1. Little Preparation or Training
When you enter the market arena, you had better be prepared. However, few traders perform the necessary due diligence before moving headlong into the markets: "The market is a food chain — the big fish eat the little fish."
Dr. Elder agrees that many people underestimate what it takes to be a profitable trader.
Recommendation: Enter the market with a sufficient amount of training, through vehicles such as books published on securities trading, educational courses, and trading conferences.
2. Being Too Emotional About Money
According to professionals, the reason many emerging traders fail to consistently earn profits is because of their perceptions of money.
There are ways to desensitize one's emotional connection to money. Start by trading smaller share size (such as 100 shares per trade). Trading in smaller quantities can help minimize both the losses and the emotional distress that often comes with losing larger amounts of capital.
Recommendation: Over time, as a trader becomes more successful, experts suggest slowly raising the share size — without raising your blood pressure — until a personal comfort zone is reached.
3. Lack of Recordkeeping
It's understandable why traders become emotional when trading stocks. To help bring these emotions under your control, keep a detailed trading diary.
Recommendation: Track your trading history by using a daily diary and study your progress.
4. Anticipating Profits
Most traders don't want to acknowledge that a trade could turn against them. They enter the market assuming they'll be successful, refusing to look in the rearview mirror. It's also common for emerging traders to use a calculator to predict how much they'll make and how they'll spend the unrealized profits! It's dangerous to anticipate how much you'll make in advance.
Recommendation: Enter a trade with the understanding that you may not be right. It can then be easier to acknowledge if a trade goes against you.
5. Blindly Following Mechanical Systems
A large percentage of traders use technology — in the form of online trading platforms that provide charting, research, and backtesting tools — to help them refine their strategies. A computer and software can provide important information about the technical and fundamental characteristics about stocks. However, many traders make the common mistake of relying too much on these tools without a full understanding of their capabilities.
Recommendation: Understand that computers and software trading platforms are only tools. Learn how to grasp the underlying trading concepts — such as reading and analyzing a chart —and know the reasons why you bought and sold a security.
6. Not Learning How to Short
If you fail to learn how to utilize short trading strategies, then you have cut yourself out of a number of profitable trades. Many people think that shorting is un-American or too risky.
By not learning know how to go short, you're removing a significnat percentage of potential trades, especially when the Bull market falters. The market is a two-way street, and the person who doesn't short is missing a part of the game.
Recommendation: Don't underestimate the importance of shorting stocks, and learn how to utilize this technique.
7. Lack of Specialization
Many people are attracted to trading because they think it's an easy vehicle for making money. However, there are several types of securities that can be traded in today's markets, including stocks, options, commodities, futures, and currencies. It is a daunting task to learn the characteristics of each security type. Therefore, it's often helpful to specialize.
Recommendation: Know what you trade. Don't spread yourself too thin by trading markets that you don't understand.
8. Improper Timing
It's very common for emerging traders to make timing mistakes. Quite often, a trader may have a good idea, but discovers that he or she bought the stock at an inopportune price. Timing a trade is never an exact science, but it's important for traders to recognize that there are times when it might be prudent to lock in a profit or cut a loss.
Recommendation: A detailed trading diary and experience could help minimize timing errors.
9. Placing Improper Stops
Many traders incorrectly place stop orders, causing their positions to get stopped out too early and failing to capture much profit. It's common for newbies to place stops according to a set percentage, such as 2%, or a set amount. How much a trader is willing to lose depends on his or her risk-tolerance.
Place stops according to what the market is telling you, such as support and resistance levels. When placing a stop, let the stock's behavior, or a standard deviation, tell you where the best stop placements are.
Recommendation: Try placing stops according to the stock's standard deviation, rather than on the basis of percentages or dollar amounts.
10. Not Calculating a Stock's Risk-Reward Ratio
Many traders do not calculate the risk-reward ratio of a stock trade before they establish a position. A stock's risk-reward ratio is the relationship between an investor's desire for capital preservation at one end of the scale and a desire to maximize returns at the other end.
How do you determine a stock's risk-reward profile? There are three common components of a stock's risk-reward ratio: current stock price (a known); and a profit objective and stop exit price (both subjective). Calculating a profit objective and a stop exit for a trade often involves many factors, such as standard deviation or technical indicators, including Fibonnaci and moving averages.
Recommendation: Before you enter a trade, the first question you should ask yourself is: What is the risk-reward ratio of trading this stock? If you are a novice trader, using a low risk-reward ratio could help lower your potential downside.
Monday, November 29, 2010
Tuesday, November 9, 2010
YTL Power & Maybank Lift FBM KLCI To Breach All Time High
KUALA LUMPUR, Nov 9 (Bernama) -- While share prices on Bursa Malaysia succumbed to profit taking, rotational play in heavyweights such as Maybank and YTL Power kept up the FBM KLCI at a new all time high in midafternoon trade today, said a dealer.
At 3.20pm, the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) gained 4.98 points to 1,524.82 after opening 1.87 points higher at 1,521.71.
The Finance Index jumped 87.66 points to 13,903.38, the Plantation Index shed 25.39 points to 7,860.91 and the Industrial Index perked 2.87 points to 2,924.49 and the FBM Emas Index jumped 29.05 points to 10,325.47.
The FBM 70 Index was 13.36 points higher at 10,504.65 and the FBM Ace Index climbed 66.07 points to 4,674.79.
Turnover was at 1.0885 billion shares worth RM1.310 billion.
Decliners led advancers by 428 to 374 while 274 counters were unchanged, 320 untraded and 35 others suspended.
Among active stocks, Ranhill perked nine sen to 88 sen, Karambunai was flat at 23.5 sen and Talam inched down half a sen to 10 sen.
Among heavyweights, Maybank rose 19 sen to RM9.29, YTL Power rose 25 sen to RM2.60, Tenaga Nasional slipped two sen to RM8.80 and CIMB perked three sen to RM8.38.
-- BERNAMA
Monday, November 8, 2010
AZRB, EPIC climb in early trade
KUALA LUMPUR: Shares of AHMAD ZAKI RESOURCES BHD [] (AZRB) and Eastern Pacific Industrial Corporation Bhd (EPIC) advanced in early trade on Tuesday, Nov 9.
At 9.07am, EPIC had surged 42 sen to RM2.15 with 404,100 shares done while AZRB added 16 sen to RM1.19 with 2.61 million units transacted.
The FBM KLCI rose 1.74 points to 1,521.58. Turnover was 54.9 million shares valued at RM49.10 million. Sentiment perked up with 160 gainers, 62 losers and 153 stocks unchanged.
AZRB is selling its 21.26% stake in EPIC for RM111.5 million cash consideration to Lembaga Tabung Amanah Warisan Negeri Terengganu.
The proposed disposal will result in an estimated gain on disposal of approximately RM11.5 million at group level based on the financial results as at June 30, 2010.
Sunday, November 7, 2010
John Murphy's Ten Laws of Technical Trading
1. Map the Trends
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes – long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.
3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old "high" becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies – the old "low" can become the new "high."
4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.
8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a "histogram" because vertical bars are used to show the difference between the two lines on the chart.
9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
"11."
Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
- John Murphy
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale map of the market provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.
2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes – long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer range chart determine the trend, and then use the shorter term chart for timing.
3. Find the Low and High of It
Find support and resistance levels. The best place to buy a market is near support levels. That support is usually a previous reaction low. The best place to sell a market is near resistance levels. Resistance is usually a previous peak. After a resistance peak has been broken, it will usually provide support on subsequent pullbacks. In other words, the old "high" becomes the new low. In the same way, when a support level has been broken, it will usually produce selling on subsequent rallies – the old "low" can become the new "high."
4. Know How Far to Backtrack
Measure percentage retracements. Market corrections up or down usually retrace a significant portion of the previous trend. You can measure the corrections in an existing trend in simple percentages. A fifty percent retracement of a prior trend is most common. A minimum retracement is usually one-third of the prior trend. The maximum retracement is usually two-thirds. Fibonacci retracements of 38% and 62% are also worth watching. During a pullback in an uptrend, therefore, initial buy points are in the 33-38% retracement area.
5. Draw the Line
Draw trend lines. Trend lines are one of the simplest and most effective charting tools. All you need is a straight edge and two points on the chart. Up trend lines are drawn along two successive lows. Down trend lines are drawn along two successive peaks. Prices will often pull back to trend lines before resuming their trend. The breaking of trend lines usually signals a change in trend. A valid trend line should be touched at least three times. The longer a trend line has been in effect, and the more times it has been tested, the more important it becomes.
6. Follow that Average
Follow moving averages. Moving averages provide objective buy and sell signals. They tell you if existing trend is still in motion and help confirm a trend change. Moving averages do not tell you in advance, however, that a trend change is imminent. A combination chart of two moving averages is the most popular way of finding trading signals. Some popular futures combinations are 4- and 9-day moving averages, 9- and 18-day, 5- and 20-day. Signals are given when the shorter average line crosses the longer. Price crossings above and below a 40-day moving average also provide good trading signals. Since moving average chart lines are trend-following indicators, they work best in a trending market.
7. Learn the Turns
Track oscillators. Oscillators help identify overbought and oversold markets. While moving averages offer confirmation of a market trend change, oscillators often help warn us in advance that a market has rallied or fallen too far and will soon turn. Two of the most popular are the Relative Strength Index (RSI) and Stochastics. They both work on a scale of 0 to 100. With the RSI, readings over 70 are overbought while readings below 30 are oversold. The overbought and oversold values for Stochastics are 80 and 20. Most traders use 14-days or weeks for stochastics and either 9 or 14 days or weeks for RSI. Oscillator divergences often warn of market turns. These tools work best in a trading market range. Weekly signals can be used as filters on daily signals. Daily signals can be used as filters for intra-day charts.
8. Know the Warning Signs
Trade MACD. The Moving Average Convergence Divergence (MACD) indicator (developed by Gerald Appel) combines a moving average crossover system with the overbought/oversold elements of an oscillator. A buy signal occurs when the faster line crosses above the slower and both lines are below zero. A sell signal takes place when the faster line crosses below the slower from above the zero line. Weekly signals take precedence over daily signals. An MACD histogram plots the difference between the two lines and gives even earlier warnings of trend changes. It's called a "histogram" because vertical bars are used to show the difference between the two lines on the chart.
9. Trend or Not a Trend
Use ADX. The Average Directional Movement Index (ADX) line helps determine whether a market is in a trending or a trading phase. It measures the degree of trend or direction in the market. A rising ADX line suggests the presence of a strong trend. A falling ADX line suggests the presence of a trading market and the absence of a trend. A rising ADX line favors moving averages; a falling ADX favors oscillators. By plotting the direction of the ADX line, the trader is able to determine which trading style and which set of indicators are most suitable for the current market environment.
10. Know the Confirming Signs
Include volume and open interest. Volume and open interest are important confirming indicators in futures markets. Volume precedes price. It's important to ensure that heavier volume is taking place in the direction of the prevailing trend. In an uptrend, heavier volume should be seen on up days. Rising open interest confirms that new money is supporting the prevailing trend. Declining open interest is often a warning that the trend is near completion. A solid price uptrend should be accompanied by rising volume and rising open interest.
"11."
Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.
- John Murphy
RHB Research maintains Outperform on Sunrise
KUALA LUMPUR: RHB Research is maintaining its Outperform on SUNRISE BHD [] with a revised fair value of RM3 (cum dividend basis of the offer price) following a notice of conditional takeover offer from UEM LAND HOLDINGS BHD [].
The research house said on Monday, Nov 8 that given that the offer involves share swap, the share price performance of Sunrise will largely depend on the price performance of UEM Land shares. Some weakness in share price may be expected after ex-dividend date, as some shareholders may not want to own UEM Land shares but would like to benefit from the dividend.
“We maintain our Outperform rating on the stock with a revised fair value of RM3 (cum dividend basis of the offer price),” it said.
Last Thursday, Sunrise has received a notice of conditional takeover offer from UEM Land to acquire all Sunrise shares at an offer price of RM2.80 per share to be satisfied in either of the following manner, at the election of shareholders:
(i) through the issuance of new ULHB shares at an issue price of RM2.10 each and Sunrise shareholders will receive about 1.33 ULHB shares for every share surrendered; or
(ii) through the issuance of redeemable convertible preference shares (RCPS) at an issue price of RM1.00 each and Sunrise shareholders will receive 2.80 RCPS for every share surrendered.
Thursday, August 26, 2010
Bursa Malaysia: Supermax 2Q earnings jump 77.9% to RM45.8m
KUALA LUMPUR: Supermax Corp Bhd posted RM45.85 million in earnings in the second quarter ended June 30, up 77.9% from RM25.78 million a year ago, underpinned by strong revenue growth, cost savings and productivity.
The glove maker said on Thursday, Aug 26 group revenue rose by 24.6% or RM46.34 million to RM234.82 million from RM188.48 million a year ago, on the back of strong global demand for rubber gloves as well as higher selling prices.
?However, despite a challenging operating environment, the group did well to record profitability growth over the corresponding quarter a year ago,? it said.
Supermax said profit before tax and profit after tax rose by 55.8% (RM17.5 million) and 77.9% (RM20.1 million) respectively. The improvement in profitability is attributed to the revenue growth as well as cost savings from higher efficiency and productivity from improved processes and refurbished lines.
It declared dividend of 2.5 sen a share.
Wednesday, August 4, 2010
Zelan up 28.9% after US-based fund buys 5% stake
Zelan Bhd, a Malaysian builder, rose the most in eight weeks in Kuala Lumpur trading after Grantham Mayo Van Otterloo & Co bought a 5 per cent stake in the company.
The stock, controlled by MMC Corp, climbed 28.9 per cent to 78 sen at 5.00 pm local time, set for its steepest gain since June 9.
Boston-based GMO bought 28.3 million shares of Zelan on Aug. 2, according to a stock exchange filing today. - Bloomberg
Read more: Zelan jumps after Grantham buys stake http://www.btimes.com.my/articles/20100804171516/Article/#ixzz0vd5fdnNA
Thursday, July 29, 2010
DXN 1Q net profit doubles to RM10m
DXN HOLDINGS BHD []'s net profit for the first quarter ended May 31, 2010 (1Q11) doubled to RM10.07 million from RM5.01 million a year ago thanks to its multi-level marketing segment that contributed higher profit margins due to cost efficiency.
In a filing to Bursa Malaysia Wednesday, July 28, the group's revenue rose 4.6% to RM67.80 million from RM64.78 million previously while registering earnings per share of 4.43 sen versus 2.16 sen.
For 1Q11, DXN proposed a first interim dividend of 4% less tax and 4% tax exempt dividend per ordinary share of 25 sen each, totaling 8% gross dividend. The group's net asset per share stood at 89.33 sen as at May 31.
On its outlook, the group would remain focus on its existing core business activities and targeting more on overseas markets to enhance group performance. Its core business activities include cultivation, manufacturing and marketing of the health food supplements.
DXN added its directors anticipated that the performance of the group for the financial year ending Feb 28, 2011 to be optimistic.
RECOMENDATION FROM DALI
Why I Like DXN
DXN has proven its critics wrong over a long period of time. The fact that it has managed to transplant its business model in various countries speaks well of its ability to leverage on its scalability. The profitability has mushroomed over the last 2 years, reaping the fruits of their strong execution skills. This counter should be on investors' radar. Considering the maturity and sustainability of its extended business model, the company has easily gone past the manufacturing critical mass and is set to see very strong organic growth ahead. Its a wonder that I do not even see any broker coverage on the stock. Quiet and strong with solid foundations built over time. It has ventured a little into property and has been well received, but that's not the attraction.
Hai-O has went ballistic and seriously, DXN is a lot better than Hai-O, and its barely started to gain support. One can see that they are replicating the Amway business model but with thrust on "Asian heritage, roots and products". Having a grand vision and brilliant ideas is one thing, executing it well is something which gives me a lot of comfort in DXN.
http://malaysiafinance.blogspot.com/2010/01/why-i-like-dxn.html
Wednesday, April 28, 2010
CIMB Raises Unisem Target To MYR4.44 From MYR2.90
0806 GMT [Dow Jones] STOCK CALL: CIMB Research ups Unisem (5005.KU) target to MYR4.44 from MYR2.90, to factor in more positive outlook, increased earnings visibility; values Unisem at a price-to-book of 2.2X which is slightly above mid-cycle valuation of 1.8X-1.9X vs previous target basis of 30% premium over 5-year historical average price-to-book of 1X. "We continue to advocate an Outperform on Unisem on the back of the potential re-rating catalysts of a quarterly improvement in earnings, a more sustained pace of economic recovery and a revival of consumer spending," says analyst Terence Wong; also ups Unisem's FY10-12 earnings forecasts by 11-24% for higher revenue and margin assumptions. Stock last +1.5% at MYR3.35. (elffie.chew@dowjones.com)
Yee Lee +16% On Bonus Issue, Share Split Plan
0610 GMT [Dow Jones] Yee Lee (5584.KU) +16% at MYR2.50, highest since 2000 after consumer products maker announced plans for bonus issue, share split. Company to distribute 2 bonus shares for every 5 shares; thereafter, every share to be split into two. Exercise would result in number of shares outstanding increasing by threefold. "This means that upon completion of this exercise, each share could be ultimately priced below the MYR1 mark. The affordability of the shares may spur greater retail interest," dealer says; resistance for stock pegged at MYR2.60 (2000 high), with support at intraday low of MYR2.30. (benjamin.low@dowjones.com)
Monday, April 19, 2010
Supermax up higher price estimate
Supermax Corp, a Malaysian rubber glove maker, rose to its highest level in six days after CIMB Investment Bank Bhd increased its share estimate to reflect higher demand and capacity expansion.
The stock climbed 0.9 per cent to RM6.96 at 9:08 a.m. local time, set for its highest close since April 14.
The share price estimate was raised to RM11.90 from RM9.65, CIMB said in a report today. -- Bloomberg
Read more: Supermax up higher price estimate http://www.btimes.com.my/articles/20100420092206/Article/#ixzz0lcM1Snfx
SUPERMX 1Q net profit 51.473 million (increased 161.19%)
Supermax optimistic of bullish performance
SUNGAI BULOH: Supermax Corporation Bhd is optimistic of a bullish financial performance this year as its expects earnings per share (EPS) for the first quarter of 2010 to exceed its earnings guidance for the year.
Executive Chairman cum Group Managing Director Datuk Seri Stanley Thai said the company was revising its EPS target from a minimum of 50 sen per share to a minimum of 62 sen per share for the financial year ending Dec 31, 2010.
He said the revised profit guidance for the current year took into account latex price fluctuations, foreign exchange and the possibility of a hike in natural gas and electricity tariffs.
Supermax, the world's second largest rubber glove manufacturer, is expected to announce its first-quarter results soon.
It had projected a turnover of over RM1 billion for the current financial year based on current latex prices, the expansion of two new plants and the installation of new production lines.
Thai said the new production lines and the construction of two plants in Meru and Bukit Kapar, Klang, would require an investment of RM130 million.
"The plant in Meru is expected to be fully commissioned by June or July while the plant in the Glove City project in Bukit, Kapar, is expected to be commissioned by 2011," Thai told reporters after International Trade and Industry Minister Datuk Seri Mustapa Mohamed's visit to Supermax's factory here on Wednesday.
For the financial year ending Dec 2011 Supermax projected a revenue of RM1.5 billion.
Thai said the rubber glove industry was a resilient industry and would not be affected by price increases nor the strengthening ringgit.
Shares of rubber glove manufacturers were among the major losers yesterday, after rubber prices surged to a 20-month high in Japan while the ringgit strengthened against the US dollar.
Thai said some of the issues affecting the Malaysian rubber industry and Supermax were the non-availability of natural gas supply for new expansion projects, need for consistency in foreign labour policies, lack of advance notice of utilities rate hike, increasing cost of doing business and shortage of quality middle management staff.
Meanwhile, Mustapa told reporters he strengthening of the ringgit had no impact on Malaysian exports as other regional competing currencies have also advanced.
"The issue is how can we attract Malaysian talents to return home. This is in line with the new economic model," he said. - BERNAMA
Saturday, March 27, 2010
How to Build a Stock Portfolio
A proven strategy for building a stock portfolio that gives decent returns while posing minimun risks. This is a long term strategy that has proven itself over 30 years of markets ups and downs.
There is no single strategy for being successful in the stock market. If we look at the great investors, Warren Buffet, T. Rowe Price and Peter Lynch, they all had different investment strategies. However, few people have the natural investment talents and insights that these men held. Below than is a strategy than can be used by the rest of us to earn high returns while maintaining minimum risks.
This stock portfolio strategy is based on 3 basic principles:
1. Diversify
2. Buy Quality Stock
3. Pay the Right Price
Here are these principles laid out in nine detailed steps.
1. Diversify
Buying several stocks in different industries will prevent wiping out your investments if any one industry goes down. This should be a minimum of 10 stocks in 10 industries. The more stocks, the closer your portfolio will mirror the market, but more than 50 stocks is overkill, and becomes difficult to maintain. 10 stocks in 10 industries should mirror about 85% of the market, and if you buy 20 stocks in 20 industries, you will just about have the market mirrored.
2. Restrict Total Investment
Restrict your stock portfolio to a small portion of your asset base.
3. Buy in Equal Dollar Amounts
When building your stock portfolio, buy your stocks in equal dollar amounts instead of round lots. In other words, if you have $20,000 to invest in 10 stocks, buy $2000 worth of each stock. If you buy an even block, for example 100 shares of an $80/share stock, the value in that stock will total $8000 and will make up 40% of your stock holdings instead of 10%. This will go against our goal in item 1, which is to diversify.
4. Buy Quality Stocks
Quality of the stock is sometime difficult to determine, but here are some general steps you can take to pick a high quality stock.
A. Large Company
B. A Standard & Poor rating of B+ or higher
C. A leader or one of the leaders in their industry
D. Has been around for many years
E. Has a history of paying dividends
5. Get Good Dividends
There are two reasons that you want to go with a company that pays dividends.
A. Dividends increase the total return more than capital gains alone
B. History shows that companies that pay dividend tend to fail less often
6. Convertible Preferred Stock
If the company you are interested in also has a Convertible Preferred Stock, you may want to buy this instead
7. Do Not Trade Often
High volatility will most often lead to a worse rate of return. As part of this, trading stocks often will create higher costs due to fees and higher taxes. Unless there is a compelling reason to change, you should hold onto stocks 3 to 5 years.
8. Buy When Stock is Down
Do not buy stock in a company when it is making the front cover of Business Week for it's success. By this time the stock has already gone up and you will be buying at a peak. Instead buy when the company is down, but from your other research you know it is a quality company and will recover.
9. Have Patience
As stated in item 7, you should plan on holding on to your stocks at least 3 to 5 years. You should sell the stock when the reason you bought the stock is no longer valid. Also consider selling a stock from a company that is going through a merger. Usually you will be offered a higher price at the time of the merger and most likely the company will change and not be the same company you selected.
http://www.nassbee.com/wealthy/stock_portfolio.html
There is no single strategy for being successful in the stock market. If we look at the great investors, Warren Buffet, T. Rowe Price and Peter Lynch, they all had different investment strategies. However, few people have the natural investment talents and insights that these men held. Below than is a strategy than can be used by the rest of us to earn high returns while maintaining minimum risks.
This stock portfolio strategy is based on 3 basic principles:
1. Diversify
2. Buy Quality Stock
3. Pay the Right Price
Here are these principles laid out in nine detailed steps.
1. Diversify
Buying several stocks in different industries will prevent wiping out your investments if any one industry goes down. This should be a minimum of 10 stocks in 10 industries. The more stocks, the closer your portfolio will mirror the market, but more than 50 stocks is overkill, and becomes difficult to maintain. 10 stocks in 10 industries should mirror about 85% of the market, and if you buy 20 stocks in 20 industries, you will just about have the market mirrored.
2. Restrict Total Investment
Restrict your stock portfolio to a small portion of your asset base.
3. Buy in Equal Dollar Amounts
When building your stock portfolio, buy your stocks in equal dollar amounts instead of round lots. In other words, if you have $20,000 to invest in 10 stocks, buy $2000 worth of each stock. If you buy an even block, for example 100 shares of an $80/share stock, the value in that stock will total $8000 and will make up 40% of your stock holdings instead of 10%. This will go against our goal in item 1, which is to diversify.
4. Buy Quality Stocks
Quality of the stock is sometime difficult to determine, but here are some general steps you can take to pick a high quality stock.
A. Large Company
B. A Standard & Poor rating of B+ or higher
C. A leader or one of the leaders in their industry
D. Has been around for many years
E. Has a history of paying dividends
5. Get Good Dividends
There are two reasons that you want to go with a company that pays dividends.
A. Dividends increase the total return more than capital gains alone
B. History shows that companies that pay dividend tend to fail less often
6. Convertible Preferred Stock
If the company you are interested in also has a Convertible Preferred Stock, you may want to buy this instead
7. Do Not Trade Often
High volatility will most often lead to a worse rate of return. As part of this, trading stocks often will create higher costs due to fees and higher taxes. Unless there is a compelling reason to change, you should hold onto stocks 3 to 5 years.
8. Buy When Stock is Down
Do not buy stock in a company when it is making the front cover of Business Week for it's success. By this time the stock has already gone up and you will be buying at a peak. Instead buy when the company is down, but from your other research you know it is a quality company and will recover.
9. Have Patience
As stated in item 7, you should plan on holding on to your stocks at least 3 to 5 years. You should sell the stock when the reason you bought the stock is no longer valid. Also consider selling a stock from a company that is going through a merger. Usually you will be offered a higher price at the time of the merger and most likely the company will change and not be the same company you selected.
http://www.nassbee.com/wealthy/stock_portfolio.html
Wednesday, March 3, 2010
Adventa’s 1QFY10 net profit jumps 189%
KUALA LUMPUR: Glove maker ADVENTA BHD []'s net profit for the first quarter ended Jan 31, 2010 (1QFY10) jumped 189% to RM9.35 million from RM3.23 million a year earlier on the back of a 12.5% rise in revenue to RM76.64 million, boosted by additional capacity.
Earnings per share (EPS) improved to 6.43 sen from 2.32 sen previously. The company did not declare any dividend.
Adventa said global demand for medical gloves remained robust and the trend was expected to continue for the remaining part of the year.
"Demand of both sterile surgical gloves and non-sterile examination gloves is strong in all markets. With Asia and South America showing a surging increase in usage of medical gloves, in part from a higher standard of healthcare delivery and better understanding of medical risks containment, and the matured market increasing the typical 5% to 10%, there will be a need for higher supply in the year," it said in notes accompanying its financial results.
Natural rubber latex prices have shot up strongly in the quarter from the cyclical lower output months of February to May. Additionally, uncertainties in the equities markets which fuelled speculation in the commodities, contributed to the high prices.
"This needs to be passed on to the consumer, which has in the past been successful and we do not see any difficulties this year in this respect as the commodity prices are well publicised," the company added.
Adventa said there may be a small change in margins in the next quarter from the time lag in price increments. However, the company does not expect a full-year margin impact.
Supermax to raise RM36m via bonus issue
SUPERMAX Corporation Bhd proposed to raise RM35.7 million via a bonus issue of up to 71.4 million new ordinary shares of 50 sen each on the basis of one bonus shares for every four existing shares.
The proposed bonus issue will increase Supermax's capital base to a level which will better reflect the current scale of operations of the company and its subsidiaries, said Supermax in a filing to Bursa Malaysia today.
"It will also enable Supermax's shareholders to have an increased equity participation with a greater number of Supermax shares whilst maintaining their equity interest," it said.
The proposal is expected to be completed within the first half of 2010, it added. -- Bernama
PROPOSED BONUS ISSUE
SUPERMAX CORPORATION BERHAD (SUPERMAX OR COMPANY)
PROPOSED BONUS ISSUE OF UP TO 71.4 MILLION NEW ORDINARY SHARES OF RM0.50 EACH
IN SUPERMAX (SUPERMAX SHARES) (BONUS SHARES) ON THE BASIS OF 1 BONUS SHARE FOR
EVERY 4 EXISTING SUPERMAX SHARES HELD (PROPOSED BONUS ISSUE)
-
You are advised to read the full contents of the announcement or attachment at
http://www.bursamalaysia.com.
Monday, March 1, 2010
AXIATA : MIDF Research also upgraded its call on the mobile operator, from "neutral" to "buy", with a target price of RM4.50.
SHARES of Axiata Group Bhd (6888) rose to their highest in more than a year, as investors and analysts became more optimistic of its prospects after the group gained market share from rivals.
Its shares rose 4.3 per cent to RM3.89 yesterday, with more than 56.3 million shares changing hands. At one point during the day, it was traded as high as RM4.01.
The company recorded a net profit of RM558.28 million in the quarter to December 31 2009, clawing back its net loss of RM515.25 million in the previous corresponding period. Its full-year net profit more than tripled to RM1.65 billion.
"The key driver of our more positive view on Axiata is Celcom, the improved product offerings and marketing strategies of which continue to deliver sector-leading revenue and Ebitda growth," said Macquarie in a research report recently.
It has an "outperform" view on the company with a target price of RM4.20.
Celcom is the only incumbent mobile operator in Malaysia that gained both revenue and subscriber market share in 2009. It also registered 15 consecutive quarters of revenue and earnings growth.
"We expect Celcom to maintain its robust growth in earnings from subscriber growth and expanding revenue contributions from wireless broadband," said ECM Libra Investment Research.
What attracted investors was not only the strength of its local operations, but also the improving overseas operations. Its Indonesian operations PT XL Axiata Tbk registered a net profit of 1,709 billion rupiah (about RM624 million) in 2009, compared with a net loss of 15 billion rupiah (RM5.5 million) a year ago. XL's full-year revenue was also up by 14 per cent to 13,880 billion rupiah (RM5 billion).
"We have revised our FY10-11 EPS (earnings per share) upwards as Axiata's major operating companies (except for Dialog) continue to deliver stellar sequential improvements .., as subs growth has been robust while Ebitda margins have improved," said ECM Libra, which upgraded its recommendation to "buy", with a target price of RM4.15.
MIDF Research also upgraded its call on the mobile operator, from "neutral" to "buy", with a target price of RM4.50.
So far this year, the company's shares have appreciated by more than 27 per cent, with a market capitalisation of over RM32.85 billion.
from : Business Times
Its shares rose 4.3 per cent to RM3.89 yesterday, with more than 56.3 million shares changing hands. At one point during the day, it was traded as high as RM4.01.
The company recorded a net profit of RM558.28 million in the quarter to December 31 2009, clawing back its net loss of RM515.25 million in the previous corresponding period. Its full-year net profit more than tripled to RM1.65 billion.
"The key driver of our more positive view on Axiata is Celcom, the improved product offerings and marketing strategies of which continue to deliver sector-leading revenue and Ebitda growth," said Macquarie in a research report recently.
It has an "outperform" view on the company with a target price of RM4.20.
Celcom is the only incumbent mobile operator in Malaysia that gained both revenue and subscriber market share in 2009. It also registered 15 consecutive quarters of revenue and earnings growth.
"We expect Celcom to maintain its robust growth in earnings from subscriber growth and expanding revenue contributions from wireless broadband," said ECM Libra Investment Research.
What attracted investors was not only the strength of its local operations, but also the improving overseas operations. Its Indonesian operations PT XL Axiata Tbk registered a net profit of 1,709 billion rupiah (about RM624 million) in 2009, compared with a net loss of 15 billion rupiah (RM5.5 million) a year ago. XL's full-year revenue was also up by 14 per cent to 13,880 billion rupiah (RM5 billion).
"We have revised our FY10-11 EPS (earnings per share) upwards as Axiata's major operating companies (except for Dialog) continue to deliver stellar sequential improvements .., as subs growth has been robust while Ebitda margins have improved," said ECM Libra, which upgraded its recommendation to "buy", with a target price of RM4.15.
MIDF Research also upgraded its call on the mobile operator, from "neutral" to "buy", with a target price of RM4.50.
So far this year, the company's shares have appreciated by more than 27 per cent, with a market capitalisation of over RM32.85 billion.
from : Business Times
Sunday, February 28, 2010
Axiata Rallies, Set to Be Malaysia’s Best Performer
By Chan Tien Hin
March 1 (Bloomberg) -- Axiata Group Bhd., Malaysia’s second-biggest mobile phone operator, rose to a 17-month high after Citigroup Inc. said the company is its “preferred pick” as it wrested market share from its rivals last year.
The stock advanced 4.8 percent to 3.91 ringgit at the midday break in Kuala Lumpur, set for the highest close since Sept. 26, 2008. It’s the best performer on the benchmark FTSE Bursa Malaysia KLCI Index today, and the 28 percent advance this year is also the most for the measure.
Its mobile unit “dominated through 2009” with the highest mobile-phone revenue among Malaysia’s three major operators, Citi said in the report dated Feb. 26. Rivals Maxis Communications Bhd. and Digi.Com Bhd. lost revenue and subscriber market share last year, it said.
Axiata, which also operates in nations such as India, Sri Lanka and Bangladesh, has benefited from growth in emerging markets amid a global economic recovery. In Malaysia, the company contained costs and improved its network to boost margins, Citi said in a separate report last week.
Malaysia emerged from its first recession in a decade last quarter. Gross domestic product increased 4.5 percent in the fourth quarter from a year earlier, after contracting 1.2 percent in the previous three months, the central bank said in a statement on Feb. 24.
Axiata’s users made up 33.9 percent of Malaysia’s mobile- phone subscribers in the fourth quarter, from 32.5 percent a year earlier, Citigroup said. Maxis, the biggest mobile-phone operator in Malaysia by customers, saw its market share fall to 40.2 percent from 41.2 percent, while Digi slid to 25.8 percent from 26.2 percent.
Axiata Chief Executive Officer Jamaludin Ibrahim couldn’t immediately be reached in his office for a comment.
Kuala Lumpur-based Axiata, controlled by Khazanah Nasional Bhd., Malaysia’s state investment company, reported a 558.8 million ringgit ($165 million) profit for the fourth quarter ended Dec. 31, compared with a 515.3 million ringgit loss a year earlier. Revenue jumped 52.7 percent to 3.7 billion ringgit.
--Editor: Linus Chua, Reinie Booysen
Thursday, February 25, 2010
A 'spectacular' year for Axiata
Mobile operator Axiata Group Bhd has posted what it describes as "fairy tale" financial results for 2009, thanks to growth in most of its main operations and foreign exchange gains.
Although it expects customers to make more calls and surf the Internet from their handphones this year as the global economy recovers, Axiata also thinks that the competition will be intense.
The group, which operates in 10 Asian countries, including Indonesia and Sri Lanka, plans to become the top regional mobile operator group by 2015.
Axiata posted a net profit of RM558.28 million in the quarter to December 31 2009, clawing back its net loss of RM515.25 million in the previous corresponding period.
Full-year net profit more than tripled to RM1.65 billion.
It also exceeded all its targets, or key performance indicators, last year, and turned free cash flow positive for the first time.
"It's a spectacular year. It's like a fairy tale results for us. We worked very hard to achieve these. However, for us to live happily ever after, we need to harness the foundations that we have built," group chief executive officer and president Datuk Seri Jamaludin Ibrahim said at a media briefing in Kuala Lumpur yesterday.
Celcom Axiata Bhd and PT XL Axiata in Indonesia continued to be the group's biggest income generator, collectively making up more than 80 per cent of sales and operating profit.
This year, Axiata plans to spend RM4 billion to RM4.5 billion to expand its networks. Last year, it spent RM3.4 billion.
The funds will also be used to expand its mobile broadband coverage, a business seen as the future growth driver.
To grow its mobile broadband business, the group will try to apply the formula that has made Celcom a market leader to its other regional units.
In terms of mobile broadband market share, XL ranks third in Indonesia with some 100,000 customers, while Dialog leads in Sri Lanka with some 45,000 customers.
"We believe there's a lot to be learnt from Celcom in terms of how they market the product, how they build the network," said Jamaludin.
Meanwhile, Axiata hopes to sell some of its non-core assets by the end of the first quarter.
Jamaludin stressed that such a sale would not directly impact the group's earnings significantly.
"The numbers are small, rather insignificant. We may not even need to change our annual reports. However, it will allow us to focus better in our job," he said.
Wednesday, February 24, 2010
Axiata stock up, is OSK top telecoms pick
Axiata Group Bhd, this year’s best-performing stock on Malaysia’s bechmark index, climbed to its highest level in more than a year after HwangDBS Vickers Sdn Bhd, Kenanga Investment Bank Bhd and OSK raised their stock ratings on quarterly profit.
The shares climbed 3.1 per cent to RM3.61 at 9:56 a.m. in Kuala Lumpur, set for their highest close since Oct. 14, 2008.
Axiata's solid FY09 results demonstrated the early success of the many group-wide initiatives crafted by management over the past 18 months to solidify its position as a leading regional mobile operator, said OSK Research.
As such, OSK has upped the target price on the stock at RM4.24 with a "buy" call.
The research outfit highlights the continued solid execution at Celcom/XL Axiata, its maiden positive "FCF" and no impairment to be undertaken on Idea.
OSK believes the stock remains under-appreciated with consensus forecast upgrades driving a further share price re-rating.
Axiata remains OSK's top Malaysian telecoms pick. - Reuters
The shares climbed 3.1 per cent to RM3.61 at 9:56 a.m. in Kuala Lumpur, set for their highest close since Oct. 14, 2008.
Axiata's solid FY09 results demonstrated the early success of the many group-wide initiatives crafted by management over the past 18 months to solidify its position as a leading regional mobile operator, said OSK Research.
As such, OSK has upped the target price on the stock at RM4.24 with a "buy" call.
The research outfit highlights the continued solid execution at Celcom/XL Axiata, its maiden positive "FCF" and no impairment to be undertaken on Idea.
OSK believes the stock remains under-appreciated with consensus forecast upgrades driving a further share price re-rating.
Axiata remains OSK's top Malaysian telecoms pick. - Reuters
Bought Axiata @ 3.57
Axiata Records Profit Of RM1.65 Billion For 2009
KUALA LUMPUR, Feb 24 (Bernama) -- Axiata Group Bhd reported a 232 per cent increase in profit after tax and minority interests (PATAMI) to RM1.65 billion for the year ended Dec 31, 2009 from RM498 million in 2008.
Group revenue grew 15 per cent to RM13.1 billion, driven by continuous improvement in performance from all operational companies.
Its President and Group Chief Executive Officer, Datuk Seri Jamaludin Ibrahim, said the continuous improvement could be seen across the board, particularly PT XL Axiata Tbk and Axiata (Bangladesh) Ltd, which returned to black compared to losses in 2008 on the back of relentless cost management.
The group also turned free cash flow positive for the first time, up 265 per cent to RM2.1 billion, he said during a media briefing on the group's 2009 financial results here Wednesday.
When asked on any dividend announcement, Jamaludin said the group was not planning to announce a dividend as it wanted to use the funds for further growth.
For the current financial year ending Dec 31, 2010, the group would be spending between RM4 billion and RM4.5 billion in capital expenditure (CAPEX) to boost its expansion programme.
"We plan to spend RM4 billion to RM4.5 billion on information technology to build a new model which can help reduce cost and synergise the five countries' operations," he said.
He said the group was expecting "good growth" on the back of improved macro economic condition.
"But we expect the competitive environment in some countries will be heating up. We have to balance the competition pressure from all countries," said Jamaludin.
To drive future profits, he said the group was looking at subscriber growth, mobile broadband as well as non-voice services from all the countries where it operates.
Jamaludin said the group expected to come out with the target for its current financial year by May this year.
Currently, the group, including its subsidiaries and associates, has over 120 million mobile subscribers in Asia and 511,000 mobile broadband subscribers.
Meanwhile, commenting on plans to dispose non-core assets, its Group Chief Financial Officer, Datuk Yusof Annuar Yaacob, said the disposal of some of these assets would be finalised by the first quarter of this year.
-- BERNAMA
Tuesday, February 23, 2010
Supermax set for another record year
IT WAS a record year for rubber glove maker Supermax Corp Bhd (7106) in 2009, and 2010 is likely to be the same.
Rubber glove makers are enjoying strong global demand for the health control product, helped in part by the influenza A (H1N1) pandemic.
"Demand for rubber gloves continues to outpace supply and Supermax will continue to register double-digit growth in 2010 and possibly 2011," Supermax executive chairman and group managing director Datuk Seri Stanley Thai told reporters during a briefing in Kuala Lumpur yesterday.
In the fiscal year to December 31 2009, Supermax's net profit jumped almost threefold to RM129.7 million, its highest ever since its establishment 23 years ago.
Revenue rose 7.4 per cent to RM196.4 million.
"Capacity will grow at least 30 per cent a year and we aim to increase our production to 17.7 billion pieces by year-end and 21.7 billion pieces by 2011," said Thai, who owns 20.6 per cent of the company.
Supermax, which exports to 145 countries, has the capacity to produce 14.4 billion pieces of rubber gloves, or around 15 per cent share of the world market.
Ongoing refurbishment works and construction of a plant in Meru, with additional capacity of 2.3 billion pieces of gloves a year, are expected to contribute to the group's future performance.
Friday, February 19, 2010
Supermax 4th quarter net surges 40-fold on strong global demand
SUPERMAX Corp Bhd (7106), the country's second largest rubber glove maker, said its fourth-quarter net profit rose almost 30-fold on strong global demand, increased output from refurbished lines and higher prices commanded for rubber gloves sold.
Net profit for the three months ended December 31 2009 rose to RM44.1 million, from RM1.5 million in the year-ago period.
Revenue increased 7.4 per cent to RM196.4 million. Earnings per share were 16.55 sen versus 0.56 sen.
It also proposed a tax-exempt final dividend of 8 per cent per share of 50 sen for the fiscal year 2009 amounting to RM10.8 million and special tax exempt dividend of 9 per cent amounting to RM12.2 million.
Supermax said the management had resolved to focus on certain key areas including receivables management, inventory management, productivity management and financial management at the beginning of 2009 and the concerted efforts put in have yielded strong results.
"In addition, the group has also been focusing on producing high margin products resulting in higher manufacturing profits in the current quarter," it told Bursa Malaysia yesterday.
Aside from higher manufacturing income, the group also benefited from improvements in its distribution income, as reflected in higher profit contributions from its associate companies.
It also benefited from the favourable foreign exchange translation as the currencies of the countries in which the associate companies operated had all appreciated against the US dollar.
For the 12-month period, Supermax net profit jumped almost three-fold to RM129.7 million from RM47 million in the previous year.
Supermax said the rubber glove industry continues to be on a strong growth path despite the current global financial challenges and global economic uncertainties.
Ongoing refurbishment works as well as the construction of its new Meru plant with added capacity of 2.3 billion pieces of gloves per year, is also expected to contribute to the group's performance going forward.
Net profit for the three months ended December 31 2009 rose to RM44.1 million, from RM1.5 million in the year-ago period.
Revenue increased 7.4 per cent to RM196.4 million. Earnings per share were 16.55 sen versus 0.56 sen.
It also proposed a tax-exempt final dividend of 8 per cent per share of 50 sen for the fiscal year 2009 amounting to RM10.8 million and special tax exempt dividend of 9 per cent amounting to RM12.2 million.
Supermax said the management had resolved to focus on certain key areas including receivables management, inventory management, productivity management and financial management at the beginning of 2009 and the concerted efforts put in have yielded strong results.
"In addition, the group has also been focusing on producing high margin products resulting in higher manufacturing profits in the current quarter," it told Bursa Malaysia yesterday.
Aside from higher manufacturing income, the group also benefited from improvements in its distribution income, as reflected in higher profit contributions from its associate companies.
It also benefited from the favourable foreign exchange translation as the currencies of the countries in which the associate companies operated had all appreciated against the US dollar.
For the 12-month period, Supermax net profit jumped almost three-fold to RM129.7 million from RM47 million in the previous year.
Supermax said the rubber glove industry continues to be on a strong growth path despite the current global financial challenges and global economic uncertainties.
Ongoing refurbishment works as well as the construction of its new Meru plant with added capacity of 2.3 billion pieces of gloves per year, is also expected to contribute to the group's performance going forward.
Supermax's 4Q earnings surge nearly 30 times to RM44m
KUALA LUMPUR: Supermax Corp Bhd reported a strong set of earnings in its fourth quarter ended Dec 31, 2009, with net profit surging nearly 30 times to RM44.11 million from only RM1.48 million a year ago as it benefit from higher margins for its rubber gloves and contributions from its associates.
It said on Friday, Feb 19 that revenue rose 7.4% to RM196.42 million from RM182.82 million a year ago. Earnings per share were 16.55 sen versus 0.56 sen. It proposed a tax exempt final dividend of 8% per share of 50 sen for FY09 and special tax exempt dividend of 9%.
Supermax said revenue benefited from strong global demand, increased output from refurbished lines and higher prices commanded for rubber gloves sold.
The group recorded a near 30 times increase in profit after tax from RM1.5 million to RM44.1 million. This is despite the fact that the group had to incur a one-time exceptional interest expense of RM5.4 million arising from having to immediately expense off the balance of the serial bond upfront fee following the full redemption of the bond in November 2009," it said.
Supermax said the management had resolved to focus on certain key areas including receivables management, inventory management, productivity management and financial management at the beginning of 2009 and the concerted efforts put in have yielded strong results.
"In addition, the group has also been focusing on producing high margin products resulting in higher manufacturing profits in the current quarter," it added.
Aside from higher manufacturing income, the group also benefited from improvements in its distribution income, as reflected in higher profit contributions from its associate companies. It also benefited from the favourable foreign exchange translation as the currencies of the countries in which the associate companies operated had all appreciated against the US dollar.
Its operational expenses in 4Q were lower at RM150.72 million versus RM163 million a year ago. Its associate companies contributed RM13.36 million compared with losses of RM10.32 million a year ago.
For FY09, net profit rose 176% to RM129.75 million from RM46.99 million while revenue was slightly higher at RM814.83 million versus RM811.82 million.
It said on Friday, Feb 19 that revenue rose 7.4% to RM196.42 million from RM182.82 million a year ago. Earnings per share were 16.55 sen versus 0.56 sen. It proposed a tax exempt final dividend of 8% per share of 50 sen for FY09 and special tax exempt dividend of 9%.
Supermax said revenue benefited from strong global demand, increased output from refurbished lines and higher prices commanded for rubber gloves sold.
The group recorded a near 30 times increase in profit after tax from RM1.5 million to RM44.1 million. This is despite the fact that the group had to incur a one-time exceptional interest expense of RM5.4 million arising from having to immediately expense off the balance of the serial bond upfront fee following the full redemption of the bond in November 2009," it said.
Supermax said the management had resolved to focus on certain key areas including receivables management, inventory management, productivity management and financial management at the beginning of 2009 and the concerted efforts put in have yielded strong results.
"In addition, the group has also been focusing on producing high margin products resulting in higher manufacturing profits in the current quarter," it added.
Aside from higher manufacturing income, the group also benefited from improvements in its distribution income, as reflected in higher profit contributions from its associate companies. It also benefited from the favourable foreign exchange translation as the currencies of the countries in which the associate companies operated had all appreciated against the US dollar.
Its operational expenses in 4Q were lower at RM150.72 million versus RM163 million a year ago. Its associate companies contributed RM13.36 million compared with losses of RM10.32 million a year ago.
For FY09, net profit rose 176% to RM129.75 million from RM46.99 million while revenue was slightly higher at RM814.83 million versus RM811.82 million.
25 M'sian stocks that are expected to outperform the FBM KLCI
Standard & Poor’s recently issued a comprehensive report on Malaysia and the 25 top stocks it was looking to outperform the market in the Year of the Tiger. Below is an excerpt of that report.
AS we enter the Year of The Tiger, we can expect more volatility, especially with the current market valuations providing lesser room for disappointment.
Stock picking is likely to be more important this year, with fewer bargains available particularly as headwind builds.
Although share prices are not as cheap as in early 2009, forward price-to-earnings ratios (PERs) remain undemanding and we believe equities will remain favourable, given the limited alternatives.
We have selected 25 Malaysian stocks that we expect to outperform the FTSE Bursa Malaysia KL Composite Index (FBM KLCI) this year.
SUPERMX
Friday, February 19, 2010
Supermax - Distributing more angpows?
Potential profit jump; maintain BUY. Yesterday, Business Times penned an article on its interview with Supermax’s managing director, Dato’ Seri Stanley Thai. His comments were very much in line with our view but his forecasts of industry demand and supply differ from our estimates which are based on information gathered from our industry contacts. Also noteworthy was management’s confirmation of a special dividend if it exceeded its net profit target for FY09. We retain our earnings forecasts pending Supermax’s release of its 4Q results next week. We expect its core net profit to be stronger on both qoq and yoy basis. As industry prospects remain favourable, we maintain our BUY call on Supermax. Our target price remains intact at RM7.96, still pegged to a 20% discount to Top Glove’s target P/E of 16.5x. Potential re-rating catalysts include the anticipated strong 4Q results, continuing uptick in glove demand and upcoming capacity expansion. Supermax remains one of our top picks for the rubber glove sector.
STOCK analysts are staying bullish on the prospect of rubber glove makers this year after a sterling 2009, convinced that the strong demand seen last year can be sustained.
Rubber glove companies including Supermax Corp Bhd (7106) have far outperformed the FTSE Kuala Lumpur Composite Index last year, having soared between 94 per cent and 540 per cent compared to a 45 per cent gain in the local benchmark.
"Despite the strong performance, their price earnings multiples remain at a discount to the market instead of the premium that they historically traded at," CIMB Research wrote in a note on January 6.
The sector stands at an average financial year 2010 price earnings multiples of 9.4 times, or just half the valuations during their peak at the end of 2006 and early 2007, it noted.
"We believe that the rubber glove companies are still undervalued and offer tremendous earnings upside due to their expansion programmes," CIMB said.
The stockbroker kept its overweight stance on the sector, with Adventa and Supermax remaining its top picks in the industry.
Its target price for Supermax was pegged at RM7.96, representing a 56 per cent potential upside from its last traded price of RM5.12. Adventa's target price was put at RM5.44.
"Many of the companies under our coverage are undertaking major capacity expansion, which will ensure earnings growth that is superior to the market," CIMB said, adding that factors that could extend the re-rating for the sector include the continued rising demand from the healthcare industry, ongoing capacity expansion and strong earnings growth.
Capital gains aside, Affin Investment Bank believes that shareholders may potentially be rewarded by another round of bonus issue or special dividends.
"Judging from past track record, glove manufacturers have been generous in rewarding shareholders via at least two to three rounds of bonus issues since their initial public offerings, backed by continued profitability and swelling retained earnings," Affin pointed out in a January 11 report.
Affin estimates that companies under its coverage, namely Kossan Rubber, Supermax and Top Glove, have enough share reserves to give out bonus shares.
"While this will not have any fundamental impact, any bonus issue exercise is positive to sentiment and share price," Affin said.
Thursday, February 11, 2010
4 New CIMB Warrants
4 new call warrants from CIMB will be listed on 11 Feb 2010:
New Warrants Expiration Type Ex Price Ratio
IJMLAND-CB 30/12/2010 Call MYR 2.0000 3 : 1
UMW-CC 30/12/2010 Call MYR 6.0000 6 : 1
TCHONG-CB 30/12/2010 Call MYR 3.0000 3 : 1
HARTA-CA 30/12/2010 Call MYR 7.0000 8 : 1
Top Glove falls after shares trade ex-div
TOP Glove Corp, the world’s largest rubber-glove maker, fell to the lowest level in almost five weeks in Kuala Lumpur trading after the shares traded ex-dividend.
The stock dropped 1.7 per cent to RM10.82 as of the 12.30 pm local time break, set for the lowest close since January 11.
The shares went ex-dividend, meaning that investors buying the stock from today won’t be entitled to the company’s dividends. - Bloomberg
Tuesday, February 2, 2010
DJ MARKET TALK: Latexx 4Q Net Profit Likely +20% Vs 3Q - CIMB
0723 GMT [Dow Jones]Glove maker Latexx (7064.KU) likely to report 4Q net profit of MYR17 million, up 20% on quarter, up 1.4X on year, says CIMB Research's analyst Terence Wong; attributes increase to additional annual production capacity of 800 million pieces of gloves in 4Q, higher nitrile products; estimates FY09 net profit at MYR51.9 million vs MYR15.2 million year ago. Keeps Outperform call with unchanged MYR5.44 target. "Potential share price triggers include the upcoming strong results and improving earnings ability, driven by its major expansion plans and move towards premium products," says Wong; adds Latexx's 3-year EPS CAGR of 104.4% is highest in industry. Company expected to release 4Q earnings after 0900 GMT Friday. Stock last down 1.3% at MYR3.69. (ECH)
Wednesday, January 27, 2010
ZHULIAN 10 Jan
4QFY09 Results – within expectations
• Zhulian’s full-year FY09 results came in within our expectations with net profit of RM82.1m, which is close to our projection of RM79.7m.
• Despite a slow macroeconomic environment in FY09, the Group managed to registere a modest 3.9% yoy and 9.9% yoy growth in revenue and net profit respectively. Furthermore, we are also encouraged by its achievement in improving its net profit margin to 26.0% in FY09 vs. 24.6% in FY08.
• We attribute the robust results to successful rollout of new products, growth in distributorship,effective cost management and lower effective tax rate. In FY09, Zhulian introduced a number of new products, which included several gold-plated and rhodium-plated jewellery, the ISO 7 Mixed Fruits and Vegetables Extract Beverages, the Premix Coco Drink, as well as the new sanitary napkin range named WANISA.
• Meanwhile, Zhulian’s balance sheet continues to strengthen further, with NTA/share growing to 93 sen in FY09 from 81 sen in FY08. Similarly, net cash/share rose to 36 sen from 31 sen during the same period. We note that the Group’s net operating cashflow also increased 35% yoy to RM68m in FY09.
• Zhulian declared a fourth interim single-tier dividend of 3 sen, as well as a special single-tier dividend of 2 sen for the quarter under review. This brings total FY09 net dividend to 14 sen, which surpassed our expectation of 12 sen. At current share price, Zhulian offers an attractive net dividend yield of 7.5%.
• Prospects in FY10 remain bright for Zhulian. We expect the uptrend growth in revenue and net profit to prevail. The management has identified a number of growth plans, which amongst others, include expansion of manufacturing and warehousing floor space in Malaysia and Thailand (warehousing only), setup of new distribution centre in Sarawak and rollout of newproducts in FY10. Zhulian’s distributor force is growing steadily too, reaching 480,000 at present compared to 420,000 in early FY09.
• Against this positive backdrop, we raise our FY10 net profit estimate 3% to RM87.0m, which translates into an EPS10 of 25.2 sen. We also increase expected FY10 dividend payout to 14 sen from 12 sen earlier.
Recommendation:-
ZJ Research maintain our Buy call on Zhulian with a slightly higher fair value of RM2.27 (from RM2.21), derived from pegging its EPS10f against a peer average PER of 9x. Our optimism is supported by 1) the Group’s healthy earnings growth and cashflow generation, 2) management’s clear growth strategy, and 3) solid balance sheet. As such, we opine that its current valuation, at 7.4x FY10 PER, remains attractive. Zhulian also offers attractive net dividend yield of 7.5% which is on par with Amway, the industry leader in direct marketing.
Now, I shall write the latest version in here, all in English.
Ok, first introducing Haio. One of the most well known chinese herbs distributor in Malaysia. Recently it has become a hot stocks partly because of the well know CEO Tan Kai Hee who involves in some dispute where you can see his faces appearing in chinese newpapers. Another part is because of Haio's successful organic growth in their MLM business especially in Indonesia, an untapped market during 2008 and the great dividend yield it provides. Recently it has gone under exercise of further splitting of shares coming soon. Zhulian in the other hand is a much much low profile stocks and company. It mainly sell jewelery and some other households products, through MLM. Well, its cash dividend has been quite stable with RM0.03 almost every quarter.
Now, let's have a look at their earning and growth prospectives.
HAIO (‘000)
2007 RM22,113/RM189,346 =12%
2008 RM49,118/RM373,822=13%
2009 RM53,011/RM435,216=12%
Zhulian (‘000)
2007 RM58,927/220,546=27%
2008 RM74,690/303,577=25%
2009 RM82,057/315,275=26%
EPS 2009
HAIO latest EPS=0.22*4=0.88,Market Price RM8.80,p/e=10
2009 EPS=0.63,MKT PRICE RM8.80,P/E=13.96
ZHULIAN 2009 EPS=0.2377,Market price=1.80,p/e=7.5
Div yield
Haio has been paying stably RM0.3-0.4/year dividend, while Zhulian paying consistently RM0.03 every quarter, almost RM0.12-0.14/year.
Well, comparing the div yield, Haio=4.5% Zhulian=7.6%
Zhulian has a lower p/e and better div yield. Currently if you look at growth, Haio provides a better pictures on its growth with almost 100% over last 2 years, while Zhulian due to its low volume, is unlike by many as its sales grow slowly, same as the EPS.
Posted by 山下聖人 at 7:24 PM
Labels: Haio, Zhulian
Wednesday, January 20, 2010
Not One Trader in 1,000 Knows This Secret
By Tom Dyson
The secret I’m going to share with you today is probably the single most important factor in determining the success of stock market traders. If you can master it, you can make millions in the stock market.
This technique is simple, but it requires months of training and dedication to master. The trouble is, it goes against our basic emotional conditioning. Don’t worry if you don’t get it immediately. Keep practicing…
So what’s the secret?
The amateur thinks winning in the market is about predicting the future. The amateur buys some shares and hopes the market rises. He has no idea what to do if something unexpected happens. He wings it completely and ends up trading with his emotions. There’s nothing more destructive to wealth than emotional trading.
The market is a game of probability. It has nothing to do with predicting the future. When you treat the market as a game of probability, money management becomes your most important weapon. What I mean is, the stocks you buy become far less important than the position size you use and the decisions you make after you pull the trigger.
This is the secret to beating the stock market. Maybe one speculator in 1,000 knows this. Until you realize this, you have hardly any chance of making money in the market. It boils down into three easy rules…
Trading Rule No. 1: Risk a constant amount of capital in each trade… and keep it small.
Most investors put more money into their favorite ideas than they put into their least favorite ideas. They have no system for figuring out bet size.
Skillful traders know they can’t read the future, so they give every bet the same chance. They make thousands of small but profitable trades and accumulate their fortunes slowly but surely. The key is to keep your bets small and constant by putting, say, 2% of your total trading capital in each trade.
Trading Rule No. 2: Cut your losses. You are trading against some of the world’s smartest people, armed with incredible research budgets and advanced supercomputers. They don’t trade as a side job or as a hobby. These people live, eat, and sleep the market.
The market is a hostile place. It’s like a medieval army trying to get into your castle day and night. Your stop losses are the castle gates. A position without a protective stop loss is like an open gate. You’re letting the army pour in and take your gold.
To control your losses, use a stop loss. This way you know exactly how much money you stand to lose if your stock falls, before you’ve even entered the trade. The stop loss applies at all times and can never be overridden.
Trading Rule No. 3: If your trading idea shows a profit, add to your position. If it keeps rising, add more. For example, begin your investment with a purchase of $2,000. Once your stock is up Y%, invest another $2,000. Then, once your stock is up Z%, invest another $2,000, for a total cash investment of $6,000. Decide what Y and Z are before you enter the trade. Write them down so there’s no confusion.
In my Penny Trends trading service, I have a mantra that captures the essence of this secret. We call it “doing more of what’s working and less of what’s not.” This mantra drives every decision we make.
By using these three simple money management techniques… that is, push your profits, cut your losses, and keep your positions small and constant… you can beat the market, too. You won’t win every trade, but in the long run, you’ll generate a positive return in your trading account.
~~DailyWealth~~
http://feeds.feedburner.com/bursa88bursamalaysia
The secret I’m going to share with you today is probably the single most important factor in determining the success of stock market traders. If you can master it, you can make millions in the stock market.
This technique is simple, but it requires months of training and dedication to master. The trouble is, it goes against our basic emotional conditioning. Don’t worry if you don’t get it immediately. Keep practicing…
So what’s the secret?
The amateur thinks winning in the market is about predicting the future. The amateur buys some shares and hopes the market rises. He has no idea what to do if something unexpected happens. He wings it completely and ends up trading with his emotions. There’s nothing more destructive to wealth than emotional trading.
The market is a game of probability. It has nothing to do with predicting the future. When you treat the market as a game of probability, money management becomes your most important weapon. What I mean is, the stocks you buy become far less important than the position size you use and the decisions you make after you pull the trigger.
This is the secret to beating the stock market. Maybe one speculator in 1,000 knows this. Until you realize this, you have hardly any chance of making money in the market. It boils down into three easy rules…
Trading Rule No. 1: Risk a constant amount of capital in each trade… and keep it small.
Most investors put more money into their favorite ideas than they put into their least favorite ideas. They have no system for figuring out bet size.
Skillful traders know they can’t read the future, so they give every bet the same chance. They make thousands of small but profitable trades and accumulate their fortunes slowly but surely. The key is to keep your bets small and constant by putting, say, 2% of your total trading capital in each trade.
Trading Rule No. 2: Cut your losses. You are trading against some of the world’s smartest people, armed with incredible research budgets and advanced supercomputers. They don’t trade as a side job or as a hobby. These people live, eat, and sleep the market.
The market is a hostile place. It’s like a medieval army trying to get into your castle day and night. Your stop losses are the castle gates. A position without a protective stop loss is like an open gate. You’re letting the army pour in and take your gold.
To control your losses, use a stop loss. This way you know exactly how much money you stand to lose if your stock falls, before you’ve even entered the trade. The stop loss applies at all times and can never be overridden.
Trading Rule No. 3: If your trading idea shows a profit, add to your position. If it keeps rising, add more. For example, begin your investment with a purchase of $2,000. Once your stock is up Y%, invest another $2,000. Then, once your stock is up Z%, invest another $2,000, for a total cash investment of $6,000. Decide what Y and Z are before you enter the trade. Write them down so there’s no confusion.
In my Penny Trends trading service, I have a mantra that captures the essence of this secret. We call it “doing more of what’s working and less of what’s not.” This mantra drives every decision we make.
By using these three simple money management techniques… that is, push your profits, cut your losses, and keep your positions small and constant… you can beat the market, too. You won’t win every trade, but in the long run, you’ll generate a positive return in your trading account.
~~DailyWealth~~
http://feeds.feedburner.com/bursa88bursamalaysia
Friday, January 15, 2010
Thursday, January 14, 2010
Rubber stock performance 14/01/2010
IRCB says unaware of reasons for unusual market activity
KUALA LUMPUR: Integrated Rubber Corp Bhd (IRCB), whose shares hit limit-up in early trade on Thursday, Jan 14, has told Bursa Malaysia Securities it was unaware of any reason for the unusual market activity (UMA).
IRCB, in a reply to Bursa Securities, said after having made due enquiry with the directors and major shareholders, they were not aware of any reasons which may have contributed to the UMA.
Its shares rose 30 sen to RM1.87 in early trade, prompting the query.
At the midday break, it was off the early high, with the shares up 18 sen to RM1.74 with 53.69 million shares done.
The Edge FinancialDaily reported that IRCB's single largest shareholder Chip Lam Seng Bhd sold two million shares on Monday, Jan 11 when its share price surged 39.5 sen to close at RM1.34.
A filing with Bursa Malaysia showed it sold the shares in the open market, reducing its total shareholding to 95.6 million shares or 40.37%.
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