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Thursday, October 30, 2014

Gamuda has a bullish breakout

Today, Gamuda announced that it has received a letter from MRT Corp appointing the MMC-Gamuda JV as project development partner (PDP) to build the Mass Rapid Transit Line 2 from Sungai Buloh to Serdang and Putrajaya.

The stock and its warrant broke above its recent high. From past price movement, I believe that Gamuda is likely to continue to rise towards RM6.00 and its warrant is likely to head towards RM3.00.





Based on bullish breakout, Gamuda and Gamuda-WD are good trading BUY. Nevertheless, you are advised to trade cautiously as the market is still unsettled and may see volatility in the near term.


Chart 1: Gamuda's weekly chart as at Oct 29, 2014 (Source: Tradesignum)


Chart 2: Gamuda-WD's weekly chart as at Oct 29, 2014 (Source: Tradesignum)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Gamuda & Gamuda-WD.

Wednesday, October 22, 2014

HAPPY DEEPAVALI

I like to wish all my readers of the Hindu faith a HAPPY DEEPAVALI.

 
(Source: therakyatpost.com)

Tuesday, October 21, 2014

Market Outlook as at October 21, 2014

FBMKLCI broke its uptrend line at 1830-1840 last week. To regain the uptrend momentum, FBMKLCI needs to first, comeback above 1800 and then, to climb back above the uptrend line (at 1840-1850). Until FBMKLCI has climbed above 1800, the bearish outlook will persist. Until it has climbed above the uptrend line, the bullish sentiment will not be present.


Chart 1: FBMKLCI's weekly chart as at November 21, 2014_11.45am (Source: BTX)

Looking at the indices of US markets and key European markets, we can consider ourselves 'lucky'. DAX has formed a downtrend, with a lower 'low' and a lower 'high'. FTSE, S&P500 and DJIA have all formed lower 'lows' and, if the current rebound fizzles out, we will have a lower 'high'.


Chart 2: DAX's weekly chart as at November 20, 2014 (Source: Stockchart)


Chart 3: DJIA's weekly chart as at November 20, 2014 (Source: Stockchart)


Chart 4: S&P500's weekly chart as at November 20, 2014 (Source: Stockchart)


Chart 5: FTSE's weekly chart as at November 20, 2014 (Source: Stockchart)

Based on the above, we should not be too enthusiastic in buying into the market. This market requires us to exercise a lot of self-control.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of any of the indices shown above.

Thursday, October 09, 2014

LPI: Bottom-line jumped q-o-q due to investment income

Result Update

For QE30/9/2014, LPI's net profit increased by 25% q-o-q or 6% y-o-y to RM64 million while revenue inched up 3% q-o-q or 6% y-o-y to RM301 million. The improved bottom-line was mainly contributed by higher investment income received. LPI seems to have a jump in profit every 3rd quarter for the past 7 years.


Table 2: LPIs last 8 quarterly results


Chart 1: LPI's last 35 quarterly results


Chart 2: LPI's last 10 yearly results

Valuation

LPI (closed at RM17.48 yesterday) is now trading at a PE of 17.5 times (based on last 4 quarters' EPS of 99 sen). At this PE multiple, LPI is deemed fairly valued.

Technical Outlook

LPI is consolidating within a triangle, ABC. If it can break to the upside of the triangle at RM17.70, its uptrend may continue. For now, LPI will find support at RM17.00, which also happens to be the 40-week EMA line.


Chart 2: LPI's weekly chart as at Oct 8, 2014 (Source: Tradesignum)

Conclusion

Based on good financial performance, reasonable valuation & positive technical outlook, LPI is still rated a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, LPI.

Wednesday, October 08, 2014

Market Outlook as at October 7, 2014

Our market internal continued to weaken. Yesterday, FBMKLCI lost a mere 7 points but losers outnumbered gainers by 804 to 159. While FBMKLCI hung tough on its uptrend line at 1830-1840, the strength may well be temporary, due mainly to local funds supporting blue chip stocks such as TM, Axiata & Tenaga. The buying support has propelled these 3 stocks above their strong resistance. Meanwhile the middle market has been losing ground as well as market leaders, such as SKPetro, Bonia, PMetal & KSL. All these 4 stocks broke below their uptrend lines. They may remain in doldrums for a while or they may even continue to trend lower, as seen in the price movement for Petdag and GAB.

In a market where 2nd and 3rd liner stocks rein supreme, one has to wonder whether we are at the cusp of a major market top, which may not be revisited for many years. This market reminds me of 1995-1996 when speculators, fresh from their killing in the property market, charged recklessly into the 2nd Board where every stock was pushed above RM10. While our market has not reached the level of insanity of 1996, the rise of many 2nd & 3rd liner stocks has been spectacular. If our property market were to correct next year, cash-tight speculators would have to liquid their investment. Given a choice, I believe speculators would choose property over equity.

If the market continues to weaken, we could see a breakdown of the uptrend line at 1830-1840. The next stop, where a rebound must kick in, will be at 1800. Failure to stay above 1800 could signal the end of the uptrend and the market going into hopefully into a sideways market. Below 1800, I see support at 1600 & 1350.

Based on the above, I think it is time to reduce our exposure to our equity market.

 
Chart 1: FBMKLCI's weekly chart as at Oct 7, 2014 (Source: BTX)

 
Chart 2: Bonia's weekly chart as at Oct 7, 2014 (Source: Tradesignum)

 
Chart 3: KSL's daily chart as at Oct 7, 2014_semilog (Source: Tradesignum)

 
Chart 4: Pmetal's daily chart as at Oct 7, 2014_semilog (Source: Tradesignum)

 
Chart 5: SKPetro's weekly chart as at Oct 7, 2014 (Source: Tradesignum)

 
Chart 6: TM's weekly chart as at Oct 7, 2014 (Source: Tradesignum)


Chart 7: Axiata's weekly chart as at Oct 7, 2014 (Source: Tradesignum)


Chart 8: Tenaga's weekly chart as at Oct 7, 2014 (Source: Tradesignum)


Chart 9: GAB's weekly chart as at Oct 7, 2014 (Source: Tradesignum)


Chart 11: Patdag's weekly chart as at Oct 7, 2014 (Source: Tradesignum)

Yesterday, DJIA dropped 272 points. If you look at the chart below, DJIA is still in an uptrend. I would only be worried if DJIA goes below 16500-16600- the 200-day SMA line. The resilient US market acts both as a driving force propelling global markets as well as the magnet that draws away funds from emerging market during periods of uncertainty.


Chart 12: DJIA's daily chart as at Oct 7, 2014 (Source: Stockcharts.com)

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of any of the stocks or indices shown above.

Wednesday, October 01, 2014

Market Outlook as at September 30, 2014

Over the past 3-4 weeks, our market has dropped to the long-term uptrend line. From Chart 1, we can see that the support of that uptrend line is at 1850. We had broken below that line and we need to recover above it quickly.

Despite recent weakness among 2nd & 3rd liner stocks, FBMFLG, FBMSCAP & FBMACE are still in an uptrend line.


 Chart 1: FBMKLCI's weekly chart as at Sep 30, 2014 (Source: BTX)

The decline in our market mirrors similar drop in oversea markets. With the exception of DAX, most market indices are still in a long-term uptrend.


 Chart 2: STI's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 3: HSI's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 4: CAC's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 5: FTSEs weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 6: NASDAQ's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 7: S&P500's weekly chart as at Sep 30, 2014 (Source: Stockcharts)


 Chart 8: DAX's weekly chart as at Sep 30, 2014 (Source: Stockcharts)

Despite the poor market sentiment, the technical outlook is still cautiously bullish. The decline in share prices should be viewed as a correction unless the uptrend lines are violated. Having said that, we should always exercise caution since this rally is already 5 years old. There are many investors sitting on large handsome gain and they would hesitate to sell to capture their profit.

VS: Top-line & bottom-line continue to rise

Result Update

For QE31/7/2013, VS's net profit increased more than 8-fold q-o-q but rose less than 1% y-o-y to RM36 million while revenue was up 42% q-o-q or 49% y-o-y to RM534 million. Pre-tax profit was mixed; up more than 4-fold q-o-q but down 45% y-o-y to RM21 million. Pre-tax profit jumped q-o-q mainly attributable to higher sales generated by the Malaysian operations compared to the preceding quarter coupled with improved gross profit margin resulting from improved sales mix for the Malaysian operations. For QE31/7/2014, VS's net profit was given a bump up from tax credit due to the recognition of tax incentive in relation to the enhanced export incentive.


Table 2: VS's last 8 quarterly results


Chart 1: VS's last 38 quarterly results

Valuation

VS (closed at RM2.59 yesterday) is trading at a trailing PE of 8.9 times (based on last 4 quarters' EPS of 29 sen). At this multiple, VS is deemed relatively attractive.

Technical Outlook

VS is a strong uptrend. This exponential rise -not unlike what was witnessed in 2006/2007- might just happen again, with a test of the 2007 high of RM3.30. However, it must be noted that a stock that rose sharply would be prone to sharp correction too.


Chart 2: VS's weekly chart as at Sep 30, 2014 (Source: Tradesignum)


Chart 3: VS's monthly chart as at Sep 30, 2014 (Source: Equities Tracker)

Conclusion

Based good financial performance, fairly attractive valuation and bullish technical outlook, VS is a good stock for medium-term investment (by buying on weakness).

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, VS.

Monday, September 29, 2014

Yinson: High valuation calls for high earning...

Results Update

For QE31/7/2014, Yinson's net profit increased by 2% q-o-q or 200% y-o-y to RM31 million while revenue was mixed- down 5% q-o-q but rose 23% y-o-y to RM281 million. The bottom-line improved by RM0.4 million q-o-q due to better segmental results (albeit lower revenue) and lower finance costs, which more than offset higher tax charge and lower share of results from associate and JVs. When compared to the same quarter last year, Yinson's bottom-line improved by RM20 million due to higher segmental results of RM20 million (of which RM16 million was contributed by the Marine division) and higher share of results from associate and JVs, which more than offset the increase in finance costs and tax charges.


Table 1: Yinson's last 8 quarterly results


Chart 1: Yinson's last 28 quarterly results 

Valuation

Yinson (RM3.38 last Friday) is now trading at a trailing PE of 30.4 times (based on last 4 quarters' EPS of 11.07 sen). At this multiple, Yinson is deemed fully valued.

Technical Outlook

Yinson is in an uptrend, with support at RM3.00 (using the 20-week SMA line as a proxy for uptrend line).


Chart 2: Yinson's weekly chart as at Sep 26, 20114 (Source: Tadesignum)

Conclusion

Despite good financial performance & positive technical outlook, it is not easy to make a case to buy Yinson due to its high valuation. For now, I would rate it a HOLD.

Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of,Yinson.