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Friday, January 28, 2011

CENSOF Target Price Fair Value IPO - Century Software IPO


PEGGY Method Evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

CENSOF share price RM0.93
PE Ratio 13.3x (Dec10)
Growth 51% (2011)
Gearing net cash
Dividend yield 0%??
The above figure is from TA Securities,

According to TA Securities, Century Software IPO price of RM0.93, CSHB trades at 13.3x FY10 PER and 8.8x FY11 PER – a discount to industry peers (namely SAP and Oracle). With that, we fairly value CSHB at RM1.30, using a CY11 EPS of 10.6sen and pegging it at 20% discount to the peer’s simple average CY11 PER of 15.8x. This target price implies a 39.8% upside from the offer price of 93sen. We believe the discount is justifiable due to it smaller market capitalization and focus on local business only.

Century Software Holding Berhad (CSHB) is a wholly‐owned Bumiputra Information Technology company. The history of CSHB traces back to 1997 where it provided financial management and business solutions to the government and commercial sectors in the Asia Pacific Region. The group has served the Malaysia’s public sector for over 10 years.

Polite Market's Comment:
The PE ratio 13.3x is not cheap, but the growth is high 51%. End of 2011 the PE ratio will drop to 8.8x. But what happen after 2011? Although there is no dividend policy, but why there is no Century Software dividend forecast?


More info on Century Software

Thursday, January 27, 2011

Fitters Target Price Fair Value - Movie 'Back To The Future'

Fitters is acquiring a palm oil mill in Kedah with a capacity of 60 tonnes per hour (tph) of fresh fruit bunch (FFB) for RM67.5m to be transformed into a "green" palm oil mill, to showcase its waste-to-energy technology, and more importantly, the commercial viability of the technology, this is according to RHB.
According to Mercury Securities research, one of their favorite stock is Fitters because of growth. Let us use my PEGGY Method to evaluate Fitters and see how.

PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

Fitters Share Price At RM0.785.
PE ratio is 16.0x (Dec 2010).
Growth 130% (2011) and 43% (2012)
Net gearing will increase from zero to 0.3 in 2011.
Dividend will only be paid in 2011, about 1.9% dividend yield.
The above figure is from RHB, with Fitters Target Price Fair Value at RM1.13.

The two things that attract me are growth and the new waste-to-energy technology (something similar to the movie Back To The Future.

My Questions:
First Question
If the growth and profit forecast if correct, then this stock can be considered (if you don't mind Fitters dividend yield, quite low). Fitters PE ratio will drop to only 4.9x in 2012.

Second Question
The forecast is different from RHB previous report.
JULY 2010 report, net profit forecast:
2010 16.2mil
2011 30.6mil
2012 43.2 mil

JANUARY 2011 report, net profit forecast:
2010 10.2mil
2011 35.5mil
2012 50.7 mil

What happen? Why the forecast adjusted so much lower and higher? Why?

Third Question
Fitters Diversified Bhd is NOT under RHB coverage. But why they have came out with two research reports on this?

Politemarket's Comment:
I'm interested to whether Fitters's "Back To The Future" waste-to-energy technology is workable or profitable or not.
On whether this stock is good or not, depend on whether you think the forecast by RHB is accurate or not. Anyway, Mercury Securities also like this counter. Make your own decision.

Previously I have wrote something on the movie "Back To The Future" waste-to-energy by Fitters. Please refer here.


Wednesday, January 26, 2011

Strategy During Current Market Uncertainty

There are many strategies to use when stock markets and economy are very unstable. Eg hold and do nothing, buy defensive stock, buy high dividend yield stock, sell ALL your stocks and divide to 24 months and start investing for the next 24 months, short the market, etc.

Now I will touch on HIGHER HIGH and HIGHER LOW. Conversations below:

A: Market and economy are unstable. I see may crash.
B: You think so?
A: Yes. Shall I buy MBMR when it drop to RM3.00. Many analysts have recommended?
B: MBMR has the lowest PR ratio among the automotive stocks.
A: Can buy?

B: Well, you mentioned that the market and economy are unstable. What if the share price does not move up, then economy is bad for few years. After that the economy and market recover, will MBMR trade higher than RM3.00?

A: Not sure.

B: If you are not sure, then you better buy higher high and higher low stock. After the 2008 crisis, Eg Public Bank recovers and achieve HIGHEST profit. Same as QL.

A: But both are not cheap. How about TSH?

B: TSH they keep planting, more and more trees are maturing. Although in near term profit and share price may be volatile, after few years due to more trees being matured, they are going to achieve higher profit.

A: You mean I should avoid MBMR now?

B: Go back to our original conversation. You are the one that said market and economy are unstable. Some said 2011 can continue to have bull run. Different market condition use different strategies. Ask yourself two questions. Is market unstable? If yes, is MBMR a higher high and higher low stock for the next few years? Then make your own decision.

A: Thanks

Please note that this is not a recommendation. This is just some explanation on higher high and high low. I heard the conversation on 23/01/2011.

More info on higher high and higher low....


Tuesday, January 25, 2011

Hua Yang Net Profit grew 179%

Hua Yang reported 3rd quarter result ended 31 Dec 2010, the net profit grew 179% year on year.
Quarter on quarter grew 83%.

Let us do my PEGGY Method evaluation:
PE: PE Ratio
G: Growth
G: Gearing
Y: Yield (dividend)

I don't have latest analyst research report on Hua Yang.
RHB previous forecast is EPS of RM0.185 ending 31/3/2011.
Just three quarters Hua Yang already made RM0.176
If I add latest quarter EPS of RM0.0711, then whole year will be RM0.2471. Easily exceed RHB forcast.
With price of RM1.12, the PE ratio will be 4.5x only

Growth: No latest analysis. Previous RHB forecast Financial Year 31/03/2013 (EPS RM0.383)

Gearing: still at 20% ++ ??

Dividend yield, with the price of RM1.12, will be at 2.7%?

Based on the above, Hua Yang still a cheap counter even at RM1.12.
But as I have posted previously, there is some risk and disadvantage in buying Hua Yang.

More info here...


Monday, January 24, 2011

52 Ways of Making Money in Stock Market - Part 04/52 - Buy High Dividend Stocks

Buy Good Dividend Stocks. Buy High Dividend Yield Stocks.
You need to differentiate what is dividend and what is dividend yield. Dividend is just based on the absolute amount, eg a counter is paying $0.50 dividend. So the dividend is $0.50.
Dividend yield is dividend divided by share price. If the share price is $12.50, then the dividend yield is 4%.

If a company is paying $0.42 dividend, but the share price is $7.00, then the dividend yield is 6%. Although the second example pay $0.42 dividend which is lower than the first example of $0.50, but the dividend yield of 6% is better than the 4%.

I know many friends who buy shares base on good dividend and they have been consistency making money.

When a company is paying good dividend, indirectly it also means that the company is profitable and the cash flow is strong. Furthermore, the management is good that it rewards the shareholder. Some pay very little dividend and retain most of the profit, and after many years, make a low General Offer to shareholders and de-list the company.

How to find high dividend yield company? Some people refer to newspaper. But newspapers are historical data and also include one off special dividend. What we need to know is the future dividend.
You can check with many research reports, where they have forecast the dividend yield. You may also find out the dividend payout ratio of the company. Dividend payout ratio is how many percent of the profit is being paid as dividend. Off course the higher the better.

Risks, Limitations and Difficulties
The growth of the company and the share price are also important. Assuming the share price is $7.00 and paying dividend of $0.42 per year. But after few months because of lower profit, the share price drop to $6.00. Your loss is $1.00 and you only get back $0.42 dividend. Net loss is $0.58. Furthermore if the company has lower profit, the dividend may not be sustained and they may pay lower dividend in the future.
Some dividends are special or one off. Don’t be trapped. They may not pay these kind of dividend again.

It is good to look for high dividend yield stock. The higher the dividend yield the better. But you also have to look at other factors such as profitability and growth, etc.

Please bookmark me. More on 52 Ways of Making Money in Stock Market.....

Thursday, January 20, 2011

How to Improve your Stock Market Trading

I did a survey in my blog in early January 2011. Few hundred people responded and I think the result should be similar to overall Malaysia findings.

Questions: Did you make money from stock market in 2010 (IPO, dividend, paper gain, contra, etc)

More than 2009: 51 %
Less than 2009: 12%
Loss money in 2010: 25%
Breakeven in 2010: 12 %

KLCI was up 19.3% for year 2010 but 37% (25% loss and 12% breakeven) of respondents did not make money in stock market for year 2010. Many argue that KLCI is only 30 big counters, and the actual stock market did not go up. But this is not true, many small company share prices also went up in 2010.

For those who did not make money in 2010, have to do an evaluation on the share trading. Samples of evaluation are here … . . . . . .

In 2010, market up 19.3%, and in 2009 up 45.2%. However, 51% make more money in 2010 than 2009. You know why?

Many retail investors still in old bad trading strategy/habit.
Refuse to buy when the market is at rock bottom. When market has went up a lot, then many investors start to join in. That is why many make more money in 2010 as compare with 2009.

Whether we make money or not, it is good to have an evaluation of our trading activities so that we can improve on our stock market trading. Click here on how to evaluate our own trading….

Monday, January 17, 2011

52 Ways of Making Money in Stock Market - Part 03/52 - Buying-in

What is Buying-in?
Currently after you sold your shares on T day, you need to deliver your shares the latest is T+2 evening. If you don’t have the shares to deliver, then you are subject to Buying-In on T+3 morning.
On T+3 at 8.30am, Bursa Malaysia will buy the shares for you at HIGHER PRICE than the previous day closing price, and pass the shares to you IMMEDIATELY to deliver.

Here is how Buying-In works:
On T Day, Mr X accidentally sold 10,000 units Stock A at $1.50.
On T+2 night, Bursa realized that Mr X still don’t have the shares to deliver, so they initiate a Buying-In against Mr X. Assuming on T+2 Stock A closed at $1.60
On T+3 morning at 8.30am sharp, Bursa will on behalf of Mr X buy from the Buying In Market, 10,000 units at $1.70 ($1.60 + $0.10 penalty).
The delivery of this Buying In market is IMMEDIATE. So, Mr X will get the shares immediately (at $1.70) and able to deliver to Mr X original buyer.

How investors can benefit from Buying-In?
You can sell to the Buying In market (the price is higher than the previous day closing price).
Assuming you have stock A. So, you will sell 10,000 units to the Buying-In market at $1.70, and buy back stock A when market open at 9.00am at market price (around $1.60). You made $0.10 X 10,000 units.

How to determine Buying-In price? It is determined by Bursa Malaysia.
If the previous day closing price is $0.18, then the Buying-In price is $0.23.
If $0.30, the Buying-In price will be $0.35

$0.18, will be $0.23
$0.30 will be $0.35
$2.58 will be $2.68
$7.55 will be $8.05

Previously the Buying-In Price is 10 bids higher than the last done price. But now I think have changed.

Risks, Limitations and Difficulties:
*To sell to Buying In is first come first serve basis. At 8.30am the whole Malaysia remisiers will try to key in to sell. So the chances are very slim.

*Everyday there are only limited few Buying-In stocks available, you may not have the stock and also hard to find big quantity. Imagine have to compete with whole Malaysia remisiers. If the remisier is consistently trying, only once a while will get.

*Only remisiers can key into Buying-In market. It is up to remisiers which account or client he wishes to key in to sell. Off course if I am remisier I will select my family account (if they have the stock) or my big client account.

*Another risk is you may not be able to buy back the stock at price below the Buying-In price. In the above example, after selling 10,000 units at $1.70, if market is so good that the stock open near $1.70 and then move up above $1.70, then you are not able to buy back and may make loss. This is very real when the stock or counter lack volume for us to buy back.

*Not worth doing if small quantity. Lose out on brokerage.

*The maximum quantity that can be keyed-in is 10,000 units only. So, even there are huge 200,000 units, remisier can only key in 10,000 units, and usually when he key-in again the second time, all quantity are gone (remember first come first serve).

If got chance, can try.
But just do a quick check on the stock volume and price for the past few days and the US market up or down. Just make sure it is easy to buy back.

Please bookmark me. More on 52 Ways on Making Money in Stock Market......

Friday, January 14, 2011

Benalec Share Price Fair Value Target Price

BENALEC HOLDINGS BERHAD Share Price Fair Value. RM1.20, RM1.90 or RM1.39?
Banalec IPO share price RM1.00.

Let us do my PEGGY Method evaluation:
PE: PE Ratio 10.8x (Jun 2010)
G: Growth 7.4% (2011), minus 6% (2012)
G: Gearing 0.44 times
Y: Yield (dividend) 1.3%

Benalec plans to distribute 15% and 30% of its net profit for financial year ending 30 June 2011 and 2012 respectively.

The above info is from JF Apex Securities Berhad, with Benalec fair value target price of RM1.20

The PE ratio is normal. But the growth is low and negative in 2012.
Gearing of 0.44 times, but with the Benalec IPO proceed I think not a concern, also as long as can make profit. Dividend yield is low.

The figures are not so good.

But wait ! ! ! ! ! ! ! ! This can be good?
AmResearch said Benalec target price is RM1.90 ! ! ! 90% upside! !. Appeared in The Edge Financial Daily, I saw it but didn't have time to read. But Aminvestment Bank is the Principal Adviser, Sole Underwriter and Sole Placement Agent. I am not sure whether any conflict of interest.

As highlighted by JF Apex, some companies in the same industry the share prices are trading at higher PE ratio. Can Benalec trade at higher PE Ratio?
IJM PE Ratio 18.11x
GAMUDA PE Ratio 16.95x
WCT PE Ratio 14.36x

I heard the response for Benalec private placement/offer for sale is very good.

The above figures are by JF Apex Securities Berhad only. Other brokers may have a better Benalec profit forecast. That one I am not sure because I don't much info.

RHB project Benalec’s net profit to rise by 10-36% in FY06/11-13, underpinned by progress billing for its current outstanding orderbook of RM664.1m and assumption of RM600m p.a. new contract win for FY06/11-13. Indicative fair value is RM1.39 based on 12x CY11 EPS of 11.6 sen, at a 2-multiple discount to 1-year forward target PER of 14x for Hock Seng Lee, its closest listed peer. The discount is to reflect Benalec’s absence of track record as a publicly traded company.

Politemarket's Comment:
Base on JF Apex Securities Berhad, this counter is fully valued and is not cheap. But if you can find other brokers with better profit forecast, then is up to you which broker you want to trust or just take the average. RHB has a higher profit forcast

Benalec EPS Earnings per share
    *    JF Apex     *     RHB
2010  *  8.00      *    8.00
2011   * 8.59      *  10.9
2012    * 8.09     *  12.2
2013    * n/a       *   13.5
As per RHB forecast, base on RM1.00, Benalec PE ratio will be on 7.4x in 2013.

From what I have observed, the interest for Benalec is very high, many friends said good and applied. I don't know why. They told me others said good.


Units : 730,000,000 Benalec Shares
Par Value : MYR 0.250
Benalec Stock code : 5190
Stock name : BENALEC
Benalec ISIN code : MYL5190OO003
Board : Main Market

Benalec Holdings Berhad (BH) is an integrated marine construction service provider. BH operates in a niche market, focusing mainly on land reclamation and coastal construction works

Thursday, January 13, 2011

Century Software Holdings Berhad IPO

Century Software Holdings Berhad IPO
Century Software IPO Opening 12-01-11
Closing Date 19-01-11
Century Software Issue Price RM 0.93
Public Issue 23,000,000 Century Software Shares
Offer for Share 10,931,200 shares
Private Placement 19,481,200 shares
Issuing House MIH 508
Main Market
Tentative listing Date 31-01-2011

Century Software Holdings Berhad is an investment holding company whose core business is the provision of Financial Management and Payment Aggregation Software Solutions via it's subsidiary companies, Century Software (M) Sdn Bhd and T-Melmax Sdn Bhd.
Century Software Holdings Berhad IPO News
The Star 30 December 2010
KUALA LUMPUR: Century Software Holdings Bhd, a financial management software solutions provider, plans to raise RM21.4mil from its initial public offering (IPO).
The company said in a statement yesterday that RM6mil, or about 28%, of the IPO proceeds would be used for research and development (R&D).
"The rest are for capital expenditure to expand business, working capital, repayment of bank borrowings and listing expenses," it said.
Its deputy executive chairman, Samsul Husin, said the company planned to enlarge its current R&D team and use part of the IPO proceeds together with internally-generated cash flows to develop new applications and solutions.
"The IPO is aimed at not only to create a higher profile for the group but more importantly to take R&D capability to the next level," he said.
Century Software's IPO entails a public issue of 23 million new ordinary shares and an offer-for-sale of 10.9 million vendor shares at an issued and offer price of 93 sen each.
Of the public issue of 23 million new shares, 8.55 million shares are for private placement to selected investors, 5.8 million shares for eligible directors, employees and business associates and 8.65 million shares for the public via balloting process.
Century Software is slated to issue its prospectus and list on Bursa Malaysia in January next year.
Kenanga Investment Bank Bhd is the adviser, sole underwriter and sole placement agent for the IPO. - Bernama
Century Software Holdings Bhd (CSHB), which develops accounting software, plans to list its business on the Main Market of Bursa Malaysia.
It is proposing to issue 23 million new shares, representing 13.3 per cent of its enlarged paid-up capital under its proposed initial public offering (IPO).
In a prospectus exposure on the Securities Commission's website, the group is offering 8.65 million of the new shares, representing 5.03 per cent of its enlarged paid-up capital, for the general public. Half of it would be for Bumiputera investors.
It will place 8.55 million shares to identified investors and another 5.8 million shares to eligible directors, employees and business associates of the Group.
CSHB is also proposing to offer 10.93 million shares of 10 sen each, representing 6.36 per cent of its enlarged issued and paid-up share capital, by way of private placement to identified investors.

It is also proposing to implement a one-for-one bonus share issue involving 172.1 million new shares that would increase to 34.42 million as fully paid-up to be listed on the Main Market.
Kenanga Investment Bank Bhd is the adviser, underwriter and placement agent for the exercise.
CSHB said it will use 27.67 per cent of the funds to be raised for research and development expenditure, 24.9 per cent for business expansion and capital expenditure, 19.76 for working capital, 15.81 per cent to repay bank borrowings and the balance for listing expenses.
The Group said it is constantly looking to develop new revenue generating softwares and products to ensure continuous growth in revenue which is in line with its strategy towards achieving a multi-solution company.
Business expansion and capital expenditure may include expansion into overseas countries such as Indonesia, Brunei and Cambodia.
The Group's two MSC status subsidiaries are Century Software (Malaysia) Sdn Bhd (CMS) and T-Melmax Sdn Bhd (TMX).
CSM is an end-to-end solution provider of high-end financial management software and services (FMSS), with over 10 years experience in the public sector.
The government had appointed CSM to implement and maintain their respective Standard Accounting System for Government Agencies (SAGA).

Tuesday, January 11, 2011

Tambun Indah Land Berhad Share Price target price fair value

Tambun Indah Land Berhad Share Price IPO RM0.70.
Tambun Indah Land Berhad target price fair value RM0.81.

Let us do my PEGGY Method evaluation (base on Tambun Indah IPO price RM0.70):
PE: PE ratio 6.0x
G: Growth 10% (2011), 11.2% (2012)
G: Gearing net cash
Y: Yield (Dividend) 7.7%

The above figure is by RHB.
They said Tambun Indah Land dividend yield is one of the highest in the property sector. They value TIL at a fair value of RM0.81, based on a 30% discount to RNAV.

Polite Market's Comment:
Although growth is just 10%, some said good, some said not high enough, but the PE is low, at 6x and with fairly high dividend.
Tambun Indah land Berhad dividend payout ratio policy is 40% to 60%.
This counter is good if they really payout 40% to 60% as dividend.
Even the profit or stock price does not go up, you still get low PE counter with 7.7% dividend.
Furthermore, this company is projected to grow at 10%. Any increase in profit will increase your dividend.

This is an IPO stock. Normally the forecast is not so the accuracy for IPO stock because is new to analysts.

Tambun Indah Land IPO Balloting Result Table.
Tambun Indah Land IPO Oversubscribed Public more than 20 times, Bumiputra 9.78. Overall 14.9$FILE/PRESS%20RELEASE.pdf

Monday, January 10, 2011

AMedia Share Price Target Price Fair Value

Asia Media Share Price IPO RM0.23
AMedia Target Price Fair Value RM0.28

Let us do my PEGGY Method evaluation:

PE: PE ratio 7.67x  (2010)
G: Growth 37% (2011), 46% (2012)
G: Gearing net cash
Y: Yield (dividend)- Not available

The above figure is by TA Securities.
TA Securities said Asia Media target price fair value is RM0.28. They tag a 50% discount to TA media sector PE ratio of 15x because of Asia Media limited business profile and small market capitalisation and new business model. They still think RM0.23 is good value because of healthy capital upside and growth prospect.

POLITE Market's Comment:
Base on the figure, Asia Media IPO share price IPO at RM0.23 is good.
Asia Media PE ratio just 7.67x and the growth is so good!!!
Although no info on the dividend, the PE ratio and growth rate is good enough, furthermore no gearing.
If they pay good dividend, then this will be wonderful.

But this is IPO.
Most analysts just spend very little time on IPO stock and after listing no more info.
Question is, can Asia Media achive the two years forecast by TA Securities???
As TA Securities had said, this is new business, so hard to predict the future profit.

Asia Media Group berhad stock code 0159
Units : 228,000,000
Asia Media Par Value ($$) : MYR 0.100
Stock name : AMEDIA
ISIN code : MYQ0159OO002
Board  : ACE Market

Saturday, January 8, 2011

52 Ways of Making Money in Stock Market - Part 02/52 - Pick Up Dead Chicken

What is Pick Up Dead Chicken? This is where you make very little effort and trying to benefit from others mistakes or efforts.

You can key in very ridiculous low price, and if someone make mistake (accidentally sell wrong stock or wrong price), then you may get it at very low price.
Sometimes, the seller may be under forceselling or need cash and need to sell urgently.

Stock A is $2.00, then key in $1.50 to buy. Sometimes people do make mistake and you may be able to buy it at $1.50. Or sometimes seller desperately need to sell, so they will sell at whatever price.

More easy to pick up dead chicken on illiquid stocks.

You can also trying to sell at a very ridiculous high price and hope someone make mistake. Then buy back at market price.

Risks, Limitations and Difficulties:
Morality- Some people refuse to pick up dead chicken, saying it is immoral to hope people make mistake. I am not here to argue, but I provide my view. Mistakes do happen. By key in the order, just in case people make mistake and we benefit. We are Not hoping people to make mistake, but just in case. Furthermore, if more and more people key-in the orders, it provides some support for the stock not to fall so much. Example if the stock is $4.00, and someone make mistake (key in wrong price) and sold it at $3.00 at big quantity, then the stock will all the way down to $3.00. If many people want to pick up dead chicken, they may have keyed in at $3.30, so the seller may have sold higher at $3.30 rather than $3.00.

Another risk is rather than you pick up dead chicken, you become the dead chicken. This is when you yourself make mistake in key in orders.

Chances of you picking up dead chicken is slim, but it do happen. I have seen people make $10,000, and some more than $100,000 in a single dead chicken. But for some people, they said it is not worth the effort to key in and only very slim chances of getting.

Nowadays, Stock Exchanges, example Bursa Malaysia have been trying to protect people from making big mistake. The one that make mistake can actually request Bursa Malaysia to cancel the trade. But certain conditions must be fulfilled, eg genuineness of the mistake, must report to Bursa within certain time or minutes, the loss must exceed certain amount, etc.

I went to a presentation by US Exchange that they have built in a formula to prevent people from key-in exceptional error price. The order must be compared with certain % of the last done price, best offer price or best bid price, etc.

Cautious!!!!! Warning! ! ! ! ! ! ! ! !
Another risk is you are not aware of corporate exercise. Eg the stock is $2.00. You hope to pick up dead chicken so you key in to BUY at $1.50 everyday. Got bonus issue 2 for 3, so the market price ex-bonus is RM1.20. But you are not aware and you key in to BUY at $1.50, so become the DEAD CHICKEN.

If you have GTD or GTC function, why not? But have to be careful on the corporate exercise.
What is GTD? What is Good Till Date?
Good Till Date means you key in an order (only one time and specify the expiry date) and everyday the system will help you to auto re-key in until it is matched or expired.

What is GTC? What is Good Till Cancel?
Similar, but has no expiry date. Everyday the system will re-key in for you until it is matched or you cancel it.

Please don’t ask your remisier to key-in for you every day, unless they can auto carry forward your order (by using Dealer Mobility). Please be considerate to your remisier.

More on 52 ways of Making Money in Stock Market....

Thursday, January 6, 2011

SPSetia Call Warant Made 10%, but NOT me

Referring to yesterday post in SPSetia-CB, my friend spotted a big discount in SPSetia-CB and bought at RM0.64 on 4Jan and sold at RM0.705 on 5Jan. There is about 10% return.

The sad point is, she only tell me on 4Jan AFTER 5pm.

5Jan morning before 9am, I placed an order at RM0.645 (previous close was RM0.635).
At 9am the buyer is already RM0.66, and when I went to check after 9 something, the price has already shot up to RM0.68.

Closing on 5Jan, SPSetia just up 0.2%, but SPSetia-CB up 10.2% ! !

If my friend had told me BEFORE 4.30pm 4Jan, I may bought it around RM0.64 (4Jan last done was RM0.635). I need some time to check and verify the details and make decision.

Sad that I miss it.

There are many ways to make money in stock market and one of the ways is to identify big discount of call warrant.

This year I am posting a series of article "52 ways of Making Money in Stock Market"
More info here.....52 Ways

Wednesday, January 5, 2011

SPSetia-CB Buy? SPSetia Share Price RM6.30

SPSetia Share Price RM6.30
SPSetia-CB share price RM0.635
Exercise price RM3.50
4 shares exchange to 1
SPSeta-CB Fair Value = (RM6.30 - RM3.50) divided by 4= RM0.70
On 04 January 2010 someone alerted me on SPSetia-CB.
She bought at RM0.64.
But she alerted me AFTER 5pm ! ! ! !
What can I do.

Asia Media Share Price IPO Balloting Result Table - Oversubscribed 21.46 times

Asia Media Oversubscribed 21.46 times.
Asia Media Share Price IPO Balloting Result Table -$FILE/PRESS%20RELEASE.pdf

Tuesday, January 4, 2011

KSL Share Price Fair Value Target Price RM2.78 BUY

KSL Share Price Fair Value Target Price is RM2.78 with BUY recommendation.
KSL share price is RM1.80. KSL RNAV revalued net asset value per share is RM3.97.
Let us do my PEGGY Method test:
PE: PE ratio
G: Growth
G: Gearing
Y: Yield
Current KSL PE ratio is 10x. Normal.
The growth is 30% 2011 and 24% 2012. Good.
KSL Gearing net is 20%, ok.
Dividend yield is 2.8%. Normal.
KLS PE ratio is ok, but with high growth rate this is consider cheap.
PE ratio will then drop to only 6.2x in 2012.
The above figure and KSL target price is by RHB, just initiated research coverage on KSL with an Outperform rating. Based on a 30% discount to RNAV, KSL fair value target price is RM2.78, giving an upside of 54%. KSL is RHB top pick for small-mid cap exposure.
According to RHB, the investment case is: i) A good proxy for IDR play; (ii) An RNAV play -market value for the 446-acre land in Klang has appreciated to RM25-30psf, vs KSL's cost of only RM8-9 psf; (ii) Various property launches in 2011- Bandar Bestari (GDV: RM2.5bn) - KSL's first township development in
Klang Valley , One Mutiara - new township in JB (GDV: RM380m) and D'Embassy @ Jalan Madge (GDV: RM200m); (iii) Ramping up recurring income from property assets - KSL City shopping mall from Jan 2011; and (iv) Potential disposal of KSL City shopping mall.
RHB said KSL Shopping Mall book value is RM150m. If KSL sell their KSL City shopping mall worth about RM500m, potential gain is RM350m.
Total number of shares is 390.5m.
Sales proceed per share is RM1.28 per share.
Profit per share is RM0.89 per share.
If after minus out the borrowing of RM150m, still got RM0.51.
They said KSL has a size of 446 acres of land in Klang Valley and the cost is RM8 to RM9 psf.
Market value now is about RM25-30 psf.
Assuming at RM27 psf and cost is RM8.5, the profit will be RM360m.
Profit per share will be RM0.92
KSL is good. But if they don't reward shareholders with good dividend and don't make good use of the land, this counter may not be exciting and may to hold longer.


52 Ways of Making Money in Stock Market - Part 01/52 - Arbitrage

52 Ways of Making Money in Stock Market - Part 01/52 - Arbitrage

What is Arbitrage? In economics and finance, arbitrage is the action of taking advantages of price difference between two similar or same items, and striking a deal on these items, and the profit is the difference of these two prices.

In theory, there is no risk involved. But in practice, there is some minor risks involved such as timing, execution risk or mistake, currency fluctuation, etc.

Arbitrage can in many forms. Same stock in different exchanges, warrant and mother share, Loan Stock, rights issue, local and foreign stock, currency, football quotes, etc. We just look at Stock Market.

In stock market, it is about buying and selling the same or almost same stocks and the price difference will be the profit.

Four important components of Arbitrage:
1) There is price difference between A and B
2) A and B are the same or almost same stocks.
3) Simultaneously buying A and selling B.
4) The price difference is the profit and the risk is very minimal or low.

Public Bank Local and Foreign Shares
PBbank $10.00
PBbank-O1 $10.30

If you have PBbank-O1, so you sell at $10.30 and simultaneously buy PBbank at $10.00. You make $0.30. Minus out the brokerage, you still make.
End of it, you still own a PBbank share.
If PBbank price is higher than PBBank-O1, then sell PBbank and buy PBbank-O1.
Many friends and family members have done that many times.

Rights Issue Entitlement OR.
Normally the Ordinary Rights (OR) stock add the Rights Issue Subscription price, is lower than the Mother Share.

Stock A $3.00
Stock A-OR $1.00
Right issue Subscription price $1.70
If you have Stock A, you will sell it at $3.00.
Then SIMULTANEOUOSLY buy the OR at $1.00. Then add $1.70 to subscribe, the total cost is $2.70.
Wait for the right issue to credit into your account in about three weeks time.
End of it, you still own a Stock A, but you save $0.30. Minus out the brokerage, you still make.

Is the same principle as Rights issue. If the exercise price plus warrant price is lower than the Mother Share, then you can do arbitrage if you have the Mother Share.

Loan Stock.
Stock A $4.20
Loan Stock A $1.00
4 Loan Stocks to convert into one Mother Share.
Assuming you are having Stock A. You can sell Stock A at $4.20, and SIMUTANEIOUSLY buy 4 Loan Stock A at $1.00.
4 X $1.00 =$4.00.
Then you convert your four Loan Stock A into Stock A.
End of it, you still own a Stock A, but you save $0.20. After minus out brokerage, you still make.

There are also MANY other ways in stock market and also can apply in areas other than stock market. As long as you know how to do it, then you can identify the opportunity.

Risk, Limitations and Difficulties:
*You need to own something first. You cannot buy it and then do arbitrage,

*There are dividends involved, if the transition period is long (eg warrant conversion or rights subscription) then you may lose out on the dividend if they announced and paid out dividend during that period. When the shares credit into your account, the dividend ex-date already over. Miss out on the dividend may be worse than didn’t do arbitrage.

*Time Factor- For warrant and rights issue, it takes about two to three weeks for the shares to credit into your account. So you are unable to sell your shares within these periods no matter what happen. If got war or earthquake you also can’t sell your shares. If the shares goes up 70% also you can’t sell your shares.

*Execution Risk
After you have sold A, when you want to buy the warrant although simultaneously, the price may suddenly shoot up and you may miss it.

*Technical Problem- if you fill up the form wrongly or you forgot to subscribe the rights issue, then all you money is gone. Or your dispatch boy brought to the wrong address and you miss the deadline. Although this rarely happen, but many things can happen. Accident, hospitalized, wife give birth, strike contest, all these can make you forgetful or unable to do the subscription. Most registrars also refuse to provide acknowledge receipt. You can’t argue if they say their didn’t receive.

Good opportunity. If you have the shares and there is a chance to do it, try to do it. You may do only some of your shares if you are afraid of the risks. Check out their normal dividend payment date. About the subscription, apply early to avoid any unforeseen circumstances.

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Monday, January 3, 2011

Maxwell International Share Price IPO Balloting Result Table - Undersubscribed

Maxwell International Share Price IPO Balloting Result Table.
Maxwell IPO oversubscribed or Undersubscribed?
The answer is undersubscribed.
But I saw the headline as "Maxwell's 43.75m shares fully placed out".
In the news content the word undersubscribed is not mentioned.
You can see how people play with words. Only publish what is good.
1,698 applications for 18,014,500 shares were received from Malaysian public applicants, in respect of 20 million ordinary shares made available for application.
If you have applied Maxwell IPO, sure strike already, unless got technical problem like wrongly filling up forms.
The adviser, underwriter and placement agent for the public issue is OSK Investment Bank Bhd.

52 Ways of Making Money in Stock Market - Part 00/52 - Introduction

52 Ways of Making Money in Stock Market

Starting 4 January 2011, I will post a series of articles, called 52 Ways of Making Money in Stock Market.

Normally people will buy a stock and try to sell it at higher price to make profit.

Rather than the conventional or traditional way of just buying and selling, my articles will be on non-conventional ways. Even though all the methods still need to buy a stock, but they are very different from our normal buying.

I will be focusing in Bursa Malaysia, but most (with the exception of a few methods) of the 52 methods of how to make money in stock market can also be applied in other stock exchanges.

Those with experience in the stock market, they already know most of the methods. However, these methods are useful knowledge or reference for those who are new in the stock market.

Human do make mistake and I may make mistake in these articles. I want to clarify that I am NOT an expert and I am NOT giving any advice or recommendation. All the 52 Ways of how to make profit in the stock market are my own personal opinion or knowledge and I am just sharing my experience. You will have to seek your remisier / dealer or financial consultant for any advice.

You may post any question if you need further clarification on any of the method. You are welcome to share your own opinion or knowledge so that other readers may benefit.

Wishing all of you make more money in the stock market.

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Sunday, January 2, 2011

Yes! I Hit it Right!!

Congratulation!! You bought the right stock at the right time.
But two questions I need to ask you.
1) How many percent you made?
2) What is your normal investment amount and how much you invested on this?
Investor A
I made 15%. I normally invest RM3,000 and this stock also RM3,000

Polite Market: Normally people made right decision but the gain is just 10% to 20% (RM300 to RM600 if based on RM3000 above). But if the decision is wrong, refuse to cut loss and the loss is 50% (RM1,500).
Investor B
I made 100%. Normally I invest RM3,000 and this stock because it is risky and volatile, so I just invested RM1,000

Polite Market: If other stock made wrong decision the loss is 50% (RM1,500).
This stock made 100% but the gain is just RM1,000
Investor C
I made 100%. Normally I invest RM3,000 and this stock also RM3,000

Polite Market: Wrong decision loss 50% (RM1,500). Right decision gain 100% (RM3,000). WELL DONE!!!
Both A, B, C also made the right decisions. All should be happy.
But A & B should not shout, just normal profit.
Only C can shout.
Sometimes I also invest in smaller amount. So, if I make, I cannot shout.
But most of the times, I invest in equal amount.

Actually we should.....
1) Try to make more % gain
2) Try to invest in equal amount

Saturday, January 1, 2011

K.Seng Seng Share Price IPO

K Seng Seng Corp Bhd (KSSC), en route for listing on Main Market of Bursa Malaysia Securities Bhd next year, expects to raise RM11.47 million from its intial public offering (IPO).

In a statement today, KSSC said RM3.31 million of the proceeds would be used to buy machinery for the development and production of a new range of secondary stainless steel products.

"The rest will be used for working capital (RM6.26 million) and listing expenses (RM1.9 million)," it said.

The IPO involves a public issue of 20.124 million new ordinary shares of 50 sen each at an issued price of 57 sen.

The public will be offered six million shares, 5.124 million shares for eligible directors and employees and nine million shares for private placement.

An offer for sale consisting of 2.2 million ordinary shares will also be made to identified investors. - Bernama and Business Times


Melayu Cepat Lupa

Dr Mahathir once said Melayu cepat lupa.

Polite Market's Comments:
Investors also cepat lupa. We thought that investors will be smarter and have learnt their lessons (already paid tuition fees in stock market).
But many repeat the SAME mistakes.
Buying during bull market when the prices are too high
Refuse to cut loss
Not buying during bear market
Bad stock selection
Etc etc
Investors Cepat Lupa



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This blog also is not an advice, recommendation or an invitation to buy or sell or invest in anything, eg shares, futures, derivatives, gold, etc. Consult your investment adviser before making any decisions.
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