52 Ways of Making Money in Stock Market - Part 34/52 - Follow Popular Bursa Malaysia Stock Market Blogs

Follow Popular Bursa Malaysia Stock Market Blogs
Some of the famous Malaysia stock market blogs, immediate after they have posted and recommended a stock, there will be an immediate buying interest in the stock and the share price will go up.
Let us have a scenario.
Stock A is $3.00. Immediately after a popular Bursa Malaysia stock market blog posted recommendation on Stock A, and then you buy at $3.00.

After few hours when more and more people read his article and buy it, it went up to $3.30 and you then sell it to make a profit.

RISKS, LIMITATIONS OR DIFFICULTIES:
You need to buy it immediately after he posted the article. But how to know when he will post? It will take many hard works to monitor the blog. I’m not sure whether there will be any alert whenever a blog has posted a new article. If you are late, then the share price already went up.

Although some Malaysia stock market blogs are quite influential, but if they recommend too many counters, they may lose the effect. This is what I have noticed. After a few counters that really went up, suddenly there are many more counters, and the counters did not move up.

I have friends, they are retired husband and wife. They actually follow, but after awhile they gave up. Because too time consuming and most of the times they were slightly late. Furthermore, the counters recommended by the blog suddenly increase and these stocks prices didn’t go up.

Some people said these blogger bought first, then recommend in his blog so that he can sell to you. Refer to my article here for argument. Bursa Malaysia Stock Market Blogs


OPINION:
You may want to do paper trading before real trading, whether it will work. But please take note of the timing, very important.

Argument on Bursa Malaysia blogs
Bursa Malaysia Stock Market Blogs


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China Stationery Limited IPO and Sentoria Group Berhad IPO Target Price Fair Value

China Stationery Limit IPO is a China company or China stock, I think with the name, many will know what kind of business they are in. Some of the products are plastic filling and storage product, and plastic tape printer.


CSL IPO price is RM0.95 and let us look at some of the figures (from TA Securities):
China Stationery PE ratio is 5.3x and the earnings are projected to grow that 14% in year 2012.
Gearing is low at 0.1x and China Stationery dividend yield is 3.8%. They have a dividend policy or dividend payout ratio of 20%.


This is a new company, and therefore, hard for analysts to really accurately forecast the future earnings. China stocks are not so popular in Malaysia as evidenced in the few China stocks that are currently listed in Malaysia. TA Securities gave China Stationery target price fair value at RM1.23 with 29.5% upside from the IPO price. CSL target price fair value is based on 6x PE ratio of 2012, and 25% discount from the industry's average PE ratio.


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Sentoria Group Berhad IPO is in property development and also leisure and hospitality. Sentoria Group Berhad IPO price is RM0.85 and let us look at some of the figures (by TA Securities):


Sentoria PE ratio is 7.4x (sep 2011) and the earnings are to grow at 11.3% (sep 2012) and 16.9% (sep 2013). Sentoria dividend yield is about 3% with no net gearing (net cash).


TA gives Sentoria target price fair value also at RM0.80, valuing Sentoria at 6x PE ratio for 2012. This is a discounted 0.4x multiple of the average small cap PE ratio because of Sentoria market capitalisation of less than RM400 million, rising competition in the theme park industry and unclear earnings visibility.


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Articles that you may be interested:

IPO is very Good for Bursa Malaysia Share Market

IPO is very Bad For Bursa Malaysia Share Market

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6 Thinking Hats to improve on Stock Market Profit

Recently I went to a gathering in Pahang and someone share with us on "6 thinking hats" in decision making process. Let me explain what is 6 Thinking Hats, then I relate it to Stock Market.

The 'Six Thinking Hats' is a technique in decision making. It forces you to move outside your habitual thinking style, and helps you to get a more rounded view of a situation. It was created by Edward de Bono in his book '6 Thinking Hats'.

In order to make effective decision, we need all the 6 thinking hats. One person can wear or perform all 6 thinking hats roles, but very tough. Generally different people will have different ideas or strength or attitude, and therefore, it is better to have few persons to perform the 6 thinking hats role.

Each 'Thinking Hat' is a different style of thinking. These are explained below:

White Hat:

With this thinking hat you will focus on the data available. Look at the information you have, and see what you can learn from it. Look for gaps in your knowledge, and either try to fill them or take account of them. This is where you analyze past trends, and try to extrapolate from historical data.

In stock market, this means you need to focus on the stock market data before making a decision.

Red Hat:

'Wearing' the red hat, you look at problems using intuition, gut reaction, and emotion. Also try to think how other people will react emotionally. Try to understand the responses of people who do not fully know your reasoning.

In stock market, it is very unpredictable. So, sometimes you need some gut feeling to make the decision.

Black Hat:
Using black hat thinking, look at all the bad points of the decision. Look at it cautiously and defensively. Try to see why it might not work. This is important because it highlights the weak points in a plan. It allows you to eliminate them, alter them, or prepare contingency plans to counter them.

In Stock Market, Black Hat role is very important. When during bull or good market, we tends to be very positive and ignore all the risk. We need the Black Hat to challenge all our stock buying or holding decision.

Yellow Hat:

The yellow hat helps you to think positively. It is the optimistic viewpoint that helps you to see all the benefits of the decision and the value in it. Yellow Hat thinking helps you to keep going when everything looks gloomy and difficult.

In Stock Market, yellow hat is very important in bear or bad market. This is the time where everybody is so pessimistic that many refuse to buy stock. But this is also the time that the stocks are very cheap and can make a lot of money when the market recover.

Green Hat:

The Green Hat stands for creativity. This is where you can develop creative solutions to a problem. It is a freewheeling way of thinking, in which there is little criticism of ideas. A whole range of creativity tools can help you here.

In stock market, we need some creativity too. It can be how we source for more money. Get idea to get more research, how to get lower brokerage, or how to analyse data in a shorter time, use chart or technical analysis, etc.

Blue Hat:

The Blue Hat stands for process control. This is the hat worn by people chairing meetings. When running into difficulties because ideas are running dry, they may direct activity into Green Hat thinking. When contingency plans are needed, they will ask for Black Hat thinking, etc.

In stock market, blue hat role is also important. Due to different idea by different hats, blue hat need to moderate all the decision making process. Let the process keep going rather than stop when there is conflict of ideas.

Comment:

It is very tough that one person can wear all the hats. I suggest we find few persons. Some people have a lot of data, let him/her wear white hat. Some are very pessimistic, then let him/her wear black hat, etc.

When we have all the 6 hats, we have a more complete views/ideas in the decision making process. I quote you one example.

In late 2009 the market rebounded after the crash in 2008, I have a friend who is very pessimistic (wearing black hat). He kept telling me about conspiracy theory, double recession, shown me negative web sites and all sort of bad things. Saying the market will crash further.

Then I met another friend (wearing yellow hat), he is positive and asked me to buy and keep. He said market is a cycle. Buy at that level and will make money. If drop lower, buy more.

The yellow hat friend gave me confident and I have some gut feeling that it is time to enter (I was wearing red hat). In order to decide what stock to buy, I do some research (I was wearing white hat), and buy stocks which are cheap.

After trading for few months, I noticed that the profit that I have made is not much. I want to make more. I think I can improve on my investment. Therefore, I have come out with PEGGY Method and using Dollar Cost Averaging (I was wearing green hat).

As you can see, I was the person that was looking for data, talked to different people, persist to continue, etc, I was also wearing blue hat.

If we can have 6 thinking hats, we can make better decision. Hope this article can help you in your stock market investment.

By the way, in the gathering, I met a friend, I just couldn’t understand why whenever she talks to me, she will be wearing the black hat. She will just interpret negatively in whatever thing I said or do. I find it very hard to deal with her and I am very tired. Actually I can just avoid her, but I do treasure our friendship. Hope she can change her hat. For the record, she is very cute.

Source:

6 thinking hats- mindtools dot com

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Stocks for 2012

For year 2012 in Bursa Malaysia stock market, I will be holding or adding TSH stock.
Fitters, maybe. Because of the uncertainty.

For other stocks, I will make a decision after they have announced the quarterly result. Situation will become clearer.

I'm actually lack of research reports. If anyone of you got any good stocks, please share with me. Stocks that are with low PE ratio and high growth. I really appreciate that.


Please click here for most recent Malaysia IPO, I will update on the IPO whenever I got info.
http://politemarket.blogspot.com/search/label/IPO

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China Stationery Limited and Sentoria Group Berhad IPO

China Stationery Limited IPO price RM0.95
CSL IPO Closing Date 10/02/2012
Malaysian Public 60mil shares


Sentoria Group Berhad IPO price RM0.85 Retail Price. Private placement price RM0.87
SNTORIA IPO Closing Date 10/02/2012
20mil Malaysia Public
10mil for eligible directors, employees, business associates
30mil private placement


Sentoria Group Bhd, is the developer and operator of the Bukit Gambang Resort City (BGRC) in Kuantan, Pahang.

Will post more when I get the info.

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How Remisiers Should Answer Their Clients

Before I tell you how remisiers should answer their clients, I will first relate and tell you about a Hong Kong TV comedy show. In an episode, there was a stupid actor who doesn't know how to answer questions given by reporters. Therefore, his manager taught him a easy way, that is to give few standard answers.

1) I don't know
2) Hahaha.... you are right
3) I cannot reveal
4) Let me consider it

Initially the actor managed to answer all the questions by using the standard answer. But subsequently, there were mismatch in the questions and answers.

As a remisier, sometime clients ask many difficult questions. Now, let us see whether we can use the standard answers.


Q1.  How's the market
Q2.  They say somebody going to push up Benalec share price, is that true?
Q3.  Will MAS and AIRASIA merge?
Q4.  What stock to buy
Q5.  My brother told me to buy PMetal
Q6.  Got tips or not?



If you are smart, then you can match the questions and answers
Q1.  How's the market  (I don't know)
Q2.  They say somebody going to push up Benalec share price, is that true? (I cannot reveal)
Q3.  Will MAS and AIRASIA merge?  (Hahaha.... you are right)
Q4.  What stock to buy  (I don't know)
Q5.  My brother told me to buy PMetal.  (Let me consider it)
Q6.  Got tips or not?  (I don't know)


But if like the stupid actor, then there will be some mismatch in the questions and answers:
Q1.  How's the market   (Hahaha.... you are right)
Q2.  They say somebody going to push up Benalec share price, is that true?  (Let me consider it)
Q3.  Will MAS and AIRASIA merge? (I cannot reveal)
Q4.  What stock to buy?  (Hahaha.... you are right)
Q5.  My brother told me to buy PMetal.  (I don't know)
Q6.  Got tips or not? (I cannot reveal)


 .

Boustead Stock Analysis

Boustead share price RM5.42.

Using PEGGY Method:

Boustead PE ratio is about 11x and with modest growth rate of 7%.
Gearing level is manageable and Boustead dividend yield is about 7% (with 70% formal dividend payout rate)

Some brokers recommended to buy. HwangDBS give Bosutead fair value RM6.60.

Some said growth not high enough, but some said this stock is steady due to diversification of industries. Some prefer Bstead stock because of dividend play. Some said this is bluechip some said this is not. Some said the management has turnaround the company, but some said the previous track record nothing spectacular.

Up to individuals.

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Why TMS warrant is so cheap? Or is it a trap?

TMS warrant TMS-WA is RM0.115 or RM0.12

TMS share price is RM0.40

TMS warrant exercise price is RM0.10 and TMS warrant expiry date or maturity date is 16 January 2017.

If we use RM0.40 minus RM0.10 = RM0.30.

But why TMS warrant stock price is just RM0.12? Is it because it is too cheap and we can buy? Or is it because the conversion period has not started? Or is it because the TMS stock price going to drop sharply?

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Gefung stock - a new Sunrise Bhd Stock?

Is there a value in Gefung share? Or will there be a selling down in Gefung shares due to listing of the rights issue.

Gefung rights issue:
The listing date of the rights issue shares is 27 January 2011.
Renounceable rights issue of up to 193,500,002 new ordinary shares of Gefung shares together with up to 38,700,000 free detachable new Gefung warrants on the basis of five (5) Rights Shares together with one (1) Warrant for every four (4) ordinary shares of Gefung held as at 5.00 p.m. on 27 December 2011.

Gefung Rights issue price is RM0.15
After the ex date 22 December 2011, Gefung share price was about RM0.15.
Right issue price and the share price is about the same and with just free one warrant for every four Gefung shares that your subscribe, not many people want to subscribe.

Only 53.40% subscribed / acceptance, and 2.98% applied for excess.Total is only 56.38%


My question is, who want the Gefung shares at RM0.15? Why the company didn’t set the Rights issue price lower?
Do the directors or major shareholders see value is Gefung stock that we are unable to see?

Based on Gefung Annual report 2010, the managing director is Dato’Allan Lim Kim. He was the major shareholder of Sunrise Bhd (7.24%, Sunrise annual report2010). Now Sunrise stock has been delisted (due to takeover by UEMLand stock). Can Dato' Lim turn Gefung into another Sunrise Bhd?

Look at Innoprise Plantation Bhd. INNOPRISE PLANTATIONS BERHAD rights issue in April 2010. Price was about RM1.00 and the rights issue price was RM1.00.
The acceptance was only 68.73%.
But what is Innoprise Planation stock share price now? Inno share price now is RM1.44 and some brokers recommended to buy with much higher fair value.


Information:
What is Gefung Warrant exercise price?
Gefung warrants total issue Size in Unit: 21,819,950
Gefung warrant Maturity Date is 19 January 2017 and the Gefung warrant fair value target price is determined by Gefung shares price, Gefunng Exercise price or conversion price of RM0.150.

Can Gefung Holdings Berhad be another Innoprise or Sunrise stock? Or will it trade lower than RM0.15?

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Gefung stock analysis

Gefung share price is RM0.16.

Content:
Major Shareholder of ex Sunrise Bhd stock (merged with Uemland stock)
Rights issue plus free Genfung warrant.

The analysis will be posted later.

52 Ways of Making Money in Stock Market - Part 33/52 - Private Placement

Private Placement

You can make money in the stock market through private placement. Get you private placement shares which are normally lower than the current share prices and sell it to make profit.

What is private placement? Private placement is non-IPO non-public offering issuing of shares to identified or selected group of investors.  The investors are normally strategic investors such as suppliers, customers, institutional investors such as banks, insurance companies, unit trust and  pension funds.

Merchant bank or investment bank will assist the company in the private placement, normally the total number of private placement shares is not more than 10% of the total company issued shares. The issue price is normally cheaper than the current share price.

In Malaysia, sometimes the private placement is being used to increase the Bumiputra percentage holdings in the company, The shares are then offered to selected Bumiputra and I think it may involve MITI.

Private placement may also offer to individuals that are not strategic to the company. It can be anybody as long as you have a bit of connection. 

From my observation, after the completion of the private placement, if I take a look at the annual report, there will be few individual names appear as substantial shareholders, in which I think they have no benefits to the company. I always feel that after they received the shares, many may sell it to take profit. Those who have not sold, and still holding it, I think they will then sell if they need the money. Their cost is low, therefore some prefer to sit on paper gain and no urgency to sell.

My question is this, how the company select who will be the purchaser of the private placement shares? And what benefits do these people bring to the company? If you look at the defination from a text book, it normally state strategic investors.

If the purchasers are suppliers or customers, then it will be good because it serve as strategic investors. If it is EPF or large unit trust, then is good as they can be a watchdog to the stocks. 

If you are rich, why don’t you call up your investment bank friends and see how the shares is being allocated.

RISKS, LIMITATIONS OR DIFFICULTIES:

You may need connection in order for the shares to be allocated to you. I also want to know how, and I also want to be allotted. The quantity is normally in big block and you may need to have substantial money.

OPINION:

My opinion is that all these private placement should be allocated to strategic investors and not ordinary individuals.

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