Fund manager Mr. Chen Fan Fai (of Kenanga Investment) sees KLCI grinding its way up for the rest of the year. Speaking at the Fundsupermart investment seminar in KL today, he prices the market as more or less fairly valued at 15x PE, 2.2 PBV, with dividend yield around 4 %. He is cautious of the debt crisis in Europe and slowing down of US and emerging economies. If and when the endgame comes in Europe (e.g. some countries leaving the union), perhaps in the next year or two, this would result in a financial contagion causing the market to fall off the cliff. His funds are positioned with risk management by seeking shelter in defensive stocks and presently holds 20% in cash. The sector he favors include consumer, healthcare and reits. He also foresees some weakness when the general elections are announced due to the uncertainty, which will be compounded if the opposition were to win. Award-winning Chief Investment Officer at AmInvestment Ms. Goh Wee Peng also sees a challenging time ahead. OSK's Mr. Ho Seng Yee recommends investor include global emerging markets bond fund in their portfolio to achieve a long term equity-like returns with bond-like volatility.
*most benchmarks used by unit trust funds are price indices which do not include dividend returns. Thus the returns are actually less. For example, a KLCI index should be added around 3% per annum to reflect the true returns. This means if a fund underperforms the KLCI index, the underperformance is actually worse as the dividend yield has not been included in the index.
Showing posts with label KLSE. Show all posts
Showing posts with label KLSE. Show all posts
July 21, 2012
October 05, 2011
ICAP Investor Day 2011
icapital.biz held the Investor Day 2011 in conjunction with its AGM at the KL Convention Center. I share some takeways from the talks from the captains of the industry.
(Too bad I didn't have my DSLR with me, otherwise I can post some pictures. Anyone care to donate their unwanted handphone camera to me?)
Ex-CEO of F&N Dato Tan Ang Meng:
- the 4 largest beverage manufacturers in Malaysia now are F&N, Permanis, Coca-Cola and Yeo Hiap Seng (in descending order.)
- carbonated drinks margin is highest at 15% compared to others (Asian drinks, juice) but its market share is going down especially in developed countries (for health awareness reasons) but it still has growth potential in developing countries like China and India
- Japan (Asahi, Suntory, Sapporo, Kirin) is expanding overseas due to their demographics (older population lesser consumption)
- status quo will remain for the moment for Permanis before Asahi starts introducing new products
F&N 100 plus is a large contributor to its revenue while its condensed milk sales are resilient (thanks to teh tarik stalls)
- values F&N at $7.3b (based on Permanis acquisition) but he thinks Permanis was overvalued while F&N is slightly undervalued due to the pessimism over losing its Coke licensing
- Coca-Cola (just went its own way here) is seen as a threat but will be struggling in the next few years, which is an opportunity for F&N to capitalize on with its large distribution network
- YHS is a good takeover target
CFO of Petronas Dagangan Rozaini Musa:
- Petdag is #1 in the commercial (supplying to airplanes, industries) and LPG (cooking gas)segment and #2 in retail (petrol stations, after Shell) and lubricants.
- retail still has room to expand while there are plans to expand abroad to Thailand and Indonesia
starting to sell LPG through petrol stations
CEO of Malaysia Smelting Corporation Dato Seri Mohd Ajib Anuar ("The tin man"):
- MSC is the 2nd largest tin metal supplier in the world
- tin is mostly used in electronics at the moment (for soldering) besides tin plates for packaging but has also many other uses and is non toxic
- price volatility is due to its securatization leading to speculative activities
- for smeltering, earnings are on a cost plus basis while for mining it is correlated to the price of tin itself
- US used to keep a large stockpile but now not anymore
- MSC losses in 2010 was due to divestment of its non-tin assets causing impairment
- MSC now intends to focus on tin only, thus earnings will be more stable going forward and plans to develop new mines abroad
As for Tan Teng Boo's view:
- he is bearish on 2H2011 since early part of the year
- although there may be another global recession, which will be worst than in 2008, global economic depression is unlikely due to the growth of emerging markets (none in 1930s)
- problem is worst now compared to 2008 because governments of developed nations have run out of policy tools (interest rates are near 0%) while developing nations are suffering from high inflation
- Malaysian economic outlook in the long term depends a lot on whether the promised economic reforms will take place
Padini held a fashion show with many pretty, slim models. If I could bring home that tall, long haired Eastern European (?) girl, now that would be a fantastic takeway :P
(Too bad I didn't have my DSLR with me, otherwise I can post some pictures. Anyone care to donate their unwanted handphone camera to me?)
Ex-CEO of F&N Dato Tan Ang Meng:
- the 4 largest beverage manufacturers in Malaysia now are F&N, Permanis, Coca-Cola and Yeo Hiap Seng (in descending order.)
- carbonated drinks margin is highest at 15% compared to others (Asian drinks, juice) but its market share is going down especially in developed countries (for health awareness reasons) but it still has growth potential in developing countries like China and India
- Japan (Asahi, Suntory, Sapporo, Kirin) is expanding overseas due to their demographics (older population lesser consumption)
- status quo will remain for the moment for Permanis before Asahi starts introducing new products
F&N 100 plus is a large contributor to its revenue while its condensed milk sales are resilient (thanks to teh tarik stalls)
- values F&N at $7.3b (based on Permanis acquisition) but he thinks Permanis was overvalued while F&N is slightly undervalued due to the pessimism over losing its Coke licensing
- Coca-Cola (just went its own way here) is seen as a threat but will be struggling in the next few years, which is an opportunity for F&N to capitalize on with its large distribution network
- YHS is a good takeover target
CFO of Petronas Dagangan Rozaini Musa:
- Petdag is #1 in the commercial (supplying to airplanes, industries) and LPG (cooking gas)segment and #2 in retail (petrol stations, after Shell) and lubricants.
- retail still has room to expand while there are plans to expand abroad to Thailand and Indonesia
starting to sell LPG through petrol stations
CEO of Malaysia Smelting Corporation Dato Seri Mohd Ajib Anuar ("The tin man"):
- MSC is the 2nd largest tin metal supplier in the world
- tin is mostly used in electronics at the moment (for soldering) besides tin plates for packaging but has also many other uses and is non toxic
- price volatility is due to its securatization leading to speculative activities
- for smeltering, earnings are on a cost plus basis while for mining it is correlated to the price of tin itself
- US used to keep a large stockpile but now not anymore
- MSC losses in 2010 was due to divestment of its non-tin assets causing impairment
- MSC now intends to focus on tin only, thus earnings will be more stable going forward and plans to develop new mines abroad
As for Tan Teng Boo's view:
- he is bearish on 2H2011 since early part of the year
- although there may be another global recession, which will be worst than in 2008, global economic depression is unlikely due to the growth of emerging markets (none in 1930s)
- problem is worst now compared to 2008 because governments of developed nations have run out of policy tools (interest rates are near 0%) while developing nations are suffering from high inflation
- Malaysian economic outlook in the long term depends a lot on whether the promised economic reforms will take place
Padini held a fashion show with many pretty, slim models. If I could bring home that tall, long haired Eastern European (?) girl, now that would be a fantastic takeway :P
August 11, 2011
market view
According to Hong Leong Investment Bank's latest Market View report today, their FBM KLCI year-end target of 1,670 (15x 2012 earnings) is "at risk with downside bias in view of risk aversion and potential global recession." It is noted however that Asia is facing this from a "position of strength given room for monetary loosening, ample liquidity, strong banking system and rising consumerism amidst reducing inflationary threat."
For investors who want to remain invested, they recommend defensive stocks such as Public Bank, Axiata, Digi, TM, Maxis, KLCCP, BJToto and Boustead as well as some high dividend yield stocks and REITs.
For investors who want to remain invested, they recommend defensive stocks such as Public Bank, Axiata, Digi, TM, Maxis, KLCCP, BJToto and Boustead as well as some high dividend yield stocks and REITs.
August 08, 2011
Large red bars
Many stocks gapped down when today's market opened in Malaysia, and we'll probably end up with a large red candlestick bar in the charts at the end of the day. S&P downgraded US debt to AA+ on Friday.
I am rather peeved that some of my paper profits that took some months to build have been wiped out or reduced drastically in a day.
My current forecast is that we'll have a 20-30% correction in the KLCI for 2H2011 i.e. it will be a downward bias market for the rest of the year, until we have some fresh catalyst. This will be a good time to accumulate some good quality dividend yielding stocks, while I'll try to unload some of my more vulnerable, speculative stocks if I am able to make a small profit on them. Otherwise I'll keep them for the long term. I know some traders would say to cut loss, cut loss, cut loss. But I know the stocks I have are companies that are financially strong and can survive a downturn (and have survived the last downturn). So I am comfortable with the temporary illiquidity.
It's time like these that knowing the financial condition of your company becomes more important so that you don't simply sell your good quality stocks in panic selling.
According to Macquarie, the US debt downgrade will benefit Malaysia and Singapore bonds.
"Singapore and Malaysia will be the main beneficiaries of inflows into the region as global funds step up diversification into non-dollar assets after the US lost its top credit rating, according to Macquarie Group Ltd.
International investors will add to holdings of Singapore bonds, the only economy in Southeast Asia with a top rating from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, the bank said in a research note dated Aug. 6. Malaysia, which has the world’s largest Islamic debt market, will become more attractive to investors in the Middle East, according to Australia’s biggest investment bank."- Bloomberg
Read more: US downgrade to benefit Malaysia: Macquarie
I am rather peeved that some of my paper profits that took some months to build have been wiped out or reduced drastically in a day.
My current forecast is that we'll have a 20-30% correction in the KLCI for 2H2011 i.e. it will be a downward bias market for the rest of the year, until we have some fresh catalyst. This will be a good time to accumulate some good quality dividend yielding stocks, while I'll try to unload some of my more vulnerable, speculative stocks if I am able to make a small profit on them. Otherwise I'll keep them for the long term. I know some traders would say to cut loss, cut loss, cut loss. But I know the stocks I have are companies that are financially strong and can survive a downturn (and have survived the last downturn). So I am comfortable with the temporary illiquidity.
It's time like these that knowing the financial condition of your company becomes more important so that you don't simply sell your good quality stocks in panic selling.
"Singapore and Malaysia will be the main beneficiaries of inflows into the region as global funds step up diversification into non-dollar assets after the US lost its top credit rating, according to Macquarie Group Ltd.
International investors will add to holdings of Singapore bonds, the only economy in Southeast Asia with a top rating from Standard & Poor’s, Moody’s Investors Service and Fitch Ratings, the bank said in a research note dated Aug. 6. Malaysia, which has the world’s largest Islamic debt market, will become more attractive to investors in the Middle East, according to Australia’s biggest investment bank."- Bloomberg
Read more: US downgrade to benefit Malaysia: Macquarie
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