infolinks

Wednesday, December 31, 2008

Market performance in 2008

Thursday, December 18, 2008

Net cash companies

Tuesday, December 16, 2008

Australia's dollar may fall toward the 5 1/2-year low

By Candice Zachariahs
Dec. 15 (Bloomberg) -- Australia's dollar may fall toward
the 5 1/2-year low it touched in October at 60.1 U.S. cents as
commodity prices come under pressure from a slowdown in China,
its biggest trading partner, State Street Global Advisors said.
The Australian dollar has declined 32 percent since reaching
a 25-year high of 98.49 U.S. cents in July. Chinese industrial
output grew 5.4 percent in November, the weakest pace in almost a
decade, as export growth collapsed.
"There's a lot of gloom and doom already expected and seen
in the U.S. economy," said Chris Loong, head of currency
management and asset allocation in Sydney at State Street Global
Advisors, a unit of State Street Corp., the world's largest money
manager for institutions with $14.1 trillion under custody as of
Sept. 30. "Asia is more uncertain and that's probably the
greater risk for the Australian dollar."
The currency, which traded at 66.57 cents at 11:14 a.m. in
Sydney, may extend this year's decline if export markets slow
significantly, Loong said in an interview on Dec. 10.
Asia accounted for 71 percent of Australia's minerals
exports and 66 percent of its energy shipments overseas in 2007-
2008, according to the Australian Bureau of Agricultural and
Resource Economics. The nation's earnings from commodity exports
may be A$192 billion ($127 billion) in the year ending June 30,
2009, rather than A$214 billion as forecast in September.
"China's continuing demand for minerals and metals
commodities is key to the speed of turnaround in commodities
markets," it said in a report on its Web site.

China Slowing

The World Bank forecast growth in China will slow to 7.5
percent next year, with East Asian economies growing at the
slowest pace in eight years, in its annual Global Economic
Prospects report on Dec. 9. Reserve Bank of Australia Governor
Glenn Stevens said this month that China has slowed "much more
quickly" than forecast.
The next round of commodity price negotiations will show
"how much their slowdown can flow through into our export
markets and our industry and economic growth into 2009 and
2010," said Loong. "How much of a deceleration we'll get in
Chinese growth and our other export markets," will affect the
currency, he said.
Australia's dollar strengthened since the October trough as
the central bank bought a record A$3.15 billion in the market to
support the currency. Governor Stevens pruned interest rates
three percentage points since September to encourage domestic
spending and help the economy skirt a recession. Lower interest
rates make the nation's assets less attractive to international
investors seeking higher returns on their investments.
The low 60-cent level is "the bottom end of our valuation
range," said State Street's Loong. The mid-70 cent level would
be "roughly" fair value, he said.
"If we get past the point where people have more confidence,
they will be able to look at the Aussie and kiwi and say we're
happy to fund those currencies at those interest rates and those
commodity prices because the export markets are expected to
recover," he said.

Wednesday, December 10, 2008

TA Securities favours defensive and value stocks for 2009

TA Securities' top value stock picks are LCL Corp, KNM, Malaysia Airports, Kian Joo, QSR, Boustead Holdings, Gamuda, Tanjong, AirAsia and QL Resources

INVESTORS should stick to defensive and value stocks next year as the external environment will continue to be volatile and uncertain, TA Securities said.

The research house expects the Kuala Lumpur Composite Index (KLCI) to peak near 1,023 points, or at best 1,062 points, in the first quarter of next year, possibly March, and then trend downward for the rest of the year.

As such, it advised investors to buy defensive and value stocks at the start of the year and then sell ahead of a deeper correction in the second half of the year.

After that, investors should return to defensive mode.
"Investors should find solace in defensive high-yielding low-beta stocks that provide good capital appreciation as well as resilient business fundamentals," it said in its market strategy report for 2009.

Its top defensive stock picks are Resorts World, PLUS Expressways, Carlsberg, Asia File, DiGi, TM, JT International, Public Bank, Berjaya Sports and KFC.

TA advised investors to also buy value stocks as the recent heavy bashing in the stock market had left many stocks trading at undemanding valuations.

"It would be worthwhile to look at some of these battered stocks to ride on the future growth when the current turmoil settles," it said.

Its top value stock picks are LCL Corp, KNM, Malaysia Airports, Kian Joo, QSR, Boustead Holdings, Gamuda, Tanjong, AirAsia and QL Resources.

It sees probable downsides for the KLCI next year at 775, 615 or 559 points.

TA is maintaining its "overweight" call on the consumer, oil and gas, gaming and plantation sectors and is "neutral" on the construction, telco and power sectors.

It is "underweight" on the banking, automotive, property and technology sectors as these will be affected by the softer outlook for private consumption.

Tuesday, December 9, 2008

MALAYSIA OUTLOOK - Overwhelming downturn

10th December 2008

The slowdown in the economy in the third quarter,
from 6.7% in 2Q08 to 4.7% in YoY terms and down
to only 1.3% in QoQ annualised terms, largely
reflected the drag from net exports. Since then there
have been indications of slowing private sector
demand compounding the fall in exports.
This has triggered both fiscal and monetary easing.
However, these will provide only partial offset
against sharply declining export revenues. Even
with further interest rate cuts and fiscal measures
pushing the official deficit to 5.8% of GDP (with
additional off-budget expenditure at 1% of GDP or
more) we still believe recession is unavoidable,
maintaining our negative real GDP forecast for 2009.
Private consumption growth slowed in the third
quarter but was still buoyant at 6.5% QoQ
annualised. Auto sales have provided the first signal
of consumption turning down with a 14.7% YoY
contraction in October. This has taken the trend
level of auto sales down to late 2007 levels and
heading south.
Malaysia’s cyclical vulnerability stems from its high
export to GDP ratio at around 100% of GDP. The
slump in global demand will lead to tumbling export
revenues which will spill over to falling investment
and employment growth thereby leading to a further
cutback in consumption. The export downswing has
already started with a 6.7% YoY contraction in
October (US$ terms).
Malaysia is doubly exposed on the export front. It
has suffered a reversal in its terms of trade as oil and
commodity prices have fallen. This year, combined
oil, gas and palm oil exports comprised 26% of total
exports. This was 6ppt higher than in 2007
highlighting the boost to export revenues during the
commodity boom. This will be more than reversed
though, at current low oil and commodity prices
leading to a steep decline in export revenues.
The other exposed sector is electronics with a high
38% share of total exports confronting a severe
global electronics downswing. The effects on the
domestic economy are apparent from job losses and
declining wages in the manufacturing sector (see
second chart). Manufacturing employment
contracted by 1.6% YoY in the third quarter (even
before the 19% YoY contraction in electronics
exports reported in October) while manufacturing
wage growth slowed to 2% YoY, well below the
7.3% average wage growth in 2007.
The trade surplus remained buoyant at US$2.7bn in
October despite the dip in exports. However, larger
outflows on the capital account were evident from
falling foreign reserves which continued through
November. Reserves have fallen by US$28.1bn
from the June peak, equivalent to 22% of total
reserves. As export revenues continue to fall, the
external liquidity squeeze will counter the central
bank’s efforts at fuelling private sector demand
through further interest rate cuts.

Sunday, December 7, 2008

Will US Dollar appreciate?

Martin father, J. Irving Weiss, wrote about the Great Depression before he passed away

"In just three short years between the peak of the stock market boom in 1929 and the bottom in 1932, it felt like the entire world was falling apart.

"The financial bubble burst.

"Giant companies failed.

"America lost 13 million jobs as unemployment surged to 25 percent.

"Industry cut its production nearly in half, and home construction plunged by more than four-fifths.

"Over 5,000 banks failed.

"And yet, despite it all, there was one all-important investment vehicle that not only survived, but actually thrived: The United States dollar.

"Why? Because of deflation and fear.

"Thanks to deflation, prices fell on virtually everything — commodities, farm land, homes, automobiles, consumer goods, even labor. And because of fear, investors shunned risk and sought the safety of cash in greenbacks. Result: The dollar's purchasing power and value surged."

That's What's Happening Today!

Today, like in the early 1930s, unemployment is surging, with over a half million jobs lost in the month of November alone.

As in the 1930s, America's largest financial institutions — Fannie Mae and Freddie Mac, Washington Mutual and Wachovia, Bear Stearns, Lehman Brothers, and Merrill Lynch ... even giants like AIG and Citigroup — have gone under, been bailed out or forced into shotgun mergers.

Most important, as in the 1930s, prices are falling, with fear driving millions to the safety of hard cash.

The net result: The U.S. dollar — virtually given up for dead not long ago — is now gaining steadily and rapidly in value.

In this midst of all the bad news, this is the one, outstanding ray of hope — for two reasons:

First, it indicates that, despite all the economic pain still ahead, the United States dollar will survive and thrive.

Second, it means you are now witnessing the first phase of a dollar rise that opens up some of the largest and steadiest profit opportunities of our lifetime.

So convert some of our assets to US$ and ride the up wave, of course at your own risk.

Friday, December 5, 2008

Recession in US began in December 2007

1 December 2008
http://finance.yahoo.com/banking-budgeting/article/106257/How-Long-Will-the-Recession-Last?
Longer than past downturns, and Wall Street's meltdown will slow the recovery.
Well, now it's official: we're in a recession. And we know when it began: December 2007, according to the official arbiter of business cycles, the National Bureau of Economic Research (NBER), which made the announcement Monday. So now the question is: When will it end, and how deep will it get?
There are good reasons to be worried about both of these measurements, as the headwinds facing the economy are powerful indeed. But it's best to resist the temptation to give in to predictions of unconditional gloom and take a cool-headed look at how this recession compares so far to the many other downturns we've survived.
On the likely depth of the recession, it has been often said that this may be the most severe recession "in decades." This statement is almost certainly true but not particularly informative, as the two most recent recessions, in 1990-91 and 2001, turned out to be famously mild and short-lived by historical standards. So the real question remains: "the deepest recession" in exactly how many decades?
The most intuitive, and legitimate, reference is the 1981-82 recession, which lasted a longer-than-average 16 months and led to a peak of 10.8% in the unemployment rate - by all standards, a pretty serious affair. Still, it would take an extraordinary amount of additional severe damage to today's economy over a fairly long period to drive the unemployment rate from its current 6.5% to double-digit territory.
It is also important to remember that the 1981-82 recession was almost deliberately caused by sky-high interest rates, in the titanic fight of Fed chairman Paul Volcker to drive inflation out of the system. In contrast, the Fed's response now has been to pull out all the stops in the other direction, including the precipitous lowering of short-term interest rates and a barrage of other actions. A somewhat more plausible comparison to the current downturn is the 1973-75 recession, commonly attributed to the surge in oil prices at the time. That one lasted a longer-than-average 16 months and led to a 9% peak in the unemployment rate.
Direct comparisons to the Great Depression have become more common in recent weeks, given the collapse of the stock market and consumer spending. But those comparisons overlook many key facts. During the Great Depression, the unemployment rate surged to 25% and GDP contracted by 28% between 1930 and 1932, an unthinkable prospect in today's environment, thanks to a long list of underlying differences between then and now.
For example, the banking system collapsed in its entirety during the Great Depression and the absence of bank deposit insurance at the time caused catastrophic erosion to household wealth and consumption. Today, FDIC insurance (and its recently elevated limit to $250,000) provides a significant cushion; the response of economic policymakers is immeasurably faster and more aggressive now; and the coordinated actions among the major economies today to address the root causes of the current episode are both impressive and totally unprecedented.
How long will this one last? The prevailing view: probably through the middle of 2009. Two points to highlight here:
First, such a prediction is not based on any particularly refined insight that economic forecasters have into the current recessionary dynamic. After all, economic forecasting has a well-deserved reputation for being a notoriously imperfect art (most definitely not a science).
The predictions about this recession lasting through mid 2009 are mostly based on the following simple calculation: Until the NBER's announcement on Monday, the prevailing view was that the recession probably started at some point last summer and it was likely to be about average in length, by historical standards. Given that the average length of the ten recessions since World War II has been 10.4 months, with a range of 6 months in the 1980 recession to 16 months in the 1981-82 one, the natural "placeholder" time frame for the end of this recession would appear to be the middle of 2009.
However, the fact that the recession is now already 12 months old, and clearly not approaching its trough yet, raises the distinct prospect that it will exceed the length of the 1973-75 and 1981-82 recessions (both at 16 months), making it the longest since the Great Depression (43 months, from August 1929 to March 1933). The crowd fond of making comparisons to the Great Depression will be quick to declare some kind of victory on this one.
Second, the prediction that this recession may end around the middle of 2009 is not unreasonable, but even if accurate it disguises the critical question: What kind of a recovery is likely to follow? The answer is: probably a gradual one, unlike the more typical (but not universal) pattern of the economy coming out of most past recessions roaring ahead, propelled by pent-up consumer demand.
The healing process of a deeply wounded banking system, that has already led to nearly $1 trillion of write-downs, will act as a weight around the neck of any economic recovery in the latter part of 2009. Banks will likely continue the slow process of recapitalization and cleaning up the mountains of toxic assets on their balance sheets for a period longer than just the next few quarters.
That task will become even more challenging in the months ahead, as the recession itself will tend to generate an additional amount of toxic assets in their portfolios, impairing their ability to resume a more normal pace of lending. So, even though the economy may technically emerge from the recession in the second half of 2009, the recovery may initially become more of an issue of semantics rather than a robust turnaround in economic activity.
To be sure, this is a major recession and its downside risks in the midst of a highly volatile financial market environment shouldn't be underestimated. There are reasons, though, to believe that its severity and length will ultimately be contained by an unprecedented array of economic policy measures, some already in place, others in the pipeline.
Despite a series of false starts with some of those measures by the Treasury, the Fed's seemingly limitless reserve of innovative actions and the incoming administration's commitment to put in place a particularly aggressive fiscal stimulus package should gradually gain some traction that will help stabilize the economy within the next three quarters or so.
Anthony Karydakis is a former chief U.S. economist for J.P. Morgan Asset Management and currently an adjunct professor at New York University's Stern School of Business.
Copyrighted, Fortune. All rights reserve

Tuesday, December 2, 2008

RESORTS - How low can it go ?


If Resorts share price returns to historical P/B trough of 0.9x this implies a share price of RM1.45 (FY09 PER 7.2x -36% downside risk). Foreign shareholding remains relatively high at 36% as at end Sept 08. Maintain UP with TP RM1.80.

Monday, December 1, 2008

High yielders ; Value pick

2nd December 2008
Dividend picks. In the medium term, concerns about growth
will likely continue to weigh on the market. In this
environment, we like stocks with relatively resilient dividend
flows. Despite projected slower economic growth, we
expect Public Bank’s operating parameters (asset quality,
loans growth, ROE momentum) to remain strong and
support dividend yields of 7-8%. Utility-type earnings at YTL
Power and PLUS Expressway should be relatively resilient to
sustain high dividend payouts. BAT should also be a safe
haven for dividend seekers.
Value stocks. With the market’s 40% YTD drop, several
stocks have tested lows last seen in 1998. Our picks here
are IJM Corp (0.5x FY10 BV, below 1998 low of 0.6x), WCT
(0.9x FY09 BV, versus 1998 low of 0.8x), AMMB (0.7x BV,
lowest since 1999) and KNM (0.9x BV, all-time low).
Downside for Sime Darby, Maybank and BCHB. On the
other hand, we see further downside for Sime Darby, being
the most expensive in the sector at 10.8x FY09F EPS with
projected 44% drop in earnings and lower dividends. For
Maybank, we see risks in the consolidation of its
acquisitions, especially BII, and are concerned about the
potentially higher borrowing costs it might incur for the rest
of its capital raising exercise. BCHB remains Fully Valued on
continued weak capital market activities. There could be
further increases in operating expenses resulting from the
consolidation of its acquisitions (i.e. Lippo-Niaga merger and
Bank Thai).

Wednesday, November 12, 2008

Watch out when DJIA hits 7,000 - 7,500 . bottom buy opportunity

This week could be a major turning point for equity and commodity markets. The US DJIA has likely completed the wave “d” of the triangle formation and only needs one more leg up to complete wave “e”. This should then be followed by one more major down leg targeting the DJIA at 7,000-7,500pt, likely a major bottom. The Dollar Index (DXY Index) which has been trading sideways for the past three weeks in a triangle consolidation finally broke out last night, currently trading at 87pt this morning. Dollar Index should surpass the 90 levels soon. This could mean trouble for global equity markets as there has been a strong inverse relationship of the US$ and global equity markets since Mar this year. As such, it is not surprising crude oil below US$60/barrel last night, currently at US$58/barrel. It is likely that crude oil could fall towards the US$50/barrel levels before a major bottom sets in. We will provide more details on global equity and commodity markets in our next Alpha Edge end of this week.

Tuesday, November 11, 2008

Panic and opportunity

Nearly everywhere you look, another massive corporation is announcing staggering losses and begging Washington for billions to avoid bankruptcy.

CASE STUDY #1 — General Motors: $25 billion wasn’t enough — needs $50 billion more to survive! GM’s sales are down 20% in a year. Its share price is down nearly 90% — from $31.14 a year ago to $3.36 at yesterday’s close.

The last time GM stock was this low, Harry Truman was in the White House, and Elvis Presley was in grammar school. And now, analysts are warning that America’s largest automaker may soon be worth zero.

Investors have every reason to fear for GM’s survival: Last Friday, GM posted a $2.5 billion net loss for July, August and September, bringing its 2008 losses to $21.3 billion.

Worse: Yesterday, the company revealed that despite the $25 billion in Washington aid already on the way, it is now burning through its cash reserves at the staggering rate of $2.3 billion per month.

The company’s top executives now freely admit that without a bailout, GM will likely go broke in the first half of next year.

Alarmed that an estimated 1.4 million GM workers and suppliers could suddenly find themselves out of work, House Speaker Pelosi huddled with car company executives to arrange another, additional bailout of up to $50 billion. And during his visit to the White House yesterday, President-Elect Obama urged President Bush to sign the bill when it passes Congress.

CASE STUDY #2 — American International Group (AIG): $150 billion refinancing announced yesterday!

First, the Fed gave AIG an $85 billion line of credit in a failed attempt to save America’s largest insurer.

When that failed to work, the Fed added $38 billion more through its borrowing facility.

And when the company continued racing towards failure, the Fed agreed to buy more billions of AIG’s toxic commercial paper.

Now — just yesterday — after announcing it still lost a whopping $25 billion in July, August and September, the government revealed that it refinanced AIG’s earlier loans with better terms and gave them still MORE money, for a new, total rescue package of $150 billion!

That’s just ONE single company, and already it has gotten as much money as the entire U.S. population got from the economic stimulus package of 2008.

CASE STUDY #3 — Fannie Mae: Losing money so fast, it could need as much as another $100 billion or shut down completely!

Despite the $100 billion already spent to bail out Fannie, the company has revealed that it lost a staggering $29 billion in the third quarter — an announcement that means America’s largest mortgage lender will probably need untold billions more to avoid a total shut-down.

Ten Billion Here ... A Hundred Billion There ...
Before You Know It, You’re Talking REAL Money!

Anyone who thinks that these three companies are alone — and there won’t be hundreds more lined up behind them to demand their share of the greatest bail-out bonanza in history — is dreaming.

Just yesterday, we heard more calls in Congress for a second huge stimulus package in an attempt to get shell-shocked consumers to begin spending again.

And anyone who believes the government can magically create all of this wealth out of thin air is greatly mistaken. They will have to BORROW the money. Indeed, last week — even BEFORE this latest news hit the wires — the U.S. Treasury announced that it will borrow a total of $550 billion — more than the entire deficit for ALL of fiscal 2008 — just in the last quarter.

But even that record-smashing amount is only the tip of the iceberg: Goldman Sachs analysts announced that, to finance an $850 billion federal deficit ... to buy $500 billion in bad assets ... and to roll over $561 billion in maturing Treasury securities, Washington will have to borrow TWO TRILLION DOLLARS!

Worse: That $2 trillion will almost surely STILL not be enough: Just to cover the bailout loans, investments and commitments the government has announced SO FAR, the total bill comes to a whopping $2.7 trillion. (See table at right).

As the U.S. economy continues to crater ... as federal tax revenues continue to plunge ... and as Washington continues to run amuck with new bailouts ... Washington could easily add another $1 trillion or even more to this borrowing spree!

A NEW Orgy of U.S. Government
Borrowing Is Directly Ahead!

This reality — the fact that the greatest tidal wave of Treasury bonds in history is about to slam into the markets — means two things:

1. Plunging bond prices: Like any other investment, when the supply of bonds rises, bond prices fall. Given the mind-boggling size of this borrowing binge, we’re now staring down the barrel of one of the most devastating bond market crashes ever.

2. Huge profit potential for contrarian investors like us: Investments that soar when bond prices plunge are about to give you the opportunity to multiply your money throughout the rest of 2008 ... throughout 2009 ... and beyond!

In fact, this great government borrowing binge gives us not just one, but TWO opportunities to go for windfall crisis profits in the weeks and months ahead ...

WINDFALL PROFIT OPPORTUNITY #1:
These New, Little-known Investments
Can Hand You Triple-Your-Money Gains
When Bond Prices Plunge ...

Years ago, unless you were a registered government bond dealer, it was impossible to profit from a bond market decline. You were not allowed to sell Treasury bonds short to profit from their decline. And later, even with the advent of Treasury-bond futures, the risk was too great.

Not any more! For the first time in history, you now can buy a simple, exchange-traded fund (ETF) that was specifically created to PROFIT from falling bond prices.

The basic principal is very simple: The more the government has to borrow, the more bond prices are likely to decline ... and the more bond prices decline, the more money you stand to make!

PLUS, for the first time in history, there is ALSO an ETF now available that lets you DOUBLE your profits as bonds crater: With each $1 decline in the bond price index, you make $2!

Best of all, you can grab that huge profit potential without buying futures or options, without selling short, and with ...

Simple, easy-to-trade EXCHANGE TRADED FUNDS: No exotic investments, no margin, no foreign accounts — just buy or sell ETFs in your regular broker account. If you can buy 100 shares of AT&T, you can just as easily buy 100 shares in these special ETFs, online or offline.

Low cost of entry: Ideal for investors with as little as $5,000 to invest and also for investors with $100,000 or more ...

ETFs that hand you TWO dollars for every one dollar that stock or bond indexes fall: When they drop 15%, you could make 30% ... when they fall 30%, you could grab 60% ... and when they plunge 50%, you could double your money!

Five layers of protection to shield you from excess risk: Designed to help you minimize risk and maximize your returns, making you steadily richer every time stocks plunge ...

All for just $2.46 per day: Recos designed to multiply your money every month for less than the cost of your morning coffee!

If, for example, bonds fall as much as they did in the bond market crisis of 1980, you could see gains of as much as 200% in my favorite inverse bond ETF.

Given the sheer size of this precedent-shattering borrowing spree, I personally think you’ll do much better. But even if bonds only fall half as much as they did in 1980, you could double your money in a relatively short period of time.

WINDFALL PROFIT OPPORTUNITY #2:
These Inverse ETFs Can Hand You
Many MORE Doubles As Crashing Bonds
Take Stocks to New Lows!

The fact is, if these inverse ETFs on bond prices were the only way to go for huge gains as the government’s borrowing binge unfolds, your profit potential would be enormous.

But the wealth you can amass directly from sinking bond prices is only the beginning.

Your second windfall profit opportunity is with ETFs designed to profit from falling stock prices — both in the U.S. and abroad. With the U.S. government borrowing massive amounts and pushing interest rates higher ...

Millions more consumers will find it increasingly impossible to make payments on mortgages, credit cards, auto loans and revolving charges, pushing more lenders to the brink of collapse ...

Companies that manufacture, transport and sell high-ticket items like automobiles and trucks ... flat panel TVs, computers and other electronics ... stoves, refrigerators and other home improvement products ... will suffer greater losses than ever — and many will go belly up ...

The stocks of those companies will crater as earnings turn into massive losses, driving the Dow, S&P and Nasdaq into the most severe tailspin we’ve seen so far ...

And the inverse ETFs on those indexes and sectors will skyrocket, spinning off gains of 46.1% ... 89.9% ... 106.7% — in some cases in as little as a few days — or even in a single trading session!

The simple truth is, with just one trade this summer, these double inverse ETFs could have helped you turn $5,000 into as much as $10,335 ...

Or $50,000 into $103,350 ...

Or $100,000 into a whopping $206,700 ...

All in just a few weeks!

On big down days in the market, you could make those kinds of gains in just a few HOURS! But I don’t stop with just helping you go for huge gains on single days: My Crisis Opportunity ETF Trader is designed to help you COMPOUND your gains — month after month — as long as this crisis lasts!

And in this super-volatile environment, only inverse ETFs can make those kinds of gains possible — all in a regular brokerage account, even an IRA!

Even last summer — between May 15 and July 15 — when stocks were far less volatile than they are now, inverse ETFs could have handed you gains of 30.9% ... 46.1% ... up to 106.7%.

Thanks to these inverse ETFs, you could have banked ...

  • A healthy 30.9% gain between June 5 and July 15 as the technology sector declined ...
  • An impressive 37.2% gain between June 5 and July 11 as the semiconductor sector fell ...
  • A tidy 37.7% gain between May 15 and July 15 as the consumer services sector dropped ...
  • A tasty 46.1% gain between June 5 and July 15 as the real estate sector plunged, and ...
  • A whopping 106.7% gain — more than a DOUBLE — between May 15 and July 15 as the financial sector cratered.

And more recently — as the markets became more volatile in September and October, these inverse ETFs could have handed you ...

  • A 49.6% gain in just 14 days as the semiconductor sector declined between October 1 and October 15 ...
  • A 61.0% gain in just 15 days as the technology sector fell between September 25 and October 10 ...
  • An 89.13% gain in just 19 days as the real estate sector dropped between September 26 and October 15 ...
  • An 89.6% gain in just 19 days as the consumer services sector plunged between September 26 and October 15, and ...
  • An 89.9% gain in just eight days as the financial sector cratered between October 1 and October 9!

Unfortunately, you can’t go back in time to grab those gains and neither can I. But it’s crucial to understand two things: First, in each case, your money would only have been at risk for a brief time, and second, over time, these kinds of short-term gains could easily multiply your money three times ... four times ... even five times over!

And now, with soaring interest rates, global stock markets are setting themselves up to get crushed again, and my favorite inverse ETFs on foreign stock markets could give you even greater profits in a shorter period of time!

Inverse ETFs:
The Best of All Possible Worlds

I love using exchange traded funds at a time like this. Of course, losses are always possible with any investment vehicle. But like mutual funds, ETFs spread your risk over a basket of securities. And as with mutual funds, you can trade them in your regular brokerage account. You can even put them in your IRA if you wish.

But that’s where the similarities end. UNlike mutual funds ...

  • ETFs cost less to own. They never nick you for loads or 12-b1 (marketing) fees.
  • You always know what your ETF owns. You can check online, anytime, 24/7.
  • ETFs are priced continuously through the trading day — so you always know precisely what your shares are worth ... and you can buy or sell your ETFs instantly ... at any time of the day.
  • Plus, INVERSE ETFs let you profit when a particular index or stock sector goes down. And best of all, double-inverse ETFs let you earn two dollars for every one dollar the index falls!

Crisis Opportunity ETF Trader’s mission:
To protect your capital and profits
like a junkyard dog.

If history proves anything, it’s that the ONLY way to build wealth consistently over the long haul is to avoid excessive risk like the plague. Doing everything I can to limit any losses is the only way to compound your profits over time and to turn a molehill of money into a Mount Everest of money.

That’s why Crisis Opportunity ETF Trader aims to protect your money and your profits in five, crucial ways:

1. No Margin: I never, NEVER, recommend using margin accounts or borrowed money. So you’re never exposed to the high risk of shorting or speculating in any leveraged futures or options.

2. You’ll Never Have All Your Eggs in One Basket: Because I use exchange traded funds, your investment is always spread out over a basket of stocks or bonds in each fund. Plus, my strategy is to own more than one ETF at all times to further diversify your portfolio.

3. You’ll Never Get Locked in to a Buy-and-Hold Strategy: Crisis Opportunity ETF Trader is always flexible and nimble — ready to get you into a position or to take your money off the table quickly. That’s a critical risk-protection feature in today’s volatile market.

4. I Use Every Possible Tool to Keep You Where The Most Profitable Action Is: I use every cutting-edge fundamental and technical tool available to focus your investment on the sectors that I believe are most likely to suffer the greatest declines — and to get you to the sidelines when the time is right.

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Panic in US

NEW PANIC IN WASHINGTON!
Hundreds of Billions in NEW Bailouts and Handouts Set to Slam Bonds and Stocks!

GM needs $50 billion more ... Fannie and Freddie could need $100 billion more ... AIG gets $150 billion refinancing ... PLUS Congress has a NEW $100-billion-plus stimulus package on the way!

Q: Where will it all end?
A: In the greatest orgy of government borrowing in recorded history!

Thursday, November 6, 2008

AUD is weak

By Candice Zachariahs
Nov. 7 (Bloomberg) -- Investors should sell Australia's
currency against the U.S. dollar because it may lose 29 percent
as it slumps toward a record amid a global recession, Morgan
Stanley said.
The Australian dollar, which dropped 27 percent in the past
three months, may decline toward its April 2001 low of 47.75 U.S.
cents as investors dump the nation's higher-yielding assets and
retreat to the safety of the greenback, according to Ned
Rumpeltin, a London-based currency strategist at Morgan Stanley.
``The most immediate concerns about the financial system may
have eased, but worries about global growth prospects are now
coming to the fore,'' Rumpeltin wrote in a research note
yesterday. ``There is considerable scope for further declines.''
Australia's currency dropped the most in a week, falling 2.5
percent to 66.20 U.S. cents as of 12:07 p.m. in Sydney from 67.86
cents late in Asia yesterday. It reached an all-time high of
98.49 cents on July 16.
Morgan Stanley lowered its forecast for the Australian
dollar last month, predicting it would fall to 57 cents by year's
end and then touch 47 cents by June 2009, the lowest since the
currency was first freely traded in December 1983.
The Aussie, as the currency is called, has tumbled since the
collapse of Lehman Brothers Holdings Inc. in September paralyzed
credit markets and caused equities to tumble as concern over a
global recession spread.
The International Monetary Fund yesterday predicted that
global growth will slow to 2.2 percent next year amid the first
simultaneous recession in the U.S., Japan and euro region in the
post-World War II era. A growth rate of 3 percent or less is
``equivalent to a global recession,'' the IMF said as recently as
April.
The Australian economy will grow 1.8 percent in fiscal 2009,
according to the IMF, as a A$10.4 billion ($6.85 billion)
stimulus package from the government and aggressive interest rate
cuts by the central bank boost the domestic economy.

Tuesday, November 4, 2008

Has STI bottomed out?


STI on 28 October dropped to the lowest point at 1,473. On that day, STI was at 95%

pessimistic line of the linear regression chart, suggesting that the pessimistic sentiment had

reached its lowest level.

For the past 10 years, whenever STI fell to 95% pessimistic line of the linear regression

chart, market began to turn around, as happened in 1998 and 2000. Similarly, when the

trend line was at 95% optimistic line, market also turned around, as in 1997, 2000, and 2003.

Up to now however, I find out that they are coincidental occurrences which I do not have

any theoretical explanation to prove the certainty of the accuracy of the chart. Nevertheless, I

believe the chart is definitely worthwhile for reference purposes.

STI in a short span of 3 days rebounded approximately 25%. The rebound velocity was

too traumatic. We could expect volatile fluctuations in the near term.

The financial tsunami is terrifying. I have never seen it before in my life. Cautious

navigation gives you safe voyages for many years to come. I would not suggest you put your

stake with what you have, but keep at least 50% cash with you until mid year next and to

observe how the market trend develops. The post financial tsunami effects will be traumatic.

Rebuilding devastated properties after tsunami takes a long time.

Many people puzzle over how the United States, the country that causes the financial

tsunami, the government that prints currency notes to save the market could lead to US$

appreciates so much. This has upset the financial system worldwide. Beside US$, Japanese

yen also appreciates.

The appreciation of US$ and Japanese yen induce many people to dispose of stocks

and convert other currencies to US$, and deposit monies into American banks. The

American banks however, dare not lend out monies, and US remains short of funds.

3 months ago everybody thought US would wantonly print paper money, and US$

would devalue; everybody sold US$. When US$ strengthens, the scenario turns around;

people rush to buy up US$, upsetting the worldwide market to such an extent that no

traditional analytical explanation is feasible. The only explanation is: the market has become

a big gambling den.

Governments worldwide have come out to rescue the market. I am thus basically

optimistic. The only worry is the collapse of market confidence which would take a long time

to recover. On top of it, there are many gamblers playing the market everyday, making it so

much irrationale.

For now you must try to curb your greed and fear sentiment. Fear on account of stock

holdings that see the market’s dip; greed on account of chasing stocks on market’s rise.

Share prices have dropped to relatively cheap level. The appropriate stock holding and

cash ratio should be 70% to 50% cash, or 30% to 50% stock holding. It all depends on your

own risk tolerance. Never borrow money to buy shares.

Friday, October 31, 2008

CIMA

Suspension of trading for CIMA shares in Bursamalaysia is 3rd November 2008

Take over price is RM6.26

Monday, June 16, 2008

Privatisation of Takaful

BIMB Holding (RM1.20) plans to take Syarikat Takaful private? No price mentioned.
NTA of Takaful is RM1.86, EPS FY2007 is 13.83 sen
After privatisation Mideast investors will be invited to take strategic stake in Takaful (17/6/08).
Syarikat Takaful is currently trading around RM1.82.

On 19/6/08 BIMB denied that it plans to take Takaful Private but is in talk with the Mideast investor.

Anyone has any comment? Feel free to post your comment.

Thursday, June 12, 2008

Unico-Desa Plantation has potential of RM1.40

Unico-Desa Plantation which is currently traded at RM1.00 should be a good buy.

It will pay 5 sen dividend around 23/10/08 (date is just my guess). Valuation at current price is fair and some kind of M&A to trigger a mandatory general offer may happen soon . EPS last year is 8.84 sen so at RM1 PE= 11.3

Even if the price goes side-way from here the yield is attractive and so just lock it up as long-term investment. Good luck.
(12.6.08)

Friday, June 6, 2008

Current Counters with General Offer

1. 7th June 2008, HeiTech Padu... rumour saying that PNB may be making a General
offer for HeiTech Padu shares. No mention of price involved. Yesterday HTpadu
closed atRM1.37 (reference to STARBIZ on 7/6/08) Looks like it is supported at
around RM1.30 (12.6.08)

2. UEM Builders... UEM World may make a mandatory general offer for UEM Builders at
RM1.42. If general offer fail the positive
point is UEM Builders has order book of RM2.9bn and analyst attach a target
price(TP)of RM2.00(with reference to Credit Suisse report on 2/5/08)

3. Loh & Loh .. General offer at RM4.85 (cash)by UBG .. may be targeted for
completion 3Q08 Note: 18/7/08 UBG acquired 37.6% Loh & Loh and is now extending to
acquire the remaining shares with the deadline on 29/8/08 (Friday)


4. Putrajaya Perdana..General offer at RM4.85 (cash)by UBG .. may be targeted for
completion 3Q08 . UBG on 18/7/08 has 49.1% of Putrajaya Perdana and on has
extended to acquire the remaining shares at RM4.85 with the deadline of acceptance
on 29/8/08 (Friday)
Last day to accept the General Offer is 29/8/08 (Friday)

5. UBG ... General offer at RM2.50 (cash)by Majestic Masterpice .. may be targeted
for completion 3Q08

6. INTI ... General offer at RM1.20 by Laureate Education (listed in US) ..may be
targeted for completion 3Q08