1- The DXY rally has peaked. 2- Whatever capital that flew out of emerging markets will go back. 3- Commodities are in deflation. Central banks hate deflation....
and For the ultra wise....I say
*QE4 (or whatever they end up naming it) is upon us*
I think Fiamma is a good company, but the short term prospect is not good due to the weakening of RM for their trading segment, and now depending only on single property dev project, i.e. Vida Heights, for their property dev segment. The other 2 property dev projects will launch in end of 2015 and early 2016. Thus, if invest into Fiamma, a person must be willing to hold 1 year or more to see the profit and stock price improvement.
One good sign is the company starts to buyback share at RM1.5X. They have not done so since year 2007.
Earning lifted by an amount of RM24.838 million arising from the increase in fair value of investment properties located in Jalan Tuanku Abdul Rahman. If the fair value gains noted above are excluded, its current quarters' EPS would drop to 4.3 sen.
Be watchful of a rollback of earning for FIAMMA in the next few quarters.
The latest QR profit was in fact down to 10.7m from 13.9m (last year Q4), reduced about 23%, after excluding the paper profit on one-off capital revaluation of 24m.
--------------------------------------------------------------- 2015 -------------------2014---- Profit before tax, interest & depreciation ------- 41,075,000 ----------- 21,776,000 Inter-segment profits -------------------------------- (4,224,000) ---------- (8,217,000) Depreciation, interest exp & income ------------- (1,286,000) -------------- 301,000 Increase in fair value ------------------------------- (24,838,000) ------------------------- ------------------------------------------------------------------------------------------------------- Profit before tax -------------------------------------- 10,727,000 ------------ 13,860,000
It seems like nowaday many companies that have properties will keen to revalue their properties soonest possible, rather than late, if compared to those years in history. (Look at every REIT now, everyone is doing it now every year)
Many years ago, any revaluation will only be taken up in Capital Revaluation Reserve, which is under the reserve accounts of the Balance Sheet, NOT in the profit & loss account as today as Gain in fair value of Investment Properties. (That's why many companies did not revalue their properties in those days, no initiative mah...)
The new practice will FAKE the profit of the company & distort the actual situation of the company. Many small investors will be trapped, as we all know many of them do not really look at the report. (Like last few days in Fiamma case, I am so surprise on the price up but not surprise on the price down)
These are PAPER PROFIT & no money involved.
Most importantly, revaluation are made based on the revaluation report prepared by so called "professional". (Talk about professional opinion, do you believe the Target price set by those so call analysts?)
I am SERIOUSLY OPPOSE the accounting standard by recognising the capital revaluation into the income statement. (but I know I am just a small fish in the ocean.... sigh...)
Value of the investment properties can only be realised upon disposal, if it is not disposed of, then the increase in value should not be taken up as in Income Statement.
INCOME STATEMENT is to record the performance of the operations of a company during a period of time. Since the properties are not sold, then why should it be the gain taken up in Income Statement.
Just called the Property Development Office of Fiamma to register interest for future property projects.
The proposed serviced apartment project located at existing warehouse in KL Kepong, behind Wisma Fiamma, will only likely be launched after 6 months, due to issue with authorities.
That mean no new exciting factor from the Company in near future & the share price will very likely remain stagnant, Or in fact will go down if the trading division is not doing good in the next few quarters.
Share buy back is good to shareholder especially major shareholder, the percentage of share control will increase if the share in market reduce. Warren Buffet love to see company share buy back. This also prove that company have confidence on their business.
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....
blurinvest
11 posts
Posted by blurinvest > 2015-06-25 17:58 | Report Abuse
why sudden drop