Actually 1.70 is not high given the positive fundamental change. Just stay cautious due to market sentiment now.

Lol, the minister's comment was probably more political in nature than it makes economic sense.

Anyway, our local institutions have been net buyers in the market over the past few weeks. If economy is really not doing well, I don't think they will want to dump in their funds as well. Anyway, my take is just stay cautious but do not panic and see what happens end of Sep.

I think the general sentiment of the rakyat is for the government to do more to ensure we do not plunge into a twin deficit. Anyway since someone commented about Fitch ratings, I am actually curious how we are doing relatively compared to peers in terms of Fitch ratings.

"Sovereign credit rating, is an evaluation made by a credit rating agency and evaluates the credit worthiness of the issuer (country or government) of debt. The credit rating is used by individuals and entities that purchase debt by governments to determine the likelihood that will pay its debt obligations."

ASEAN
Singapore AAA (Prime)
Malaysia A- (Upper Medium Grade)
Thailand BBB+ (Lower Medium Grade)
Indonesia BBB- (Lower Medium Grade)
Philippines BBB- (Lower Medium Grade)

BRIC
China A+ (Upper Medium Grade)
Brazil BBB (Lower Medium Grade)
Russia BBB (Lower Medium Grade)
India BBB- (Lower Medium Grade)

Others
USA AAA
Australia AAA
Germany AAA
France AA+ (High Grade)
Hong Kong AA+
UK AA+
New Zealand AA (High Grade)
UAE AA
S.Korea AA- (High Grade)
Japan A+
Taiwan A+
Mexico BBB+
Spain BBB
S.Africa BBB
Argentina CC (In default with little prospect for recovery)

I think people are just cautious. Not just this counter but the whole of Bursa is just trading with volume of 826.2 million so far. Buyers are cautious.

@JXRepcoBuffet: Thanks. Volume today is quite low. Hmmm ...

Yeah. It is going to test the highs again soon. Slow and steady.

Sama sama. Hope it helps. If LBS can cross over convincingly above RM1.71 tomorrow, we are looking at the next resistance at RM1.77.

@scjm3: NO, but unfortunately a lot of people in the market price it that way. There is one more component in the warrant which is the time value.

Imagine that you want to to buy a house. The house current market price is RM1.70. However instead of buying the house now, you decide to buy the 'right' to buy the house at a later date. This right costs you RM0.74 (premium) and allows you to buy the house at RM1 (strike price) BEFORE 11 June 2018. Now since you know the property market is only going to get better and you 'think' (based on valuation etc) that houses around the area will cost RM4 in June 2018, you believe that buying the 'right' to buy the house at RM0.74 is not a bad decision.

If the house really appreciates to RM4 in 5 years' time, your 'right' will most likely be worth RM3. With an investment of RM0.74, you have made a 300% gain in your investment. On the other hand, if you had invested to buy the house at RM1.70, your gain is only 135%. Furthermore since you can buy 2.3 times more 'rights' than house because it is cheaper, your potential gain is larger.

The 'right' in this example is the warrant. Of course by owning the 'right' only, you cannot stay in the house (business owners' rights) or obtain rent (dividends). I hope that my explanation is logically layman. For the more technical explanation, just Google for warrants.

@scjm3: Nicely put. Well there are certain points which I agree and some which I disagree.

Finding out Your Trading Edge
Very much like trading with technical indicators, each person will have their own trading edge. Some people are better at investing for the long term, mid term, 4 weeks and some maybe at day trading. For day trading, timing is critical. As you pointed out volume and price movement are important so pick the right stocks to day trade. Specifically for LBS-WA, both of these are present. The price movement range is between 9 sen and 12 sen daily over the past 2 weeks = ~12%. If you catch the warrant at the right time, you should be able to make at least 5% from day trading this counter.

Value of Warrants
Conversion ratio is not a formula for valuing warrants. Conversion ratio just tells you how many warrants it takes to redeem one mother share. The formula I used is Black Scholes to give me a reference target price for the warrant. The warrant is actually trading very near to the reference value during the high momentum uptrend 2 weeks ago. Treat this number as similar to the Target Price for normal stocks. For e.g. CIMB used 40% to RNAV/share of LBS to come out with the number RM3.03 as target price. I do not think the stock has touch that point yet. When will it touch? Only the market knows.

I am not sure how you got "burnt" but I supposed it is buying in high during stock correction / market down trend. So the real issue here is timing. However if you are a long term investor, you should not worry because an undervalued stock with a good daily volume will reach its target sooner or later.

@scjm3: Good notes. Thanks for taking the time to share. I supposed day traders can play the warrants.

http://klse.i3investor.com/servlets/anpth/934979.jsp

Just in case people missed this, LBS has full redeemed RM95mil of Sukuk issued earlier which translated into a cost savings of RM792k. This should have a positive effect on its next quarter's earnings. I believe there are more good things to come.

He 'almost' silenced the whole thread.

Yeah RPGT might be increased in Budget 2013 which should help to curb property speculation (first hand owner sell to next owner and so on). It should not have negative impact for first hand owner.

I was just looking through the charts end of day. Some basic observations:

LBS Mother Share
The RSI has bounced off the oversold threshold and formed a hook pointing upwards signalling a potential reversal of the panic sell-down sentiment due to external market events. Volume is heavy today with with majority in the RM1.50 to RM1.60 range which should form a good support base (RM1.55). LBS share buy-backs accounted for a small 2.5% of today's volume which indicated that buyers are back esp. on the move from RM1.43 back up to RM1.50. Judging from previous high volumes over the last couple of weeks, the panic sell-down could've caused some investors to take up to a 25% loss. First resistance at RM1.70.

LBS Warrants
The candle for today almost formed a bullish all engulfing pattern. Similar to the mother share, the RSI has bounced off the floor and is now looking upwards. First resistance at RM0.825

Both the Mother and Warrant were looking to cross the 20-day SMA before end of trading away from the lower part of the Bollinger band. Where do you want them to go tomorrow?

@scjm3: Thanks. You have kind words. I am just putting my thoughts in writing. Hope everyone will have a good run with this counter.

LBS is green.

True. Spend time to do those unfinished chores, be with your loved ones and do not panic. Strong buying support moving back up. Total Bid 7884, Total Ask 3057.

To those who are following the warrants, you may notice that that the buy ups are pushing back strongly.

There are some good points raised here but warrant a deeper relook on other potential factors before we start convincing ourselves of doomsday. There is also a saying that if we start acting as if it is, it may become a self fulfilling prophecy.

US markets down with main reason being the impending uncertain US strike on Syria to take down the Assad regime who used chemical weapon on civilians.

On the comparison with regional markets, there is one more factor that needs to be taken into account since 2012 and that is investors' fear of GE with money sitting on the sideline which may mean it is hard to compare our rise and fall with regional peers.

We fear the GE, then the QE instead of worrying about the PE. Whats the next? Fear of WE? Anyway this thread is interesting now that we have branched from discussion on just this counter to other stuffs.

Daily RSI is approaching 'oversold' area which may indicate a higher possibility of rebound if there is no panic sell down. First support area around RM1.55 to RM1.58 while 2nd support at RM1.45.

Anyway anything can happen in the market. Good luck guys.

Actually on the technical front, LBS is still on an uptrend.

The 20-day SMA is still above the 50-day SMA. However the price today has just crossed below the 20-day SMA. The daily MACD had a crossover the signal line but still trading in the 'bull' territory. The daily RSI on the other hand is near to oversold area but the 4-hourly RSI is showing a 'hook' which could potentially indicate a reversal.

Lets see what happens tomorrow.

Yeah that's true. Actually IMHO, stocks are not zero-sum because business (value) grows over time. Derivatives like futures are zero sum.

Crab burgers - yummy :). Before I continue, i have to say, equity investment is a risky business so the risk is yours. Similarly, the profit (if any) is also all yours :)

@spongebob: How I wish I could answer you. Unfortunately I am not in a position / knowledgeable enough to provide expert comment on that. I also do not work in / for LBS. All I notice is this piece of logic (non expert view).

Americans had to invest. Fed printed money (QE) but if Americans had invested in US = slow growth. Therefore they choose emerging economies i.e. ASEAN, Asia in general. When US economy is better, US companies will do better i.e. US stocks will rise. Americans will repatriate funds from emerging markets and invest in US stocks for higher growth / support own economy. However does that mean ASEAN economies are not doing well? When they repatriate funds, they will buy USD and sell MYR - so obviously exchange rate will be affected.

Look at CPO physical market now. From a low of RM2,2xx earlier this year, it is trading at RM2,439 today and futures contract for Sep delivery is back to RM2,500 mark although palm oil production has increased. This means demands (exports) had a higher increase. Global economy is recovering well.

One more thing about QE is, they are just thinking about printing less new money (tapering) this year and stop printing new money next year. Current liquidity is still there.

Last point is does LBS have a lot of American money invested? So who is there to repatriate funds and back to where? IMHO, price consolidation is a must but over reaction due to panic is not warranted for LBS because I share the view that it is very much an undervalued stock. Do you know of a lot of counters that usually pays 2.5 sen annual dividend only but pays special dividend of 3.2 times the annual dividend + promises special dividend for the next 4 years?

Just to contribute to the value discussion.

RNAV/share
LBS at current price of RM1.57 is trading at 69% discount to RNAV/share of RM5.05 (Source:CIMB 01 Aug 2013) and the industry average is 25.3%. If it corrects to 40%, it should be valued at RM3.03 per share OR RM3.77 according to industry average of 25%.

@DrPitchard: Actually I think everyone agrees with you. I am not sure of the intention of valueguru above but it does not sound to me that he is asking people to buy now. Personally I'd ask people not to sell at a loss due to market panic for a good value company. Every single sell down just provides that much more resistance on the way back up.

Yeah market is expected to head down for a while mostly due to panic. I don't see a reason why counters with low western foreign ownership to experience major sell down apart from market panic. The 30 KLCI counters need an overhaul. I liquidated most of my positions APART from LBS. It better live up to expectations.

RSI is 33. I saw some big hands coming in and out.

Wow, a lot of panic it seems. i hope when people sell it is really part of cut loss and not panic sell down. Good luck.

@jjoker: Yeah I supposed. The hand was actually seen in and out through treasury ops. Surprisingly today, noticed a lot of small retail buy ups - probably some internal event occured today with employees / partners that we are not aware of.

@spongebob: Luckily we didn't take the other 'learning point' on the kung fu book from that movie. Actually not drawing learning point at all, was just commenting to lighten the mood in this thread. We are all trying to make money at the end of the day.

@jjoker: Great input.

This reminds me of a Chinese movie Swordsman 2 (Jet Li). The main actor wanted to leave the martial arts world ("jiang hu") and the old man was telling him : "Humans are 'jiang hu' and 'jiang hu' are humans. Now tell me how can you leave 'jiang hu'."

Essentially, he is saying we are the market and the market is us. We determine the direction of the market. Sorry, could not resist the tone of comments being thrown around. No pun intended.

Correction. RSI is now at 50 - lets see whether we can see a bounce off that.

Actually at closing, share market only managed to close +1.42 pts

Actually there are two sides of the coin. The buyers and sellers, if you join either side, you make the other side stronger. Instead of listening to rumors / opinions, you should be informed and make the right business decision. If everyone starts to sell, it will definitely reach lower - it is common sense. This stock needs to consolidate but that does not mean you have to sell.

If you are selling at a loss because there is market fear but business is doing well, then maybe that is not the best thing to do unless it is part of your cut loss strategy. You can opt not to buy or sell but hold.

This is a strong business counter, good un-billed sales, special profit (sale of land in China), increase in Director's own holdings, not much US/EU ownership (speculated), huge volume across the RM 1.80 mark, why would it go down by much?

Agree with 2nd part of what @qwer1234 said. If you earned some, maybe can sell but I'd say, don't sell at a loss.

Regarding the LBS_WA, I think the opposite is true. 0.805 = can acquire.

Jangan panik dan cabut.

This is expected. It should consolidate between 1.78 - 1.95 in the next few weeks unless people push it down further.

Thin volume going down. Could be easily corrected back up.

(1) Margin / Contra Players?
(2) Fund managers trying to push down to acquire cheaper?

Could be many reasons.

Remember: Buy before end of today (26 Aug) to be eligible for 2.5 sen dividend.

I am a small fry but still holding some at RM1.50. :)

Acquired 19% of Utuh Sejagat.
http://klse.i3investor.com/servlets/anpth/932704.jsp

Yeah 1.80 +-. Saw many retail lot purchases today 1,2,3 lots. Interesting. Employees? Sub con?

If this piece of news is true, definitely great news. Existing fundamentals already quite solid, with this piece of news, I wonder what will the price be end of Sep. The price support should stay with the RM1.80 region due to huge volume transacted for the past few weeks unless people want to sell at a loss. Suspect sell down today due to contra / margin players. Lets see.

Both. This is just the beginning. More good news should come in the form of new projects, what is happening to the last piece of land in Zhu Hai which is the most valuable piece, performance of partner companies in CN / HK, new land grab in Malaysia, dev in Iskandar etc. People who sell down are just allowing portfolio managers to collect at a bargain price. Who wouldn't want to add an asset in portfolio which will give 5% dividend yield in next few weeks together with cap appreciation in the near term. Huge volume transactions seen across the 1.80 mark which shd form a strong base for rebound and support line for consolidation. Just my personal opinion.

Yes. Generally buy low sell high. Sounds simple but investors often face the issue of timing : when to go in and when to get out and this is what makes this whole thing interesting. Good luck.

Hope it helps. We are learning together.

Azli. Nope. Warrant price is not priced in that manner. There are multiple methods to price a warrant but generally it will take into account the strike price (&conversion ratio), annualized volatility of mother share, expiry date. These will determine the premium of the warrant which is the price. With that you will have the gearing and premium ratio of the warrant (check the general info section of the warrant in your trading platform). One method is the Black Scholes method.

Anyway these are only methods to value a warrant as reference. The market will value the warrant based on actual trades and the market is always 'right'.

Usually people play warrants to make a quick buck. They rarely convert them to shares.

I think contact your broker is the best tip. However depending the price you bought the warrants, it may not be wise to convert now. The directors who converted probably got theirs for free or low price for e.g. 0.30. When you convert you lose the time value of the warrant. With the volatility of the counter and time value (expiration days 17xx days), this warrant shd be priced at RM1.05 at current LBS price of RM1.80. I'd say wait for opportunity to sell for profit later.