Posted by Jururawat > 2018-08-09 15:31 | Report Abuse

Yes jiunn, make comparison between the ex price with another same industry, smart.


jiunn CIMB be at least 6.80 standing next to Maybank right???
Sapo....Sapo...Sapo...undervalue BLUECHIPS.....cheap cheap buying
01/08/2018 12:00

Nowadays Maybank is 9.90 then cimb should be Rm6. 90

Posted by Her Sin > 2018-08-09 15:41 | Report Abuse

This stock very very lag

Posted by Jonathan Keung > 2018-08-09 15:41 | Report Abuse

no reason for CIMB underperforming ( if new Board ) really plans to merge RHB and CIMB. after all PNB and Khazanah are all GLIC

Posted by risktransformer > 2018-08-09 15:49 | Report Abuse

But there is a strong resistance at RM5.99; must breakout above that first.... otherwise it may fall back to below RM5.90.

Posted by BetorInvest > 2018-08-09 21:26 | Report Abuse

May i compare cimb with public bank? What make cimb different than public bank? Why big fund keep pushing public bank but not this cimb, how to know when it is safe to enter ?

Posted by risktransformer > 2018-08-10 09:20 | Report Abuse

@BetorInvest: U can't do that for 2 reasons:

1. The chart pattern of Public Bank is very different from CIMB's whereas CIMB & MAYBANK's chart pattern look quite similar.

2. The price of Public Bank is around RM24.00 (way too high from the other 2 banks) whereas CIMB & MAYBANK's prices are closer to each other (only a difference of a few RM).

Posted by risktransformer > 2018-08-10 09:44 | Report Abuse

Big funds r in Public Bank bcoz it is a very profitable & financially strong bank. CIMB & MAYBANK r weaker financially. However, I've looked into CIMB's financial statements and noted that it is very profitable too. CIMB's price went down badly immediately after the May 9 election result and a new PH government.... it must b due to Nazir Razak being its chairman (not bcoz it is not profitable).

Posted by risktransformer > 2018-08-10 09:59 | Report Abuse

@BetorInvest: U really ask so many questions in one comment. The answer to your last question:

It is safe to enter if (1) it has good fundamentals (use FA) and (2) TA shows the right timing to enter.

In the case of CIMB, (1) it has good fundamentals (very profitable & growing) and (2) TA is suggesting that now is a good time to enter.

Buy at your own risk (no guarantee given)..... good luck!

Posted by Jonathan Keung > 2018-08-10 10:08 | Report Abuse

perception & trusts in PBB differs from Maybank or CIMB. this rise to higher valuations for PBB

Posted by Jonathan Keung > 2018-08-10 10:09 | Report Abuse

operation efficiency and the work culture in PBB differs sharply from government owned GLIC

Posted by Lim Tek Wai > 2018-08-10 10:27 | Report Abuse

good profit

Posted by victory015 > 2018-08-10 11:30 | Report Abuse

good profit , where do you see it?

Posted by risktransformer > 2018-08-10 11:55 | Report Abuse

@victory015:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5736001



victory015 good profit , where do you see it?
10/08/2018 11:30

Posted by BetorInvest > 2018-08-10 12:39 | Report Abuse

@risktransformer thank you for answering all my question, it is very informative.

Newbie always full of question i think hahaha. I will try to learn the chart pattern of Public Bank and Cimb, however the rising price of Public bank make me scare to enter because it is keep rising. While for Cimb i still can make a wild guess for the weakness and strength level..

Posted by Jonathan Keung > 2018-08-10 15:49 | Report Abuse

always think of the downside before the upside. just my personal view

Posted by risktransformer > 2018-08-11 13:32 | Report Abuse

Downside risk for CIMB is it may drop to its first support at RM5.77 or all the way down to its 2nd support at RM5.21. So, if anyone bought at RM5.93 ..... be prepared to cut-loss if it drop below RM5.77, don't wait till it drop to RM5.21. TA wise, it is more likely to move higher next week but no matter how good the chart of CIMB is at the moment, things can suddenly change without warning. That's y no guarantee given & buy at your own risk.

Posted by shpg22 > 2018-08-12 13:02 | Report Abuse

2. The price of Public Bank is around RM24.00 (way too high from the other 2 banks) whereas CIMB & MAYBANK's prices are closer to each other (only a difference of a few RM).

Comparing the price shows that u dunno what u r talking about bank valuation.

Posted by risktransformer > 2018-08-12 13:29 | Report Abuse

Please go ahead & enlighten us more about bank valuation.... if your explanation is correct then we all can learn something from you (no harm with that).

Posted by Balan211072 > 2018-08-12 15:28 | Report Abuse

Thank you Bro shpg22, bro jon choivo and bro calvin for all of your analyses

Posted by shpg22 > 2018-08-12 15:49 | Report Abuse

The most basic lesson is stock price is not an indication of its value, in fact it tell absolutely nothing about its value. A 24.00 stock can be cheaper in term of valuation compare to a 0.25 stock. Most beginner do not comprehend this, thus end up buying all the penny stock thinking its cheap.

Posted by risktransformer > 2018-08-12 15:53 | Report Abuse

I can agree with that.... continue (give us more of what u think is the true value of CIMB... it will be more useful for us to know).

Posted by shpg22 > 2018-08-12 16:14 | Report Abuse

Looks like u like to be spoon feed.
Bank valuation got alot to do with its ROA. Rule of thumb is the higher the ROA, the higher its P/B value. By saying so, book value is not key to valuing banks. Earnings still are key to valuing banks.

Posted by risktransformer > 2018-08-12 16:18 | Report Abuse

Those r valuation ratios for all businesses in general, we r talking here about bank valuation only (but of course those ratios u mentioned r also helpful partly).

Posted by risktransformer > 2018-08-12 16:20 | Report Abuse

So, please answer BetorInvest's question: can compare CIMB with Public Bank or not?

Posted by shpg22 > 2018-08-12 16:34 | Report Abuse

What is it to compare? Both have different ROA, of coz different P/B also.

Posted by risktransformer > 2018-08-12 16:39 | Report Abuse

The discussion among Jururawat, jiunn, BetorInvest, Johnathan Keung & myself was about using Maybank's price (not Public Bank's price) to give us an idea of where CIMB's price should be to reflect its true value. Can u use your bank evaluation expertise on this discussion?

Posted by shpg22 > 2018-08-12 18:00 | Report Abuse

You can never use stock price to compare value. As I said b4, price tell absolutely nothing about its underlying value. For bank you need to use ratio like ROA, P/B to compare value. Other industry, you normally use P/E ratio, DY. I think i just repeated what i had explained earlier. Pls try to understand it or else we ll stuck in a circle.

Posted by risktransformer > 2018-08-12 18:02 | Report Abuse

O.K. Got it. As for my answer number 2, I was just giving a simplistic answer to BetorInvest.... something like saying u can't use a RM3 million bungalow to compare the true value of a RM150k low-cost terrace house. It doesn't mean I know nothing about bank valuation.

When u talk about bank valuation, I was expecting u to use CET1, Cost: Revenue, % of non-performing loans for bank-to-bank comparison (other than those general valuation ratios) because those were the performance measurements used by banks themselves. And if u really want to go into true value of any stocks (not just banks) u should use the profitability index derived from their net present value (NPV).

My point is, my answers in response to other people's comments were catered to their discussions (since their discussion was about price patterns). They were talking in terms of price changes (chart) with a little reference to TA and volume analysis. Anyway thanks for your enlightenment.

Posted by shpg22 > 2018-08-12 18:19 | Report Abuse

Ok...looks like u know alot more than i think.

Posted by risktransformer > 2018-08-12 18:26 | Report Abuse

Thanks for the compliment. ^^

Posted by Cockroach Paul Lee > 2018-08-12 18:29 | Report Abuse

wow....interesting discussion....shpg22 n risktransformer
but i left ear in , right ear out......cant digest
i better play coc... headache lol

Posted by risktransformer > 2018-08-12 18:52 | Report Abuse

I think for most people here, it is easier to focus on the first support at RM5.77 and the 2nd resistance at RM6.56. Sell if drop below RM5.77 (cut-loss) and sell when almost reaching RM6.56 (take profit).

But for long-term investors, they may buy more if price drop all the way to RM5.21 (average-down) and hold on even when price breakout above the 2nd resistance (RM6.56).

Take my suggestions at your own risk (no guarantee given).

Posted by shpg22 > 2018-08-12 18:57 | Report Abuse

My analysis with ROA & P/B is sufficient for me to estimate CIMB price. When it was traded near 7.00 earlier this year, I had issued a downgrade to 5.00-5.50. Price did fall to a low of 5.25 before recovery.

May 21, 2018 11:20 AM | Report Abuse

CIMBs ROA of 0.88% is almost similar to RHB & AMMB but valuation wise command a high premium. I reckoned the premium is given due his relationship with Najib as PM previously. Hence due to changes in gov, it may face heavy selling pressure. May drop to 5.00-5.50

Posted by risktransformer > 2018-08-12 18:59 | Report Abuse

Good! We have many experts here... so we sure make profit one, hahahaha!!

Posted by shpg22 > 2018-08-12 19:10 | Report Abuse

Let's hope so. The thing with many experts is there will be many mouth and different opinion.

Posted by SensitiveIdeas > 2018-08-12 20:32 | Report Abuse

http://www.theedgemarkets.com/article/cimb-gets-bank-negara-nod-completes-final-piece-cimbchina-galaxy-stockbroking-jv-0

We are democratic

Posted by Jururawat > 2018-08-12 21:04 | Report Abuse

History stock price dispersion with the cimb and Maybank, excuse me...

Non-compared single stock price surely can't measure the value.

Posted by Jururawat > 2018-08-12 23:08 | Report Abuse

Adj. Close Asj. Close
........................ KLCI CIMB
1/6/2017 1763.67 6.58
1/7/2017 1760.03 6.55
1/8/2017 1773.16 7.08
1/9/2017 1755.58 6.3
2/10/2017 1747.92 6.14
1/11/2017 1717.86 6.05
1/12/2017 1796.81 6.54
1/1/2018 1868.58 7.25
1/2/2018 1856.2 7.19
1/3/2018 1863.46 7.19
1/4/2018 1870.37 7.2
1/5/2018 1740.62 5.9
1/6/2018 1691.5 5.45
2/7/2018 1784.25 5.84
*1/8/2018 1805.75 5.93
0.807831375


CORRELATION COEFFICIENT = 0.807831375

THE CIMB PRICE AND KLCI MOVEMENT CLOSE TO +1 MEAN VERY RELATEDNESS OF 2 VARIABLES.

Dispersion between cimb and Maybank RM3. 00

Posted by enning22 > 2018-08-13 07:29 | Report Abuse

there is only two experts /camps here, one is right , one is wrong.

Posted by SensitiveIdeas > 2018-08-13 09:01 | Report Abuse

Wow Jururawat, salute...

Posted by SensitiveIdeas > 2018-08-13 09:04 | Report Abuse

If the price not equal the value, ask Warren Buffett go back home, hahaha


shpg22 You can never use stock price to compare value. As I said b4, price tell absolutely nothing about its underlying value. For bank you need to use ratio like ROA, P/B to compare value. Other industry, you normally use P/E ratio, DY. I think i just repeated what i had explained earlier. Pls try to understand it or else we ll stuck in a circle.
12/08/2018 18:00

Posted by SensitiveIdeas > 2018-08-13 09:05 | Report Abuse

Remember what Benjamin"s, Warren mentor said, the MR MARKET...

Posted by BetorInvest > 2018-08-13 09:25 | Report Abuse

i learn plenty from the exchange of views, will look into ROA, P/B CET1, Cost: Revenue, % of non-performing loans and profitability index in comparing bank's stock. The price is reflected by the value and also the growth rate perceive by the share holder, which translated into the different chart pattern of both PBB and CIMB.

Posted by risktransformer > 2018-08-13 10:47 | Report Abuse

@Jururawat: I can see y u r so sure that the price of CIMB will go up to RM11 in 18 or 24 months. However, I think your correlation coefficient calculation may be misleading for the following reasons:

1. Using beginning/end of monthly closing prices is less accurate than using daily closing prices.
2. I hope u personally use more than 15 data bcoz in statistics we normally use at least 30 data (closing prices); anything less than 30 data will be misleading.
3. Professional analyst use the % of price changes instead of raw prices of KLCI & CIMB to calculate their correlation (I use the daily % changes in KLCI & CIMB for past 60 days which show a covariance of 0.000109 and a Beta Coefficient of 1.454297).

For comparison purposes: Public Bank has a Beta Coefficient of 0.922029; that means Public Bank is more correlated to the KLCI than CIMB bcoz 0.922029 is closer to 1 than CIMB's 1.454297. As u can see the following price changes this morning:

KLCI: 1,789.45 (-0.86%)
Public Bank: 24.36 (-0.16%)
CIMB: 5.87 (-1.01%)

Posted by shpg22 > 2018-08-13 11:28 | Report Abuse

Does it need to be so complicated ?? Sometimes thing is simpler than it look.

Posted by risktransformer > 2018-08-13 11:38 | Report Abuse

Not really complicated. They r calculated automatically using computer (no need to do anything personally). Just need to refer to them once in a while & interpret correctly.

Posted by Jururawat > 2018-08-13 11:42 | Report Abuse

@risktransformer percentage?!? Wah.. Like that I bang sai dou boh eng :}
Anyway good idea. I need to think it over. TQ

Posted by risktransformer > 2018-08-13 11:44 | Report Abuse

Yes, go to internet & google "Beta Coefficient" for the correct formula to use.

Posted by risktransformer > 2018-08-13 11:47 | Report Abuse

Here is a good one:

https://accountingexplained.com/capital/equity-valuation/beta-coefficient

......

Posted by risktransformer > 2018-08-13 11:57 | Report Abuse

@shpg22: As u can see.... accountants and professional financial analysts also use price changes for equity valuation (click the link below for explanation).

https://accountingexplained.com/capital/equity-valuation/beta-coefficient

Hope this settles the debate on the importance of prices (and comparisons).