You think Banks for free recommend stocks to make you rich? Please la get a brain, they only recommend stock they are trying to unload, or in companies that owe them money.
As such, that portfolio turned into $8.76 trillion in holdings, and even with the threat of the Omicron variant, the Fed was already tapering off its bond purchases. Now comes the time to start expunging as the inflation narrative also weighs heavy on the capital markets in addition to COVID-19.
"At their policy meeting last month, officials agreed to wind down their bond-purchase stimulus program more quickly amid growing concerns about high inflation, setting it on track to end in March," the Wall Street Journal reports. "Officials began discussing at that meeting what should happen to the bond holdings after that point, and some are pushing to start shrinking them sooner and faster than they did after an earlier asset-purchase program."
I've got mixed feelings here. On one hand, as a holder I'm pleased that it's going up but on the other hand I'm a little disappointed that I wasn't able to pick up a bit more between the 5.20 to 5.30 range. Technically there was a slight hope of that but it now looks like it's gone.
Even at Rm6 I believe this bank is undervalued. Assuming the upcoming quarterly EPS is in line with the previous 3 quarters, then this stock should be targetting a fair value price of at least Rm6.50 on a PE multiple of 10.
I see no logical reason why this bank should be traded at a PE of less than 10.
RHB has banged its head against the Fib. point 5.85 on Tuesday and now again this morning. If it can break through and not close and fall below 5.85, then the next Fib. point is 5.97.
It would be a surprise if it was to take on the 5.97 Fib. point today.
I'll have one eye on the stock and another on the KLCI, as I can't see that breaking 1,570. Estimating that level will be solid resistance for a while as the overall market takes a breather and slips and consolidates.
A break above 1,570 on the KLCI would mean a move up to the 1,595 area and I can't see that happening this early in the year.
The comparative RHB-OSK numbers are quite mind-boggling. NOSH of RHB - 4143 million; NOSH of OSK - 2095. Each OSK share owns indirectly 0.2 RHB share (because OSK owns 10.13% of RHB). Today price: RHB - 5.85; OSK - 0.905. Use 5.85 we can buy 6.464 OSK shares and own indirectly 1.295 RHB shares which is worth 7.57 --- isn't that amazing?
OSK has, of course, other profitable business in: - property development, including Melbourne Square and Malaysia projects - property investment - malls and commercial buildings, including OSK Plaza - Financial services - money lending license - highly profitable - Manufacturing - cables & building materials - Construction - Hospitality (currently loss-making due to covid19)
So, using the same amount of money, if we buy OSK to own RHB indirectly, we can have about 30% more of RHB straight away. At the same time we own the rest of OSK profitable business all free - proportionately. Amazing numbers.
I was very surprised and pleased that it closed the week on a Fib. point as support. Although I'm not too sure if it will be able to hold this point throughout this new week, as I'm still uncertain about the short term overall market.
Any signs of price weakness could be an opportunity to buy and hold as a twelve month investment to achieve a capital gain plus a 5%+ dividend.
The next 5 possible retracement points based on Fib, calcs:
1. 5.77 2. 5.72 3. 5.65 4. 5.57 5. 5.55
I'd probably be topping up between the 5.57 and 5.65 points if it was to drop into that area. If the KLCI was to head below the 1,530 support then we could look at lower price levels. That's the current state of play with this stock for me. All in my opinion, of course.
This news about a possible loan default from Genting HK is not what shareholders want to see. I haven't been able to see what the actual size of the loan is for each individual bank yet but it would be significant, although not "fatal".
While this cloud hangs over the three banks we could see Funds come in to short the stocks so I'm expecting some pressure on the price until things are clearer.
It's very frustrating as I was bullish on RHB for this year. For now, I have decided to hold my current holdings in RHB but will not be adding to my position until there is more clarity on the Genting HK situation.
Sadly I can think of only one reason Banks management would lend such huge sums unsecured to a single borrower. I wonder what they did with the coffee money in HK.
(Highlight) RHB Banking Group’s managing director/group chief executive officer Datuk Khairussaleh Ramli has tendered his resignation, effective March 25, RHB Bank Bhd told Bursa Malaysia on Wednesday (Jan 26).
Based on its most recent annual report, it appears that there are no GENM shares pledged by the holding company as collateral, though 14.8% or 570m Genting Bhd shares have been pledged for financing.
Source: PublicInvest Research - 28 Jan 2022
Is the mentioned USD600m unsecured loan being pledged by 570m Genting shares during the negotiation in August 2020 ??
The S&P 500 banking index rallied 1.9% after the benchmark 10-year U.S. Treasury yield hit its highest level since November 2019 on mounting expectations the U.S. Federal Reserve will start tightening monetary policy.
Shares of Bank of America Corp, JPMorgan Chase & Co and Wells Fargo all gained over 1%.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
cn21
486 posts
Posted by cn21 > 2021-10-30 11:38 | Report Abuse
Prosperity tax of 33% is bad for banks....right??