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Saturday, February 23, 2013

Why some no need to sell stock before Election

Many investors don't know what to do now, not sure to buy now or wait after election GE13. Some even thinking of selling or sold.

There are many options, buy, sell, sell later, hold, wait and buy before election, buy after election, buy now and sell two weeks later, etc.

One option is sell KLCI futures. One investor, he has many stocks but he wants to avoid the election uncertainty, so he sell KLCI futures FKLI. If market down, his portfolio down but he make from futures. If market up he lose in futures but his portfolio up.

Why he did this?
He want to sell because want to avoid uncertainty, but don't know which stock to sell. Also, as most of other investors, refuse to sell stocks. So he just sell KLCI futures FKLI.

There are also chances that his portfolio up and KLCI down, or his portfolio perform better than KLCI.

Brokerage also cheaper, about RM20 one FKLI contract. If he sell RM80,000 worth of stocks, brokerage is about RM350.

The price of FKLI is now trading at discount. If market does not move, easily lose few points worth few hundreds per contract.

FKLI contract will expire. Need to roll to next month and incur additional brokerage and may get prices that are not favourable. If sell March or June contract, the discount is much bigger.

There is a possibility that KLCI up and his portfolio down. Or FKLI perform better than his portfolio. Meaning he lose in FKLI more than he make in his portfolio.

How many FKLI contracts to sell is a question. 1600 point X RM50 is about RM80,000 per contract.

There are many advantages and disadvantages of selling FKLI. He sold it just to avoid uncertainty, his portfolio is larger than the FKLI contract that he sold. He does mind the minor prices.


I was right in my article on MBSB Warrant recently. With MBSB warrant performed better than MBSB.

P&O quarterly financial result normal. Low PE ratio with good dividend yield and a potential special dividend.

Freight Management quarterly financial result normal. Growth potential is there but not high. Reasonable good dividend yield.

QL result not so good. As I have mentioned in my earlier articles that I don't know why most brokers still recommend buying QL stock, saying PE ratio reasonable and got profit growth potential. They said QL also is a defensive stock, still can make profit during bad economy. But QL always disappoint us recently.

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Sunday, February 17, 2013

Bursa malaysia high dividend yield stocks

This is based on current financial year 2013 forecast.

Zhulian (RM2.70) 5.7%

P&O (RM1.32) 5% plus a potential special dividend.

SKPRES (RM0.35) 7.6%.  TA securities recommend outperform or buy with SKPRES target price of RM0.58, a 65% upside plus good dividend.

Pantech (RM0.71) 7.5%.

LPI (RM13.50) 5.5%.

Huayang (RM1.63) 8%

Note: The above are from what I have gathered from various farecast. Got other stocks offering higher dividend, but the above stocks are what I'm familiar. Different brokers have different figures. These companies may not achieve the forecast or may exceed. Some put net some put gross, confusing. Later all single tier dividend no more confusing.

Monday, February 11, 2013

Dear MBSB Shareholders

Make money by Selling MBSB and buying MBSB warrant? MBSB share price currently is RM2.39 and MBSB Warrant share price is RM1.33. If you sell MBSB at RM2.39 and buy MBSB warrant at RM1.33, convert to MBSB mother share by paying RM1.00 per share. Your cost is RM2.33 (1.33 + 1.00), your sale proceed is RM2.39, you make RM0.06.

Depends on how many MBSB you have and what is the brokerage and minimum brokerage, you may make RM0.02 on average, or less or loss, or make more.

Assuming you have 10,000 you may be making RM200. If you have 100,000 you may make RM2000.

What you need to do?
1) Sell MBSB and Buy MBSB Warrant. This step is straight forward.
2) Convert MBSB warrant to MBSB Mother share. This is quite troublesome for some people. Buy bankdraft, fill up forms, post or deliver. But if using share margin or nominees/custodian service will be easier because they will do all the things, clients just sign a simple form and most accept fax. Most have some charges.

After all these, you get back your MBSB shares, but in the process you save about RM0.02 per share.

What are the risks?

After you sold MBSB, in less than half minute suddenly MBSB warrant price shoot up. Or you are greedy you que to buy MBSB warrant, didn't get and the price shoot up.

The whole process will take about three weeks. In between if MBSB declare and pay dividend, you will not be entitled for the dividend because you have sold the MBSB share and have not receive the new MBSB shares from converson.

Based on the information that I have, MBSB has proposed dividends that need to be approved in MBSB AGM. As long as the AGM is more than 3 weeks is quite safe.

Note: Exercise price RM1.00? The above is just my own case study, I may be wrong in computation. Infomation is limited.There may be info that I may mot know or wrong. MBSB may declare or already declared dividend anytime now that I may not aware. If I'm wrong, please share with me.

This is not an advice or recommendation. Just my own case study, on what I can do if I have MBSB shares. I'm still learning.


This is related to the article that I share in 52 ways of Making Money in Stock Market - Number One Arbitrage

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Saturday, February 9, 2013

What should you do now? Buy? Sell? Hold? Wait? Buy if and Sell if?

With the market reacted negatively to the General Election, many are wondering what to do. Actually there was just one single day that was started Election worry, it was Monday 21 January 2013. After that people keep talking about it and market also not stable. Before that Monday, everyone also knew about the Election, many news about it, and market was trading like normal. That Monday, before market open, FKLI futures already down more than 20 points, why suddenly all people worry about Election in that Monday morning?

What I should do now?

1) Sell all my shares and buy back just before election or just after election. Everyone so worry about election, that's why I should sell all now. Why wait for it to drop everyday.

2) After selling, if I think Barisan will win, I buy just before election.

3) But someone said after election, if BN win market will also drop, because no need to maintain a feel good stock market. So I sell now and wait until months after election.

3) But someone said now already drop, market will not drop further, all the news people already know, all the selling already done. As we can see, market rebounded recently. So I should stop selling.

4) Then someone said Malaysian retail investors are matured, will make rationale decision. Both BN and Pakatan are also pro business, no significant negative impact on business. Few Pakatan states are now being managed quite ok. Many countries change of government are very normal. Market will not go down. Rather than sell, I should hold. I should buy some if any drop.

5) Then someone told me, this year will be a good year for stock market. Most international stock markets are up. Both BN and Pakatan are pro business. Stop worrying about election. Then I should buy now.

Different people different opinion. Foreign funds, retail, local funds, world news have an impact on the stock market. Market is very unpredictable.

This is what makes the stock market looks difficult. But actually is simple. So many people don't know the answer, and our decisions are part of the answer. Conclusion is, even not knowing the answer, many people still make money as long as continue to invest in fundanmental.

My friend said Phillip Capital in the new report, recommended Pantech stock. Currently Pantech share price is RM0.71. PE ratio is low with good growth prospect and good dividend.

Imaspro stock recent financial result shows improvement. No details yet, will post once I get it. Past few years, the results were bad and CIMB recommended to sell.

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Friday, February 1, 2013

Tune Ins Holdings Bhd IPO Fair Value RM1.00

According to TA Securities, Tune Ins target price is RM1.00. They said  this is 20% premium to the industry PER of 10 times. Tune Ins dividend yield is about 1% to 2.15% based in Tune Ins share price of RM1.55, the IPO price.

I like this kind of research report analysis. Although the IPO Price of RM1.55 is not fixed yet, but analyst is bold enough to give a fair value far from the IPO price. Right or wrong is another matter, because market sentiment, technical analysis, actual share price and demand and supply can be different from fundamental. But bold to stick to the price from the fundamental data.

For info, HwagDBS gives a fair value of RM1.22 to Boilerm, current share price is RM0.94. They said is a BUY because of the growth prospect and potential transferring to Main Market from ACE market.

Shall we ignore the Malaysia General Election issue and buy shares now?

For more information on recent IPO, here.

For more info on Boilermech, here.

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