Many have asked emailed me whether I am still holding the counters recommended, my reply is yes except for those which I have informed that I have sold. I recommend fellow traders to be willing to hold if they choose to enter the counters I have mentioned. There is no shorcut to value investing.

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Macro View: (~) China PMI fell to 49.2 below expectation. This is in line that the manufacturing volume has fallen to 12 month low. Clearly a sign of contraction. This is not unexpected but sends a message to all. If the industry of a country is contracting, this would mean the demand for raw materials is lesser which ultimately means commodities market would be the most affected. If industry slows, how long can the financial sector be buoyant? Corporate earnings flow in Europe and US remained mixed for the past week although the tech stocks have driven Nasdaq to new high. Oil rebounded upwards to hover around USD57 and USD66 respectively for WTI and Brent.

Potential Risk in Global / Domestic Market: (-ve) China's equity market is on a bull run. 9 Months, it has went up 100% and it is continuing to hit new highs with number of new trading account increasing daily on an average of 22,000 per day since March 2015. Although the Invest Malaysia conference has positive sound bites from it, what Zeti and PM have said is all but the surface. Fitch potential dowgrade of Malaysia is a true concern. Locally, rebound of oil is good news for the governemnt revenue but not the pocket of the people.

Contra Picks: None

I remain cautious with small cap counters. Please trade carefully and observe the movement before entering.

Short Term Picks: Tropicana (TP RM1.26)

Tropicana remains sideways between RM1.13 - 1.17. I can see the support at RM1.12 and maintain to observe for another week or so before deciding whether to let go. 

Mid Term Picks: Gadang (TP RM1.96)

Gadang is not new to many. Last year many were a beneficiary of the counter as it surge from RM1.20 all the way to a high of RM2.08. Subsequently, it consolidated around RM1.50 following the private placement. Naturally, cosntruction sector is highly challenging there is only a handful of companies that can make good profit. Gadang is one of it. With low PE valuation of around x6 and industry peers like Mitra at 10x, I think Gadang is an undervalued stock with only room to go further upwards. In fact, its involvement in various industries such as water treatment, palm oil, infrastructure construction projects, property development and others, it can hold its ground against weaker economic climate.

Long Term Picks: Signature International (TP RM3.00)

Signature International is one of the counters with strong fundamentals, namely low PE valuation, increasing growth in revenue QoQ, healthy gearing and the list goes on. What is most interesting is that a counter like Signature is considered in the secondary sector. It is highly dependant on the cyclical property market. As the number of units to be VP/handover in the next 3 years, I foresee a surge in the demand for products by Signature. While property stocks are no longer hot in demand due to the slowing sales, Signature's orderbook will only grow to cater to ready units soon to flood the market.

Food for thought: The bulls are here, everything seems green. Will it turn red and attract the bear? Only if there is honey.

May good fortune come your way!

Disclaimer: This is not a recommendation to trade. It is merely the expression of the author's personal opinion and shall not be held responsbile for potential gains or losses executed by readers.