DroidnPlay ...just be patient now.... Further downside is low. It is alright to wait for a few months...and gain more than 40% return.... better than fix deposit.... Just invest with spare cash....
Jon Choivo, 17,000 civil servants will lose their jobs as PH Govt want to cut cost. Better sell rcecap early. The first loss is the best loss. There are many cheap 2nd and 3rd liners oversold which will go up in rotational buying. You may consider getting into TA before good news out later this month.
You are the very few value investor in i3 forum. So Calvin hope you do very well.
17,000 is 3.4% of civil servants if we use najib figure of 500k civil servants, or 1.1% if we use official figures of 1.5 million civil servants (include teachers etc). And this is to be done over a period of time.
RCECAP has only 1.5% market share in personal loan space.
Assuming their customer have equal representation across the entire civil service, RCE has a worst case (3.4%*1.5%) 0.051% chance and best case (1.1%*1.5%) 0.0165% chance of being affected.
That is worst case, 9 bad customer, best case, 3 bad customer.
This is of course, unless they focus on getting government staff that are politically connected. Which i dont think so.
As RCECAP cannot borrow directly to people, but instead borrow to cooperatives, KOBENA, KSB and KOWAJA. I dont see anything when i researched those cooperatives that indicate they specialize in these politically connected civil service.
In any event, the price is so cheap now, my margin of safety more than covers most bad news. This one is not that major i think.
Of course, if anyone else thinks differently, or feel i have the wrong data, let me know. My avg cost is 1.49. If i'm wrong, id rather cut loss now.
I have just put in all my spare cash into the markets now, rcecap is 22.4% of portfolio.
I am in TA, i have a 2% position. Good luck, now bursa everything also cheap.
What our PM mean today is to terminate the contracts of political appointees contract staff only. Please don't try to created fear here. Thanks!
------------------------------------------------------------------------------------------------------------------------ PUTRAJAYA: The government will terminate the contracts of some 17,000 political appointees who served under the previous administration, Prime Minister Tun Dr Mahathir Mohamad said today.
Dr Mahathir said this excluded contract staff who worked as drivers and in other areas, adding that the government would first review their status.
"We will find other places for them to work based on their qualifications.
"We need to sort this out," the prime minister said, adding that the decision to discontinue the contracts of these political appointees in the civil sector would help reduce government expenditure and wastage.
------------------------------------------------------------------------------------------------------------------------ calvintaneng Jon Choivo, 17,000 civil servants will lose their jobs as PH Govt want to cut cost. Better sell rcecap early. The first loss is the best loss. There are many cheap 2nd and 3rd liners oversold which will go up in rotational buying. You may consider getting into TA before good news out later this month.
You are the very few value investor in i3 forum. So Calvin hope you do very well. 16/05/2018 21:34 16/05/2018 23:47
RCECAP is now directionless, a new govt. that place priority on thrift n prudence, does not hold bright prospects for personal loans, the main shareholder is calling it a day, as we know, n there were rumours way back, that he is a proxy for someone, time to switch now..
"In terms of the civil servant financing market, RCE Capital — which provides financing mainly to government employees — has about 2% to 3% market share, based on its loan book value of between RM1.5 billion and RM1.6 billion. "
Using 3% we get potential 510 customers.
RM1,496,035,000 loan book, average loan size RM15,000 (kenanga report), that is 99,735 customers.
Worst case 510 (17,000*3%) customers at 15k each, RM7.5mil. Do note some will be transferred, some will not be fired, and this will be over a specific time period. And most should still pay the loan back even if they are fired or find a new job, since when if you no job no need pay loan?
In addition, im not sure if this will directly affect the cooperatives which are loaned money by rcecap.
Current impairment provision is RM65.68mil for specific, RM51.70mil for general.
Its interesting.
The thriftiness of the government, does not mean the thriftiness of the civil servants. I doubt civil servant salary will get cut.
When i spoke to the investor relations yesterday on this matter. They indicated that contract workers consist of less than 1% of the loan book.
In addition, it should also be noted that the population of contract workers in malaysia is a lot more than 17,000. Which means, its likely to affect only a small percentage of that less than 1% of loan book.
In addition, even if you get fired,some are likely to still pay up. So there's another mitigating factor.
Why is the amount loaned to contract workers so low? My guess, lack of stability. Contract workers have contracts of usually 3 years or so, and renew at the end of contract. Ideally, you'd like to loan money to people who have permanent jobs.
And as tun m says, some will be transferred, and the low income ones will keep their jobs. In addition, it will take time. Which indicates to me, that the effect will be staggered.
However, i don't think the facts matter in the face of negative emotion or sentiment. I look forward for a chance to top up at RM1.1 or less.
@Jon Choivo you have a very unique perspective on investing. as i understand it, you are a firm value investor that invest for at least 5 yrs horizon, prefer is forever with the stk you choose n believe it has will show its value going forward. Based on this conviction, you will wait to top up further, a stock you foresee will drop further in the immediate horizon, rather than reduce your weightage now n minimise a temp. hit in the portfolio. v. interesting...
Wow, that's a big drop. Need to find money buy more.
I have to say, sometimes i wonder if i'm stupid. For example, before this, i said very loudly that i think the stock will drop more as quarter comes up due to MFRS 9, which should result in some impairment.
But instead, i bought some more yesterday at RM1.35 ahahaha.
However, i do know that as human beings, we tend to remember our correct predictions better than our wrong predictions, making us too confident in our own ability.
What i know for a fact is this, its pretty close to futile to predict short term price movements, unless you have a super algo bot that is constantly refined. People get lucky over the short term, but usually not over the long term. I generally got burned too much in terms of opportunity cost or stupidity. And if one looks and spends too much time infront of a computer screen trying to predict short term movements, you can't help but start to have very short term perspective. You start seeing the trees but missing the forest.
What i know i'm reasonably good at, and can actually constantly improve on, is my ability to estimate the intrinsic value of companies. And investing is the last real liberal art. Everything you learn about life, applies to determining the value of a business. So all i need to do, is live life with eyes wide open, and be curious. Very much more fun compared to staring at a computer screen.
I wouldn't mind holding forever, but if a business becomes too expensive i will need to sell. I may keep some, if it. =========================================================================== ohbeeyee @Jon Choivo you have a very unique perspective on investing. as i understand it, you are a firm value investor that invest for at least 5 yrs horizon, prefer is forever with the stk you choose n believe it has will show its value going forward. Based on this conviction, you will wait to top up further, a stock you foresee will drop further in the immediate horizon, rather than reduce your weightage now n minimise a temp. hit in the portfolio. v. interesting... 18/05/2018 22:47s that fantastic of a business.
Read above, you assumption is likely to be grossly false.
But i wouldnt mind if people have this perception! If the whole world thinks all 17,000 is in RCECAP book, instantly drop to 0.3! I can sailang properly then!
=========================================================================== Lukesharewalker unless 17,000 also in the books of RCE cap, hence the panic sell again,that 17k times 15k that's 255 million...LOL 18/05/2018 20:59
MFRS9 impact is only 6.2m for a loan portfolio more than 1b..hahaa .. good quarter! Announced 4 cents final dividend, this brings the full year dividend to 7 cenrs ..wow
The Board of Directors of RCE is pleased to propose a final single-tier dividend of 4.0 sen per ordinary share in respect of the financial year ended 31 March 2018, subject to the approval of the shareholders at the forthcoming Sixty-Fourth Annual General Meeting of RCE.
The entitlement date and date of payment in respect of the aforesaid final dividend will be determined and announced in due course.
Dividend Guidance
The Board of Directors of RCE also wishes to announce that the Company has adopted a dividend payout ratio of within a range of 20% to 40% of its consolidated profit after tax for financial year ending 31 March 2019 onwards as a Dividend Guidance, provided that such distribution will not be detrimental to the Company’s cash flow requirements.
In considering the dividend payments, the Company will take into account various factors including:-
(1) the Group’s financial performance;
(2) the level of the Group’s available cash and cash equivalents;
(3) the projected level of working capital, capital expenditure and any other investment plans; and
(4) satisfactory cash flow solvency test.
The Board will re-evaluate and review the Dividend Guidance on an on-going basis, taking into consideration of the Group’s financial position, regulatory environment and business prospects.
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Posted by DroidnPlay > 2018-04-25 11:15 | Report Abuse
mneo, this stock has been trending down since few Good qr back then. BUt I'm still waiting patiently...