm oil refinery hedge against palm oil price increase.

Export centric company hedge against forex.

Looking for past hedging is acceptable, but a proper hedge done correctly will have small gain/loss. If big gain loss mostly the company is speculating and/or the hedge is temporary and can swing back the other way (profit vs hedge amount) later.

Example of big hedge is IOI's palm oil hedge which temporary loss billions but later made back from increasing profits from sales of palm products (higher priced). Or MAS big gain in hedging, but later pay back in loss of profits due to high fuel price.

Example of speculation is china aviation oil, in which the company speculate oil price to go lower, in amount way higher than sales/profits. In the end the company almost declared bankruptcy if the parent company did not bail it out.

Read more at... http://www.deloitte.com/assets/Dcom-Belgiu...nOilDebacle.pdf

Best to look for company hedging amount (reported) which is not higher than sales and at reasonable rate (not too high/low ie. speculative)
*
gark,

Many thanks again for your clear and concise reply!

Cheerio.
plumberly
post Mar 7 2013, 10:07 AM

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Attached Image
(taken from today's The Star)

Hope those in the banking industry can help me here.

As a layperson, I don't understand why the 10% cap on bank shares.

* how is bank different from other companies in KLSE where they don't have the 10% cap?
* is FSA a global thing or is it our M'sian invention?
* or is this govt's hidden agenda to reduce economic power of certain race?

Cheerio.



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