CLSA regularly makes available a Feng Shui chart to its clients every CNY. I think it is done to generate publicity as well as to pamper to the demands of some of its Chinese clients. Regardless of how this chart was compiled, I believe it represents the view of the firm, with minor 'events' added for distraction. If viewed from this angle, I believe that CLSA Feng Shui chart for 2010 is in line with my view of the market for the next few months. As for the later part of the year, we will have to wait for future events to unfold & their impact on the economy to filter through the market.
Chart: CLSA Feng Shui Index 2010 (Source: FTAlphaville)
5 comments:
Hi Alex,
Happy New Year to You. Need some comment from you about Frontkn. It dropped to lowest 0.14 yesterday after the Right Issue. Worth to buy now ?
Hi David,
I have just posted my comment to your request. To wit:
Fronken made a high of RM0.62 in end 2006. Since then, it has been in a downtrend line. It has recently broken below its strong horizontal support of RM0.15 (after the ex-date of the Rights Issue). From the technical picture, one would avoid this stock.
Strangely, Frontken's financial performance is quite decent. For 9-month ended 30/9/2009, it recorded a net profit of RM7.7 million on a turnover of RM103 million. This is however a sharp decline from the results for 9-month ended 30/9/2008, where its net profit was RM16.4 million on a turnover of RM98.9 million.
Financial position is deemed satisfactory with current ratio at 1.22 times while gearing ratio (comprising of bank borrowings & HP commitments to shareholders' funds) at 0.57 times. One concern is the high receivables collection period of 153 days. Frontken is involved in the provision of surface metamorphosis technology using thermal spray coating processes. Could the nature of its business contribute to the high collection period?
One should avoid Frontken based on the poor technical outlook. However, the current price action may be exaggerated by the trading of Frontken-OR & the arbitraging activity between the share & the Rights. The same can be said about MAS & MAS-OR price action during this period. It will be noted that both Frontken-OR & MAS-OR will cease trading on Feb 23. I believe a recovery in both Frontken & MAS may begin after Feb 23. The first sign of that recovery is the price surpassing the immediate horizontal resistance (which was the earlier horizontal support) of RM0.15 (for Frontken) & RM1.90 (for MAS).
Dear Mr Alex Lu,
Happy New Year to you too!
Would like to ask you if you can recommend a few High Dividend Yielding stocks to invest for a long time?
My problem is fixed deposit rates are at very low now. Can only get 2% to 2.5% for 12 months. I don't know what to do with my funds. Don't trust the unit trusts. Want to invest in the stock market, but no time nor interest to monitor. Just want to collect the high dividends. Don't trust one single stock. Want to hold a basket of several stocks. Maybe 5 stocks?
Want to try out RM50k first. Maybe split into RM10k.
A friend swears by PBBANK. I think the price is too high now. I missed this during the GFC. Not sure what to buy now. Should I wait for a few more months?
Can you suggest a few high dividend yield stocks with some good entry prices?
Thanks and kindest regards,
Mr Teoh
Hi Mr Teoh,
You've asked for the names of stocks that pay good dividend. It is not an easy job, especially if you want to be comprehensive. I will not. This is what I did:
1) Look through the list of Top 100 Companies by Market Capitalization which appears under the Stock section of StarBiz.
2) Select those companies that have dividend yield of above 7%.
3) I dropped off a few names, such as TM, Maybulk, DRBHicom & Media for the following reasons: TM (capital management exercise likely to cease), Maybulk (bottom-line likely to suffer for next two years) and DRBHicom & Media (recent high dividend payout may not be repeated).
4) We will end up with a short list of 5 names- Amway, Boustead, Digi, JTInter & Litrak.
5) Look through the past dividend payment record of these 5 companies. Then, estimate the likely dividend payout for FY2010. Adjust for increased share capital (eg. the Rights Issue of 2-for-5 carried out by Boustead).
6) My own estimate dividend yield for these companies are Amway (5.6%), Boustead (7.9%), Digi (8.0%), JTInter (11.4%) & Litrak (10%). Be careful of the estimated dividend yield for JTInter & Litrak, which look excessive.
5) Technically speaking, JTInter & Litrak are in a medium-term uptrend. That sounds like a good thing, except you have to watch out for potential reversal in the uptrend which could lead to serious drawdown; thus, offseting any gain from the dividend received. Whereas Amway, Boustead & Digi, which are likely to move sideway for the medium-term, would avoid the risk of sharp drawdown.
The safer approach is spread out your portfolio between the five stocks- Amway, Boustead, Digi, JTInter & Litrak.
Good luck.
Hi Alex,
How about REITs?
I found Qcapita is a very potential one. The other good picks would be UOAReit and ARRiet.
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