Many of my less informed critics are so concerned or worried about the falling steel price in China as shown on the latest steel price chart below.

Immediately after the Budget 2022 announcement, the stock market has been plunging in the last 3 trading days. Practically all the listed shares have been dropping so rapidly. On 1^st November alone, Rm 33.8 billion was wiped off the market capitalisation of KLSE. This market crash can only mean that the Budget 2022 will not be good for our economy.  

Many of my critics do not understand why I bought 1.2 million AYS shares when the steel price in China is dropping recently. AYS share price has been dropping in spite of its good profit growth. It was dragged down by the overall market sentiment due the Budget 2022 proposal.  

When is the best buying opportunity?   

The best time to buy stocks is when many fearful investors are rushing to sell their holdings. As I said in my previous article, on the last trading day, RHB bought 1.2 million AYS shares for me when it plunged to 70 sen a share. If you doubt, you can ring 05-2493279 RHB Yee Ling to confirm my purchase.

Why steel price does not affect AYS

AYS is one of the best steel traders. It is not a steel manufacturer. It buys steel from the cheapest steel manufacturers to sell to building construction contractors. Obviously AYS must be a very efficient steel trader to be able to report 8.5 EPS in its latest quarter ending June and reported EPS 4.4 sen in its previous quarter during the Covid 19 pandemic lockdown.

Currently there is no more MCO lockdown and there should be more building and infrastructure construction activities which will require more steel.

Dialog Group just secured another Rm 248 million contract to build a titanium nitrile latex factory in Pengerang, Johore for Petronas Refinery.   

Under the improved environment AYS should be able to report a much better profit for the quarter ending September before the end of this month. All investors should wait patiently to see AYS profit before rushing to sell their holdings.

No stock can drop continuously for whatever reason. After sometime it should rebound. 

Steel price is surging in USA

As I said AYS does not worry about steel price. Steel price is surging in USA as shown on the chart below.