Wednesday, February 07, 2007
AKAM, RAIL & ESRX - My Next Option Trading Target
Analysts polled by Thomson Financial expect the Cambridge, Mass.-based company to post a profit of 26 cents per share on $121.5 million in revenue for the fourth quarter.
In a Jan. 24 note to investors, Deutsche Bank analyst Todd Raker wrote that the surge of online shopping during the holiday quarter and an overall rise in movie downloads over the Web could push Akamai's fourth-quarter results higher than expected. The analyst also cited Apple Inc. comments from last month's Macworld conference that iTunes users downloaded 1.3 million movies in three months.
Akamai provides content delivery services to 13 of the top 20 most visited Web sites on the Internet. Increased traffic to these sites is likely to add to top line growth as the company charges a fee based on bandwidth usage in addition to a fixed cost for its services.
Rating Indicators for AKAM:
Wall Street consensus : 0.26- StockScouter rating : 10 / 10
- Whisper Number for this stock : 0.27
- Schaeffer rating for this stock : 7 / 10
- Power Rating : 5 / 10
- Insider Trading (last 52 weeks) : ($55.54M)
- Zacks Analysts Rating: Moderate Buy
- Option Trading: May 2007 55 Call
- Implied Volatility (IV) for Mar 2007 $55 Strike : 42.08%
FreightCar America, Inc. (Nasdaq: RAIL, stock) will announce its’ earning on Thursday, Feb-8-2007, before market open. RAIL is a manufacturer of aluminum-bodied railcars in North America, based on the number of railcars delivered. The Company specializes in the production of coal-carrying railcars, which represented 93% of its deliveries of railcars during the year ended December 31, 2005. It also refurbishes and rebuilds railcars and sells forged, cast and fabricated parts for all of the railcars it produces, as well as those manufactured by others.
Rating Indicators for RAIL:
Wall Street consensus : 2.84- StockScouter rating : 9 / 10
- Whisper Number for this stock : N/A
- Schaeffer rating for this stock : 8 / 10
- Power Rating : 6 / 10
- Insider Trading (last 52 weeks) : ($9.36M)
- Zacks Analysts Rating: Hold
- Option Trading: June 2007 55 Call
- Implied Volatility (IV) for Mar 2007 $55 Strike : 39.86%
Besides above stocks alert for option trading, I’m researchingExpress Scripts, Inc. (Nasdaq: ESRX, stock) which will announce its’ earning on the same date as FreightCar America, Inc. ESRX is quite a risky stock to invest as the price-to-earnings multiple is close to the average for the industry level.
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Stumble it!
New Call Warrants For Feb2007 – PBBANK & MAYBANK
The two call-warrants are listed as:- PBBANK-CA (stock-code: 1295CA)
- MAYBANK-CC (stock-code: 1155CC)
The expiry-date for both call-warrants is Aug-30-2007. All these call-warrants are exercisable at any time from and including the issue date. The issue prices are:
- PBBANK-CA: 36 cents
- MAYBANK-CC: 38.5 cents
# TIP: For more detail-data related to Bursa Malaysia (KLSE) call-warrants, you can visit OSK188 at Warrants Pricing Table or CIMB Warrant Portal at Warrants Analytics.
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Why Luxury Stocks Will Performs And You Should Invest
W
ith only 60 prestigious brands, LV commands 14 billion euros in total revenue for financial year 2005. It has over 59,000 employees worldwide and a retail network of more than 1,700 stores. Louis Vuitton recently paid dividend of 0.30 Euro back in Dec-2006.Okay, back to the boutique story. When you first step into LV boutique in Paris, you’ll be surprised to notice the number of tourists who swarm the shop buying like there’s no tomorrow. It was such a good business as if it’s on 90% sales when in fact LV never had any discount-sales before. People just buy it for the sake of the brand, and the quality of course (it’s water-proof but unfortunately not fire-proof, sigh). But there’re other reasons why people rush to Paris to buy Louis Vuitton’s products.
LV products, just like your dreamt Rolex watches and Mont Blanc pens, will appreciate in value over time. So when you’re in bad time, you can rely on your LV to convert some hard-cash for you at second-hand shops (ever visited one in Hong Kong?), not sure if pawnshop will accept it though.
Another reason why you should buy LV
from Paris (en route your travel path) is because you can get it cheaper in Paris than in other countries. As comparison, a Monogram Canvas (Toile Monogram) Speedy 30 in Paris will costs 415 Euro which will translate into RM 1,884 based on 1 Euro to 4.54 Ringgit. If you go to YTL Corporation Berhad’s (KLSE: YTL, stock-code 4677) Starhill Louis Vuitton boutique(the only one LV boutique in Malaysia), the price is RM 2,400. It’s a saving of more than RM 500. And if you buy more imagine the total savings you can gain.Let’s go back to LV Paris. Don’t be surprise if you noticed majority of the tourists who crazily grab LV products are from China. Louis Vuitton seems to have recognized this group of new wealthy customer-base judging from the fact that the boutique actually recruited a couple of Chinese-speaking sales reps specifically to take care of these tourists.
According to China Embassy Website, China has 236,000 millionaires (at least US$ 1 million in financial assets) based on 2004 World Wealth Report issued by Merrill Lynch (NYSE: MER, stock). With a 12 percent year-on-year growth, the number would be very much higher by today. With the ever-growing rich society, the hunger for luxury items would definitely benefits not only Louis Vuitton but other players such as Polo Ralph Lauren Corp. (NYSE: RL, stock), Estee Lauder Companies Inc. (NYSE: EL, stock) and others. And this is one of the many reasons why you should invest in their stocks (alternatively option trading, of course).
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Tuesday, February 06, 2007
Cash-Rich KFH Won Bid For RHB After Late-Night Meeting
convertible unsecured loan stocks (ICULS) and warrants. Instead of leaving RHB, UBG had been offered, and had agreed to take up, a 20% stake in the consortium.
Upon conversion of the ICULS and warrants, UBG's equity interest in RHB would rise to about 60%from 32.8% now. Following this, the consortium will have to undertake a mandatory general offer in RHB. The consortium would be supportive of the Employees Provident Fund's (EPF) proposed plan for a restricted offer for sale (ROS) of RHB Capital shares as long as it would serve to benefit all shareholders.Would Ralph Lauren Performs Equally Well Like Estee Lauder?
On Feb-1-2007, Department-store operator J.C. Penney Co (NYSE: JCP, stock) started offering a new brand called American Living (created by Polo Ralph Lauren's Global Brand Concepts) that includes merchandise, intimate apparel, accessories and home products exclusively.
Thomas Weisel Partners LLC analyst, Liz Dunn has a target of $90 on Ralph Lauren saying there’s room for significant growth ahead. “Mad” Jim Cramer has a strong take on Ralph Lauren stating consumer is strong with tax-cuts benefits which will translate to spending.
Rating Indicators for RL:
Wall Street consensus : 0.92- StockScouter rating : 7 / 10
- Whisper Number for this stock : N/A
- Schaeffer rating for this stock : 6 / 10
- Power Rating : 5 / 10
- Insider Trading (last 52 weeks) : ($60.10M)
- Zacks Analysts Rating: Moderate Buy
- Option Trading: Apr 2007 80 Call
- Implied Volatility (IV) for Mar 2007 $80 Strike : 30.75%
Sales, Income & Growth - For the past 12-months, Ralph Lauren registered $4.09 Billion sales versus the industry’s $2.97 Billion. Income amounted to $370.30 Million against the industry’s $211.55 Million. While Ralph Lauren 12-months sales growth is at 19.20%, the income growth is in the region of 40.20% (the same industry sector sales growth is at 12.60% and income growth of 28.80%).
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 9.1%. Ralph Lauren has a debt/equity ratio of 0.13 compare to industry’s ratio of 1.85.
Stock Resistance & Support Level – The resistance is at 85.00 (52-week high) while the first level support is at 79.87 (50-day moving average).
Risks – The ratio of Ralph Lauren's price-to-earnings multiple to its five-year growth rate is above the average level.
Estee Lauder Companies Inc. (NYSE: EL, stock) beats earning and make me money when it said fiscal second-quarter profit more than doubled on higher sales recently. Gauging from earning performance of Estee Lauder, I would think Ralph Lauren would performs equally well – at least both are in the same industry.
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Trading CTSH Option - 67% Profit In 1-Day
Again I can hear people say - if only you hold on a little but longer you might be able to gain higher profit. Hey, I'm not sure what'll happen next and I'm definitely not David Copperfield. I might say to myself I should hold on another day to see what'll happen. But another minute wait is another minute risk - I've my risk management to follow. Be discipline or you might be punished. Furthermore 67% profit in one-day trading option is satisfying enough - at least for me.
CTSH earned $69.5 million, or 46 cents per 
share, up 21 percent from $57.7 million, or 39 cents per share, during the same period in the previous year. Sales rose 65 percent to $424.4 million from $256.9 million. Analysts, on average, were looking for earnings of 43 cents per share on sales of $405.5 million, according to a poll by Thomson Financial. So CTSH beats earning estimate again and the stock price was rewarded generously.
Francisco D’Souza, president and chief executive officer of Cognizant, said a good portion of company’s growth came from Europe, where revenue doubled last year. In totality, U.S. contributes 86% while Europe the remaining 13% of the revenues.
Cognizant, which recently opened its eighth center in India saw strong demand from healthcare, media and entertainment. Cognizant's competitors such as Infosys Technologies (Nasdaq: INFY,stock) and Wipro Limited (NYSE: WIT, stock) also reported strong growth due to increased outsourcing demand.
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Yusli Switch Direction To Blame Remisiers & StockBrokers
According to the Star titled “Hire more young remisiers” today, Yusli noted that the number of remisiers had been stagnant since the financial crisis in 1997/98 despite increase in stock-broking branches. He blamed the lack of retail interest on remisiers, who acted as a market intermediary, and the stockbrokers, who seemed to have stopped hiring remisiers. He further urged stockbrokers to recruit young remisiers (20 to 30 of age) to cater to the new generation of investors.
First thing first, do you think by recruiting more young sexy remisiers the retail participation in the Malaysian local bourse will increase? If the existing “experienced remisiers” do not even have the latest knowledge to advice investors on listed companies’ prospect (both technically and fundamental), do you really think the young chaps will make any difference? Do not trust what I wrote? Go and ask your remisier the earning per share (EPS) or price-earning-ratio (P/E) of any stock that came to your mind. I bet he/she couldn’t answer you such basic question. Where’s the flaw? Could it be in the lack of quality of education/training that each remisiers undergo in order to pass before granted the trading license?Supposing all the remisiers are competent enough, do you think majority of retail investors are convince of the current bullish market? If you do not agree with me, you’ve the right to think otherwise. At least Remisiers Association of Malaysia president, Sam Eng agreed with me when he said “Retail investors are still not convinced with the current rally. This is perhaps something that Bursa Malaysia needs to look into.” Eng said the bullish trend was not across the board. “Only the blue chips have gone up, not the second and third liners, which are the retailers’ preferred choice,” he added.
Couple with lower commission, you need to have really huge volume with retail investors’ participation in order to attract younger people to join the profession of remisiers. Remisiers depends heavily on retail investors – they don’t really care even if composite index reach 2,000 points tomorrow but only blue-chips were the gainers. Most of the blue-chips were transacted via stock-brokers’ dealers (instead of remisiers) who deal directly with foreign investors.
So, during such blue-chip-centric bullish market, dealers are the one who benefits the most with guaranteed fat yearly bonus. Either retail investors are super-smart nowadays not to get burnt again or they’re really out of money for further investment. Have you thought of the possibility that the nation’s economy is not in good shape that there’re no surplus in the retail investors’ pocket to invest in stocks?
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Monday, February 05, 2007
Hope VFC Stock Performs Again With Blessing From Cramer
Anyway, VF Corporation (NYSE: VFC, stock) will announce its’ earning tomorrow, Tuesday 6-Feb-2007 before market open. VFC is a leader in branded lifestyle apparel including jeanswear, outdoor products, image apparel and sportswear. Its principal brands include Wrangler(R), Lee(R), Riders(R), Rustler(R), The North Face(R), Vans(R), Reef(R), Napapijri(R), Kipling(R), Nautica(R), John Varvatos(R), JanSport(R), Eastpak(R), Lee Sport(R) and Red Kap(R).
Recently VFC (Nasdaq:) was reported to be selling its intimate apparel lines to Warren Buffett Berkshire Hathaway's (NYSE: BRK.A, stock) Fruit of the Loom for $350 million – a figure said to be low (the stock price was punished) but analysts said the move has long-term benefits due to weak store sales. UBS Equities analyst Jeffrey B. Edelman points out that intimate apparel represented only 12 percent of VF's sales and wasn't an integral part of its growth strategy.
The company just completed its’ acquisition of Eagle Creek which will give it one more name in its growing stable of outdoor brands, including Vans, the North Face, JanSport, and Eastpak. VF says Eagle Creek will add $30 million to 2007 sales and sustain high single-digit sales growth over the next couple of years.
Wall Street consensus : 1.22- StockScouter rating : 8 / 10
- Whisper Number for this stock : 1.25
- Schaeffer rating for this stock : 4.5 / 10
- Power Rating : 5 / 10
- Insider Trading (last 52 weeks) : ($58.18M)
- Zacks Analysts Rating: Hold
- Option Trading: May 2007 80 Call
- Implied Volatility (IV) for Mar 2007 $80 Strike : 22.40%
Sales, Income & Growth - For the past 12-months, VFC registered $6.08 Billion sales versus the industry’s $2.96 Billion. Income amounted to $519.37 Million against the industry’s $210.30 Million. While VFC 12-months sales growth is at 10.10%, the income growth is in the region of 10.30% (the same industry sector sales growth at 12.60% with income of 29.00%).
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 8.5%. VFC has a debt/equity ratio of 0.32 compare to industry’s ratio of 1.86.
Stock Resistance & Support Level – The resistance is at 79.47 (50-day moving average) while the first level support is at 71.53 (200-day moving average).
Risks – Shares are heavily sold by financial institution.
After the announcement of its sale to Berkshire Hathaway, the stock price took a beating and current stock price should have taken that into consideration. This stock is one of the favorites ofJim Cramer. He named VF Corp. as his first fallen angel because he considers the $350 million sale of intimate apparel business as a great move due to the “razor-thin margins”. And since it’s gone now, VFC is free to "let its other higher margin businesses shine."
I have invested VFC before via option trading during the previous earning. It gapped-up but for a short-while which I hope will not happen again this time around.
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New Tool For Warrants Stock Investors But It Crawls
Being an adventurer, I further tried to enter a random Call Warrant code; I chose RHBCAP-CA simply because it is listed as top-10 volume today and I hit [ Draw Chart ] button. The processing took ages and somehow you need to count your luck to get a result. Chief 
executive officer Datuk Nazir Razak should make sure the infrastructure is ready before announcing such a service, don’t tell me the brother of deputy prime minister can’t afford to purchase better performance hardware.
Somehow RHB Capital Berhad Call Warrant (KLSE: RHBCAP-CA, stock-code 1066CA) would not returns any result but other warrants or call-warrants are able to. Strange isn’t it? Probably there’re bugs within the application. Anyway, it’s still a good tool to check volatility and expiry-date, amongst the others.
PANTECH - Another Cheap IPO Stock Worth Investing
Pantech provides pipes, fittings and flow control solutions to the oil and gas industry as well as those in the energy, refinery, petrochemical and chemical sectors, including palm oil and biodiesel. Pantech posted a net profit of RM21.6 million for the year ended Feb 28,
2006 on the back of revenue totalling RM169.77 million, with about 26% of its business arising from exports.Pantech expects strong demand from foreign and local clients to boost revenue to RM216.06mil for the financial year ending Feb 28, 2007, representing a 27% growth from 2006. It also projects pre-tax profit rising 18.5% to RM34.77mil and a dividend payout of 3 cents for the year to Feb 28. According to Executive Director, Adrian Tan, 70% of Pantech's customers were local companies and the rest were from the United States, Singapore, Indonesia, Australia, Japan and Thailand.
Based on the prospectus, the enlarged issued and fully paid-up upon listing totals 150,000,000 ordinary shares. Net EPS (earning per share) for financial year ended Feb-2007 is 16.34 cents yielding a net P/E (price to earnings ratio) multiple of 7.22. The forecast for financial year ended Feb-2008 meanwhile is giving a return of 18.37 cents net EPS translating into net P/E multiple of 6.42.
I would think this is rather cheap if I use Kencana Petroleum Bhd (KLSE: KENCANA, stock-code 5122) as a comparison (the closest I can find). Kencana is trading at RM 1.44 today which is 28 multiple of it’s earnings of 5.14 cents per share. Using the same multiple of 28 times, Pantech stock price should trade at RM 5.14. By the way, do you see some similarities between Kencana and Pantech?
Listing Schedule :
- Prospectus Date : 29-Jan-2007
- Closing of Applications : 5-Feb-2007 (today)
- Issue Price : RM 1.18 (Main Board)
- Listing Date : 15-Feb-2007
# TIP: I think Pantech is rather cheap looking at its’ earning per share projected for the financial year 2008. I would think it’s worth investing in its’ IPO stock. Subscribe it.
# TIP: Analysts have a fair-value of RM 2.26 on Pantech.
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Yahoo OurCity Is Learning Your Local Culture And Info
- Share photos, videos, trip plans or events of the cities with other communities
- Invite other people to share and contribute to the city communities.
- Related news about the city which was syndicated from international news
- Weather, blogs and a summary of the cities for newcomers such as travellers.
You can submit your comments on what you think about the city – your comment might be able to help the local authorities improve the city as a tourist destination. Personally I think the project is a great start for countries earning foreign currencies in the tourism industry. Imagine the huge latest information that tourists can get from the internet thousands of miles away. No matter how much you spend on attracting foreign tourists to your country, the campaign might not reach some individuals. But with OurCity, a foreigner might just be able to find your city from the cyberspace and plan his/her next visit.
Yahoo said more cities and several more features will follow soon – an indication that cities within U.S. soil would be next within the roadmap. Isn’t it funny Yahoo didn’t starts it with a U.S. city? In the meantime, start shooting photos to share it on the net to attract other communities - if photography is your hobby.
Sunday, February 04, 2007
No Entry For Stanley BUT Will Genting Still Into Macau?
Genting International (SIN: G13), part of Malaysian gaming
conglomerate Genting Group(KLSE: GENTING, stock-code 3182), and its sister firm Star Cruise Ltd (SIN: S21) won a licence in December to build an "integrated resort" including a casino on Sentosa.However the Ministry of Home Affairs' Casino Regulation Division declined to comment directly on the report but told AFP last month that "suitability checks will be conducted as and when necessary".
Now, we only heard one side of the story, which is from Genting. But Jackson did not elaborate on the Genting’s stake in a new proposed boutique hotel and casino to be operated by Ho's Sociedad de Jorgos de Macau. If the deal for Stanley Ho is off, can the same be said on the deal offered to Genting in Macau? So if both Stanley and Genting will not gain entry into Singapore and Macau respectively, does that mean Genting stock price should pull-back to the level where it was right before the news broke? So far, Singapore has kept a silent mode in this matter but I don’t blame them as I still do not see what values Stanley can bring into the Sentosa project if given the 6.99 percent stake.
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Malaysia KLCI Hits 10-Year High – So What?
The Star reported that overseas investors now own nearly a third of exchange operator Bursa Malaysia Berhad, a quarter of Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347) and over 40% of Bumiputra-Commerce Holdings Berhad (KLSE: COMMERZ, stock-code 1023). They also own substantial shares in top companies like IJM Corp Berhad (KLSE: IJM, stock-code 3336) and IOI Corp Berhad (KLSE: IOI, stock-code 1961).
If you look at Friday’s top gainers, you’ll notice the main contributor to the index was Genting Berhad (KLSE:GENTING, stock-code 3182), Bursa Malaysia (KLSE:BURSA, stock-code 1818), Kuala Lumpur Kepong (KLSE:KLK, stock-code 2445), Malayan Banking Berhad (KLSE: MAYBANK, stock-code 1155) and Telekom Malaysia Berhad (KLSE: TM, stock-code 4863). But if you re-look at the top volume, you still cannot escape the view of the penny stocks (second or third liner stocks) struggling to register more gains over the months. This is so different from the period of pre-1997 Economic Crisis when it’s rare to have penny stocks appeared on top 20 volume counters. I’ve covered this issue on my previous website at Why Malaysia Yusli Blames Local Investors?According to stock exchange data, the daily average value of stocks traded on Bursa in January was RM2.1bil compared with RM1.28bil in the final quarter of 2006. Brokers attributed the sharp increase in trading value in recent months to the huge inflow of funds from overseas. So with these indicators, KLSE is indeed in the bull-run phase and it’s only about 100 pointsaway from the 1993-1994 Super-Bull which registered the highest composite index of 1,332 (Jan-5-1994) before the bear took over. In fact, looking at the chart, since the resistance level of 1,018 was breached on fourth quarter last year, 2006; the composite index was on 45 degrees uptrend.
It’s not difficult to breach the 1,332 level – you need another 7 trading days of continuously register 20 points gain to breach it or 14 trading days of 10 points gain to achieve the desire result.
But the question remains – are you making any money from this so-called bull-run? If not, why not? Most probably your portfolio does not include blue-chips or index-linked stocks. But if you can only make money from blue-chips and not other stocks, then can you call this round a super-bull even if the composite index breaches the 1,332 level? So what if KLCI close at1,500 level; but only a handful of expensive blue-chips were the gainers? Foreign investors no doubt will not touch second and third-liners stocks. These stocks were traditionally chased by retail investors, speculators, syndicate who prey on first-comers or whatever you wish to call it. The reality is local retail investors are not putting their hands on the chopping board, at least not yet, after losing several fingers already.
Everyone is waiting for somebody to start the ball-rolling on the second or third liners stocks. Maybe EPF (Employees Provident Fund) or PNB (Permodalan Nasional Berhad) should start by showing retail investors their confidence on some good performers stocks categorized as second or third liners companies. Then the chain reaction will sparks the desire participation from retails dreamt by Yusli, chief executive officer of Bursa Malaysia.
# TIP: Looking forward, the 1,271 level registered on Feb-25-1997 at the height of pre-1997 Economic Crisis would be the important yardstick on how far more KLSE can goes.
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Friday, February 02, 2007
Finally StockTube Has Been Assigned A PageRank
University by Larry Page and Sergey Brin as part of a research project about a new kind of search engine. The project started in 1995 and led to a functional prototype, named Google, in 1998 and the rest is history. The name PageRank is a trademark of Google Inc. (Nasdaq: GOOG, stock) but the patent is not assigned to Google but to Stanford University.
Ready To Take Money Off The Table - CAT, ILMN, EL & MAT
I mentioned I was still researching Caterpillar Inc. (NYSE: CAT, stock) when I published the “Will Illumina Continues Its' 45 Degrees Uptrend?” which was expected to announce its’ earning the same day as Illumina, Inc. (Nasdaq: ILMN, stock). During the
announcement Caterpillar said higher operating costs trimmed fourth-quarter profit growth to 4 percent, but predicted strong results for 2007 despite an expected slowdown in U.S. machine and engine sales. This forecast is enough to send the stock price up despite earnings fell short of Wall Street's expectations as higher production costs offset strong sales. However, net income for the fourth quarter grew to $882 million, or $1.32 per share, up from $846 million, or $1.20 per share, a year ago.Next, Illumina, Inc. (Nasdaq: ILMN, stock) said yesterday its fourth-quarter profit skyrocketed, but shares fell in after-
hours trading on guidance that included a sharp rise in expenses. Quarterly earnings soared to $17.1 million, or 34 cents per share, from $326,000, or 1 cent per share, during the same period last year. Revenue on the other hand more than doubled to $60.4 million from $23 million in the year-ago quarter. Shares of Illumina sank $1.49, or 3.6 percent, to $40.07 in after-hours electronic trading – just what are analysts thinking? They’re not happy with the expenses increase expectation – what a hard-to-please bunch of clowns.Probably the best stock which deserves my praise is Estee Lauder Companies Inc. (NYSE: EL,stock), first h
ighlighted at my website during my Gamble On SanDisk Stocks Option – simply because it makes me lots of money this round (what other reason do you expect?). Estee Lauder on Wednesday said fiscal second-quarter profit more than doubled on higher sales and lower costs, prompting it to lift its full-year outlook – and the analysts just love it. Quarterly earnings rose to $208.4 million, or 99 cents per share, trouncing analyst expectations for earnings of 76 cents per share and sending the stock up all the way. But I expect some profit takings to start today.T
oy maker Mattel Inc. (NYSE: MAT, stock)reported net income of $286.4 million, or 75 cents per share, for the three months ended Dec. 31, compared to $279.2 million, or 69 cents per share, a year ago - easily beat estimates from analysts surveyed by Thomson Financial, who had expected earnings of 67 cents per share. But surprisingly the stock didn’t shoot up as what I expect. It instead chose to crawl like a turtle. Since I’ve tons of time-value (expiry on April), I’ll leave it do whatever it wish to do.Other Articles That May Interest You ...
Fastest Growing Tech To Sustain 45 Degrees Uptrend?
Cognizant is one of the America’s 25 fastest-growing public technology companies (in terms of annual sales gains), according to Forbes 25 Fast Tech, outperformed the Nasdaq Composite over the past year. In early November 2006, Cognizant announced plans to invest over $200 million through the end of 2008, expanding its facilities in India
Rating Indicators for CTSH:
Wall Street consensus : 0.43- StockScouter rating : 10 / 10
- Whisper Number for this stock : 0.45
- Schaeffer rating for this stock : 7 / 10
- Power Rating : 5 / 10
- Insider Trading (last 52 weeks) : ($26.77M)
- Zacks Analysts Rating: Moderate Buy
- Option Trading: Apr 2007 85 Call
- Implied Volatility (IV) for Mar 2007 $85 Strike : 29.05%
Sales, Income & Growth - For the past 12-months, Cognizant registered $1.26 Billion sales versus the industry’s $10.71 Billion. Income amounted to $220.94 Million against the industry’s $458.53 Million. While Cognizant 12-months sales growth is at 59.0%, the income growth is in the healthy region of 50.30% (the same industry sector sales growth at 31.90% with income of 33.10%).
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 17.6%. Cognizant has a debt/equity ratio of 0 (zero) compare to industry’s ratio of 0.25
Stock Resistance & Support Level – The resistance is at 85.54 (52-week high) while the first level support is at 80.20 (50-day moving average).
Risks – At 57.72, the price-to-earnings multiple is higher than the average of the stocks of the same sector.
I like this stock because its’ earnings growth in the past year is holding steady compared to earnings growth in the past three years. This is probably one of the performing technology stocks which consistently beat the earning estimate for the past 8 (eight) quarters. Did you notice the almost 45 degrees 1-year chart of this guy?
Do you know that of all stocks on the public markets, Cognizant Technology (Nasdaq: CTSH, stock), Google (Nasdaq: GOOG, stock), Coldwater Creek (Nasdaq: CWTR, stock), and First Marblehead (NYSE: FMD,stock) are four of the most aggressive growers and for the next five years, analysts are expecting each to grow at least 25% per annum?
Your Option Trading At A Loss - How To Reverse The Plan
Anyway, remember when the Apple Inc
(Nasdaq: AAPL, stock) announced earning which beats estimates but gave a lower (conservative) guidance on Jan-17-2007 after the market closed? In case you missed it, the website is here. In order to close the gap of my loss, I re-open another position, AAPL Feb 90 Put, on Jan-18-2007 just when it crossed the lower of the lowest within 45 minutes. And it drifted lower thereafter as what I hoped for. I put a stop-limit to lock-in profit at about $84 plus (the three months chart gives you a support at about $84 
level). It got triggered on Jan-31-2007 – the period of which I couldn’t monitored due to the disruption to my internet line.Just imagine if there’s no option for me to execute a limit-order and “Good Until Cancelled” just like in Malaysia stock market. My previous option position on Apple which is Apr 95 Call (before Apple earning) is still in the redbut after minus the profits just pocketed, I’m still making some money. And should Apple shares decided to reverse its’ down-trend (assuming $84 is the support), my Call option positions will start to make me money. Furthermore the Call option expires on Apr-2007 - time-value is on my side.
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My Internet Link Is Down But I'll Still Try To Trade
The last entry before this very post was actually posted under Starbucks (Nasdaq: SBUX, stock) wireless internet connection. And I'm currently blogging from cyber-cafes / internet-cafes (I can't take any more coffee latte) - I can't live without the internet.
However I managed to enter some trades before I was off-line two days ago. Trading U.S. options online provide you the flexibility of opening a position before market open if you choose the option of "Good Until Cancelled" under your broker's trading platform - meaning your trade(s) order will stays till your limit order is met or you cancel it manually.
I didn't post any research on my previous trades due to obvious reason stated above. Anyway below were my positions which were triggered:
Obviously, my bet on both didn't produce the result I desire - but with the fundamental in place, I hope both will behave for the coming days.
Wednesday, January 31, 2007
Will There Be A Long Tussle For RHB?
There’s a saying “Don't bite off more than you can chew” – the worst is to mix politics with business which historically has been proven not to work. What more if you put your second son who is without REALcorporate experience in managing one of the largest bank in Malaysia. What will you get as a result? An almost guaranteed of failure from the highest level of corporate decision making to the lowest level of daily operations. Some of Malaysian corporate entities seems to not understand that its’ better to leave the running of a company to the professionals.On Tuesday, the Star reported Employees Provident Fund (EPF), which owns about 31 percent of RHB Capital's controlling shareholder, RHB, has put the plan to other owners of the parent holding company to sell RHB Capital shares to RHB at a discounted price of 3 ringgit per share in order to clean up its books and pave the way for a takeover by Kuwait Finance House ( KFH ).
However, today, Business Times was told that UBG is not in favor of the plan, as the timeframe to undertake it could weaken Utama's hand at the negotiation table should there be hiccups midway.EPF wanted its’ proposal to be concluded before June 2007, when some of RHB's paper issue debts are due, and possibly affect the standing of RHB Capital (KLSE: RHBCAP : stock-code 1066). RHB has RM1.58 billion of debt due between June 30 and December 31 this year. Utama Banking owns 32.5 percent of Rashid Hussain and the fund owns about 31 percent.
It would be fun to see if this will translate into a long-battle between the two giants – which I doubt so. Money talks and it all boils down to dollars and cents. Will they learn the true meaning of business? Will these folks grow-up and mature enough to not repeat the same mistake of mixing political and business the way western countries practices? What about the case of RHB founder Tan Sri Abdul Rashid Hussain and five other individuals who are being sued by RHB Capital? Will the case disappears over the time?
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Loss On Charges But Sales Up 55% - SanDisk
The company's loss includes $186 million charge to acquire in-process technology, $31 million for stock-based
compensation, $20 million in other acquisition charges, and $10 million in income taxes related to those charges. Revenue for the quarter surged 55 percent to $1.16 billion from $750.6 million in 2005. The company's sales included results from its M-Systems acquisition, which SanDisk closed in November 2006.If SanDisk exclude the above charges, it would have earned 87 cents a share, better than Wall Street's expectation of 72 cents. So, the decline stock price over the last 3 months should have taken the acquisition costs into consideration. SanDisk also said average price per megabyte of its NAND flash fell 17% is within its’ projected forecast. But I think when the company cautioned that there is an oversupply of NAND flash, the investors decided to dump the shares causing the stock to slide by 10% to $38.30 from closing of $42.83.
So what’s the next step to salvage my trade? Depending on the chart pattern for the first 45 minutes trading when the stock market open today, I’ll decide whether to reverse my earlier trade or convert it into spread or give SanDisk some space to breathe and investors to digest the figures. Furthermore it’s very close to the 52-week support level at $ 37.34.
A Gamble On SANDISK Stock Options
The company said in December it received approval from the Chinese government to build a test manufacturing and captive assembly facility near Shanghai, in Zizhu Science Park.
Analysts polled by Thomson Financial expect SanDisk to earn, on average, 75 cents per share on $984.4 million in revenue. The company warned in October that flash memory prices could drop 15 to 20 percent sequentially during the fourth quarter.
Despite pricing declines during the quarter, Pacific Growth Equities' Satya Chillara thinks SanDisk may meet or beat Wall Street expectations. Chillara has a "Buy" rating on the stock. Citigroup (NYSE: C, stock) analyst Craig Ellis, who has a "Hold" rating, said he expects SanDisk to post a "solid" fourth quarter "fueled by robust handset card demand" but could cut 2007 guidance due to soft prices, royalty payments, and competitive pressure from Micron Technology Inc. However, Bear Stearns analyst Gurinder Kalra thinks bearish future expectations are priced in the stock.
Rating Indicators for SNDK:
Wall Street consensus : 0.75- StockScouter rating : 10 / 10
- Whisper Number for this stock : 0.82
- Schaeffer rating for this stock : 3 / 10
- Power Rating : 4 / 10
- Insider Trading (last 52 weeks) : ($97.91M)
- Zacks Analysts Rating: Hold
- Option Trading: Apr 2007 40 Call
- Implied Volatility (IV) for Mar 2007 $40 Strike : 50.77%
Sales, Income & Growth - For the past 12-months, SanDisk registered $2.84 Billion sales from the industry’s $3.29 Billion. Income amounted to $367.95 Million from the industry’s $282.25 Million. While SanDisk 12-months sales growth is at 34.6%, the income growth is in the red of -7.30%.
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 12.9%. SanDisk has a debt/equity ratio of 0.35 compare to industry’s ratio of 0.25
Stock Resistance & Support Level – The resistance is at 44.03 (50-day moving average) while the first level support is at 37.34 (52-week low).
Risks – The price-to-earnings multiple is close to the average for all stocks within the same sector. The IV is rather high for Mar 2007 $40 Strike which is at 50.77%.
Shares of SanDisk, which have traded between $37.34 and $72.36 over the last year, fell roughly 20 percent during the quarter to a Dec. 29 close of $43.03 on the Nasdaq. The stock took the biggest one-day hit during the quarter on Oct. 20, when it fell from $61.73 to $49.15 after the company posted third-quarter results.
The risk of investing this stock is quite high even though the shares are under heavy accumulation by financial institutions. The high IV compounded the risk. SanDisk stock needs an excellent result and upside guidance for a huge-gap-up in order to make money. But I’ll play on contrarian – I’ll bet on Option Call instead of Put due to the fact this stock was being punished for the last 3 months since its’ earning announcement. With its’ current price of $42.20 not too far away from its’ 52-week support at $37.34, I figure the stock price have absorbed all the negative considerations listed above.
In the meantime, I’m still researching Websense Inc. (Nasdaq: WBSN, stock) of which its’ Feb 2007 $22.50 Strike have been bid-up today. The Estee Lauder Companies Inc. (NYSE: EL,stock), manufacturer and marketer of skincare, makeup, fragrance and hair care products looks quite promising as well - will research further on this stock which is expected to announce its' earning tomorrow, Wednesday, Jan-31-2007 before opening bell.
Tuesday, January 30, 2007
New Call Warrants - Bursa, Genting, Maxis & Tenaga
The four call-warrants are being listed as:- BURSA-CB (stock-code: 1818CB)
- GENTING-CB (stock-code: 3182CB)
- MAXIS-CC (stock-code: 5051CC)
- TENAGA-CD (stock-code: 5347CD)
The expiry-date for all the four new call-warrants is 6 months from and including the issue-date. All these call-warrants are exercisable at any time for a period of 6 months from and including the issue date.
The issue prices are:
- BURSA-CB: 77 cents
- GENTING-CB: 46 cents
- MAXIS-CC: 65 cents
- TENAGA-CD: 55 cents
# TIP: For more detail-data related to Bursa Malaysia (KLSE) call-warrants, you can visit OSK188 at Warrants Pricing Table.
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Tiong Hiew King In A Hurry To Control Nanyang?
Stock price of Ming Pao which closed at HK$1.73 on Monday opened at HK$2.35 today and jumped as much as 49
percent to HK$2.58 on the merger news. Sin Chew’s stock price ended the day almost unchanged while Nanyang’s stock price closed 20 cents lower today.Sin Chew publishes Malaysia's largest circulated Chinese newspaper, the Sin Chew Daily, while Nanyang produces the country's oldest Chinese-language daily, Nanyang Siang Pau. Ming Pao Group's major publications include the Ming Pao Daily News, which is published in Hong Kong, Toronto, Vancouver, New York and San Francisco.
Sin Chew said the enlarged entity would "leverage on its extensive global footprint to expand into the media market in China as well as globally" while Tiong said "The merger is a strategic move to transform Sin Chew Media into an international media group to compete with global media corporations." Forbes in 2006 said Tiong’s net worth was about one billion dollars, listing him as number 746 of 793 billionaires worldwide.
T
he merger will see the enlarged group operating through a publishing merger of Chinese-language newspapers and magazines in Malaysia, Hong Kong, the United States, Canada and China. Under the deal which must be signed by April 30, Sin Chew and Nanyang will be de-listed from Malaysia's bourse and become wholly-owned subsidiaries of Ming Pao. Ming Pao will assume Sin Chew's publicly traded status and have a dual listing on the main board of stock exchange Bursa Malaysia (KLSE: BURSA, stock-code 1818) and the Stock Exchange of Hong Kong Ltd., investment bank CIMB said in a stock exchange statement.Sin Chew’s Executive Director Rita Chin said the exercise was targeted to be completed by February 2008, with Sin Chew and Nanyang shareholders expected to vote on the merger in the fourth quarter of this year. Shareholders of SinChew will exchange their stock at 4 ringgit per share for new Ming Pao shares to be issued and credited at HK$2.70 while Nanyang shareholders will exchange their stock at 4.20 ringgit per share for new Ming Pao shares to be issued and credited at the same price of HK$2.70.
The Nanyang Press had created sagas previously when Huaren (investment arm of MCA) bought it and later sold it to Ezywood Options Sdn Berhad which is controlled by timber and media tycoon Tan Sri Tiong Hiew King for a lost estimated at RM100 Million in 2006. Chinese community worried about monopoly of Chinese newspaper industry cried that MCA (Malaysia Chinese Association) should have sold its controlling stake in Nanyang Press Holdings Bhd to other parties instead of Tan Sri Tiong Hiew King who already controls Sin Chew Media Corporation Bhd.Oops I Did It Again - Malaysian Prime Minister
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- If you can't view it above, click here to enter the Luxury of AIRBUS A319
Monday, January 29, 2007
Is Samling Really Interested In Buying LINGUI?
T
he group posted a net profit of RM22.6 Million on revenue of RM1.24 Billion for the financial year ended June-30-2006. Its’ export of logs for the financial year 2006 amounted to 294,606 cu m, 28.6% lower than previous year in 2005.Earlier in July-2006, Lingui announced the acquisition of 24,000,000 ordinary shares of RM1.00 each in Samling Plywood (Miri) Sdn Bhd (SPM), representing 60% of the entire issued and paid-up ordinary share capital of SPM, for a purchase consideration of RM 89,554,589 satisfied by issuance of 74,628,824 new ordinary shares of RM 0.50 each in the Company at an issue price of RM1.20 per new ordinary share. The acquisition expanded the company's timber concession to about 800,000ha from previous 650,000ha.
Samling Global Ltd (SGL) – which owns a 40.75% stake in Lingui – made a mandatory general offer for the rest of the shares it did not own in Lingui at RM1.01 cash each on Apr-2006. The offer valued the stock at about 21 and 23 times its projected earnings for the years ending June 30, 2006 and 2007 respectively. SGL's offer for the balance 390.81 Lingui million shares is worth RM395mil. SGL stated its intention to maintain Lingui's listed status, but said it would take steps to de-list the company if its stake in Lingui increased to above 90% following the takeover offer. But the shareholders didn’t like the proposal when it only managed to secure about 20% of the shares it did not own, bringing its shareholding up to 60.6%.
According to BizWeek, Samling is said to have upped the price to RM4.00 per share – a sign that Yaw family is ready to dig deep into their pocket for RM1 Billion to buy the remaining 259.5 million shares it does not own(Lingui had a net asset per share of RM2.20 per share). Yaw Teck Seng who control Samling Group acquired about 130.7 million shares or 20% in Lingui at RM1.01 a share mid last year, 2006, forking out only some RM132mil for the equity.
Lingui stock was trading as high as RM3.12 per share today, Jan-29-2007, an increase of over 17% to the closing last Friday. However minutes ago, Lingui said it had received a letter from Samling on Saturday saying that neither it nor its subsidiaries planned to take Lingui private, in responding to a stock exchange query. The most important question is why would Samling offer to buy Lingui at P/E (price to earning ratio) of more than 80 times? So, was it a purely rumor spread by interested parties to benefits from the stock run-up or another chapter of buying-over is in place?
Sunday, January 28, 2007
Do You Wish To Make Money With YouTube?
revenue-sharing system in a couple of months. You will get the pie of the revenue provided you own the full copyright of the videos that you uploaded onto YouTube website.Saturday, January 27, 2007
What Will Next Generation iPhone Offers You?
You heard about how Paul O'Brian posted a link on an xda-developer forum about how to create the skin which looks similar to the iPhone user interface and upload it into your Windows Mobile Phone. Of course Apple Inc (Nasdaq: AAPL, stock) wasn’t amused and issued him acease and desist letter from Apple's lawyers.
Since then, nothing much has happened – people are still waiting anxiously for the iPhone to be released this June. Meanwhile on the other side of the creative world, designers have start talking about the next release of iPhone which will come with more “functionalities”. So sit tight and enjoy the video below (it's weekend and you should relax) on the next innovative capabilities of iPhone (some of you might have watched this, I believe).
Apple's next generation iPhone's new capabilities:
Okay, let's get serious and listen to what Steve Jobs has to say during an interview with CNBC at 5th Avenue Apple Store recently.
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How To Turn Your House Into Smart-Home?
If you’re staying in U.S. you might want to check out this facility with AT&T’s (NYSE: T,
stock)remote home-monitoring service which allow you tocontrol home lighting and appliances via live video, viewable on Cingular Wireless phones or their PCs. Talk about Cingular, I know what you’re thinking – that’s the famous name mentioned repeatedly by all the Apple Inc.’s (Nasdaq: AAPL,stock) fanatics over the iPhone gadget.According to research firm Frost & Sullivan (reported by CNNMoney), smart home market is valued at a staggering $1.3 Billion and expected to increase to $10 Billion worldwide by 2010.
Some companies such as Control4, Cortexa Technology, and Exceptional Innovation are already targeting real-estate developers to automate new homes with set-top box, central touch-screen, wireless cameras, and sensors.
Elsewhere, Motorola (NYSE: MOT, stock) partnered with New York City-based Xanboo on a product called Homesite, which cost $220 and let users monitor their homes on cell phones back in 2005. Palo Alto-based iControl Networks raised $5 million fromIntel Corp (Nasdaq: INTC, stock) Capital and VC firm Charles River Ventures in April 2006 and launched its first product - a $400 starter kit and a $15 monthly service that provides PC and cell-phone access to a home-monitoring system.
If you’re living outside of U.S. then you are at the mercy of your local mobile operators. The next region to be implemented could be Europe but I’m not discount the possibility of some Asia countries such as China, Korea and Singapore being ahead with this cool service. So, if Singapore Telecommunications Limited (SIN: Z74), Maxis Communications Berhad (KLSE: MAXIS, stock-code 5051), DIGI.com Berhad (KLSE: DIGI), China Mobile Ltd. (HKG: 0941) or China United Telecommunications Corporation (SHA: 600050) is listening, you know what your customers want, so start preparing the necessary infrastructure, will you?
What Should You Do In Globalization World?
So, what shall you do to adapt to the new era of doing business?
- On your traveling journey, get ready to experience and learn the other cultures – not just travel purely on business purpose. Go to cultural events, sporting events, try their local foods and understand their business-mind.
- Instead of thinking of retirement at the age of 55 and spend the remaining old age at your cozy home, think about traveling overseas to gain experience. Force your kids to spend some years working overseas if he/she works for you.
Learn another language as it’s not too late and too difficult to master. If you’re still young, you’ll have an easier path. If you speak Chinese, you can live anywhere in Asia. Knock, knock – “Hello government of Malaysia, are you awake and realize the importance of learning Chinese?”- If you’re blue-collar workers, keep on re-training your own skill-sets to keep yourself abreast with the latest demand on know-how to continue your survival.
- If you’re fearful of radical change in China, that’s because it’s the risk premium you’ve to pay for such an important economy powerhouse. You just can’t ignore this coming giant which was said to be able to unseat U.S. as the next biggest economy nation in the world.
- Some countries in the Middle East such as United Arab Emirates which has good visionfor the future is a starting point for you to venture into. You know such quality country when they put great effort in their local education and think about nanotechnology and bio-fuels, compare to country such as Saudi Arabia who still think their oil fields will self-regenerate once it dry-up one day. Countries which refuse to change in the name of society contract will not move along globalization.
- If you’re the government who make policies you better start reduce red-tape, improve competitiveness, improve the country’s market attractiveness and retrain segments of the population.
Just because your country is the biggest economy in the world doesn’t mean that status will remain forever. Just because a country is blessed with abundance of natural resources such as tin, rubber, palm-oil, timber and oil doesn’t make you eligible to be “self preservation”. Just because you’ve been holding a top management position in a company doesn’t mean the company will not axe you comes job-cuts. So, the key to survival is to continue learning and be open to global changes.
Friday, January 26, 2007
Can ELMO Make MATTEL's Stock Laugh Next Monday?
Toy maker Mattel Inc. (NYSE: MAT, 
stock) reports earnings for the fiscal fourth quarter on Monday, Jan-29-2007 (confirmed). Mattel, the maker of Barbie, Fisher-Price and Hot Wheels toys, has, along with other toy makers, faced pressure as the popularity of electronics and video games have displaced demand for traditional toys. But Mattel has fought back with big sellers such asTMX Elmo.
In December, Mattel said sales of Barbie, which have slumped in recent years, were up for the year, and a survey by the National Retail Federation found that Barbie was the top toy for girls during the holiday season. Mattel's TMX ELMO was the top toy for boys.
Thompson Financial estimate Mattel to post net income of 67 cents per share on revenue of $1.99 billion. Analysts generally expects Mattel do deliver the best fourth-quarter results of all the toy makers, with TMX ELMO, Dora the Explorer, and "Cars" toys performing well.
Rating Indicators for MAT:
Wall Street consensus : 0.67- StockScouter rating : 9 / 10
- Whisper Number for this stock : 0.68
- Schaeffer rating for this stock : 7 / 10
- Power Rating : 5 / 10
- Insider Trading (last 52 weeks) : ($9.80M)
- Zacks Analysts Rating: Hold
- Option Trading: Apr 2007 25 Call
- Implied Volatility (IV) for Mar 2007 $25 Strike : 24.83%
Sales, Income & Growth - For the past 12-months, Mattel registered $5.38 Billion sales from the industry’s $3.9 Billion. Income amounted to $585.73 Million from the industry’s $381.33 Million.
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 10.9% against industry’s 7.9%. Mattel has a debt/equity ratio of 0.41 compare to industry’s ratio of 0.40.
Stock Resistance & Support Level – The resistance is at $24.08 (52-week high) while the first level support is at $22.91 (50-day moving average).
Risks – For a large company like Mattel, its’ stocks are neither being accumulated heavily nor sold heavily by financial institutions.
This stock has beaten earning estimates most of the time and 
December generally is the peak season for toys. Mattel stock also made me some money during the last quarter’s earning. I believe the ELMO sold-out during the 2006 Christmas period would help the earning figure when Mattel announce next Monday. However this round I plan to join the crowd of out-of-money Apr 2007 25 Call. If you noticed the $25 Strike for Feb, Mar and April, you’ll noticed this 25.00 Call were being bid-up with such a high volume. Interesting isn’t it? Maybe the crowds already knew something about Mattel.
Elmo was so popular that it was being offered for sale on eBay (Nasdaq : EBAY. stock) for as much as $93.99, more than twice the toy's $39.99 list price. Perhaps the new T.M.X. Elmo will laughs, slaps its knee, and rolls around on the floor next Monday with a set of good result.
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NYSE Teaming With TSE - BURSA Try To Follow?
"Over time it makes sense to have linkages with the Tokyo Stock Exchange...We are working at it," Thain told reporters on the fringes of the World Economic Forum annual meeting in Davos. He also said that fullintegration of NYSE and Euronext would take a year, and that the combined exchange was open to include other European bourses.On the other hand, Bursa Malaysia (KLSE: BURSA, stock-code 1818) stock price jumped to above RM10.00 earlier this week when the speculation on Bursa taking up minority stakes in regional stock exchanges was on the air. Bursa chief executive officer, Yusli Mohamed Yusoff later confirmed the rumor but admitted the difficulty in doing so. Well, at least he understands that stock exchanges are regarded as national infrastructure and without strong justification, you can’t simply propose and hope the other parties will hand-over the stake to you. That's the mentality within Asia region at this moment, with the exception of Japan?
It’s the same way the government of Malaysia over-protect its’ own pets in terms of GLC (government-link-companies) such as Malaysian Airline System Berhad (KLSE: MAS, stock-code 3786) and Proton Holdings Berhad (KLSE: PROTON, stock-code 5304), Telekom Malaysia Berhad (KLSE: TM, stock-code 4863) and Tenaga Nasional Berhad (KLSE: TENAGA, stock-code 5347). Of course now that Proton is in deep trouble the government starts to open up the door for foreign acquisition. Khazanah Nasional Bhd is also reviewing the prescribed limit on foreign shareholding in GLCs in view of rising interest in Malaysian equities by foreign investors, echoed by TENAGA president and chief executive officer Datuk Seri Che Khalib Mohamad Noh during TENAGA’s earning announcement.
While the western countries (and certain Asia country such as Japan) have recognized the benefits of open market, most of ASEAN countries are still struggling trying to learn the basic-101 of open-market. It’s time to give these countries a wake-up call before they’re left in their own dinosaur-age thinking. I’ll not be surprise if Singapore be the next (the best candidate) to liberalize its’ equity market.
The Day Bear Rules The Stock Market
Investors were basicallynervous about corporate earnings growth, which is expected to slow in the fourth quarter, after more than four years of double-digit gains. For example,Microsoft Corp. (Nasdaq:MSFT, stock) fell 2.1 percent as investors sold the software maker's stock even before its quarterly earnings report. But the stock turned around (rose 1.8 percent to $31.00) after the close as the software maker posted quarterly earnings that topped Wall Street's estimates, driven by sales of database software and its Xbox 360 game console. Microsoft also raised its full-year profit target.I guess there’re too many bad news on one day. A report showed sales of existing homes took their biggest tumble in 17 years in 2006, and bond yields jumped to their highest level since August after a five-year Treasury note auction attracted only lukewarm interest. Higher bond yields can signal higher borrowing costs for companies - a trend that worries stock investors because higher rates can dampen corporate profits.
The blue-chip Dow average and the S&P 500 suffered their steepest one-day percentage declines since late November 2006. If you can’t remember that particular sell-off day, you can read it againhere which affect other stock markets the next day, including Malaysia stock market.
Bear Rules the Day - The Dow Jones industrial average dropped 119.21 points, or 0.94 percent, to end at 12,502.56. The Standard & Poor's 500 Index slid 16.23 points, or 1.13 percent, to finish at 1,423.90. The Nasdaq Composite Index fell 32.04 points, or 1.30 percent, to close at 2,434.24. If you look at the data-chart, Russell 2000, Semiconductor and Dow Transport also drop by one percentage. This is a sign of bear creating havoc to the market with sentiments changed over-night.
The point and figure data which map out the relationship between supply (created by sellers) and demand (created by buyers) at different price levels shows market is entering the“High Risk Area” of 70% level. At current level of 68%, index fund managers would start tightening stop loss points on all holdings and sell all laggards stocks (weak relative strength). Index fund investors’ strategy at this moment will be the switching from stock to call options to limit equity exposure.Investor optimism soared to its highest level since 2004, reaching 103 for the month of January 2007. This is a jump of 13 points from last month’s level of 90 and only the fifth time the Index has been above 100 since December 2000. Generally investors began the New Year 2007 with a bullish outlook for the stock market. On the other hand investor sentiment continues to suggest that residential real estate market conditions continue to deteriorate with two in three investors believe so. With such a high optimism, there’s only one way to go when other market data shows bearish trend and that is – downwards.
The stock market needs good news to continue the bull-run – maybe an interest rate cut by our dear Ben Bernanke will do the trick.
NFLX - Locked-In Profit After 1 Day Option Trading
is good with only 1 day trading, at least I’m happy.The whole bearish day could be due to Dow Jones and Nasdaq trading in the red-territory. I’m not sure yet but I might re-enter this stock again at a later stage during the day depending on the trend.
In the meantime, did you noticed how strong F5 Networks, Inc. (Nasdaq: FFIV, stock) made a U-turn from a loss of almost 3 points from yesterday closing to positive territory now. That’s what I called a good fundamental 
stock – just because it gave a lower guidance, investors should not panic and dump it.
QUALCOMM Inc. (Nasdaq:QCOM, stock) is still stubbornly refuse to run – it’s crawling instead but I have confidence with this stock.
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Thursday, January 25, 2007
Will Illumina Continues Its' 45 Degree Uptrend?
Rating Indicators for ILMN:
Wall Street consensus : 0.30- StockScouter rating : 7 / 10
- Whisper Number for this stock : NA S
- Schaeffer Rating for this stock : 7 / 10
- Power Rating : 4 / 10
- Insider Trading (last 52 weeks) : ($16.35M)
- Zacks Analysts Rating: Hold
- Option Trading: Jun 2007 40 Call
- Implied Volatility (IV) for Mar 2007 $40 Strike : 50.83%
Sales, Income & Growth - For the past 12-months, Illumina registered $147 million sales from the industry’s $6.2 billion. Income amounted to $23.15 million from the industry’s $1.29 billion. The company’s one-year sales growth is at 145.90% against industry’s 91.70%.
Profitability & Financial Health – For the past 12-months, net profit margin is in the region of 15.7% against industry’s -1273%. Illumina does not have and debt compare to industry’s debt/equity ratio of 0.32.
Resistance & Support Level – The resistance for this stock is at $45.87 (52-week high) while the first level support is at $39.70 (50-day moving average).
Risks – Current P/E (price to earnings multiple) of 87.50 is rather high compare to industry. The relative strength is rather weak at 24 for the last 3 months.
However this stock has beaten earning estimates for the last three quarters and should it do the same this time, it should gap-up again just like the previous quarter when I made some decent money from it. In the meantime I'm still researching Caterpillar Inc. (NYSE: CAT, stock) which will announce its' earning the same today as Illumina - tomorrow before market open.
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Could Property Stocks Take Off In A Bigger Wave?
Focusing on the property sector, stocks with exposure to retail such as KLCC Property,KrisAssets Holdings Berhad
(KLSE: KASSETS, stock-code 6653),Starhill REIT (KLSE: STAREIT, stock-code 5109) and Hektar REIT (KLSE:HEKTAR, stock-code 5121) will definitely see improvement in its’ earning. On the other hand Genting Berhad (KLSE: GENTING, stock-code 3182), Resorts World (KLSE:RESORTS, stock-code 4715),Sunway City (KLSE: SUNCITY, stock-code 6289) and Pulai Springs (KLSE: PSPRING, stock-code 5059) would likely enjoy better earnings from higher hotel occupancy rates.
Earlier, UBS (NYSE: UBS, stock) Investment Research has raised its target price for IGB Corp Bhd (KLSE: IGB, stock-code 1597) a
nd KLCC Property Holdings Bhd (KLSE: KLCCP, stock-code 5089) on expectation that the developers will benefit from robust office rents and strong tourist arrivals this year. IGB, operator of Mid Valley City which comprises office, retail and hotel offerings, had its target price lifted to RM2.50 from RM1.96.
A week later, IGB Corporation Bhd clarified to stock exchange that it has received no proposal for the sale of its five-star Renaissance Kuala Lumpur hotel which was reported by a newspaper. The report values the possible deal at about RM850 million prompting the stock of IGB to hikes. The potential buyers reported were 
Genting Group, Permodalan Nasional Bhd, YTL Corp Bhd or Malaysia Land Properties Sdn Bhd.
UBS also raised KLCC Property, which has property assets such as the Petronas Twin Towers, Suria KLCC and the Mandarin Oriental hotel - to RM3.50 from RM2.88. KLCC Property is also expanding its assets via Lot C, a mixed development project in the vicinity of the Petronas Twin Towers.
Yesterday, Malaysia's Eastern & Oriental Berhad (KLSE: E&O, stock-code 3417) raised 64 million ringgit ($18.3 million) by selling a 5.2 percent stake in subsidiary E & O Property Development 
Berhad (KLSE: E&OPROP, stock-code 3468) to a global investment mutual funds manager,Capital International. This will result in a gain of some 24.8 million ringgit for the year ending March 31, 2007.
Foreign investors also are clamoring to get into thePhilippine real estate market but an ownership cap and a dwindling supply of prime property is hindering investments.
Thailand risks losing some of its resort home market to Southeast Asian rivals Malaysia and the Philippines if it goes ahead with plans to close a loophole that lets foreigners own freehold property. Currently, foreigners cannot own landed property, according to Thai law - only apartments are allowed. But many buyers have sidestepped the rule by holding property through a local company, which they control because Thai "nominee" majority shareholders waive voting rights. The Thai government wants to change the Foreign Business Act to outlaw such nominees, leaving foreigners with only the option of a maximum 30-year lease.
It could be the combination factors of Visit Malaysia Year, Kuala Lumpur stocks bullishness and capital inflows from neighboring countries that contribute to the run-up of the property-related stock prices. Nevertheless, investors who managed to secured shares of KLCC Property during the IPO would have better dreams at night now that their stocks begin to move in tandem with Composite Index. So, are you bullish on property stocks based on current trend?
Singapore Offended By Genting-Stanley Macau Deals?
Singapore's Home Affairs Ministry, responding to questions from the newspaper, said that
suitability checks would be conducted as and when necessary. Genting Bhd said on Tuesday it would sell a small stake in its $3.4 billion Singapore casino project to Ho and would in turn buy a controlling interest in a new gaming project that Ho plans in Macau.If the flag had indeed be raised, it would spark a problem to the just-won Resorts World at Sentosa. I think the government of Singapore might get offended because it was keep in the dark of the secret alliance between Genting Group (KLSE: GENTING, stock-code 3182) and Stanley Ho. Traditionally, Singapore prefers to be updated on any changes to projects or issues concerning its’ benefits and welfare. Perhaps, the problem can be solved by a friendly pat on the back and a cup of Starbucks (Nasdaq: SBUX, stock) Latte by Lim Kok Thay.
F5 Disappointed But NETFLIX & QUALCOMM Perform
Jefferies & Co. analyst Bill Choi said investors were expecting revenue figures to beat analysts' estimates by a bigger margin, as the stock trades at a relatively high valuation of close to 30 times its forward earnings. Jefferies has a "buy" rating and a price target of $85 on the stock.
So, the stock price tumbled $4.60 or 6% on after-hours electronic trading – though my prediction of beating the earnings was right, it disappoints with its’ lower guidance. While option trading can be fun and excited, it can sometime spells disastrous – nevertheless, with sufficient time-value, I’m pretty sure this guy will recover given time. Depending on the pattern of the price movement, I might go with “Put Option” to make some profit to minimize my loss on the “Call Option”. Alternative I might convert my Call to a spread trade. So, one down two to go…
Netflix, Inc. (Nasdaq: NFLX, stock) - has repeatedly proved the skeptics wrong since it launched its online DVD rental service eight years ago when it announced a great earning result. Netflix said it earned $14.9 million, or 21 cents per share easily exceeded the average earnings estimate of 15 cents per share surveyed by Thomson Financial. Revenue for the period totaled $277.2 million, a 44 percent increase from $193 million in 2005.
The company attracted an additional 2.1 million subscribers during the entire year, bringing its customer count to 6.3 million through December. The stock price surged by $2.50, or 10.9 percent, in extended trading hour.
QUALCOMM Inc. (Nasdaq: QCOM, stock) - posted a 5 percent increase in fiscal first-quarter profits driven by strong sales for mobile phones that offer speedier Internet downloads. Qualcomm earned $648 million, or 38 cents a share, in the three months ended Dec. 31, up from $620 million, or 36 cents a share, for the same period last year. The latest result includes a charge of 5 cents a share for share-based compensation, a loss of 1 cent per share from its strategic investments unit, and a gain of 2 cents a share for tax adjustments from previous years.
Excluding those items, Qualcomm earned 43 cents a share, 1 cent higher than the consensus estimate among analysts polled by Thomson Financial. Revenues jumped 16 percent to $2.02 billion from $1.74 billion, buoyed by demand for so-called third-generation mobile phones, which offer faster Internet downloads.
For its fiscal second quarter, Qualcomm projected a profit of between 42 and 44 cents a share, compared with analyst estimates of 43 cents a share. It estimated revenues between $2 billion and $2.1 billion, about equal to analyst estimates of $2.1 billion. The stock climbed 91 cents or 2.36%in after-hours trading.
I didn’t open any position on Parexel International Corp. (Nasdaq: PRXL, stock) as there’re not much volume – a sign which I don’t like as I’ll be at the mercy of the market-maker. So while Netflix and Qualcomm make me money, F5 disappointed me – what a day.
FRK - Will This Cement Leader Performs Again?
Some of the Indicators for FRK:
Wall Street consensus : 0.61- StockScouter rating : 10 / 10
- Whisper Number for this stock : NA
- Schaeffer rating for this stock : 7 / 10
- Power Rating : 3 / 10
- Insider Trading (last 52 weeks) : ($1.97M)
- Option Trading: Jun 2007 45 Call
- Implied Volatility (IV) for Mar 2007 $45 Strike : 33.12%
One of FRK’s competitor, Texas Industries, 
which revenues depend on 75% of its’ cement capacity are generally bullish by analysts. Demand for cement specially in Texas and California was strong. So even though the housing market is softening, the demands for cements are still there, particular California. But that’s California, you might argue.
Well, Florida Rock Industries, which distributes sand, gravel, concrete, and cement is another company that has been setting record sales and earnings lately. The stock is very cheap(trading at price earning ratio or P/E of only 15.2) and is also exposed to the construction market and the commercial market which are doing well. Because of substantial weakness in the Florida residential real-estate market, the Jacksonville-based company will instead look to non-residential and highway construction for growth opportunities in 2007.
In the meantime I'm still researching Netflix, Inc. (Nasdaq: NFLX, stock), Parexel International Corp. (Nasdaq: PRXL, stock) and QUALCOMM Inc. (Nasdaq: QCOM, stock).
# TIP: I think it’s worth investing in FRK – option trading with sufficient time-value, as usual.
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Wednesday, January 24, 2007
Will F5 Stock Continues Its' Uptrend?
Some of the Indicators for FFIV:
Wall Street consensus : 0.45- StockScouter rating : 7 /10
- Whisper Number for this stock : NA
- Schaeffer rating for this stock : 5 / 10
- Power Rating : 7 /10
- Insider Trading (last 52 weeks) : ($13.83M)
- Option Trading: Apr 2007 70 Call
- Implied Volatility (IV) for Mar 2007 $70 Strike : 44.64%
Recommended by Jim Cramer, this stock displayed Relative Strength as it climbs higher off the opening to a new high above the week's 80-resistance level on Jan-12-2007. F5 proved its’ global leader in Application Delivery Networking when it was positioned in the Leaders Quadrant of Gartner, Inc.'s Magic Quadrant for SSL VPN, North America on Jan-10-2007. As the e-commerce continues to grows, the demand for improve performance and security on the net ensure F5 continuity survival. Zack average brokerage recommendation is Moderate Buy.
However, the price-to-earnings (P/E) of 46.20 multiple is higher than the average for all stocks within its' sector. On accumulation point of view, the stock is neither being accumulated nor sold heavily by financial institution. SInce the stock has shown the strength in the past week, the risk of being dumped should it announce some financial figures which are not favorable to analysts are high.
# TIP: StockTube nevertheless is optimistic in this stock with sufficient time-value on option trading.
Make Money Trading FRK Option After 2 Months
my profit but it spells disaster when it fell to the price before the announcement and remained there for almost one month.It could be due to the general perception that the housing industry was weak but I believe in its’ fundamental as the leader in cement sectors. If you’re staying in Florida, then you should know what company this giant really is. The stock started to rally just after the 2007 New Year and yesterday was a big one which could be due to its’ next earning announcement schedule on (...drum please) today, Wednesday Jan-24-2007 after market close.
With plenty of time-value prior to the option trading on Nov-29-2006, the waterfall drop 
seems to start kicking in with my Mar 2007 40.0 Call Option – hence, I closed my position yesterday, Tuesday Jan-23-2007. I need to lock-in my profit to realize the money before something bad happen. I might re-open new position today before it announce its’ earning after the market close today. We’ll see if it’s feasible to invest in this stock/option later.
# TIP: Due to water-fall drop when the option nears the expiry, always consider time-value before trading option – just in case.
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TOP Reasons Why Genting Agreed To Partner Stanley Ho
In 2001, two years after Portugal reluctantly handed back the goose that lays golden eggs to China, foreign casino
operators allowed into Macau. Before the liberalization, Macau’s casino industry was monopolized and controlled by the Casino King - Stanley Ho's Sociedade de Jogos de Macau for almost 40 years. The entry of gaming giants such asWynn Resorts (Nasdaq:WYNN, stock), MGM Mirage(NYSE: MGM, stock) andGalaxy Entertainment Group Limited (HKG: 0027) basically gave Stanley a run for his money.And you can bet your last dollar how drooling Genting Group (KLSE: GENTING, stock-code 3182) was in wanting a piece of the pie. But what are the main factors that prompted Genting’s willingness to trade its’ just-won lucrative 30-year gaming license in Singapore through Star Cruise Ltd (SIN: S21) for the auto-entry into Macau’s casino industry?
- Macau’s gaming revenue surged to US$6.95bil last year from US$5.6bil in 2005, surpassing Las Vegas which
was estimated to have achieved US$6.6bil revenue in 2005. Experts see Macau's gambling revenue growing quickly to $9 billion to $11 billion by 2010 and upward of $15 billion by 2012. Looking at this great potential it would be insane not to get excited and drool at the same time? - After unsuccessful bid for a casino license in Macau four years ago of which Genting Group lost to Stanley Ho, Wynn’s Co and Hong Kong-based Galaxy Resort & Casino, there appears to be no other opportunity (at least in the short-term period) to tap into the golden-bowl. Hence, it makes lots of business sense to partner with Stanley for aninstant footprint into Macau’s gambling industry. Furthermore both Genting and Stanley have the cards that each other is looking for at the same time.
- Macau is perhaps sitting on top of one of the biggest “Ready-Market” in the casino industry. It was estimated there are 1.3 billion people living within three hours’ flight from Macau and 100 million people are within the radius of a three-hour drive. Chinese gamblers normally spend most of their money at casino tables – a good indicator for gambling business.
- Though Chinese gamblers are notorious for staying in Macau for
only a day, spending most of their money at casino tables and rarely enjoy themselves at fancy restaurants, shows or conventions the trend is expected to change once more entertainment-centric projects are launched. Stephen Wynn who launched the new $1.2 billion casino resort in Macau once said if-you-build-it-they-will-come approach will work as Las Vegas faced the same problem before. According to Macau Statistics Bureau, the region received 21.99 million visitors last year, up 17.6% from 2005 with 55% came from China. And this is the exact area where the Genting would target with its’ specialization in families entertainment and hospitality sector back in Malaysia. While casinos are quite crowded, resort entertainment is still at its infancy. - Genting needs to grow out of Malaysia, a Muslim country, since it’s not likely that another casino license will be issued. With its’ huge war-chest, Genting is desire to relocate out of Malaysia should anything happen be it business-wise or politically. Though Genting’s crown jewel, Casino de Genting and Genting Highlands Resort will remain the only player in Malaysia, you’ll never know when you’ll lose the gaming license. Furthermore the permit has to be renewed every three months with an estimated cost of 40 to 50 million ringgit per-renewal. This quarterly permit renewal makes Genting vulnerable to license hikes or sudden political change, not that the Government of Malaysia adopt an investment-friendly policies with its’ ever-famous NEP (New Economic Policy).
“The news is materially positive. Genting are getting capital and also getting majority control of a casino in Macau," said James Mitchell, an analyst at Goldman Sachs (NYSE: GS, stock) who had a buy call on the stock prior to the news. With a market value of $7.54 billion, Genting is already the world's seventh-largest casino operator, behind Las Vegas-based Wynn Resorts (Nasdaq:WYNN, stock), and about one fifth the size of top firm Las Vegas Sands (NYSE : LVS, stock).
Some analysts said that Genting stock price should be 
rated at par with those of US casino owners, Las Vegas Sands Corp is trading at 84.90 P/E, MGM Mirage at 37.69 P/E and Wynn Resorts at 16.92 its’ price earning ratio or P/E.
Genting International (SIN:G13), a majority-owned vehicle for expansion outside Malaysia was listed in 2005 in Singapore. The stock price has tripled in the last three months and currently trading at an unbelievable P/E (price earning ratio) of 218. Genting Berhad stock price is trading on PE of 19 times.
# TIP: StockTube is definitely bullish with both Genting and Resorts stocks in the long-run. After the share split, the stock could be more affordable for local retail investors.
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Tuesday, January 23, 2007
GENTING, Stanley And Chua - The New Three Musketeers
Genting group said it was venturing into Macau via the acquisition of a parcel of land in Lago Nam Van on the shores of Nam Van Lake in downtown Macau for HK$1.47 billion (RM659.72 million). New Orisol Investment Ltd is buying
75% of Macau Land Investment Corporation, which owns the land while Genting International (SIN : G13) owns the balance of 25% in New Orisol. The group intends to build a boutique hotel calledResorts World by 2009, in which will be sited the casino that will be owned and operated by Ho, while Star Cruises will provide the facilities and services.Star Cruises had signed an agreement with Ho's gaming company Sociedade de Jogos de Macau, which will operate a casino in the hotel. The corporate deal will see Stanley Ho, Malaysian businessman Chua Ma Yu and three other parties ending up with a 6.99% stake or 510 million shares in the enlarged share capital of Star Cruises under subscription and share option agreements.
Under the subscription agreement for 255 million Star Cruises shares for HK$583.95 million or HK$2.29 each, Stanley Ho via Profit Boom Investment Ltd will subscribe for 120 million shares, Chua 42 million shares, SJM shareholder and director Leong Angela On Kei (40 million), Win Ever Investment Ltd (40 million) and Ideal Collection Assets Ltd (12.5 million). The option shares granted to the five parties are 255 million at a premium of 28 Hong Kong cents each or a total of HK$71.4 million. Its exercise price is HK$3 for each Star Cruises share or a total of HK$765 million.
Star Cruises said the subscription and option shares represent 7.52% of existing paid-up capital or 6.99% of its enlarged capital, and the proceeds would be used to fund its S$5.2 billion (RM11.84 billion) Sentosa Integrated Resort.
Reuters reported that Star Cruises and Genting International would buy a controlling stake in the yet-to-built casino in Macau. The report said the deal would give octogenarian Ho a stake in Singapore’s casino resort while offering Genting group access to the lucrative China gambling market.
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Jetstar Flying Off To Malaysia, AirAsia Next?
Passengers flying Jetstar from Sydney to Kuala Lumpur can choose between economy and business class (despite being a budget carrier) seats on the 303-seat Airbus A330-200 jets to be used by the carrier for the new service. Jetstar launched its long haul flights in November
and currently flies directly to Bangkok, Phuket, Ho Chi Minh City, Bali and Honolulu from either Sydney or Melbourne and scheduled to start a daily service to Osaka from Sydney and return via Brisbane from March 25. Jetstar will be the second fully foreign-owned low-cost carrier to fly to KLIA (Kuala Lumpur International Airport) after the Philippines' Cebu Pacific Airways.When I check the flight schedule, it shows you can actually make the booking now – I assume the approval has already been granted. Jetstar offers three types of flight, JetSaver, JetFlex and StarClass. You can find the differences at the website here.
Jetstar plans to offer low fares through online booking with the one-way economy fare from Kuala Lumpur to Sydney costing 633 ringgit (US$180; euro141).
Even though Jetstar spokeswoman Simone Pregellio denied that the new flights are part of an arrangement to allow Malaysian budget carrier AirAsia Berhad(KLSE: AIRASIA, stock-code 5099) to fly to Australia, I believe it is already a done-deal-strategy considering the business benefits of such co-operation. Earlier, AirAsia has said it plans to spread its wings beyond the Southeast Asia-China region to Europe, India and Australia. With this announcement, I expect AirAsia to announce the direct flight from Malaysia to Australia (Melbourne, Sydney or Brisbane?) very soon. And Malaysia Airports Holdings Berhad (KLSE: AIRPORT, stock-code 5014) will definitely benefits from the extra income from the increase flights. So, save some money for more holidays out of Malaysia.# TIP: With more flights from AirAsia out to regional destination and more foreign flights into Malaysia, AirAsia and Malaysia Airports will benefits from extra incomes.
Why Malaysia Yusli Blames Local Investors?
He noted that foreign institutional investors were the net buyers on Bursa, accounting for 35% of last year's daily volume. If that is the case, the local investors should make up the remaining 65% of the volume. So, how can he say local investors are waiting on the sidelines? Unless he has statistic which shows that out of the 65%, only a single digit or a small portion of it consists of local investors. Or maybe the majority of the 65% of the volume were actually played by government financial institution such as PNB (Permodalan Nasional Berhad) or EPF (Employees Provident Fund).
Why is he so worry about this local investors’ participation? Considering the record-breaking Composite Index and the over 1-billion daily volume, he should be smiling as these two indicators are what Malaysia stock market saw during the 1993 super bull-run. If indeed 35% of the volume came from foreign investors, it’s already a good figure showing foreign investors’ confidence in Malaysia equity market which should be front-paged on daily basis out of pride. If the majority of the remaining 65% volume were from local investors, then he shouldn’t cries asking for more.Unless, or course something is not right about the whole bullishness of the stock market. Perhaps the 35% of foreign investors’ participation is not true. Perhaps the Composite Index was up because of a call from government to EPF or PNB to counter-criticism that Malaysia stock market lagged behind too much compare to regional bourses. EPF with its’ hundreds of billions ringgit in employees fund is the richest institution in Malaysia. If you compare the trend today against the 1993 bull-run, you cannot miss the picture where the market then was bull in totality – second liners and even third liners were snatched-up like there’s no tomorrow while second-board companies rarely saw stocks with less than 1 (one) ringgit a share. But now if you look at the top-20 active stocks in Malaysia stock exchange, you’ll notice about 70% of the stocks are trading below one ringgit (though the volume is high).
Could it be that local investors are smarter nowadays after being trapped by numerous false-bulls previously? Could it be that most of these local investors who were trapped are insteadwaiting for their portfolios to break-even before cashing-out? Could it be that most of these local investors are dominated with “fear” emotionally? Not everyone has a money-printing machine at home to enable them to keep on buying in the stock exchange.
The fact remains that majority of local investors are targeting cheap (known as second or third liners) stocks in Malaysia as blue-chips are still considered expensive (though the trading lots have been brought down to 100 shares instead of 1,000 shares previously). Local investors just like the feeling of holding 50,000 cheap shares compare to 500 blue-chips shares due to the perception that when the cheap stocks explode, the ROI (return on investment) could be in hundreds of percentage points. So, is the stock market bullishness artificial?
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Monday, January 22, 2007
Will New York Lose Its Shine As Financial Center?
Michael Bloomberg, the mayor of New York City together with New York Senator Chuck Schumer today expressed their concerns on the possibility of New York losing its position as the world’s leading financial center. According to a study done by McKinsey, New York could lose up to 7 per cent of its market share, equivalent to 60,000 jobs, over the next five years. Unless the U.S. government implement legal & regulatory reforms to prevent the declining share of global capital markets activity – reported Financial Times.
The study which comprises interviews with 50 financial services chief executives concluded that New York had 
become less attractive than London over the past three years, and the trend might continues. While London’s financial services employment rose 4.3% to 318,000 during the 2003 to 2005 three years period, New York fell by 0.7% to 328,000.
Besides London, Asia capital market is eating up New York’s pie too. Earlier in my website titled “Hong Kong beats New York for Second Place" the World Federation of Exchanges reported that in 2006, Hong Kong surged past New York ($33.61 billion raised) as the world's second most popular place to float new stock listings raking in US$39.57 billion in IPOs behind London ($48.92 billion raised). And we have not take Shanghai into consideration yet.
Amongst the immediate measures suggested in tackling the problems:
- clearer guidance on the Sarbanes-Oxley (major bottleneck)
- securities litigation reform
- promoting the convergence of accounting standards
- easing visa restrictions on foreign professionals
Chuck Prince, chief executive of Citigroup Inc (NYSE: C, stock), recently forecast continued "diffusion away from New York", when the Citigroup's corporate and investment bank fourth quarter earning in 2006 shows Europe and Asia out-performed the US for the first time.
In the competitive global financial market, whoever can provide the platform which is fast, easy yet simple will win the businesses. That’s the formula for success in the world of globalization. And I think U.S. authorities should start acting fast if it’s serious about polishing the weakling shine. Already, Singapore has recognize the threat within Asia region itself when Minister Mentor Lee Kuan Yew announced last Saturday, Jan-20-2007, that Singapore's corporate tax rate would be cut by at least one percentage point from the present 20 percent at the upcoming Budget in mid-February. What do you think the Government of Malaysia will do next to compete (if they're awake)?
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Sunday, January 21, 2007
Is Malaysia's Coffer Out Of Money?
Badawi was making the clarification when a blogger claimed that "Malaysia was borrowing US$50bil without borrowing". The blog said that the US$50bil
purportedly procured from 25 prime banks was being channeled through a private limited company which would act as a front for the Malaysian government so that the country was not seen as borrowing US$50bil from overseas.It's not difficult to find out from which blog this claim came from, thanks for the age of internet and Google's (Nasdaq:GOOG, stock) search engine, of course. I believe the blog is none other than Malaysia Today and the article was written by the author can be found titled "How Malaysia is borrowing USD50 billion without borrowing", unless there're other blog's article which I might have over-look during the online search.
Could this be true? That the Government of Malaysia is indeed ran out of money to finance the ambitious 5-year plan in order to spur the economy which obviously is slow if you happen to ask any small businessman on the street? Does the company mentioned, Asasatu Technology Sdn Bhd, which is in the process of being wound up together with its' managing director Hj Zubir bin Hj Ahmad really connected to this USD50 billion funding arrangement? What about the other Australian company Project Equity Services Group (PESG)? What is more disturbing mentioned in the article was that the Bank Negara has agreed that a private limited company be used as a front for the Malaysian government to borrow USD50 billion.
Why You Should Invest TMC-Life and StemLife Stocks?
TMC Life Sciences is the market leader in fertility treatment in Malaysia which was listed on the Mesdaq Market on October 2005. TMC Life founder and managing director, Dr Colin Lee, has a 49.28% stake as of April, 2006.Back in Dec-2006, TMC Life announced its new venture into cord blood and adult stem cell banking, therapy, application and research and development with the setup of TMC Stemcells Sdn Bhd. TMC Stemcells would mainly be in the business of harvesting, processing and cryo-preservation (storage) of umbilical cord blood stem cells and peripheral blood stem cells, as well as provision of cell therapy services for the treatment of blood disorders, cancers, and heart and other diseases.
The setting up of TMC Stemcells is indeed a good synergy and correct direction
considering the close relationship between fertility and cryo-preservation medical business which requires storage. The new building of TMC Life, Tropicana Medical Center which is due to open in 2008 will provide the much needed spaces as the existing Damansara fertility centre in Damansara is already crowded. Stem cell therapy which could be applied for various instances such as heart disease, blood disorders, cancer therapy and diabetes is estimated to cost RM30,000 per procedure. With fewer than three private sector players in the industry, TMC Life can expect good business growth.Foreign patients have been increasing from less than 1% in 2002 to about 10% in 2005. It was said that some Hong Kong female artists have flew in quite frequently for medical check-up at TMC Life due to the lower costs compare to Hong Kong or Singapore. TMC Fertility Center has scores quite a number of “First”, amongst them:
Produced Malaysia's First Freeze Thaw Blastocyst Baby- Produced Malaysia's First Conception Twins (born one and a half years apart) and first Conception Quadruplets (born two and a half years apart).
- Produced Malaysia's First Frozen Embryo baby
- Produced Malaysia's and Singapore's First Blastocyst PGD Baby
This brings my memory back to StemLife Berhad (KLSE: STEMLFE, stock-code 0137) the specialist and the largest stem-cell bank provider in Malaysia. Will StemLife be the next speculation play?
# TIP: Both TMC Life and StemLife stocks are my favorite and should be in your stocks' portfolio as part of the investment diversification plan. Both are in the health industry which is growing without much competition.
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Why You Hate And Love TENAGA At The Same Time?
The 2.7 month bonus is the highest ever
paid, according to CEO Datuk Seri Che Khalib Mohamad Noh. While the bonus will surely bring joys to the 27,000 employees, the higher electricity bill will no doubt affect the more than 25 million Malaysia populations.Meanwhile, TENAGA is expected to announce better first-quarter results next week, Jan-25-2007, as well as financial target for 2007. Earlier, Che Khalib had said the tariff hike last year contributed RM400 million to its earnings last year. Analysts expect TENAGA to post a net profit of RM673 million in the first quarter, according to estimates compiled by Bloomberg.
Besides, it would get a boost from lower fuel prices, especially coal, which makes up 44 per cent of its fuel cost in 2006. Coal prices have been on the downtrend since hitting the peak in March 2006 and are currently trading in the lower US$40 (RM140) per tonne region. It is estimated that for every US$5 (RM17.5) per tonne drop in prices, TENAGA's earnings per share in 2007 would rise by 3 per cent.
All 21 analysts that track TENAGA's shares recommend that investors buy them, according to Bloomberg data. So, while socially TENAGA can be accused of squeezing money filled with sweats from man-on-street, business-wise the stock has and will performs in tandem with higher profit from higher tariff and lower fuel costs.
# TIP: Invest this stock should there be any immediate pull-back before the earning announcement to make some decent money.
General Electric To Buy Malaysia EON Capital?
General Electric Capital could offer up to 9 ringgit per EON Capital share, a 28 percent premium to Friday's closing price of 7.05 ringgit, because the 139 million-odd shares are a controlling block, the paper said. If this is true, it will values the stake at 1.25 billion ringgit ($357.2 million) and the entire firm at 6.23 billion ringgit.
Seventh-largest lender EON Capital's main business is in automotive financing, primarily for local automaker Proton Holdings Berhad (KLSE: PROTON, stock-code 5304The controlling shareholder of DRB Hicom, Tan Sri Syed Mokhtar Albukhary was reported to be the person wanting to dispose the 20.2 percent equity. Besides Syed Mokhtar, General Electric has the option to talk to other substantial shareholders of EON Capital such as Tan Sri Tiong Hiew King (holding 17.1% stake) and Rin Kei Mei (holding 15.5% stake). I believe General Electric will talk to all the parties to pull-off the best deal possible.
EON Capital posted RM211.3 million on RM1.7 billion sales for the nine months ended September 2006. Of all the major shareholders, I think Syed Mokhtar is the person most desperate wanting to sell as he still has another financial service provider in Bank Muamalat Berhad which provide Islamic financial services via his 70% Bukhary Capital Berhad.Furthermore he needs to sell-off EON Capital soonest possible to liquidate for cash in order to reduce DRB Hicom debts which totaled RM1.9 billion. Syed Mokhtar paid RM3.60 a share or about RM560 million to wrest control of DRB Hicom four years ago. Since then, the stock price has almost halved his initial investment (talk about greed and political connection). Furthermore, should Proton Holdings Bhd be sold of to either Volkswagen Aktiengessellschaft (FRA : VOW), PSA Peugeot-Citroen (EPA : UG) or General Motors Corp. (NYSE : GM, stock) before Syed Mokhtar able to find a buyer, EON Capital might not command the dominance as the proton's primary automotive financier.
GE Money, a unit under General Electric which focuses in consumer financial services has as much as US$163 billion in assets. GE Capital International Holdings Corp, a unit of the U.S. giant recently completed the acquisition of a 29% stake in Thailand’s Bank of Ayudhya Public Company Limited (BAK: BAY) for US$600 million.
Friday, January 19, 2007
Easing Short-Selling Rules - Tackling The Wrong Spot?
and attract international investors. After the slow start, he still has not smelled the root problem of the slowness in short-selling business. He further added that "hopefully"some loosening controls will kick-in end of the year. He should tackle the basic fundamentals issue with short-selling which aren't seeing any encouraging activities since it was started. Simple questionnaires with brokers and investors (both retail and institutional) should shed some lights on what are the bottlenecks.
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