Tough call Qii.Against the external market sentiments as described by you. the Malaysian economic fundamentals have to be addressed rather drastically as foreign direct investments have dried up with the latest report of a Chinese smelter cancelling its plans to set up base in Malaysia.As reported by one research house the bulk of the domestic investments were hugely concentrated in the property sector if I am not mistaken about 45%. Unless we have a strong leadership to bite the bullet and expand the revenue base by widening the tax base and at the same time narrowing down the budget deficit and public sector borrowings ie. the twin devils facing both the foreign investor buying into government treasury bills and local investors trying to pick a gem of a jewel ie. profit margins are not impacted by the weakening ringgit and minimum wages where the current reportings have showed that net profits for most sectors have slowed with the exception of the banking sector. The other main concern if you are a major shareholder of a public listed company....would you repatriate your profits from the sale of your overseas investments?According to one report and even Bank Negara acknowledged it is that we have seen growing outflow of private capital since 2008 General Elections. I think the market is a leading indicator of future set of events because it discounts the hopes and worries.It would be a volatile market as it hinges on current account surplus which is narrowing,Petronas contributions to the government coffers based on prevailing Brent oil price not withstanding the statement by OPEC recently that in 2 to 3 years time US production of shale oil will increase and US would be a next exporter of crude oil and gas.Also palm oil prices have not recovered. It used to be RM2,800.00 per metric ton now hovering at RM2,400.00. Yes I do agree one need to be invested but it takes guts to stay the course.Having your money parked in fixed deposits is equally a bad option as inflation would kick in with the subsidy fuel rationalisation.
@Stockwatch: Thanks for the notes. These are definitely good. I will try to relate these to the discussion on LBS.
I am not sure whether the reference of 45% domestic investment in property is referring to all investments or just investments in property stocks in Bursa. Either way, it is a healthy indicator which means property sector is more resilient since it is domestically driven. In total, foreign shareholding in Bursa accounts for 24.6% of total investments. Issue arose in several counters with high foreign holdings such as UEMS which was why they have been sold down heavily recently. They have good fundamentals but foreign shareholding is high. LBS should not face this issue ... yet.
Regarding the profits from the sale of land of LBS, the payments will be staggered over 4 years in cash and shares. Due to this, they have also adopted a special dividend policy to pay special dividends over the next 4 years. We will likely seen the use of the cash proceeds to reduce gearing and improve landbank in Malaysia esp. Iskandar. Between China and land near to Singapore, I think it is a no brainer. Furthermore JV development on the last parcel of land in Zhu Hai will be another catalyst.
@Stockwatch: Regarding palm oil prices, you are right. Actually it reached RM3500+ in 2012. Though we must not forget that competition from other grain type oil such as soybean oil has increased together with production. IMHO, its more a supply & demand thing. To be honest with you, personally I am actually glad that the food type oil has decreased. It can only mean good things for world food prices esp the poorer countries.
Personally you need to check out the party LBS join-venture with on the last parcel in Zhu Hai.It is good LBS will pay special dividends over the next 4 years.It would mimic like a fixed deposit.The only caveat you need to check out on this Chinese developer ie. its ratings, gearing and free cash flow and its historical track record of dividend payments.If you feel it is up to mark then it is your call. LBS was pretty quiet on the domestic scene for the last few years due to the above strategy adopted by its management to go offshore.It is a basically a mass scale developer ie. apartments going by its historical launches here and not a niche developer or boutique developer like Sunrise (now taken over ) or Tan & Tan. I also think it was in the same China venture bandwagon which Farlim, another listed company,took but unfortunately for Farlim, not a good outcome.Unfortunately they did not take a copy of Sun Tzu's Art of War when operating in China.
@scjm3: Thanks but if you don't mind me asking, why are you planning to take down your postings? Comments are based on known factors during that time anyway.
Side comment on the market sentiment. Despite the uncertainty in US strike against Syria & QE tapering, the KLCI futures seemed to have ended with a 4-pt premium over the cash index against a 12-pt discount on Friday. Wow. How these 2 weeks pan out will be very interesting.
Technically speaking, it is still too early for the cycle to end. Daily RSI just crossed over the 50 threshold and is still bullish. Target for LBS today is to sustain RM1.71. Next target will be RM1.74 to ascertain the bullish sentiment on this stock followed by next pivot point at RM1.77. Support is seen at RM1.67-68 range. At the moment, judging from momentum, buyers are still cautious since transacted volume is relatively low.
@Euscilyn: My targets for today are at RM1.71, RM1.74, RM1.77. My note to potential buyers are need to be cautious on Thursday. If cannot hold, please do not buy.
RM1.74 is the current SMA20. If it can cross over that convincingly, we are talking about a bullish sentiment on this stock. It has nothing to do with transacted price so far. Anyway it is too early to call the closing / high / low for today. It is only 10.35am.
@scjm3: Cool down mate. I am just sharing what I observed from the charts and indicators - not my personal opinion. Secondly, if I may repeat, I did not put RM1.74 up because it was transacted today. RM1.74 is the current SMA20. For a stock, if it can cross above SMA20, it means it is bullish. Currently LBS has NOT crossed over SMA20 yet. RM1.74 is a target, not a done deal. I hope we don't misunderstand each other.
Now market is still in euphoria due to upbeat Chinese export data. Thursday could be down because US Congress may authorize a strike on Syria. Market sentiment can go either way. External sentiments for this week and next can change drastically.
Of course there is nothing wrong with that. It is an open market. The only worrying portion that the community needs to work on is market panic. Panic can create many bad things - not just $$$
Of course. I think we are on the same page :) apart from the interpretation of bullish and bearish as buy or sell signals. Those are just observations of the charts and not a call to buy or sell. My tone here has always been to caution against panic buying (chase) or selling if people do not know what they are investing in / cant hold.
I have one good news and one bad news. Good news is LBS today seemed to have a breakout after forming a quick cup and handle chart pattern = may see further upside bias. The bad news is the breakout may be 'fake' due to potential -ve market sentiment this Thursday (US congress vote on Syria) and next week (FOMC meeting aka QE tapering). If in doubt, Investors may want to wait until end of next week for some certainty.
@scjm3 just felt weird..cause i dint saw you give comment on others shares except LBS..and i don't think you hold any of this shares right? that's why i ask..no offense ya..i am sorry if you felt any..
but all the specialise also not encourage on the property counter now due to new government polisi, (increase BLR, bank loan periods shorten, sale tax increase within 5 years, no DIBS...)
Support line at 1.69~1.73. It's consider stable line support up to today because not much affected by contra player. Good sign !!
As mentioned by you guys, the market is cautious therefore not much fisherman play around the pool. Fundamentally, is a good counter don't need to worry about dropping line. The lowest rate will be at $1.60 ~1.65.
Let's us wait for support line $1.80~1.85 by end Sept. Target goal at $ 2.00 ~ 2.05 within this few months. Good Luck guys !!!
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Stockwatch
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Posted by Stockwatch > 2013-09-04 23:53 | Report Abuse
Tough call Qii.Against the external market sentiments as described by you. the Malaysian economic fundamentals have to be addressed rather drastically as foreign direct investments have dried up with the latest report of a Chinese smelter cancelling its plans to set up base in Malaysia.As reported by one research house the bulk of the domestic investments were hugely concentrated in the property sector if I am not mistaken about 45%.
Unless we have a strong leadership to bite the bullet and expand the revenue base by widening the tax base and at the same time narrowing down the budget deficit and public sector borrowings ie. the twin devils facing both the foreign investor buying into government treasury bills and local investors trying to pick a gem of a jewel ie. profit margins are not impacted by the weakening ringgit and minimum wages where the current reportings have showed that net profits for most sectors have slowed with the exception of the banking sector.
The other main concern if you are a major shareholder of a public listed company....would you repatriate your profits from the sale of your overseas investments?According to one report and even Bank Negara acknowledged it is that we have seen growing outflow of private capital since 2008 General Elections.
I think the market is a leading indicator of future set of events because it discounts the hopes and worries.It would be a volatile market as it hinges on current account surplus which is narrowing,Petronas contributions to the government coffers based on prevailing Brent oil price not withstanding the statement by OPEC recently that in 2 to 3 years time US production of shale oil will increase and US would be a next exporter of crude oil and gas.Also palm oil prices have not recovered. It used to be RM2,800.00 per metric ton now hovering at RM2,400.00.
Yes I do agree one need to be invested but it takes guts to stay the course.Having your money parked in fixed deposits is equally a bad option as inflation would kick in with the subsidy fuel rationalisation.