In early August, HSBC Holdings plc ('HSBC') broke above its 3-years old downtrend line at HKD80.00. That breakout did not recruit sufficient support & the stock slid below the said downtrend line & hit a low of HKD75.00. The following 2 weeks, HSBC rallied above the same downtrend line & came close to its recent high of HKD83.00 (recorded in the 1st week of August). Today, it gained 90 cent to close at HKD82.60. A break above HKD83.00 would signal the continuation of the short-term uptrend that began at the end of May as well as the beginning of a new upleg for the stock.
Chart: HSBC's weekly chart from July 2007 to Sept 13, 2010 (Source: Yahoo Finance)You may gain entry into this stock directly or indirectly by buying the 2 CWs listed in our exchange- HSBC-C6 or HSBC-C7. The valuation & terms are tabulated below.
Table: HSBC-C6 or HSBC-C7- Valuation & Main TermsDespite the slightly higher premium, I prefer HSBC-C7 to HSBC-C6 for longer duration.
12 comments:
Hi Alex,
Would you comment AJI please. What is your rate to their valuation, yield and medium term picture.
In addition, is BIPORT has potential to rally soon?
Many thanks
AL
hi alex,
with reference to pantech corporate exercise:
PROPOSED RENOUNCEABLE RIGHTS ISSUE OF UP TO RM77,224,875 NOMINAL VALUE OF 7-YEAR 7% IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (“ICULS”) AT 100% OF ITS NOMINAL VALUE ON THE BASIS OF TWO (2) RM0.10 NOMINAL VALUE OF ICULS FOR EVERY ONE (1) EXISTING PANTECH SHARE HELD IN THE COMPANY TOGETHER WITH 77,224,875 FREE DETACHABLE WARRANTS (“WARRANTS”) ON THE BASIS OF ONE (1) WARRANT FOR EVERY TEN (10) ICULS SUBSCRIBED FOR (“PROPOSED RIGHTS ISSUE”);
Question:
1) What is an ICUL? Is it convertible to stock like warrants?
2) What does 7% mean, is it interest?
3) What does RM0.10 mean, is it conversion price?
thanks
maxwealth88
hi Alex, when i tried to visit your blog just now, it was blocked by mozilla as it warned me that visiting nexttrade will harm my computer. somebody (who has nothing better to do) must have reported your blog as containing harmful or malicious programs.hope you can rectify it soon.cheers
Hi CK,
I saw the "Attack Site" warning on my blog. I am trying to solve the problem now. Anybody who knows how to solve this problem, please drop me a line.
Hi Ai Ling,
Aji is on the verge of breaking out of its symmetrical triangle at RM4.10. If this breakout failed & the stock were to slide further, it may drop to its uptrend line at RM3.60. That support should be a good entry to the stock.
Based on 1H2010 results, Biport's EPS for FY2010 would be about 37 sen. At Friday's close of RM6.88, the stock is trading at a rich PE of 18.6 times. Chartwise, Biport's resistance is at its recent high of RM7.00 or its Oct 2007 high of RM7.20. I would give Biport a miss.
Hi MaxWealth88
The answer to your questions:
1) What is an ICUL? Is it convertible to stock like warrants?
Ans: It's a loan stock which is not redeemable (which means that you won't get any repayment of capital) but it's convertible to share (like a warrant).
2) What does 7% mean, is it interest?
Ans: That's the coupon rate (or the rate that the interest would be computed & paid to you).
3) What does RM0.10 mean, is it conversion price?
Ans: That's the principal sum on which the interest computation is based on. It's not the conversion price. Since the ICULs nominal value is 10 sen & the share par value is 20 sen, the conversion may be by way of surrendering 2 ICULs in exchange for 1 share. However, this is not definite & you should wait for the announcement of the terms of the ICULs at a later date.
Hi Alex, i am not sure how you can do it but i was prompted by a pop up bar which ask me to go to this link http://www.stopbadware.org/firefox?hl=en-US&url=http%3A%2F%2Fwww.nexttrade.blogspot.com%2F to report if the website is not a harmful website.
but this link is down at this moment.maybe you can try later.
by the way alex, can you advise on some technical comments about guan chong, i have been monitoring this counter for a long time and feel there is something brewing. thanks
Hi Alex
If you search nexttrade.blogspot.com on a google bar, it will display searches together with "This site may harm your computer". Click on that link to see a solution offered by google.
By the way Alex, do you happen to have CI Holding under your radar? What's your view of the counter?
Dear Alex
Can you comment on Scanwolf? I found that this counter is quite attractive in term of dividend payback.
Thank you
Mason
Hi Mason
You are right about Scanwolf. Good financial position- no borrowings & high liquidity- but unexciting financial performance. High dividend yield for FY2010 & FY2009- at 14%. Can it maintain this level of payout?
Chartwise, it has strong horizontal support at RM0.28 & strong resistance at RM0.38. A breakout either above either resistance or below support would point the way forward for the stock.
Hi JY
Thanks for the tip on solving the problem of being labeled as an "attack website".
CI Holding broke above the strong horizontal resistance at RM1.20-1.30 in October 2009 & took off. At the current price, it's extremely hard to get into the stock.
It is trading at a PE of 13 times (based on FY2010 EPS of 26 sen & last Friday's close of RM3.27). This multiple is not too high in view of the company's strong growth in the past 3 years. Its turnover increased from RM290 million to RM363 million to RM516 million from FY2008 to FY2010, while net profit increased from RM14 million to RM21 million & finally to RM38 million over the same period. While it has benefited from a low base in FY2008, CI Holding's growth story may continue due to its attractive products line-up.
A good entry level is at its uptrend line support of RM2.60. However this price may not be seen anytime soon.
Hi CK
Thanks for the tip on solving the problem of being labeled as an "attack website".
Guan chong, another stock that I have missed out on. I saw the breakout at RM0.84-85 in July this year but I thought it would be a short rally. I was afraid of drawing investors into the stock only have them caught off when cocoa price retreats. However, the later did not happen (or did not happen yet). The stock continued to rally.
Guan chong's financial performance has been lackadaisical until last 2 quarters, when its net profit soared to RM39 million from RM2 million previously. The jump was attributable to higher cocoa prices & gain on forex derivatives. Would these double "one-off" gains repeat themselves? I doubt it.
Check out my 2007 post on Guan chong here .
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