Wednesday, April 06, 2011

MHB may have a bullish breakout

MHB may have a bullish breakout above its rising wedge at RM7.00-7.05 today. While this breakout could be a good trading BUY, I would suggest a cautious approach. I am not entirely convinced of the breakout as it happened on relatively thin volume & came rather late in the afternoon (at precisely 4.15pm). Sudden sharp rise among GLC stocks in the late afternoon tends to be instituted by local funds for the purpose of supporting market indices. Watch the stock closely tomorrow for signs that this is not a flash in the pan. If the price is still firm for the first 2 hours tomorrow & the volume is significantly higher, this trading BUY has a good chance of success.


Chart: MHB's daily chart as at April 6, 2011(Source: Quickcharts)

As always, you can look through the table of CWs below & ride this trade via a cheaper instrument. My preference is for MHB-CB & MHB-CC.


Table: MHB's CWs' terms & valuation
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4 comments:

  1. AnonymousWednesday, April 06, 2011 10:09:00 PM

    Hi Alex

    Can you comment on kkb? Fundamentally, It is currently just trading at 7x, dividend yield of more than 8%, and is in net cash position with 40sen/share. Could kkb due for re-rating or just deserve current valuation?

    ReplyDelete
  2. Remnant 888Thursday, April 07, 2011 5:48:00 PM

    Hap Seng Cons. share price has dropped to low of 6.20 and is deemed attractively cheap wrt. dividend yield,
    (with 22 sen due in May pending announcement of ex. date, bonus shares w/ RI + free warrants). Ex. price around RM1.98

    Assume simply for comparison:
    6.21/3 = RM2.07
    Typical dv 7c + 6c = 13c tax exempted

    Contrast:
    THP dv 12.5c/217
    TDM dv 13.5c/290

    ReplyDelete
  3. Alex LuTuesday, April 19, 2011 2:46:00 PM

    Hi hng

    I have posted on KKB a few times in the past. Its financial performance is satisfactory. Its valuation is reasonable. Go here .

    However, I am a bit concerned about its connection to the emabttled Chief Minister, Taib Mahmud. We ahould be well acquainted with the difficulties encoutered by Scomi after Adbullah Badawi stepped down as the Prime Minister. The same fate may befall KKB once Taib Mahmud leaves the scene. I guess all good things must come to an end sooner or later.

    ReplyDelete
  4. Alex LuTuesday, April 19, 2011 2:56:00 PM

    Hi Remnant 613

    One can make many argument in favor of buying Hap Seng but your argument may not make the cut. How did you arrive at the dividend of 13 sen TE.

    For FY2010, Hap Seng proposed or gave out dividend of 28 sen as compared to EPS of 57.35 sen. For FY2009, it gave out dividend of 12 sen as compared to EPS of 17.79 sen. Go here .

    ReplyDelete