Velo Invest

Trade: Magnum & Tanjong

2007-03-28T21:11:00.000+08:00

Yesterday, I made a major move by selling all my 13000 units of Magnum share at RM3.30 and the remaining 1000 units of Tanjong at RM15.90. The main reason that I did the sell-off was I am getting worried with the U.S. economy development and I believe the whole global market will be dragged down by it, regardless it will be a soft or hard landing. The fact that many Americans are spending way beyond than what they made and tougher credit facilities to fuel the consumer purchase which triggered by softening of housing market is undebatable. Besides, many local analysts although did upward revise their target KLCI index from 1300 to 1400 by year end, but to me it is not a big margin from what we are today and the risk of going down has out striped the potential of thin gain anticipated.

If I look at the earning of Magnum which is about 16 sen per share, at RM3.30, PE is ~20.5. Compare to BJTOTO with 36 sen per share earning, PE at RM4.40 is only ~12.2. This is way too high for Magnum. Even if we factor in a potential capital return of RM1.00, PE of Magnum at RM2.30 is still ~14.4. I have long never did such a PE calculation on Magnum and was surprised with the figure. Hence, I reckon it is now a good time for me to sell off the share, and keep a close eye on it. Hopefully I can pick it up later when it drops below RM2.80.

Below is my latest share portfolio after yesterday trading.

Portfolio 10-Mar-2007

2007-03-12T04:06:00.000+08:00

With the recent rebound of KLSE, my overall portfolio value also goes up by ~1.8% or RM 1630 compare to last week.

Along the week, I made a contra trade on Genting-ca. I bought 10 lots of Genting-ca on Monday with price 70 sen and sold it on Thursday at an average price RM1.16. It was never intended to be traded in such a short time, and the idea of contra play did not ever strike across my mind when I picked up Genting-ca. All just happened spontaneously, following the strong rebound of market. To me, at 70 sen, I strongly feel Genting-ca is a very good bet (there was no big fundamental change at that time and only some negative speculation on spread) and at ~RM1.20, I also think it's value is near saturation. To me, it was a psychological battle against the majority who drives the KLSE trend. Buying the call warrant is my strategy to leverage the amount of my bet. Besides, I really do not think that Genting will drop the ball of Sentosa casino business that was already in its hands. It will be such a hard slap on its face if that happens.

Moving forward, I foresee that KLSE will be very volatile. Genting-ca was my first trade in my "hit n run" portfolio. At this point of time, I do not intend to share and maintain a second portfolio here as I have no time to update it frequently. The amount allocated for this other portfolio is around RM 10k, which is the money that I am willing to lose. It will be a high risk investment as my strategy is generally to go against the big market trend. I will pick up over sold, good value, high liquidity counter that has strong market correlation and sell it out when market stabilized. I am not sure how many more cycle of correction will the market be undergoing before it reaches the peak and / or it starts melting. As of now, I think the market is still in uptrend and it will be quite safe to bet if there is another round of correction to come. In view of the limited fund size, I will also likely to concentrate more on warrant or call warrant. Currently, stocks on my radar are such as Bursa-cb, TA-wb, Megan and of course Genting-ca.

Tanjong has slowly regained its lost over the last few trading days. Again, I am looking forward to sell out the remaining 1,000 units if it reaches RM15.50. I am actually quite regret that I did not sell all when it was ~RM16.00, not very long ago. While for the others, especially on Magnum (but exclude all REITs), I will hold on until the very last days of first half of the year, in hope for the market peak.

Portfolio 3-Mar-2007

2007-03-04T18:20:00.000+08:00

Have been more than a month I did not update my blog. Here's how my latest portfolio looks like...

KLSE has taken a sharp correction since last week and as a result, at least RM13k of my portfolio value being wiped off within just a few days. I called this as a correction because I still believe the bullish trend is intact and such a retreat is expected in a bull run. The fundamentals of our economy has not changed much, at least not to a point that is justifiable for a major market melt down. Although I still believe in my earlier prediction that in future ~6 months or so a real bad economy (both global and local) will start to surface, I am quite optimistic on near term market. As such, I really hope that this correction will be very short and market can rebound and pick up its earlier strength as fast as possible. In short, I believe we have not yet reached the peak of the bull. However, if the poor sentiment keep on circulating KLSE for any longer than 1-2 months from now, I will have no choice but to start dispose all my equity holding. I foresee people will start feel the pinch of the slowing growth of US economy when entering 2nd half of the year.

In last month, I indeed disposed majority of Tanjong share. The average selling price of Tanjong was done at RM15.20. It was not the highest price that I managed to sell, but I am quite relieved that I still made about 12% of profit from the investment excluding dividend. Part of the proceeding was used to purchase 1000 units Tenaga at RM12.30. The decision to purchase Tenaga was driven by its outstanding quarterly result announced recently. Nonetheless, right after my purchase of Tenaga, its rise of share price came to a halt. It seems that probably some funds were starting to dispose it to cope for profits.

Another purchase made last week was 2000 units Tawin at RM1.50. I picked up Tawin in view of its undemanding P/E of 3.8 compare to its peers e.g. Metrod. I bet only a small amount of Tawin as I view it as a speculative move in hope for rising copper price and rumour of potential takeover.

In coming a week or so of market "correction", I am eyeing to buy in more Magnum at price below RM2.80. I still believe Magnum has a lot values in it and those big guns buying at price higher than RM2.80 will not be such an idiot to see their investment eroding away. It is just a timing problem for them to "unlock" its value and take profit of it. Just hold on and perhaps enjoy a few sticks of "Magnum" ice-cream while waiting for the show to put on stage.... hahaa

Despite the recent retreat of stock market, my investment in Public Mutual PBOND and PIBOND are continuing register a steady return. Both have grown ~5.5% and ~4.2% respectively in exactly 6 months. My unit trust agent has been pushing me to switch to equity fund about a month ago and I am relieved that I did not do that. Otherwise, I would have suffered great lost as many of the equity funds are dropping sharply following the market. Although many has said (and practiced) that when investing in stock market or mutual fund, we ought to follow the big market trend. However, I believe strongly in the theory of contrarian, which tell me why majority of peoples loose big time in investing while only a handful of them make huge profits!

Portfolio 27-Jan-2007

2007-01-28T16:36:00.000+08:00

Despite KLCI continues to inch up 1.93% to 1169.89 points this week, my portfolio has grown 9.3% (or RM10,480), beating KLCI by a huge margin! In my memory, this is my most impressive gain in a week.

REIT has risen a lot since last week. AXREIT jumped from the lowest RM1.62 to now all time high of RM1.85, gaining ~14% in just one week. Similarly, STAREIT also managed to chunk out a weekly gain of ~12%. The sharp increase in REIT price in my opinion is driven by active foreign participation, as can been seen by the supported trading volume. As predicted, with the strengthening trend of RM, all the MREIT prices are due to be revised by market.

However, my view for its coming few weeks is most MREITs will rise to a saturated point and maintain until there are further good news from the government. Also, even though the government said they are comfortable with current RM exchange rate, I doubt they will let it continue to rise beyond RM3.40. If both AXREIT and STAREIT managed to hit near RM2.00 and RM1.00 respectively, I am willing to let go all my stake of it. They are no longer appeal to me from the yielding perspective and to lock-in the profit now is a much wiser move.

Another strong mover in my portfolio this week is Magnum. My stance on Magnum has not changed, I will hold on Magnum until the end of this bull market or until the much anticipated capital return being announced. Since my entry price of Magnum is relatively low, I am willing to take this bet.

Along the week, I have also added 1000 units Tenaga @ RM12.30 into my portfolio. For me, this is purely a speculative move. According to OSK, the PER for FY07 at current price is ~20.5, with estimated EPS of 59 sen. To me, this is ridiculously high and from fundamental point of view, I rather dump my money into Tanjong than Tenaga. However, Tenaga is a much more active counter than Tanjong and given the latest impressive earning report in such a bullish market, I am quite confident Tenaga will continue to rise in tandem with market. This is sort of my "hit n run" strategy for the time being.

Portfolio 20-Jan-2007

2007-01-21T21:14:00.000+08:00

My portfolio underperformed KLCI this week, where KLCI rose 2.54% while my portfolio return dropped from 14.3% to 13.8%. This is mainly due to the lost suffered from AXREIT, which I am aggressively picking up the stock lately.

Along the week, I have also made 2 additional purchases of AXREIT, at 2000 units each time with price RM1.66 and RM1.62 respectively. The purchase at RM1.66 was a mistake, as I have keyed in wrongly the figure. My intended price to purchase was indeed RM1.62. Nonetheless, I was relieved that the cost of my stupid mistake was not huge. This serves as a lesson for me to be more careful when placing an overnight order in future. AXREIT will be announcing its quarterly result together with the half yearly income distribution very soon and I think that is the reason its share price jumped back to RM1.65 at the very last hour of trading on Friday. With expected half yearly income distribution of ~6 sen, the yield at RM1.62 is an impressive 7.4% p.a. I am confident that the stock will gain more attention from foreign investors as its liquidity being improved by public placing of 50 millions new shares in near future and along with the strengthening trend of RM.

As I am exiting the "bull" market slowly by shifting my holding in equity to more secured and stable instrument like REIT and bond fund, I am also considering setting up a small amount of "hit n run" speculative portfolio, say RM5,000 to RM10,000 and buy into volatile counters such as warrant or call warrant to take profit of the current bullish trend. It will be a very risky portfolio and fundamental of these stocks are not among the important selection criteria. I will be likely picking up counters that are very linked to the KLCI index and play with the fluctuation. As of current, I am still considering it and fighting with myself as how much money to set aside and willing to lose.

Will it be too late to enter market now? What is your say?

Portfolio 13-Jan-2007

2007-01-14T17:02:00.000+08:00

Finally, this is my first portfolio update of year 2007. Compare to my previous portfolio which is about a month ago, there has been some major changes.

First, I have disposed all the non "core" investment counters, such as MTD and KASSET. I would like to start off my new year portfolio which is more streamlined and focus on only few selected counters. MTD was disposed at RM2.10 per share while KASSET was sold at RM2.55 averagely. From the trade of MTD, I roughly made a profit of 16% (or RM550) while for KASSET, all the 266 units were essentially obtained for free, deriving from the share distribution of IGB held previously. I am quite satisfied with these trades.

Secondly, I have topped up my investment in AXREIT while added STAREIT into my stock selection. For the latter, I strongly think that market has under valued it at current price of ~83 sen. Although there are few drawbacks on STAREIT which I have posted here previously, with its recent asset acquisition of The Residences (story here), its outlook has changed to be more positive. Furthermore, I also believe the Malaysian REIT investment scene will be much improved in this year, while I am still expecting the stock market to have a sharp correction (hopefully not a hard crash) in very near future. With the potentially brighter future of REIT (related story here), I reckon shifting from common equity to REIT is a safer bet.

On Magnum, there is a very good perspective of view that I strongly recommend it to every Magnum investors (link is here). My personal take is to hold onto it as long as I can, hopefully until the day that all the retail investors are rewarded accordingly (by capital repayment...etc) but not until the worst when bull has finally died and bear is ruling. I have confidence that the best is in making rapidly in view of recent high volume surge of the counter.

As for Tanjong, I start losing patience with it. Time is running out and it doesn't seem to move along with the major market. Moreover, the overdue IPA issue with Tenaga is still hanging. There is no announcement and the fact that Tanjong is heavily rely on this income stream makes me feel very uneasy. I think I will very soon make some moves on Tanjong.

New Year Resolutions

2006-12-11T00:47:00.000+08:00

Since there is only 3 weeks left for year 2006, I figure that it is wise now to start setting my next year resolutions. For the sake of matching the theme of this blog, I will only discuss my investment resolutions here. Nevertheless, I do agree with many others that life is not just about money, there should be many other things more to achieve and do while alive.

Well, while having other personal resolutions, I think that, sincerely, all those listed here are the most direct and perhaps easiest goals for me to execute and achieve.... hahaaa. Reasons? I think I have a clear mind what to do with my investment and next year is a cautious year for me, thus I have no aggressive goal. Oh yeah, it is also because I need to put more efforts into my other more complicated personal resolutions....hehee...

So, there are only 3 main goals for my investment next year:
1) Achieve 10% nett return for equity, bond and cash that are set aside for investment
2) Maintain 4% nett return on property
3) Increase RM50k on my net worth

On my first goal, I need to boost my return as much as possible before end of 1H 2007. I reckon that when I switch from equity to bond fund in the 2nd half of the year, my expected return will likely less than 10%. In addition, the target of 10% return is including the cash that I will allocate for investment. Hence in term of actual value, I am targeting to achieve roughly RM20k yield. Unfortunately, I am not ready to share all my investment details yet. I feel more comfortable to leave some privacies on the amount of cash and other personal net worth I have at this point of time. My apologize for that. Specifically on stocks, I am targeting to gain additional RM10k by end of June '07, before cashing out from KLSE and settle to 10:90 of equity to bond ratio.

For my second goal, I need to start looking for new tenant after March next year as the current one will end in June. I cannot afford to leave vacant for more than a month with the property, unless I can find a new tenant myself and save on the additional 1 month commission to agent. My strategy is to talk to my current tenant next year and pay him some money if he can find me a new tenant as soon as his one ends. I expect that will be easier for a foreign student to get his pals to rent my place than scouting for new one myself.

On my last goal, its success is really depended on how well I can execute my first and second goals. If I managed to achieve the first 2 goals, that will only leave me roughly RM25k to grow. From my past record, it is not too difficult. With some salary increments factored in, all I need to do is maintain my current level of life style and minimize the big ticket purchases, especially purchase of those "nice-to-have" tech toys... hahahaaa.

Last but not least, along the course of making money, we must not forget to give back bits and bites to the society. Hence, it is one of my small resolutions next year to donate 2% out of my net worth growth back to the charity and people in need. Also, I would like to declare that all income generated from this blog (thanks to all my readers) will be donated out. Hopefully I will receive my first AdSense paycheck in next year and to all my fellow readers, please let me know by then your choice of charity to donate to!

Portfolio 09-Dec-2006

2006-12-10T21:19:00.000+08:00

Week to week, my portfolio value gained 5.13% against KLCI rise of 1.71%, owing to the sharp increment of Magnum and Tanjong.

On Magnum, although I mentioned that I will consider to dispose partial of it when it reaches RM2.40 last week, it ended that I did not sell any. This is mainly because from technical point of view, the strong rise in price (passing my RM2.40 target) together with volume, in my opinion, should not be a short stint. I decided to hold it a bit longer.

Tanjong should reveal its quarterly earning in the coming week. For the past 2 quarters, Tanjong results have not been encouraging. As we approaching to the end of year 2006, I am also looking forward for the finalization of long dragging IPA issue. For these two reasons, I decided to put my bet on Tanjong and hold it until there are the announcements. Again, on the IPA matter, I strongly believe that Tanjong and others power providers will not settle on any severely disadvantage deal, base on the length of negotiation time taken.

On my bond fund, there is only a small negligible increment of 0.2-0.3% last week. It current value stands at RM51495.16, from RM50000 invested since early Sept.

Public Mutual Bond Funds (Part 2)

2006-12-10T16:15:00.000+08:00

Public Enhanced Bond (PEBF)
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities redeemable loan stock and money market instruments. It may also invest up to 20% of its NAV in equities of defensive stocks.

Q2 2006 Investment spread:
Fixed income securities - 66.5%
Money market - 15.5%.
Equity - 18%

Comment: Obviously, this bond fund does consist of ~20% equity. In my opinion, regardless how defensive these stocks are, they will still be swung by big market when KLCI starts tumbling. In addition, I prefer to control the equity:bond ratio myself by invest into the 100% bond fund and selectively choose my own "defensive" stocks.

Public Select Bond (PSBF)
Strategy: Primarily invests in fixed income securities which has a remaining maturity of 7 years and below. It may also invest in redeemable loan stock with convertible features.

Q2 2006 Investment spread:
Fixed income securities - 39%
Money market - 61%.

Comment: In my opinion, it is a very conservative bond fund. By limiting the selection to short and medium-term bond, this fund can minimize the risk of inflation, interest rate fluctuation and probably defaulting risk. However the equation of low-risk low return cannot be altered. I think it is only suitable for investor who is very risk adverse or very pessimistic of the future economic outlook. But if that's the case, why not just put into bank's FD?

Public Mutual Bond Funds (Part 1)

2006-12-05T10:14:00.000+08:00

Below are some information that I got from the Q2 2006, quarterly mutual fund report from Public Mutual. It is not the latest info but is sufficient to give anyone an idea on the different investment startegies applied by Public Mutual on its various bond funds.

Public Bond (PBOND)
Strategy: Primarily invests in fixed income securities comprising sovereign bonds, corporate debt securities and money market instrutments. It may also invest in redeemable loan stocks with convertible features to enhance overall returns.

Q2 2006 Investment spread:
Fixed income securities - 95%
Money market - 5%.

Public Islamic Bond (PIBOND)
Strategy: Invests in Islamic debt securities such as Islamic sovereign bonds, corporate debt securities and the balance in Islamic money market instrutments.

Q2 2006 Investment spread:
Fixed income securities - 70%
Money market - 30%.

Comment: Not much different in term of strategy from PBOND except bond selections are limited to those with syariah compliance. Higher % in money market tools.

Public Institutional Bond (PINBOND)
Strategy: Invests in fixed income securities such as sovereign bonds, corporate debt securities and money market instrutments. 50% bond must be minimum "AA" rating while the balance is not less than "A" credit rating.

Q2 2006 Investment spread:
Fixed income securities - 80%
Money market - 20%.

Comment: Although its name has "Institutional", but one glance on the major securities holding reveals that >25% was invested into M'sia Government Bond. Rather misleading with its name...

I will continue this in part 2 as I have too short of time to compile all at once.

Portfolio 02-Dec-2006

2006-12-03T16:41:00.000+08:00

KLCI continues to rise 1.86% this week, hitting 1080.11 points, a 10-years high before the Asian financial crisis. With the current local and U.S. economic fundamentals, I am a bit worried on the speed of this bull. I am afraid we are going too fast over the cliff and will face with a hard crash later. As a matter of fact, it is the law of nature that what goes up will eventually come down. Hopefully for KLCI, it will be a soft landing. This is possible if there are more corrections coming in to support the current level, and both local & U.S. governments manage to improve the economy in short time. At the minimum, keeping down with inflation and for god's sake, take less corruptions!

My portfolio outperformed KLCI this week, gaining 3.42%. This is largely due to the rise of Magnum and Tanjong. Magnum has finally broken the RM2.30 level in the last minute of market closing. MPHB also reported they have gained an additional 9% of Magnum share through open market, raising its share holding on Magnum to 49% on 27-Nov. Thus, I believe that the last minute surge on Friday is due to further share acquisition in order to meet the 51% level. If the surge is sustainable next week, I will consider to dispose partial of Magnum stocks at price >RM2.40. As for Tanjong, I will still hold it, maybe until after its earning report in the coming 1-2 weeks as it is still far from my target price.

On the other hand, as bond has an opposite cycle compares to equity, both my PBOND and PIBOND only increased 0.25% in value on week to week basis. Nonetheless, I am pretty happy with the investment and so far, it has given me about 2.6% return (or ~12% p.a.) in 3 months time, much better than bank's FD. I am considering to put in more money when I start cashing out from equity. In fact, it is the best time to go into bond when share market is rocketing high.

Portfolio 25-Nov-2006

2006-11-27T07:16:00.000+08:00

It has been more than a month that I have stopped posting new article. My apologize for that and definitely I am still very much want to keep this blog alive, at least to the time that I am able to achieve my dream, with 1 million net worth...hahaa

Since my last blog, KLCI has risen from 983.54 to 1060.43 points (or 7.82%). On the other hand, my portfolio value also gone up from 4.6% to 7.5% net return, despite that I have taken some profits from selling out all my stacks of BKAWAN (1000 units) at RM9.50, with roughly 25% profit. The proceeding of that was used to re-invest into Tanjong, by acquiring additional 500 and 300 units at price RM12.30 and RM11.90 respectively.

Todate, BKAWAN has risen to RM11.10 or 16.84% while Tanjong only gained 8.65% in average from my last 2 purchase prices. I admit this appears as now not a smart move, as I have not anticipated that palm oil stocks still have that much of steam to go up despite the cooling down of crude oil price. However, to me, Tanjong is relatively cheap at its current price level, fetching an undemanding PE of 14x and a dividend yield of 5%. Personally, I bet the earning of Tanjong will be improved. This should be seen in its coming quarterly report in next 2-3 weeks time.

MPHB has announced a general offer for Magnum at RM2.30. The intention of this according to MPHB is take Magnum as its subsidiary and hence streamline its operation. MPHB will still want to maintain the public listing status of Magnum after the exercise. This is rather confusing to me. What MPHB meant is to finally raise its stake from current 39.9% to between 51%-75% and takeover the directive control of Magnum Corp? What is the advantage of doing that? Going after the cash pile of Magnum Corp? Yeap, it can become another example of poor corporate governance by scarifying the benefits of retail investors, really disappointed with the management.

Hopefully, this move by MPHB will not be successful. I will now hold on my share of Magnum until the last day of the GO, and praying that MPHB will not achieve the 50+1 percent of shareholding to initiate a conditional GO. MPHB got the pay a higher premium for it to own this golden cow of Magnum and the retail investors like me got to be rewarded appropriately!

Portfolio 14-Oct-2006

2006-10-14T18:26:00.000+08:00

This week, KLCI continues its "mini bull" trend by inching up another 1.29% to 983.54 points, an all time high in nearly 6.5 years. Looking back to my portfolio value compare to last week, it also managed to chunk out a reasonable 2.82% hike, mainly owing to the rise of Magnum.

Magnum has increased 3.3% over the week to RM2.17 due to active share buyback. Technically, I think Magnum is on the bullish trend based on my amateur analysis skill. From the MACD indicator, the bullish centerline crossover has just emerged after a rather weak positive divergence trend. This usually means buy signal. I am crossing my fingers hoping that Magnum will break through its resistance level of RM2.20-2.23 so that I am able to sell out partial of Magnum share at price beyond RM2.50.

Along the week, I also managed to sell out all the remaining YTLPWR-w at price RM0.65. The sudden surge of YTLPWR and its warrant without any positive news posed a great opportunity for me to dispose it totally. From the beginning till now, the whole trading of YTLPWR-w has costed me a loss of RM1450 or -6.96%. I learnt two important lessons from this losing trade. First, never buy any warrant during a stagnant or bearish market. Holding it will not generate any dividend and due to its price leveraging power, losses can be huge. Secondly, never buy a non growth stock at its peak price in a non bullish market. I do not doubt that YTLPWR is a fundamentally strong counter. Unfortunately, I also do not think that it can be considered as a growth stock, that can justifies any consistent price appreciation. The buy-in price of YTLPWR-w for me was as high as RM0.805 in Feb this year and I have to admit this was my big mistake.

On the other hand, my bond fund continues to grow in value. PBOND grows 0.23% while PIBOND grows 0.13%. Total value has increased to RM50,488.79. As of this week, my equity to bond ratio stands at 61:39, still far from my target of 10:90. I have set a dateline until 30th June 2007 to achieve this weighting, in preparation for an economic recession.

Frugal Living

2006-10-08T20:46:00.000+08:00

I came across this article which I like so much and would like to share it here. It is not about the details or information in it, but the important message it conveys: delayed gratification. The author (a blogger) had a frugal living for the past 5 years after his graduation and start working; he lived as if he was still a college student. As such, he was able to build a healthy net worth at young age.

..... To net it down - What I believe I did right was disassociate my spending and living standards from my job salary. Instead every year as my net worth builds, my "expected" annual consumption and living standards grows with my worth.

And I truly agree with his principle, that is to disassociate the level of spending with one's earning. I am a strong believer of this, and this mentality has greatly helped me to leverage the value of my hard earned money. In exchange of some instant short stint of funs, I gained more years of easier life ahead by saving and investing those money. If you realise how significant the power of compounding effect, then you will agree how critically important to start saving / investing as early as you can.

Many do not believe an average working Joe can save up and become a millionaire one day. Worse still, some are struggling their whole life to become debt free. All in all, this is because many do not know how to appreciate a simpler life and keep on chasing a life style that is beyond their means.

The idea to be able to jump out from the rat race is my biggest motivation. Just imagine if one day that you do not have to work for living, then there will be so much more times for you to spend on more interesting and meaningful things in life instead. Better still, if that happens at young age when you have a lot of energy to try different things.

I believe I am on track to achieve my dream. If you ask me what is my secret formula, I will tell you to think twice about what you really want in your life. Is that the styling handphone, big nice 4-wheels, expensive massaging chair or the plasma TV for relieving your after-work tension, or a break from your mind boggling work forever... I believe you will know what to do once you have the answer.

Portfolio 07-Oct-2006

2006-10-07T18:28:00.000+08:00

This week, my portfolio value rose 0.90%, outperformed KLCI (+0.35%). Along the week, I have made a switch, converting 10 lots of YTLPWR-w at price RM0.59 to 500 units of Tanjong at price RM12.50.

As mentioned last week, I strongly feel that Tanjong with price below RM12.50 is much better to hold than YTLPWR-w. Besides, referring to The Edge Daily, Tanjong PER is just about 12 and next interim dividend of 12 sen will be due on Oct 18. Its estimated dividend yield of 6.4% (or 80 sen per share) at RM12.50 now is irresistible. This although does not seem to be in line with my overall strategy of cashing out from equity, I bet Tanjong's downside risk is limited and hope that with this cost down, I can achieve a better opportunity to exit later.

Magnum has traded in a narrow band lately, with strong support at RM2.10. There is always the thinking to take profit lingering around in my mind but so far I have been able to suppress that. I still can see occasional share buyback of Magnum and this made me think its current RM2.10 will be well supported. I will only consider to dispose partial of it if it starts to breach RM2.20 again.

This week, my bond fund value increased to RM50399.97 from last week value of RM50298.11, or 0.21% increment w-o-w. PBOND still performed better than PIBOND, with to-date return of 1.03% and 0.57% respectively in a time frame of ~1 month. Frankly, I am very satisfied with these performances, considering the fact that these 2 funds are consistently rising from day to day.

Portfolio 30-Sept-2006

2006-10-02T01:36:00.000+08:00

My portfolio almost stayed flat this week, with only slight gain of 0.14%. Compare to KLCI which rose marginally also, 0.24%, it is not that bad afterall.

Magnum regained 3 sen over the week, but unfortunately majority of the gain has been countered off by the drop in Tanjong's share price, from RM12.80 to RM12.60. Tanjong's earning report was disappointing, with net profit dropped 33% from RM117m to RM 78m on QoQ basis. The losses incurred by Germany Tropical Island project have widen to RM17.7m, despite euro 34m (~RM 158m) turn around plan is on way to save this sickening business. Personally, I do not think this leisure business undertaken by Tanjong has any bright prospect, simply because it does not and will not ever meet the expectation of most Europeans for a true tropical vacation. It would have been a huge attraction if it were an artificial snow house for skiing built in Malaysia but it will not be any success that it is a fake beach with unnatural sun-shine in the middle of Europe. Many Europeans do not mind to travel far to real seaside or tropical island to get themselves tanned and enjoy the sea wind, rather than stuck themselves into an imperfect, fake "tropical" dome. The consumerism behaviour of Europeans is totally unlike our Asean, and Tanjong is doomed if it is doing it the Asean way! Nonetheless, I do think the visitor number will go up in the coming next 2 quarters as weather in German is turning cold and into winter but even that, I really doubt the project will turn profitable!

Luckily, this leisure business is only a minor bit of Tanjong and other businesses such as gaming and power are still very stable and generating constant flow of profit. At current price of RM12.60, Tanjong is very attractive to me and I am looking forward to buy in more at price below RM12.50. I do not mind to hold Tanjong for long term as it has reasonable dividend yield (estimated 3-4% in my own calculation), much better than holding YTLPWR-w with zero dividend and bleak prospect of capital gain.

On the other hand, I will start reporting the performance of my other portion of investment, i.e. bond fund. I am still thinking a proper format to keep track of it but until end of this week, I am happy to report that both my PBOND and PIBOND has started generating profit. PBOND is the better performer, which has gained 0.77% while PIBOND gained 0.42%, despite both were purchased at 0.25% premium of its NAV price due to upfront loading. In value, my investment in bond fund has steadily increased to RM50,298.11 in just over 3 weeks. Sweet!

Portfolio 24-Sept-2006

2006-09-24T13:59:00.000+08:00

Finally, I did pull up myself and do the portfolio review this week. I was busy on some other works for the past few weeks, which include developing my new found hobby...photography @ velo photo, heheee...

Well, back to stock investing, it was indeed a disappointing week for me. The value of my portfolio lost 1.46% or RM1228 compare to last week while KLCI gained 0.65%. The main losers were Tanjong and Magnum, which lost 2.29% and 1.41% respectively. Personally I think Tanjong has been oversold. There was no any new finalization on the IPA negiotiation yet and it seems that many investors were selling out Tanjong base on some romours. Although I did have some concerns on its certain businesses like the Germany Tropica Resorts, but I will likely to convert some other shares (e.g. YTLPWR-w) to Tanjong if its price drops further. As for Magnum, I have no plan to sell my stake as it still appears very attractive with its large cash reserve and continuos share buyback activities.

On the other hand, I guessed I have missed the oppurtunity to sell MTD at RM1.83 as targeted earlier. With its current price fluctuating at range RM1.70-1.80, it is unlikely that I am able to sell it without suffer some losses. I am just praying that there will be more new projects granted to MTD in near future so that its price can be lifted beyond RM1.80. I plan to hold it for another 1-2 weeks. Let's see...

Trading: Public Bond & Public Islamic Bond

2006-09-16T12:58:00.000+08:00

Last week, I have finally made a big change in my investment allocation, I moved a big portion of my liquid cash to 2 bond funds. I have invested RM25,000 each in Public Bond and Public Islamic Bond, with price at RM0.9327 and RM0.9989 respectively. This made my current bond to equity ratio around 38:62. In the next 6 months, I plan to increase this ratio to about 90:10. However, I still have no idea whether to convert all the remaining equity to bond fund, or keep it as cash in fixed deposit. This will depend on the overall economic scene then. Also, I have put off my initial plan to invest in gold, which I will detailed out my rationale later.

I selected Public Bond (PBOND) based on its consistant performance and proven track record. It may not be the best performer at all the time, but over a longer term and/or during the recession, it did outshine many other funds. Base on Lipper fund ranking found in Personal Money magazine, PBOND is not even in the top ten ranking of 1-year performance chart (in fact, it only gains 2.89% in past 1-year). However, in longer term, it ranks 4th for the 3-years performance while crowning the top in 10-years performance chart. Furthermore, during the economy slowdown period of 1997-1998 and 2000-2001, it managed to chunk out an impressive 18.97% and 22.70% respectively in the tough 2-years period ! Thus, I believe this fund will be a very good hedging for sailing through any possible recession.

Thanks to recommendation of Emily in one of my blog comment, I took a deeper look into Public Islamic Bond (PIBOND) and later decided to split half of my investment into it. PIBOND is a newer fund than PBOND but it managed to outperform the latter in both 1-year and 3-years return. From the latest quarterly fund report of Public Mutual, I reckon that PIBOND is a slightly more volatile (thus more aggressive?) fund than PBOND as it has significantly larger exposure to money market of 33.91% compare to only 4.64% of the latter. However, this could also means that PIBOND has not fully invested into bond market and is in the process to find the suitable Islamic bond. Nonetheless, its shinning past few years performance caught my heart and in case I was wrong on the prediction of major slowdown ahead, I will still get reasonable 3-4% annual return in bond, after averaging it between PBOND and PIBOND.

I did a last minute pull out from gold mainly because after reading an article regarding gold investment and rethink of my short term investment goal and strategy. It was a really good article but unfortunately I couldn't remember now where I read it from. All in all, the article made me to think why invest in gold, what is the hedging provided by gold, what support the rise in gold price and more. In the past, I always think that gold is a good hedging for inflation, rising crude oil price and falling currency. But looking into details, historical gold price has no strong or firm correlation to any of these elements. Besides, gold has never been "recession-proof". No doubt that inflation and rising crude oil price can leads to recession, but it is also not all due to just these few factors. We have had recession in the period of low inflation, low crude oil price. It suddenly becomes unclear to me why I want to invest in gold and looking at the current high gold price, it is definitely too risky to dip in. I may not be right on what I view in gold but that are at least some of my concerns. Previously, my focus was more on how to invest in gold, rather than looking at the very basic of the rationale in investing gold. For all other gold investors / guru out there, your comment or correction of my view on this topic is most welcomed !

Portfolio 02-Sept-2006

2006-09-05T21:34:00.000+08:00

First, my apologise to all my blog readers as I did not manage to do the portfolio review for last week in time. The reason is I did not manage to capture the price change of my portfolio as I am on traveling. I'm too lazy now to track back (without able to refer directly from my Star portfolio) as I believe that the minor change in my portfolio is not worth to mention. However, I would like to mark down here few of my comments in view of the budget 2007 announcement and some corporate developments concerning my portfolio that happened last week.

I was delighted that government has finally reduced the tax imposed on REIT, despite it is only a mere 8% reduction (to 20%) in the case for foreign investor. If I interpret correctly, for Malaysian, the REIT tax will be capped at 15% instead of 28%, which follows individual income tax bracket. This means tax will be lesser for people with annual taxable income of more than RM50k. This will certainly make REIT more attractive in term of nett yield. Nonetheless, compare to Singapore with only 10% tax for foreign investor, there is still a big gap to catch up with. This is reflected in the share prices of REITs after budget announcement, which did not get boosted at all. I think it is just a matter of time for foreign investor to come and start investing in local REIT, as encouraged by the positive move of government and most importantly, the potential appreciation of RM. In addition, I also feel that the new tax structure which will only apply to REIT that distributes at least 90% of their income is another positive action to encourage more REITs to comply to this requirement. So for those richies out there, make sure you buy some good REITs (with 6-8% yield) and start enjoying the lower tax of 15% on your side income!

The second goodness is of course the corporate tax reduction from 28% to 27% in 2007 and eventually 26% in 2008. In an article from The Edge Daily, the saving in tax reduction can almost wholly be transferred to the same increase in earning (0.9% according to one analyst base on their share selection). Personally, I doubt this eventually will make any big "wave" to the general industry. Moving forward, many has acknowledged that the economy will be slowed down, thus reduced earning or even potential loss may happen to the corporate. The 1% saving in tax (in the case of corporate makes profit) will only give an additional boost in good time but during the bad time, its effect is near minimal if not none, in my opinion. Government got to take other more aggressive measures to reduce the bottom line of cost of doing business, such as direct monetary incentive to certain industries or sectors that are most vulnerable to economy slowdown. Thus, I will not rejoice over this move by government, and certainly will not alter my stance of continuing reduce my exposure in stock market.

Lastly, this is a note to myself. For those who follows my blog, you will notice that I have never or seldom touch on the discussion of some counters in my portfolio, likes MTD or KASSETS. The reason is because I treat these counters as hibernating counters which I do not have any plan to buy or sell them in short term. As time passes and new development progresses, in this case is MTD, I revise my call. The latest quarterly report of MTD is indeed very disappointing to me. Mainly I see that its quarterly profit has dropped ~44% and debt has widen by ~14% compare to the last quarter. Investsmart has done a review and he has downgraded it from BUY to HOLD. For me, I will be looking forward to sell this counter when it touches RM1.83, where I'm able to recoup some of the transaction and opportunity cost involved.

At last, I made a real change in my investment vehicle weighting today. I have dropped the idea to invest in gold in the last minute and bought more bond fund instead. If you are interested to know the reasons of my last minute change and details of my latest move, watch out for my next post.....

Gold Investment - II

2006-08-29T04:10:00.000+08:00

This is my second series on gold investment. In my first blog, I only managed to explore the gold investment opportunities offered by Maybank. This time, thanks to Nik2004 from another Real Estate Forum, I came to know the gold offering by UOB Bank, which is much better than of Maybank.

UOB Bank offers a number of physical gold tradings, such as Australian Nuggets, Gold Maple Leaf, KineBar, Pamp Gold and Singapore Lion. Similarly, they come in several sizes in ounce (oz) or gram (g). And of course, the most economic in term of buy/sell spread is again the largest size gold, which is 1 oz. I found that 1 oz Aust Nuggets, Gold Maple Leaf and Singapore Lion has the cheapest spread, which is about 2.24% base on bank selling price. Compare to Maybank Kijang Emas which is about 3.18%, UOB offerings definitely more attractive. I found an intriguing fact which is this buy/sell spread determined by bank with each type of gold investments are actually not fixed. As of today, the spread with the few types of gold from UOB is RM56-57, but in a few weeks back, it was actually at RM65-66. Same case to Maybank, very puzzling! Nevertheless, with the quite big of gap between UOB and Maybank gold, I believe that UOB ones will still be a better buy at anytime. For UOB daily gold price, please refer to this link.

Again, I made a call to UOB bank to confirm that these golds are not actually available at their every branches. Only selected branch will sell certain types of gold but most of them will able to buy back all types of gold in their offering. So, in order to make sure your gold trading can be done at specific branch, make sure you call them to check out before make your visit. All UOB branches and their contact numbers can be found here.

To store your gold, it is also best kept in a safe deposit box in a bank, by paying a small annual fee. Unfortunately, I checked through UOB website and safe deposit box is not one of their service / product offered. It is a pity that one has to carry out the gold from UOB and keep it with other banks that offers such service. Of course, it will not be a problem if one has a safety box at home...hahaa. This is the part of gold investment that I hate most.

I have decided to allocated about 20% of my total investment value in gold. And after much consideration, I will buy the 1 oz Gold Maple Leaf because of its reputation and cheaper cost. At current entry price of gold about USD610-630 per oz, I think it is a good bet with the hope that gold will bounce back later this year and thus hedges partial of my money from inflation.

What do you think about gold? Please feel free to leave your comment.

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Portfolio 26-Aug-2006

2006-08-26T13:18:00.000+08:00

This week, my basket of stock selection finally gave me more impressive gain compare to many previous weeks of boring performance. My portfolio value has inched up by 1.72% (+RM1438) while KLCI only increased by 0.90%.

Main gainer of course has to be Magnum, gaining an impressive 6.89% from last week. As mentioned in the previous post, Magnum quarterly result was indeed impressive and at current price of RM2.14, its PER is only 12.3. This is quite comparable to BJTOTO with PER of 12.5. These numbers are low mainly due to their improved EPS. I am earger to look at the coming balance sheet of BJTOTO and Tanjong to determine if the overall market for gaming sector has expanded. I have a thinking that maybe due to current tougher economic condition, there are more people resort to betting in hope for a sudden windfall...hahaa, what a crazy thinking. My current target price for Magnum is RM2.30, in anticipation for further share buyback and re-valuation of gaming counters. Hopefully, BJTOTO will also show an impressive balance sheet mid next month.

The only disappointment I have in the week is with the ROS announcement by YTL Corp. Although YTL Power has registered a good quarterly result with profit increased by 17.8%, it did not manage to lift up the share price. As I have suspected, the ROS will create more negative impact to YTL Power and its warrants than a good earning can turn it around, I have indeed placed a selling order of half of my stake in YTL Power-w at RM0.61 on Friday morning, but failed to be carried out. At yesterday closing price of RM0.58, I think that the warrants is set at a dangerous level compare to its mother share which has lost 7 sen in a day. Personally, I don't see much capital gain potential on YTL Power-w because of the dragging IPA issue, and its future price when ROS is executed. I believe there must be some amount of profit taking by retail investors after receive their ROS and that definitely will batter the share price. This is simply another case of supply-demand balance. Logic tells me to sell out my stake now but emotionally I hate to cut loss. Although the warrants price has been consistently in downtrend and almost reach to bottom, I suspect in coming few weeks, its price will still go down slightly and then stay a while at RM0.50 - 0.60 range. Hard decision for me, after all, I hate to sell out at bottom trough but on the other hand need to correct my share exposure in short time.... Tough!

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Magnum Quarterly Result 30-June-2006

2006-08-24T01:22:00.000+08:00

Magnum Corporation Bhd posted a net profit of RM66.48 million in the second quarter ended June 30, 2006, up 36.1% from RM48.85 million a year earlier due to higher sales and lower prizes payout ratio.
It declared an interim dividend of six sen less tax.
In a statement on Aug 23, Magnum said revenue rose 11.2% to RM716.02 million from RM644.08 million due to higher gaming sales, which grew 11.4% on the back of an additional draw and mBox sales.
For the first half, its net profit was 11% higher at RM126.9 million against RM114.35 million a year earlier, while revenue rose 7.9% to RM1.5 billion versus RM1.39 billion.

quoted from The Edge Daily, 24th-Aug-2006

Magnum has posted an excellent result yesterday. Despite World Cup which traditionally lowered the total revenue of gaming companies, Magnum managed to register 11.2% rise. Contrarily, in World Cup 2002, Magnum suffered 2.5% Y-o-Y drop in revenue. This is mainly owing to its increased sale of m-Box, a similar gaming product that was initially launched by Tanjong as I-Box. It is a renovative product where with just RM1, one can bet on all the permutations of a 4D number. I think it must attracts a lot of small punters such as foreign labor and maid. Furthermore, this product also provides better profit margin. Recently, Sports Toto also followed the herd and launched I-Perm.

With the jump of 36.1% in profit, EPS for half a year of Magnum now standing at 8.70 sen. If Magnum can keep up with current performance, whole year EPS is estimated to be 17.4 sen. At current price of RM2.04, this equals to PER of 11.7! Very attractive I would say. Besides, Magnum's nett cash has increased to RM814 millions!

On the prize payout ratio, Magnum always performs the worst among the other 2 competitors. For the six months period, it is somewhat disappointed to hear that the ratio is marginally increased compare to the same period last year. Personally I view this as a blessing in disguise. This is because higher prize payout ratio will definitely make Magnum more attractive to punters and thus maintain its market share in 4D betting. I think that as long as the ratio is not ridiculously higher than the competitors, it is necessary for Magnum to fence off market share domination, especially from BJTOTO, since the latter has more variety and popular products.

Coupled with its latest 6 sen dividen declared, I strongly think it is a good buy.

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Portfolio 19-Aug-2006

2006-08-20T17:01:00.000+08:00

My stock portfolio value was up slightly by 0.49% (+RM378) this week compare to KLCI, which has fluctuated in tight range of 938-946 and ended 942 or down 0.03%.

Main gainer was BKAWAN, which gained 5.08% over the week. At current price of RM9.30, it is very close to my previously set target price RM9.50. Its quarterly report is due to be announced by end of the month, and hopefully another interim dividen will be declared. In view of current bullish stance on CPO price, I will hold BKAWAN at least until the coming earning announcement, and evaluate further whether to keep it for long term.

Another gainer was Tanjong. Tanjong has rebounced 3.85% from last week price of RM13.00. I am looking forward for its price to pass the level of RM13.80 in order to start reducing my stake on it. There is indeed very little foreseeable excitement laying ahead except hoping for continuous rise of KLCI and so its share price.

The biggest loser this week was Magnum, dropped 4.69%. On Monday, I have purchased another 3000 units at RM2.07, with speculation that its price will be pushed up further. However, that did not happen due to the lacking of share buyback activity. Magnum only did a share buyback on Friday. It is interesting to note that the share price on Friday was also being stirred up to highest RM2.09. To me, it is evident that if Magnum continued it share buyback campaign, its price will inevitably rise in tandem.

For next week, I will keep my eyes on AXREIT. I intend to accumulate more of the share before the budget announcement next month. Like many others, I believe government will revise the foreign tax holding for local REIT to encourage foreign investment. I am waiting to buy more AXREIT at price below RM1.73, which I hope it will reside from current level after the 6.2 sen dividen ex-date on 21-Aug.

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Tips: Get Your Stock Quote Cheaply on Mobile

2006-08-18T04:46:00.000+08:00

Many times, when we are on the move, and eager to know the latest stock price, we always find it is either difficult or rather expensive to get a realtime stock price quote. Of course one can always call his/her remisier and ask, stop by to look for a PC like internet cafe, or subcribe to many more expensive mobile solutions such as 3G, Hotlink Stock Live Service, EasyAcess, SMS Stock...etc.

However, there are actually some other inexpensive ways exist. Now, I'm going to share with you one of my way to do that easily and cheaply, at only 1 sen per quote with no monthly subscription fee! So here how it works...

Requirements:
1) A GPRS enable mobile phone preferable with big colour screen
2) Hotlink prepaid (for postpaid and other telco, you need to check out the rate for GPRS)
3) Mobile browser, highly recommend Opera Mini (download as link)

The steps are easy, just download and install Opera Mini to your handphone. You can use a USB bluetooth donggle on a PC to "push" the Opera Mini applet to your handphone and it will install itself.

The trick is to find a source that is small in data and precisely gives you the stock quote that you want in real time. Personally, I use OSK188. If you go to the website, you will observe at the top right of the page, there is a small javascript that enable user to get realtime stock quote. Of course, you do not want to load the whole website everytime. Doing that will cost you a bomb and waste your time. You just want to get instantly to the stock quote. So, instead key in www.osk188.com to you Opera browser, you need to key in http://www.osk188.com/MASA/stock_search.jsp?stock=xxx. Replace "xxx" with the stock symbol of your choice, e.g. bjtoto.

The advantage of GPRS is the cost is count by size of data. It doesn't matter how long you stay on with the browser or how long it takes to load the data. For the stock quote of OSK188, it only has less than 1kb in size, which is only 1 sen using Hotlink. With Opera mini, instead of key in the long address everytime, you can just add it and several others with your favourite symbol as bookmarks. Below are some examples how the stock quote from OSK188 look like:

Tanjong BKawan Magnum

For easy setup, I have made a few illustrations to guide you as below. Enjoy!

Related info:
a) For Digi user, there is an alternative cheap solution here.

Hope you find this tips useful.

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Magnum vs BJTOTO

2006-08-16T01:20:00.000+08:00

After my recent purchase of Magnum base on speculation, I did a simple research looking at some of the fundamentals of Magnum compare to BJTOTO. Here I am to share:

a) Price Earning ratio (PER)
Earning per share for Magnum and BJTOTO is estimated at 14.2 sen and 32.8 sen respectively for Y2006. Base on Magnum price of RM2.07, this equals to PER of 14.6. For BJTOTO, with current price of RM4.42, its PER is 13.5. Obviously, Magnum doesn't look attractive, especially with the fact that most analysts will put a discount on fair PER for Magnum because of its non-market leader position in gaming sector.

b) Nett Cash
Magnum has piled up RM683.8 million of cash as reported in 1Q2006 while BJTOTO has -RM82.3 million in debt reported in 4Q2006. However, after settlement of inter-company loan, BJTOTO is expected to have RM450-500 million. For Magnum, after preceeding of Sepang land sale, it will has additional RM210 million. Considering a nett cash position of RM700-900 million, Magnum is capable to return back shareholder RM0.85-1.15 per share. While for BJTOTO, Macquarie anticiapted it will be able to distribute 35-39 sen of special dividen. However, one must take note that the cash pile of Magnum has been built up in years and Magnum had not been generous in dividen payout in the past.

c) Dividen Yield
From past history, Magnum will typically give out 10.0 sen per share dividen compare to 40.0 sen of BJTOTO. This translates to dividen yield of about 5.0% and 9.0% respectively. Again, for long term investment, BJTOTO is much more attractive than Magnum.

d) Potential Earning Growth
Magnum has been volatile and high on the prize payout ratio compare to BJTOTO. Moving forward, analysts are expecting Magnum to improve its payout ratio from 70-75% to below 70%, in line with industry benchmark. This will able to improve EPS of Magnum. For BJTOTO, analysts are confident that it will continue to expand further in market share, despite its current leading position.

So, after this simply study, I have to admit that my latest purchase of Magnum at RM2.07 appears to be quite expensive. AmResearch rate HOLD on Magnum recently at RM2.00. If we apply fair PER of 13 to Magnum, its fair price will be about RM1.85. However, I doubt that with its current price trend, Magnum price will drop back to that level.

Related articles:
1) Brokers' Digest
2) Corporate: End to BToto's intercompany loan woes soon

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