SE Asia Stocks: Malaysia at record high; Fed meeting eyed

July 16, 2012

BANGKOK, July 16 – Southeast Asian stock markets extended gains today with Malaysian shares hitting a record high as fears of an economic hard-landing in China subsided, but trading volumes were low as investors waited for a US Federal Reserve meeting.

Malaysia hit an all-time high of 1,635.96 points with a 0.6 per cent gain, while the Philippines outperformed the region with a 1.6 per cent jump.

Indonesia gained 0.7 per cent to a more-than one-week high with, Thailand edged up 0.3 per cent to its highest since May 8.

Singapore closed 0.1 per cent firmer at 2-1/2-month high.

Regional analysts said investors cautiously bought into equities ahead of Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the US Congress on the economy set for tomorrow and Wednesday. – Reuters

Malaysia’s stock market hit an all-time high

Stock market hits all-time high

Malaysia’s stock market hit an all-time high of 1,603.96 points yesterday and closed at 1,603.78 for a gain of 7.45 points. PETALING JAYA: Malaysia’s stock market hit a new high yesterday with the FTSE Bursa Malaysia KLCI (FBM KLCI) reaching 1,603.96 after... By WONG WEI-SHEN weishen.wong@thestar.com.my

Foreign investors selling down shares: MIDF

Foreign investors selling down shares: MIDF
Published: 2011/03/14

Bursa Malaysia's total market capitalisation held by foreign investors, is estimated to be about 21.5 per cent currently, assuming a net foreign selldown of about RM4 billion since the beginning of the year.

The percentage of its total market capitalisation held by foreign investors was 21.9 per cent at the end of December, MIDF Research said in a note today.

It said foreign investors have been selling down local shares since January, after a bullish start to the year.

Local institutions continued to prop up the market while retailers were still relatively heavy net sellers, MIDF said, adding, gross purchase by local institutions amounted to RM4.5 billion last week, similar to that of the previous week.

"Risk aversion is creeping back into the market. There is too much uncertainty in the world currently for equity investors to be even remotely aggressive," it said. "Locally, the market's volatility appears to be increasing by the day," it added. -- Bernama


Read more: Foreign investors selling down shares: MIDF http://www.btimes.com.my/Current_News/BTIMES/articles/20110314121658/Article/index_html#ixzz1GZ0vznMp

FTSE Bursa Malaysia KLCI closed for the year at 1,518.91

52wk Range:	1,072.69 - 1,531.99

Interesting graphs of FTSE Bursa Malaysia KLCI over different periods.  Do you have a strategy to protect your downside and to profit from the upside, from the volatility of the stock market?

Warren Buffett lamented that many business schools are teaching the wrong stuff to their students.  He is of the opinion that basically to be a good investor, you need to be taught two topics in great detail.

Firstly, you need to have a very thorough understanding of how to value various assets.  Secondly, you need to understand the behaviour of the stock market, so that you can take advantage of it and not fall folly to it.

This year has been another very rewarding year for my investing.  My portfolio has shown good returns.  A worrying point now is that in my portfolio of stocks, twenty-two stocks have huge gains and two stocks have small losses.  The two small losses were in stocks bought in 2007 and they constitute a very small proportion of the overall portfolio.  It wasn't a surprise that most of my stocks would be showing gains, especially those that have been in the portfolio for a very long time and bought at regular intervals (dollar cost averaging).  However, when almost ALL the stocks bought in recent years showed gains from their cost prices, one has to be apprehensive of the stock market.

Many geniuses are born in a bull market, so the saying goes.  Therefore, one may assume that either one is a genius (don't be fooled) or perhaps the market is too gregarious and optimistically overpricing most stocks (one can be easily and unknowingly fooled by this too).

Perhaps, with the New Year approaching, a re-look at my portfolio with view to re-balancing is not inappropriate.

Happy New Year to all.

Bursa Malaysia: The Past Years in Review

1 Year Chart

2 Years Chart

5 Years Charts

The emergence of the underperformers

The emergence of the underperformers

by Ghaz Ghazali ghazghazali@theborneopost.com.
Posted on December 6, 2010, Monday

Earning numbers in 3Q10 not favouring outperformers – Analysts

SHIFT IN TREND: Photo shows the Bursa Malaysia building at Bukit Kewangan, Kuala Lumpur – the nation’s bourse and index centre. Companies pegged under ‘downgrade’ call have exceeded the ‘upgrades’ by 33 per cent as corporate earnings in the country have been slipping against expectations since last year’s fourth quarter.

KUCHING: The year’s third quarter results signals the rise of underperformers, which outnumbered outperformers by two to one – indicating continued pressure faced by certain key sectors, say analysts.

On a percentage basis, companies pegged under ‘downgrade’ calls exceeded the ‘upgrade’ ones by 33 per cent as corporate earnings in the country had been slipping against expectations since last year’s fourth quarter, observed OSK Research Sdn Bhd’s (OSK Research) head of research Chris Eng.

“Third quarter earnings were uninspiring particularly the small caps, with 45 per cent of companies reporting results that were below expectations compared with the big caps, of which 60 per cent were within expectations.

“Sector-wise, only the media sector outperformed. On the flipside; the smaller steel, technology and O&G (oil and gas) companies reported weak results owing to lower margins, a stronger ringgit and delays in contract awards,” he outlined.

On the other hand, ECM Libra Capital Sdn Bhd’s (ECM Libra) head analyst Bernard Ching noted that while the trend appeared to favour underperformers in the reviewed quarter, positive earnings surprises were somewhat more than those in the negative.

“Even as positive ear-nings surprises for the third quarter – which comprised 18 per cent of stocks under our coverage – were lower than the 29 per cent reported in the preceding second quarter, there were fewer negative earnings surprises as well,” he pointed out, adding that 12 per cent of stocks under coverage had failed to meet estimates against 20 per cent in the preceding quarter.

Notable players that recorded such positive earnings surprises included telco giant Axiata Group Bhd, national airline Malaysian Airline System Bhd (MAS), O&G-related services provider Dayang Enterprises Holdings Bhd and construction conglomerate Sunway Holdings Bhd.

On the negative end, the research house weighted off building materials provider Lafarge Malayan Cement Bhd; consumer goods distributor Pelikan International Corp Bhd; O&G groups Petra Perdana Bhd and Wah Seong Corporation Bhd; plantation player Boustead Holdings Bhd; and construction company Sunway City Bhd.

Adding in a more optimistic take on the underperformers-versus-outperformers scenario, HwangDBS Vickers Research Sdn Bhd’s head of research Wong Ming Tek maintained that the restructuring of the KLCI in July last year should provide an added boost with higher weightings on bigger caps.

“The absolute 2010 net profit for our universe is set to surpass pre-financial crisis levels, supporting the KLCI (Kuala Lumpur Composite Index) to new highs in 2011. Coupled with impending Sarawak state elections, the government’s ongoing reforms and potentially strong CPO (crude palm oil) prices; we believe that the resilient economic growth, interest rate differential and weak US dollar could also see higher levels of foreign ownership.”

Similarly, ECM Libra’s Ching was also positive on the foreign ownership matter, highlighting that foreign net equity inflows would remain strong in the near term.

“We are still positive in the near term. Although the local index has retraced by about three per cent since hitting a high of 1,528.01 three weeks ago, we are unfazed by it.

“Rather, we believe the market will continue its uptrend in a more meaningful manner in next year’s first quarter, led by resilient domestic consumption, strong foreign net equity inflows, M&A (mergers and acquisitions) activities and also the Sarawak state election.”

On behalf of OSK Research, Eng believed that upgrades might again beat downgrades by the end of the fourth quarter, assuming that “things to turn for the better in the coming last quarter of this year.”

“For now, we maintain our 2011 fair value of 1,648 points, with our KLCI earnings growth to remain intact at 16 per cent. We maintain our ‘overweight’ call on the Malaysian market,” he added.

http://www.theborneopost.com/?p=78965

Foreign, retail buys spur Bursa trading

Main points:

1. Last month, foreign funds bought RM10.6 billion worth of stocks and sold some RM8.8 billion of them.
2. In contrast, domestic funds bought RM12.8 billion worth of stocks and sold some RM14.2 billion worth of stocks.
3. Last month, retail players bought RM7.6 billion worth of stocks and sold RM7.7 billion worth of stocks.
4. Retailers accounted for 48.04 per cent of the 25.2 billion shares traded in October.
5. Apart from sentiment, cheap credit has also helped stir the layman's interest in equities.
6. According to Bank Negara Malaysia, up to September this year, some RM35.6 billion, which is an increase of 8.1 per cent over the same period a year ago, was lent by banks for purchase of securities.

By Francis Fernandez
Published: 2010/11/11

The momentum is in the larger capitalised stock, and the buying has been steady, says Jupiter Securities' head of research

Malaysia's stock market drew more buyers than sellers among foreign investors in October while small or retail investors made up almost half of the trading volume, data from Bursa Malaysia showed.

Jupiter Securities head of research Pong Teng Siew expects the trend to continue this month, as local institutions like the Employees Provident Fund need to sell to raise income for dividends.

"They need to sell to pay dividends. But, because the market is strong the local institutions will also be buying stocks," Pong told Business Times in a telephone interview.

It is also clear that foreign funds are buying although they have yet to do so in large quantities.

"The momentum is in the larger capitalised stock, and the buying has been steady," said Pong.

Last month, foreign funds bought RM10.6 billion worth of stocks and sold some RM8.8 billion of them.


In contrast, domestic funds bought RM12.8 billion worth of stocks and sold some RM14.2 billion worth of stocks.

Meanwhile, Lee Cheng Hooi, Maybank Investment Bank's head of retail research for equity markets, said that retailers were also strongly back in the market.

Lee added that opportunities are abundant in the market, and retailers should focus on laggards and lower-priced stocks.

Last month, retail players bought RM7.6 billion worth of stocks and sold RM7.7 billion worth of stocks.

Retailers accounted for 48.04 per cent of the 25.2 billion shares traded in October.

Yet another indicator of retailers coming back to the market is the rise in volume on Bursa Malaysia's FBM Small cap index, which measures the performance of stocks with smaller market values.

This has led to a surge in demand for stocks below RM1. Over the past three months, from the 17 stocks that have gained more than 100 per cent, 13 of them are priced below RM1.

Among the penny stocks that have notched gains of 200 per cent or more are Scope Industries Bhd, Karambunai Bhd, Petaling Tin Bhd, Majuperak Holdings Bhd, Ho Wah Genting Bhd and Cuscapi Bhd.

Apart from sentiment, cheap credit has also helped stir the layman's interest in equities.

According to Bank Negara Malaysia, up to September this year, some RM35.6 billion, which is an increase of 8.1 per cent over the same period a year ago, was lent by banks for purchase of securities.

Pong says the bulk of the money went to large corporations to fund takeovers, and retailers are getting their purchasing power from loans provided by stockbroking firms.


Read more: Foreign, retail buys spur Bursa trading http://www.btimes.com.my/Current_News/BTIMES/articles/forexx-2/Article/index_html#ixzz14vh6GpgX

The FBM KLCI has risen more than 20% since the beginning of the year.

Year-to-date, several Asian markets including Indonesia and the Philippines have broken passed their record levels while the FBM KLCI has risen more than 20% since the beginning of the year.

http://biz.thestar.com.my/news/story.asp?file=/2010/11/10/business/7395324&sec=business

KLCI highest Dividend Yielding Stocks

FTSE Bursa Malaysia KLCI 30 (Malaysia) highest dividend yielding stocks top 30

Is the KLSE overvalued?

5.10.2010

KLCI 1462.27
Market PE of KLSE = 17.48
Earnings yield = EY = 1/PE = 5.7%
Risk free FD interest rate = 3.0%
Equity risk premium = 5.7% - 3.0% = 2.7%

Equity risk premium is the compensation investors require for holding stocks.
Equity risk premium = earnings yield (1/market PE) - the risk free rate.

More than 3.5%, market is undervalued
0.6% to 3.5%, market is fairly valued.
Less than 0.6%, market is overvalued

So, presently, by the above criteria of equity risk premium, the market is neither undervalued nor overvalued, and is at fair value.

http://myinvestingnotes.blogspot.com/2009/07/when-is-market-over-valued.html

Market PE of KLCI 5.10.2010

Market PE of KLCI  5.10.2010

https://spreadsheets.google.com/pub?key=0AuRRzs61sKqRdHJMTjI0N1NhSG16dVhBMDZCYTQ3eVE&hl=en&output=html

5.10.2010

KLCI 1462.27

Market PE of KLSE =  17.48

Market DY = 2.52%



Compare this with:

Market PE of KLSE 10.2.2010

http://spreadsheets.google.com/pub?key=tqTRwLLBhkoRtg4BhuybqMA&output=html

KL bourse 'rediscovered long-lost mojo'

KL bourse 'rediscovered long-lost mojo'
Published: 2010/09/28

Malaysia’s stock market has “rediscovered its long-lost mojo,” evidenced by rising trading volumes as a stronger ringgit and economy lure investors, Credit Suisse Group AG said.

“We have noticed a distinct shift in the tone of the market over the last few weeks,” according to a report by analysts led by Stephen Hagger. “Foreign funds have been attracted by a combination of a strengthening currency and economy, Malaysia being part of ‘hot’ Southeast Asia, it being under-owned, and increasingly Prime Minister Najib Razak’s economic reforms.”

Hagger, whose team was ranked second for Malaysian research in Institutional Investor’s 2010 Asian poll, favors so-called proxies for economic growth including banks, property companies, Tenaga Nasional Bhd and PLUS Expressways Bhd.

Malaysia’s government said on Sept. 21 it plans to develop a nuclear energy industry, build a mass rail network and create a shopping district to rival Singapore’s Orchard Road. The plans are part of the US$444 billion worth of potential projects it has identified to accelerate growth and transform it into a high-income nation.

The benchmark FTSE Bursa Malaysia KLCI index has surged 17 per cent since the May 26 low, surpassing levels before the start of the global financial crisis in 2008. Foreigners have become net buyers of the nation’s stocks since June, Hagger said.

‘Positive News’

“Up until recently, stocks did not react to positive news, and the market lacked a certain vibrancy,” Hagger said.

That’s changing as turnover increases, Hagger said. Trading volume on the stock market rose to 1.7 billion shares on Sept. 24, the highest level since Jan. 5, according to data compiled by Bloomberg. The daily average has risen to 843 million shares this quarter so far, from 788 million in the second quarter.

Malaysia’s economy expanded 8.9 per cent in the second quarter, close to the fastest pace in a decade, the central bank said on Aug. 18. Growth may exceed 6 per cent this year, Governor Tan Sri Dr Zeti Akhtar Aziz said then. That’s helped to boost the Malaysian ringgit by 10.8 per cent against the dollar this year, the best performance in Asia excluding Japan. -- Bloomberg

Read more: KL bourse 'rediscovered long-lost mojo' http://www.btimes.com.my/Current_News/BTIMES/articles/20100928132854/Article/index_html#ixzz10pPnMJpy

Bursa surpasses psychological 1,400-point level

Tuesday August 24, 2010

Bursa surpasses psychological 1,400-point level

PETALING JAYA: The local bourse surpassed the key 1,400-point level to close 0.58% higher at 1,403.15 on selective buying of blue-chip stocks in the latter part of the trading day by funds as better-than-expected corporate results at home outweigh the lack of fresh leads from abroad.

Analysts were convinced that the benchmark index would face resistance at that level after a spate of macro news which heralded a gloomier second half.

CIMB Group Holdings Bhd became the largest bank after its market capitalisation exceeded that of Malayan Banking Bhd’s (Maybank) yesterday.

CIMB’s market capitalisation stood at RM58.06bil compared to Maybank’s RM57.61bil. CIMB’s share price rose 22 sen to RM7.92 while Maybank’s added 1 sen to RM8.14.

Among other actively traded counters, Genting was up 11 sen to RM8.72, PPB added 40 sen to RM17.36 and TM was three sen higher at RM3.58.

However, investors remained cautious as reflected in the broader market, with 465 counters down compared to 291 gainers while 270 counters were traded unchanged.

Volume was relatively low at 805.11 million shares traded with a total value of RM1.33bil.

The local bourse bucked the trend in the region, where Tokyo’s Nikkei 225 lost two-thirds of a per cent to 9,116.69, Hong Kong’s Hang Seng Index fell 0.44% to 20,889.01 and Singapore’s Straits Times Index was 0.36% lower at 2,925.99.

Meanwhile, the Aussie dollar faced selling pressure after a federal election over the weekend failed to deliver a majority to either incumbent prime minister Julia Gillard nor opposition leader Tony Abbott.

Sydney’s S&P/ASX 200 Index was little change, shedding 0.4%.

http://biz.thestar.com.my/news/story.asp?file=/2010/8/24/business/6907184&sec=business

KLCI over the last 3 months to 17 Years (30.6.2010)

3 months (1.4.2010 - 30.6.2010)






6 months (1.1.2010 - 30.6.2010)







12 months (1.7.2009 - 30.6.2010)




2 Years (1.7.2008 - 30.6.2010)




5 Years (1.7.05 - 30.6.2010)




17 Years (Dec 1993 - 30.6.2010)

Historical Investment Data of KLSE 1993 to 2010 (6.6.2010)

Historical Investment Data of  KLSE 1993 to 2010
http://spreadsheets.google.com/pub?key=tVCJOWP_2GLeToC9ioAeuZw&output=html


Here are some interesting observations:

KLCI Index 
Beginning of 1994:   1275.32
Beginning of 2010:   1259.16  :-(

Market Returns
During the period, the average annual capital appreciation of the stock market was 4.26%.  Assuming a DY of 3%, the total return of the market was 7.26%.

Of the 17 years from 1994 to 2010:

• There were 5 Bear Markets when the market index went down >20% from the beginning of the year.
• There were 4 Bull Markets when the market went up > 20% from the beginning of the year.
• The rest of the period (8 years), the market fluctuated between +/- 20%; there were 6 positive years and 2 negative years.
• The market was very volatile at times.  For example, the KLCI was down 53.19% in 1997 and was up 55.91% in 1999.  In the year 2008, it was down 36.52% and in 2009, it rebounded 42.37%.

What can we learn from studying the KLCI?

What investment strategies can be employed to safeguard your investments in the local stock market?  What investment strategies can be used to maximise your investment gains?

FBM KLCI falls for eighth day running

FBM KLCI falls for eighth day running
Written by Surin Murugiah
Tuesday, 25 May 2010 10:40


KUALA LUMPUR: The FBM KLCI extended its losses for the eighth straight day on Tuesday, May 25, dragged by losses at key blue chips and banking counters.

On Wall Street, stocks slid on Monday, May 24, driving the Dow to its lowest level since Feb 10 as fresh signs of Europe's banking problems emerged, according to Reuters.

Concerns about Europe's banking system continued to weigh on markets, after the Bank of Spain took over a small savings bank, CajaSur, over the weekend, increasing anxiety among investors worried about debt problems spreading throughout financial markets, according to Reuters.

The Dow Jones industrial average dropped 126.82 points, or 1.24%, to 10,066.57. The Standard & Poor's 500 Index slipped 14.04 points, or 1.29%, to 1,073.65. The Nasdaq Composite Index fell 15.49 points, or 0.69%, to 2,213.55.

At mid-morning Tuesday,

• Japan's Nikkei 225 fell 2.37% to 9,526.67, 
• South Korea's Kospi lost 2.63% to 1,562.73, 
• Taiwan's TAIEX Index fell 2.02% to 7,175.14, 
• Singapore's Straits Times Index fell 1.12% to 2,693.29, 
• Shanghai's Composite Index down 0.86% to 2,650.20 while 
• Hong Kong's Hang Seng Index opened 1.8% lower at 19,317.14.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a note to clients advised them to remain vigilant of a potential damaging and sustained bear trend in the coming months.

He said the euro zone crisis and the Dow Jones and European equity market malaise would persist, and it was best for investors to turn defensive and remain in over 90% cash at least.

"Recent price movements and global volatility suggest that investors should shy away from the FBM KLCI.

"We advise clients to sell and step aside for the next few months, as we believe that the market might revisit 801.27 and possibly 626.50 in the longer term," he said in a note Tuesday.

At 10am, the FBM KLCI fell 10.93 points to 1,262.76, dragged by losses at key blue chips including CIMB, Genting, PPB and Tanjong.

Losers thumped gainers by 322 to 62, while 143 counters traded unchanged. Volume was thin with 108.61 million shares valued at RM173.58 million.

Among the major losers in early trade, DiGi fell 42 sen to RM22.48, PPB Group down 32 sen to RM15.88, KLK 20 sen to RM15.60, Genting and Hartalega down 13 sen each to RM6.41 and RM7.60, while Tanjong fell 12 sen to RM17.34.

Among banking stocks, Hong Leong Bank lost 11 sen to RM8.44, and CIMB, Public Bank and Maybank fell six sen each to RM6.76, RM11.46 and RM7.19, respectively.

Meanwhile, Sime and IOI Corp lost eight sen each to RM7.73 and RM4.80, respectively.

Gainers included Petronas Gas that added 13 sen to RM9.79, HELP up 11 sen to RM2.34 and UEM Land up one sen to RM1.34.

CIMB, IOI Corp, UEM Land, Genting and Berjaya Corp were among the most actively traded counters.

http://www.theedgemalaysia.com/business-news/166709-fbm-klci-falls-for-eighth-day-running-.html

RM26.3b market cap lost over 4 days

RM26.3b market cap lost over 4 days


Written by Surin Murugiah
Thursday, 20 May 2010 00:02


KUALA LUMPUR: A combination of weakness on Wall Street, the European debt crisis, worries of tighter financial regulation and negative news flow from one of the larger companies on Bursa Malaysia Securities drove the FBM KLCI to its steepest decline on May 19 since March 30, 2009.

The lingering uncertainty over the global economic well-being also resulted in the FBM KLCI losing 38.69 points over the last four trading days, and wiping off RM26.27 billion in overall market capitalisation on Bursa Securities.

On May 19, Asian markets fell while European indices, worried by the effectiveness of the measures adopted in Europe to arrest the debt crisis as well as Germany’s decision to ban naked short-selling on selected stocks, mostly opened lower.

At the close on May 19, Singapore’s Straits Times Index fell 2.45% to 2,774.54, Hong Kong’s Hang Seng Index lost 1.83% to 19,578.98, Japan’s Nikkei 225 fell 0.54% to 10,186.84, the South Korean Kospi fell 0.8% to 1,630.08, Taiwan’s Taiex Index fell 0.34% to 7,559.16, and the Shanghai Composite Index shed 0.27% to 2,587.81.

On the local front, the FBM KLCI declined for the fourth consecutive trading day and fell 1.65% or 21.94 points to 1,308.23, the biggest single day drop since March 30 last year when it fell 1.82%.

Trading volume was 781.53 million shares valued at RM1.4 billion. Losers thumped gainers by 689 to 135, while 175 counters traded unchanged.

Crude palm oil futures for the third month delivery fell RM10 per tonne to RM2,435 while crude oil fell US$1.14 (RM3.71) per barrel to US$68.27 as at 6.30pm.

The top eight laggards on the 30-stock FBM KLCI accounted for 16.52 points of the index’s decline, while PPB GROUP BHD [], whose 18.4% associate company Wilmar International’s Indonesian subsidiaries had been reported to be under probe for alleged unlawful value-added tax-restitution claims, saw RM1.21 billion erased from its market capitalisation.

PPB fell 5.79% or RM1.02 to RM16.60, the sharpest decline since Oct 24, 2008 when it fell 6.71%. Its market capitalisation fell to RM19.68 billion from RM20.89 billion.

Among the losers, IOI CORPORATION BHD [] fell 26 sen to RM5; CIMB Group Holdings Bhd 17 sen to RM7.04, PUBLIC BANK BHD [] 16 sen to RM11.78, AMMB HOLDINGS BHD [] 14 sen to RM4.86, GENTING BHD [] 12 sen to RM6.77, MALAYAN BANKING BHD [] nine sen to RM7.49, while SIME DARBY BHD [] lost eight sen to RM8.18.

Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi said fundamentals were not really that good, adding that stripping out inventory re-stocking (IRS), 8% out of Malaysia’s 1Q10 10.1% gross domestic product year-on-year growth was due to the IRS.

He pointed out the negative news flow, including Sime Darby’s cost overruns, the reports on Wilmar, as well as Wah Seong Corp’s Socotherm bid setback had affected market sentiment.

“Markets in the world are falling like nine-pins. Asia is down about 2.5% today. The FBM KLCI broke the 1,315 support level; this means we will see 1,300 very soon, maybe by May 20,’ he said, adding that markets might be turbulent for the next few months.

Lee said risks were high and rewards meagre, and advocated that investors sell most stocks and step aside, adding it was better to have more cash.

Inter-Pacific Research Sdn Bhd head Anthony Dass said the eurozone debt crisis would not leave Asia unscathed, and thus could force financial institutions to be more cautious in their lending, raise financial volatility in the financial market and hurt export demand.

“We fear the low interest–free environment in euro will feed into Asia, compounding liquidity issues that will flare asset prices. For countries like Malaysia, the widening fiscal gap may alleviate short-term pressure,” he said.

MIDF Research head Zulkifi Hamzah said it was difficult to quantify the extent to which local factors accounted for the lacklustre market condition now.

“The BN’s loss of its Sibu parliamentary seat may be unexpected, but political risk for Malaysia had been elevated since the last general election and swings in by-elections should no longer be surprising,” he said.

“Several instances of corporate misadventure such as Sime’s substantial provision and the latest being Wilmar’s predicament in Indonesia which affected PPB’s share price also contributed to the drag on the market.

“Otherwise, earnings for the quarter ended March are decent, with some significant surprises, especially that of Maybank,” he said.

However, he said putting things into perspective, the decline in FBM KLCI was nowhere near as severe as it had been made out to be.

“From the year’s high of 1,346.92, the FBM KLCI has given back less than 3%. If it is a correction, then it can be considered a healthy one and is an opportunity to accumulate.

“The fact remains that the strength of the ringgit reflects the fundamentals of the economy and the weak spots in the world today are in the West, and not Asia,” he said.

http://www.theedgemalaysia.com/business-news/166427-rm263b-market-cap-lost-over-4-days.html

OSK expects 50 Jewels to shine

OSK expects 50 Jewels to shine
By Goh Thean Eu
Published: 2010/05/07

OSK Research Sdn Bhd, a unit of OSK Investment Bank Bhd, expects companies that made it to its top 50 Malaysian small-cap list, dubbed "50 Jewels", to register between 5 per cent and 15 per cent growth in earnings this year, driven by their strong fundamentals, as well as a recovery in the economy.

The research house also expects companies in the Top 10 list, which are made up of the 10 best small- cap companies from the 50 Jewels, to post between 8 per cent and 15 per cent earnings growth.

This year, 19 new companies have made it to the 50 Jewels list, including Notion Vtec, Zhulian, Sunway Group, EP Manufacturing, Glomac, AEON Credit and Southern Steel.

"In this edition, we continue to feature 50 of Bursa Malaysia's top small-cap companies, but unlike the previous editions, we have raised the market capitalisation threshold to RM1.5 billion from RM1 billion.


"This is to maintain coverage depth and breadth and to ensure that the better small-cap companies are represented," said OSK Research head Chris Eng in a media briefing in Kuala Lumpur yesterday.

Companies which made it to the 50 Jewels list in 2009 have performed commendably, with 32 of them having posted absolute returns of 50 to 375 per cent, outperforming the benchmark index.

Its top-10 picks for 2009 also posted absolute share price returns of 52 to 347 per cent. Mudajaya, its top construction pick for 2009, rallied 347 per cent.

Meanwhile, the research house expects the local stock market to continue to be volatile over the next three months, mainly due to one of the following factors -

• global bull factor, 
• global bear factor, 
• local bull factor and
• local bear factor.  :-))

"We expect things to stabilise sometime in the third quarter, and then the company's fundamentals and economic fundamentals will drive the market," explained Eng.

In its recent research report, OSK Research targeted the benchmark FTSE Bursa Malaysia KL Composite Index to hit 1,465 points by year-end. It also placed a fair value of 1,580 points on the index in 2011.

Read more: OSK expects 50 Jewels to shine 

Nazir says SC proposal would severely hit M&As

Tuesday April 6, 2010

Nazir says SC proposal would severely hit M&As
By ELAINE ANG

elaine@thestar.com.my

PETALING JAYA: The Securities Commission’s (SC) proposed rule change on the assets and liabilities method of buying listed companies will result in a severe drop in merger and acquisition (M&A) activities in the country, said CIMB Group Holdings Bhd group chief executive Datuk Seri Nazir Razak.

“(The SC proposal) in its present form, absolutely, will cause a drop especially in mergers, not so much takeovers. Value is created by mergers,” he told a press conference to announce the group’s plans to set up a research institute to promote Asean integration yesterday.

The press conference was held on the sidelines of the 7th Asean Leadership Forum.

To recap, the SC had recently issued a consultative paper which proposed to raise the shareholder approval level in an acquisition via assets and liabilities from the current simple majority to 75% shareholder approval.

It also suggested an additional requirement that not more than 10% of shareholders present can object to the deal.

Under Section 132 (c) of the Companies Act, a buyer only needs a simple majority to take out the assets of the listed company.

This allows the buyer to circumvent the Takeover Code, where the threshold to take over a company and de-list it is higher at 90% acceptance of shares outstanding that are not owned by the offeror.

This is aimed at protecting the interests of minority shareholders by requiring a higher threshold of shareholder approval before a deal is done.

Nazir said if the bar was set too high there would be no deals.

“What we want is a framework to protect minorities but enables transactions to be done. In its present form, it is so prohibitive that you will see a very sharp drop in M&As.

“Is that good for the country and capital market?” he said.

Nazir highlighted the need to strike the right balance between the interests of the majority and minority shareholders.

“Minorities also profit a great deal from M&A activities. We have to be very sensible in evaluating the new proposals.

“I have heard comments that the higher the takeover threshold the better, especially for minorities. It is not true that the more power to minorities the better it is.

“Minorities also need deals, mergers and takeovers,” he said.

http://biz.thestar.com.my/news/story.asp?file=/2010/4/6/business/5997210&sec=business

FBMKLCI Chart 1990 - 2010

Saturday March 13, 2010

PETALING JAYA: The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) may find it difficult to breach its all-time high of 1,516 points this year although the index is currently just 13% shy of that record.

Although the market hit a fresh two-year high of 1,328.22 points on Wednesday, it is still some way off the record high of 1,516.22 points reached on Jan 11, 2008.

http://biz.thestar.com.my/news/story.asp?file=/2010/3/13/business/5856504&sec=business