KLCI up on late bargain hunting

Stocks started the first trading day for the second half of the year on a somewhat tentative note. Although most of the regional bellwether indices closed in positive territory, gains were not very convincing. Indeed, the strong upward momentum that drove share prices sharply higher for the better part of 2Q09 has been absent for a while now. And the prevailing sentiment may persist over the near term. Asian stock markets have already done very well in the year to date, chalking up strong double-digit gains. The Chinese market has been among the best performers in the world – the Shanghai Composite index gained nearly 63% in 1H09. Most believe that the world’s third largest economy will recover faster from the current downturn on the back of strong domestic consumption and massive government stimulus package.
The KL Composite Index was up by a more “modest” 22.6% in 1H09. Our economy is more dependent on external trade. Although the worst appears over, a recovery in exports is likely to be slow given that demand from major consuming countries like the US and Europe remains weak.
Indeed, recent data on US consumer confidence indicated some renewed weakness after rebounding strongly in previous months. With unemployment expected to continue rising, consumers are less likely to go on a spending spree. Households are still trying to de-leverage and are saving more to repair their balance sheets.

The KLCI had on July 1 fluctuated within a narrow band throughout the day, slipping in and out of positive territory. A last-minute spurt of buying lifted the benchmark index to close at its intra-day high of 1,079.4 points, up four points from June 30. Some of the bigger gainers include Tanjong plc, Nestle, BAT and Genting.

Market breadth was, however, negative. There were roughly seven losing stocks for every four gaining ones at the close. About 826 million shares were traded. KNM was the day’s most actively traded stock.

What fund managers say

Scott Lim

MIDF Amanah Asset Management chief executive officer and chief investment officer Scott Lim reckons the recovery in the market that investors saw during the first half (1H) of the year was mainly driven by optimism. “The optimism at the moment is not backed by very concrete evidence. We actually need that evidence for a smooth path to recovery. But, definitely the conditions have stopped worsening. Whether we have reached the bottom now is too early to tell,” Lim said. “The only surprise that came from the first half was that the trading volume came back rather strongly for some speculative companies. Other than that, the performance of companies was not very surprising. This is because they were from a low base so their results were within expectations,” he added. Moving into the second half (2H), Lim said investors can look forward to see if some of the signs for the so-called “green shoots” at the earlier part of the year will take shape. “Whether the recovery is sustainable is a question mark. We’ll get more evidence whether the recovery is sustainable. For 1H, the optimism has started to come back and in the 2H, we need to see evidence to justify that hope. It’s tricky,” he added. Lim said if there isn’t enough evidence to show that a recovery is evident, the market is in for rough ride. “This is because the recovery was based on hope and optimism and if those are proven wrong, the market will have a relapse and it’ll be more painful.” Lim said he was “not giving a very strong call for the market” at the moment. “I would rather take a backseat and watch for now. I am indifferent to the market,” he said.

Choong Khuat Hock

Kumpulan Sentiasa Cermelang Sdn Bhd’s director of research and fund manager Choong Khuat Hock believes the rally in the 1H of the year was driven by strong liquidity. “The markets all bottomed around March and there was a sharp recovery and a lot of it was due to strong liquidity.

A lot of fund managers locally and globally have a lot of cash and when the rally happened, it had forced them to participate,” he said. As we move in 2H of the year, Choong said a fundamental recovery is crucial as what the market has reflected so far is based on ‘a lot of potential recovery’. “We haven’t seen clear signs.

Things have yet to stabilise… but it’s likely not to get worse. We have not seen a sharp recovery so far. We need a recovery by year-end to justify the strong market conditions. If the economy remains weak at the end of year, it’ll have a negative impact on the markets,” he added. Choong’s top three picks from the FBM KLCI are DiGi.Com Bhd, YTL Power Bhd and Parkson Holdings Bhd. He advises investors to stick to names that are ‘relatively defensive’ like DiGi and YTL Power. “YTL Power’s earnings from utilities are stable. Whereas for DiGi, its revenue is also stable as no matter how bad the economy is, mobile phone services are essential in this day of age,” he explained. He added that Parkson’s potential catalyst was its exposure to the China market.

Pankaj Kumar

Kurnia Asia Bhd’s chief investment officer Pankaj Kumar Bipinchandra said for the first half of 2009, the local bourse did perform well but did not rise as much as some other Asian markets did. “Assuming we close the first half of the year at the level we are today, which is 23% up year-to-date, as far as the local index has gained, it has performed well but not as good as some Asian markets.

But compared to the Malaysian market’s fall last year, don’t forget, we didn’t fall as much either,” Pankaj said.

Pankaj added that the rally we’ve seen in the equity markets so far this year has been driven by expectations and may have gone too far ahead of fundamentals. “There must be some form of meaningful pullback to absorb the rally to bring the equation closer to the reality of economic numbers and market expectations,” he added. Pankaj’s top three picks on the new FBMKLCI are Tenaga Nasional Bhd, Resorts World Bhd and Tanjong plc.

Chris Eng

OSK Investment Research head Chris Eng believes that the jump in the first half of the year may have been too high too soon. As a result, he expects a retracement — a reversal in the movement of a stock’s price, countering the prevailing trend — to happen in the second half of the year. “For the second half, we expect a retracement to happen and it would bring the market back to reasonable levels. Reasonable in this case would be 1,000 before a gradual strengthening towards year-end,” he noted. He added that his top three picks for the new FBMKLCI are Resorts World Bhd, Axiata Group Bhd and Public Bank Bhd. “For Resorts, we think there is the possible M&A angle and as it is newly constituted into the KLCI, it will likely see money flowing into it. Also, we think its operations are fairly resilient and even if the economy does suffer a very slow recovery, the company will do quite well,” Eng said. “For Axiata, we like the long-term prospects, it has growth in Indonesia, India and Sri Lanka. Meanwhile, for Public Bank, we think it’s more of a defensive bank. We expect the market to retrace inevitably, but Public Bank will do quite well because of its defensive earnings and is well run by its management,” he added.

Teoh Kok Lin

Singular Asset Management Sdn Bhd founder and chief investment officer Teoh Kok Lin said performance of Bursa has lagged the performances of other regional stock markets in 1H 2009. “This, however, is not unexpected given that the Malaysian stock market was among the most resilient during the sell-down in 2008.

“China and Indonesia have been the star performing stock markets — given that their economy is more domestically orientated (rather than overly dependent on exports),” he told The Edge Financial Daily in an email reply.Teoh said that after the strong rally in share prices globally and in Malaysia in 1H2009, the next six months were going to be more challenging. “Stock picking will become more important — well-managed companies will continue to perform well. We continue to see many great companies trading at attractive valuations in Malaysia and in the region (especially in China and Indonesia),” he said.Construction, building materials, plantation and China-related plays are likely to continue performing well, he added.

Anthony Dass

Inter-Pacific Research Sdn Bhd head of research Anthony Dass said the KLCI’s 22.8% rise year-to-date had outpaced actual economic fundamentals.Dass cautioned the market might not make significant headway as there were signs of disconnection between valuation that were at mid-cycle levels and the economic outlook which is to be in recession.While the KLCI might inch upwards taking advantage from the positive regional movement should there be positive news driving the markets, he said the upside to KLCI could be limited, with Malaysia likely to underperform in a potential rally as the large caps have limited upside potential.“We only plan to revise upwards our view if we can firmly conclude there are growing signs of strong policy implementation and structural change as proposed; strong earnings upgrades and we find a widening regional valuations gap.”Inter-Pacific Research is focused on a balanced strategy and it favours stocks for yields, such as Berjaya Sports Toto, Tanjong plc and YTL Power, as well as AMMB Holdings and Public Bank Bhd for positive earnings or news.

Doomesday fears pushed aside, Wall Street did well in Q2; What lies ahead?

Investors carried Wall Street to a remarkable second-quarter performance even though stocks' big spring rally stalled weeks ago.
The major indexes all managed to end the quarter with double-digit percentage gains.
Now, whether the market regains its momentum in the July-September period or hunkers down again will depend on what companies have to say in the next few weeks - not just about their own prospects, but the economy's as well.
The Dow Jones industrial average rose 11 percent during the quarter. The Standard & Poor's 500 index surged 15.2 percent. Both indexes logged their first quarterly gains since the third quarter of 2007.

The Dow also had its best quarter since 2003 and the S&P 500 its best since 1998. The S&P 500 index and the Nasdaq composite index are finishing the first half of 2009 in the black.
The Nasdaq, heavily populated by tech stocks, rose 20 percent for its first winning quarter in a year and had its best quarter since 2003. The quarter turned out better than most traders might have expected when the major indexes sank to 12-year lows in early March on growing despair about the recession. But the market's advance wasn't as impressive as it was in mid-June, when the major indexes hit multi-month highs.
Since then, investors' uncertainty about the strength of an economic recovery has brought the Dow down 4 percent, the S&P 500 down 2.8 percent and the Nasdaq, 1.5 percent.
On Tuesday, the last day of the quarter, the Dow fell 82.38, or 1 percent, to 8,447.00; the S&P 500 fell 7.90, or 0.9 percent, to 919.33, and the Nasdaq slid 9.02, or 0.5 percent, to 1,835.04.
Investors have gone through a big psychological shift over the past six months. After sending the Dow plunging to a 12-year low in early March amid fears of another Great Depression, they drove it up a staggering 34 percent from mid-March to mid-June as the global economy and corporate world showed signs of stabilizing. It was the shortest time frame for a market recovery of that size since the 1930s. And while no one knows yet if the United States was coming out of a recession during the just-ended quarter, the market as measured by the S&P 500 acted as if it was.
The S&P 500 was up 13.6 percent in the first quarter of 1991 as it came out of a recession, and 16.8 percent in the fourth quarter of 1982.
"That massive fear of a complete failure in the financial system? That's been taken off the table," said Brett D'Arcy, chief investment officer of CBIZ Wealth Management.
"The doomsday predictions? Those have been largely pushed aside."
But investors are well aware that American businesses may still be facing hard times. That's making the market uneasy about what corporate executives have to say in the coming weeks.
First, there's the issue of how they're making money. Companies largely cost-cut their way into profitability in the first quarter of 2009. That technique might not fly with investors looking for signs of real growth as they enter the second half of the year - when the economic recovery is supposed to arrive.
"I don't think the markets are going to give companies a free pass anymore," said Keith Wirtz, president and chief investment officer at Fifth Third Asset Management in Cincinnati.
Second, investors want to hear executives' take on the economy. Outlooks are important in any business environment because companies offer more detailed views into economic indicators such as orders, inventories and consumer trends. Even if the forecasts are disappointing, analysts believe stocks are on a more solid footing than they were earlier this year.
The market is no longer being driven by panic
Still, stocks have paused and wobbled because the economic data that fired up their rally in early March haven't improved significantly the past few weeks. Companies aren't laying off workers as much as they were in early 2009, but the unemployment rate keeps heading toward 10 percent. Reports have shown that consumers are saving more than they're spending, and that home prices still haven't recovered. Stocks fell Tuesday after the Conference Board's consumer confidence index fell unexpectedly in June.
The Standard & Poor's/Case-Shiller index showed another decline in home prices, albeit it the smallest since June 2008. For Wall Street's rally to continue, the market needs to experience that economic recovery, said Nicholas Colas, chief market strategist at ConvergEx.
The U.S. government has pumped trillions of dollars into the financial system and the economy. Stimulus packages usually take six to nine months to work their way through the system, so investors will be looking for those dollars showing up in corporate growth and personal spending in the second half.
The most closely watched industry during earnings season will be financial companies, Colas said, as banks have gotten the biggest boosts from the government. Colas predicts impressive second-quarter results from financial institutions, but major disappointments could thwart the market's recovery.
Bob Doll, global chief investment officer for equities at BlackRock Inc., anticipates U.S. stocks will log a double-digit percentage gain in 2009 - an impressive move, though it's important to remember that Wall Street had its worst year since the Depression in 2008.
Experts also expect the S&P 500 index, the broadest measure of the stock market, to finish the year higher.
The S&P 500 is only up 1.8 percent since the beginning of the year, and still down 41 percent from its record high in October 2007, so the second-quarter rally needs to be put in perspective, D'Arcy said

TECHNICAL ANALYSIS >>> 综合指数 2009年 6月 30日 / Composite Index 30/06/2009

综合指数 2009年 6月 30日

如图所示，综合征指数再度精确在对称三角形（Symmetrical Triangle）的L2阻力线遇阻，所以综指未能摆脱盘整格局。综指阻力水平依然是1095.91点的胜图自动费氏线，支持水平则是布林中频带及1035点的胜图自动费氏线。
如图中箭头A所示，布林频带进一步收窄16%，这与对称三角形的巩固图形讯号一致，这确认综指目前依然处于盘整中。布林频带收窄时也表示综指正酝酿着一个新的走势，而新的走势必须等到布林频带重新打开时才能显示出来。
如图中箭头B所示，虽然马股总成交量周二增加46.8%，但依然未能达到40天的成交量平均线（VMA），这表示马股的交投依然属于淡静。换句话说，市场未能有足够的承接力来吸纳套利的卖压，所以综指未能转强，摆脱L2阻力，继续处于盘整中。
如图中C圈所示，随机指标（Stochastic）维持于70%水平，这是综指短期有望转强的讯号，不过，随机指标是属于辅助指标（Secondary Indicator），其讯号在综指调整巩固时往往会稍微过敏，所以目前的分析就必须以图形（对称三角形）为主。
总的来说，综指目前依然处于盘整格局中，加上周二下跌股项过于上升股项，而且大部分的热门股项都出现套利的现象，所以综指继续有调整巩固的迹象，暂时未能转强，直到成功上扬突破对称三角形及1095.91点的阻力水平为止。

Composite Index Daily Technical Analysis 30/06/2009
As shown on the chart above, the KLCI remain resisted by the L2 line of the Symmetrical Triangle, and therefore, suggesting that the KLCI is still consolidating, with 1095.91 Fibonacci Retracement as the major resistance while the Bollinger Middle Band and the 1035 Fibonacci Retracement are the supports.
As indicated by A, the Bollinger Bands Width contracted another 16%, showing a similar signal as the Symmetrical Triangle, suggesting a consolidation for the KLCI. Meanwhile, the contraction of the Bollinger Bands Width also implies that the KLCI is preparing for a new movement, and the new movement shall only be revealed when the Bollinger Bands Width re-expands.
As indicated by B, total market volume increased 46.8%, but still below the 40-day VMA level. This shows that the overall market is still relatively quiet as the inflow of fresh capital is still insufficient to off set the selling pressure. Therefore, the KLCI failed to regain its strength while still resisted by the L2 line.
As circled at C, the Stochastic remain above 70%, which is a short term bullish territory. However, during a consolidation stage of the KLCI, Secondary Indicators like Stochastic could be over-sensitive, and therefore, the priority of the analysis should based on chart analysis, in this case, the Symmetrical Triangle.
In short, the KLCI consolidation remains intact. With losers outnumbering the gainers, and also most of the most-active counters are showing sign of profit taking, the KLCI is less likely to pick up its strength until successfully breaking above the L2 line and 1095.91 Fibonacci Retracement.

Meet BT spammer Edmund Tan aka JAMBAN KING

Hello BT visitors >>> meet BT spammer Edmund Tan @ Spartan King @ Jamban King

This is the moron who uses ZL's name to spam Ah Seng's BC blog and use Ah Seng's name to spam ZL's blog. This is the way he showed himself 2b an oucast of the financial blogosphere.

Jamban King loses heavily trying to catch falling knives (PERWAJA) against ZL's advice and my sincere efforts to plead him NOT to post his KLCI 600 article. These 2 articles are published below in his own shiitty words.

ARTICLE #1

Monday, October 27, 2008
KLCI Next Target is 600

Posted by Spartan King
This morning, Tuesday 28 Oct, I saw KLCI opening down 50 points to 802 at more than 6% lost, I was extremely happy. I am happy that my previous target of 880 no longer becomes a joke but instead, Winbursa is now hailed by many as the number 1 Financial blog.

So the next question is, is this madness over? No, it is not over, it is what I call a perfect crisis.

I, King Spartan Edmund, is now predicting that KLCI will now hit my next target of 600. I believe many other bloggers (you know very well who I am talking about) out there who are jealous and disbelief of Winbursa ridiculous target will continue to shot and harrass Winbursa. I am not suprised as I have seen many bloggers out there begin to criticise Winbursa when my previous target of 880 was reached. I think the main reason is jealousy as I have no offended them in any way.

Again, I believe that if my prediction of KLCI hitting 600 by end of December come true, the harrasing and criticism will continue to get stronger, out of jealouse and hatred.
Whatever happened, the truth must be told-this is the number 1 rule in Winbursa. Now enjoy the ride down Spartans, and wait for my call to go to war for a at least 300% gain. And for the rest of those shitters out there, "may you live forever".

PLEASE TAKE NOTE >>> ZL DID NOT ADJUST OR EDIT A SINGLE NUMBER OR A SINGLE ALPHABET IN THESE ARTICLES ABOVE AND BELOW.

THEY ARE AS ORIGINAL AS THEY CAME WITH THE CHARTS DRAWN ON TOILET PAPER.

ARTICLE #2

Saturday, September 06, 2008
WHAT IS ACTUALLY HAPPENED TO PERWAJA?
Ok, before we even begins to find out what happened to Perwaja, lets look at what a good reputable Investment Firm have recommended on Target Price for Perwaja:-

1) HLG Research rates Perwaja shares at RM4
2) HwangDBS Vickers has a target price of RM5
3) OSK Investment Bank fairly valued Perwaja at RM4.90
4) RHB Research Institute estimates that the share price could rise to as much as RM5.75
5) KING SPARTAN EDMUND TARGET PRICE FOR PERWAJA: 1.50 (50% DOWM FROM THE IPO PRICE OF RM 2.90.
(SO LETS FARKING SEE WHO TARGET PRICE IS MORE REALISTIC, NOW YOU ALL SEE WHY I FARKING HATE ALL THE MOTHER FARKERS, AND HOW IMPORTANT IS WINBURSA NOW!)
==========================================
Message from Winbursa-Advisor Zhuge Liang
perwaja-5146
Listed 20 Aug 08
opening 2.80 down -10 sen from 2.90 IPO.

That one who dunno?
But what many traders do not know including ZL is the shares OVERHANG of PERWAJA. Being a restructered entity, how much haircut did the white knights, Kinstel for one and some other new major shareholders gave the creditors such as banks, financial institutions, suppliers or relevant biz associates? Outstandings had been for many many years, mind you.

Remember Eric Chia UMW bossman who was dragged into PERWAJA fiasco? Becoz of Eric's CBT case PERWAJA listing was delayed a few years and the accumulated loans & creditors interest (%) snowballed into tens of millions. PERWAJA hutang ZL cannot remember how many billions but their FYE losses averaged RM500 mil per annum. Eric was just a sideshow - they had nothing on him.

PERWAJA needed time to negotiate with foreign and local creditors. The Japanese & Koreans were involved. The Govt do not need a diplomatic fallout with them. The local creditors can be leashed but not the foreigners.

Eric Chia's case presented more financial headaches but valuable time to the restructurers & potential suitors or white knights. The initial proposal went into the waste paper basket.

Back to the drawing board ..... From what I heard ( I cannot confirm this ), Kinstel came into the picture only as recently as when Eric was proven not guilty and by then the hutang interest keep snowballing. It was finally agreed more new shares will be issued at a higher IPO price. The original IPO proposal was RM1.65 for public and RM1.90 for instituitional investors. RM2.90 IPO?

Nevermind, that one we know but what we do not know is : How many "extra millions" shares were added on? How much were paid to creditors in lieu of hutang. How much haircut were they pruned? Finally, how much of the :"extras" remain and in whose hand?

Research houses gave biased views and fair value using what figures? From the numbers of the original proposals? With so many questions unanswered, which analyst should we believe? NONE ...they all also tembak buta aje.

As far as the PERWAJA short-selling goes, ZL can relate better still becoz ZL had very close relationships with some traders or syndicate if that's what u wish to call them. I hv 1st hand experiences with some remisiers "working" such projects.

Naturally I went along for the free ride and made some good money as well. How does the short-selling system works? Any bankers or remisiers worth their salt should be able to deploy these schemes without much problems providing they stay within the regulatory framework. As long as the trading is concern, those with PERWAJA shares in CDS can sell then buy back same day for quick $$$ with no changes in personal volume at end of day. If they wishes to hold SHORT and buy back as late as T3 or beyond then they must inform the head honcho of this project. As if SC don't know what's happening but what can they do?

Technically there is no foul play. Which part of the equity rule books says a shareholder cannot average down? But if the creditors ended his day with the same volume as when he started, where does the sellers volume that ended up with naive suckers of PERWAJA came from?

There are many bargain hunters or falling knives catchers who keep rooting for their positions. Problem is .....roots grow downwards. Back to the mysterious VOLUMES ...... this, ZL believe, are the overhangs I refered to in email to Ed few days back. From where or who holding them ZL honestly clueless but u bet they do exist and in big numbers.too.

Bottomline is ..... there is no bottomline since we can't even guess their numbers. There is nothing, no numbers, no figures and how much balance float to even estimate when the selling stops. If it is the creditors selling and turning their papers into cash then possibly there may be some figures to estimate. For those who took by way of quick cash and still holding their allocated credit / volume payment, a pre-arranged scheme known as a 'married deal" whereby block shares changed hand off market from one shareholder to another usually in the same broking house or bank thus aka willing buyer willing seller married deal. Such deals are usually time frame gentlemen agreement between 2 parties or more. To the insider, this is a win-win situation for many concern. The creditors gets their instant interest (%) payment for holding and helping to shortsell PERWAJA.

The bankers & remisiers gets besides their regular biz, rewards for their cooperations and hardwork.The restructurers gets something for their brilliance and on top of that the opportunist who hitch hiked a free ride.

At the end of the day, it is the major shareholders who benefit the greatest when they buy that married deal off the creditors at a pre-arranged price. Imagine their stakes holding up 5% in PERWAJA at 50% discount off IPO price.

WOW! U guys just compare HUAAN & PERWAJA, the former used 2b ANTAH Holdings. Bossman Antah is #1 son of xxx who is now 10x more richer than ANTAH days. U see HUAAN anywhere near it's IPO price? PERWAJA @2.90 will be like HUAAN - a distant dream. Sorry to say this King Ed ......U had been had. And finally to end it all ....how ZL knows abt these schemes so thoroughly?

Psssttt psssttt ....ZL used 2b one such bastards before .....ssshhhhh

p/s If those mysterious hands sticks to the original restructuring proposal, then maybe, just maybe the roundabout should not be too far off RM 1.65. Just an educated guess.
Take nothing for granted ok?
Goodluck2ur PERWAJA

(King Spartan Edmund-I forget to tell you that I have cut loss Perwaja at the cut loss price of RM 2.10)
Posted by Edmund TTS at 11:17 AM 1 comments

Newly added by ZL >>> U talk RUBBISH Jamban King Edmund Tan. From what ZL found out you held PERWAJA from RM2.70 entry until T4 FORCE SELLING whereby accumulating HUGE CONTRA LOSSES unpaid until today. Your remisier dragged you to court after sending bouncers & bill collectors to your house and office on numerous occasions.

You are BLACKLISTED by SC for unsetled HUTANG so your claims today of selling 100K worth of stocks is PURE LIES >>> Show and prove ZL is a LIAR to all BT visitors >>> if you can.

What trades? Your account suspended sucker!!!

With your bearish KLCI 600 at the back of your mind you wanna contradict youself and buy THOUSANDS worth of shares? ZL doubt your ability to make a bowl of porridge if not for your Mrs and your well-to-do father in law. On your own abilities??? You'd be eating shiit like that foto exhibited in BT.

Have a nice day Jamban King @Spartan King @Edmund Tan