Next stop $70?
The bearish flag is also observed in the SP500. Next stop 1000?
September 18, 2011
bearish flag
Oil price has been in a downtrend for the past 5 months. Notice the bearish flags continuation pattern.
Next stop $70?
The bearish flag is also observed in the SP500. Next stop 1000?
Next stop $70?
The bearish flag is also observed in the SP500. Next stop 1000?
September 15, 2011
news bits
World Bank President Robert Zoellick said on Wednesday the world had entered a new economic danger zone and Europe, Japan and the United States all needed to make hard decisions to avoid dragging down the global economy....Zoellick said European countries were resisting difficult truths about their common responsibilities, Japan had held off on needed economic and social reforms, and political differences in the United States were overshadowing efforts to cut record budget deficits. (Reuters)
Carl Weinberg, the chief economist at High Frequency Economics is very worried about Europe. His central forecast is that the debt crisis will lead Europe into a depression that will mean soaring unemployment, deflation and zero interest rates for the foreseeable future....Gold will offer the safest haven, according to Weinberg, who fully expects Europeans to move cash under their mattresses in early phases of this crisis...."The beneficiaries of this flight of cash out of Euroland will be the hot economies of Asia, notably China, India and Korea." said Weinberg. (CNBC)
Food prices could rise next year because an unseasonably hot summer likely damaged much of this year's corn crop....More expensive corn drives food prices higher because corn is an ingredient in everything from animal feed to cereal to soft drinks. It takes about six months for corn prices to trickle down to products at the grocery store. (AP)
All Malaysian gasoline stations will offer bio-diesel fuel by next year, Plantation Industries and Commodities Minister Bernard Dompok told reporters. (Bloomberg)
Carl Weinberg, the chief economist at High Frequency Economics is very worried about Europe. His central forecast is that the debt crisis will lead Europe into a depression that will mean soaring unemployment, deflation and zero interest rates for the foreseeable future....Gold will offer the safest haven, according to Weinberg, who fully expects Europeans to move cash under their mattresses in early phases of this crisis...."The beneficiaries of this flight of cash out of Euroland will be the hot economies of Asia, notably China, India and Korea." said Weinberg. (CNBC)
Food prices could rise next year because an unseasonably hot summer likely damaged much of this year's corn crop....More expensive corn drives food prices higher because corn is an ingredient in everything from animal feed to cereal to soft drinks. It takes about six months for corn prices to trickle down to products at the grocery store. (AP)
All Malaysian gasoline stations will offer bio-diesel fuel by next year, Plantation Industries and Commodities Minister Bernard Dompok told reporters. (Bloomberg)
September 13, 2011
MAYBULK
Malaysian Bulk Carriers Bhd. is the largest drybulk shipowner in Malaysia engaged in international shipping. It presently owns and operates a fleet of vessels which includes dry bulk carriers and product tankers. Bulk carriers are involved in the transportation of dry cargoes comprising major bulks such as iron ore, coal, grains and minor bulks like sugar, coke, fertilisers. Tankers are engaged primarily in the seaborne transportation of clean petroleum products, chemicals and vegetable oils.
This will be a good stock to hold during euphoric times of economic growth, such as between 2006-2007. It's our proxy to the Baltic Dry Index. However, its share price has been beaten down since the past 2 years and its now even lower than its 2008 low (unadjusted). For the past year, EPF has been slowly disposing the stock in the market.
Its financial condition is healthy with current ratio of 4.1 and debt-to-equity ratio of 0.05. LTD/PAT is 0.36 while cash/debt is 3.8. In terms of returns, it has a high ROE of 24% and profit margin of 87% (both based on 5 years average) and gives a dividend yield of 5% (higher in the previous few years). it is currently trading at a PE of 8 and its net assets per share is $1.63.
Being a fundamentally strong stock, I'll keep it in view of recovery of its share price. Things I will look out for are
1. consolidation in its technical chart
2. upturn in the Baltic Dry Index
3. climax of the current global economic woes
4. renewed optimism in the growth of emerging markets
The figure below shows the effect of quantitative easing (QE) 1 on the BDI. Notice that QE 2 did not have much effect. The BDI recovery in 2009 could also be attributed to China buying up commodities which were at rock bottom prices then.
This will be a good stock to hold during euphoric times of economic growth, such as between 2006-2007. It's our proxy to the Baltic Dry Index. However, its share price has been beaten down since the past 2 years and its now even lower than its 2008 low (unadjusted). For the past year, EPF has been slowly disposing the stock in the market.
Its financial condition is healthy with current ratio of 4.1 and debt-to-equity ratio of 0.05. LTD/PAT is 0.36 while cash/debt is 3.8. In terms of returns, it has a high ROE of 24% and profit margin of 87% (both based on 5 years average) and gives a dividend yield of 5% (higher in the previous few years). it is currently trading at a PE of 8 and its net assets per share is $1.63.
Being a fundamentally strong stock, I'll keep it in view of recovery of its share price. Things I will look out for are
1. consolidation in its technical chart
2. upturn in the Baltic Dry Index
3. climax of the current global economic woes
4. renewed optimism in the growth of emerging markets
The figure below shows the effect of quantitative easing (QE) 1 on the BDI. Notice that QE 2 did not have much effect. The BDI recovery in 2009 could also be attributed to China buying up commodities which were at rock bottom prices then.
September 05, 2011
market views
Views collected from the MoneyWeek magazine:
John Stepek advises there core holdings for the long term - gold, blue chips with dividend yields and cash.
Dominic Frisby believes we’re now in a bear market and that rallies should be sold. This is based on the Death Cross signal on the SP500 and FTSE charts - both moving averages sloping down as the 50 dma crossed the 200 dma. Since 1996, this has only happened twice- in late 2000 and early 2008. Both were times to get out of the stock market.
Simon Caufield sees a temporary recovery of the economy this year before recession hits in 2012. He advises holding free cash in your portfolio and prepare to catch once-in-a-generation opportunities next year.
John Stepek advises there core holdings for the long term - gold, blue chips with dividend yields and cash.
Dominic Frisby believes we’re now in a bear market and that rallies should be sold. This is based on the Death Cross signal on the SP500 and FTSE charts - both moving averages sloping down as the 50 dma crossed the 200 dma. Since 1996, this has only happened twice- in late 2000 and early 2008. Both were times to get out of the stock market.
Simon Caufield sees a temporary recovery of the economy this year before recession hits in 2012. He advises holding free cash in your portfolio and prepare to catch once-in-a-generation opportunities next year.
August 29, 2011
news bits
The hottest summer since 1955 in Iowa and Illinois is eroding yield prospects for corn and soybean crops in the U.S., the largest grower and exporter. Signs of diminished output appeared this week during a four-day, seven-state sampling of about 2,000 fields in the Midwest organized by the Professional Farmers of America, which will report its findings later today. A Bloomberg survey of 25 tour participants showed all expected the government to cut its corn-harvest forecasts and 21 predicted a reduction for soybeans. (Bloomberg)
World wheat production will be 0.4 percent higher than a July estimate at 677 million metric tons on better production in the European Union, Russia and China, the International Grains Council said yesterday. The EU estimate was increased 0.5 percent to 137.5 million tons. (Bloomberg)
The new head of the IMF on Saturday, Aug 27 called on global policymakers to pursue urgent action, including forcing European banks to bulk up their capital, to prevent a descent into a renewed world recession...."Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," Lagarde said, adding that central banks should stand ready to jump back into unconventional policy actions if needed. (Reuters)
The U.S. won’t slip into recession after Federal Reserve Chairman Ben S. Bernanke said the central bank has more tools to support growth if needed, said Templeton Asset Management’s Mark Mobius....Mobius is positive on commodity stocks and expects higher raw-material prices as inflation accelerates...He is “pretty positive” about Southeast Asian equity markets, he added. “Looking at Southeast Asia, it’s Thailand and Indonesia.” (Bloomberg)
World wheat production will be 0.4 percent higher than a July estimate at 677 million metric tons on better production in the European Union, Russia and China, the International Grains Council said yesterday. The EU estimate was increased 0.5 percent to 137.5 million tons. (Bloomberg)
The new head of the IMF on Saturday, Aug 27 called on global policymakers to pursue urgent action, including forcing European banks to bulk up their capital, to prevent a descent into a renewed world recession...."Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation," Lagarde said, adding that central banks should stand ready to jump back into unconventional policy actions if needed. (Reuters)
The U.S. won’t slip into recession after Federal Reserve Chairman Ben S. Bernanke said the central bank has more tools to support growth if needed, said Templeton Asset Management’s Mark Mobius....Mobius is positive on commodity stocks and expects higher raw-material prices as inflation accelerates...He is “pretty positive” about Southeast Asian equity markets, he added. “Looking at Southeast Asia, it’s Thailand and Indonesia.” (Bloomberg)
August 23, 2011
13 Reasons to Invest in Wellcall
I made this list based on an article about Wellcall in The Edge Malaysia yesterday.
13 Reasons to Invest in Wellcall:
1. It is the largest exporter of industrial rubber hoses in Malaysia
2. It is able to pass down the cost to customers if raw material prices (rubber) rises gradually
3. It has the flexibility to switch between natural and synthetic rubber
4. 98% of transactions are in US dollars (advantageous if the US dollar strengthens)
5. Its operations are capital intensive rather than labour intensive, with a workforce of only 400.
6. Its products are more for niche markets, especially in the oil and gas (O&G) sector. Other major application markets include automobile, ship building, mining and food and beverage (F&B).
7. It has no significant competitors in Malaysia due to high cost of equipment.
8. Its current production utilisation is reaching 80% and planning to expand.
9. It derives 90% of its revenue derived from foreign markets, i.e. Asia, Middle East, Europe, North America, Australia/New Zealand and South America. It is expanding its customer base in places such as Africa, Russia and Latin America.
10. 85% to 90% of its sales come from the replacement market because industrial hoses last up to eight months before they are replaced.
11. It does not hold stock of its products because production is based on a job order basis, thus preventing overcapacity and price dumping.
12. The market for industrial hoses has a growth of 4% to 5% a year.
13. High dividend yields and debt free
I like reasons No. 7, 8, 10, 13.
Main risks would be 4 and 9.
Its share in global market is only 0.4%.
Its website comes out in the first page of Google when I searched the term "industrial rubber hoses."
It would be a good buy if the global economy is expanding.
13 Reasons to Invest in Wellcall:
1. It is the largest exporter of industrial rubber hoses in Malaysia
2. It is able to pass down the cost to customers if raw material prices (rubber) rises gradually
3. It has the flexibility to switch between natural and synthetic rubber
4. 98% of transactions are in US dollars (advantageous if the US dollar strengthens)
5. Its operations are capital intensive rather than labour intensive, with a workforce of only 400.
6. Its products are more for niche markets, especially in the oil and gas (O&G) sector. Other major application markets include automobile, ship building, mining and food and beverage (F&B).
7. It has no significant competitors in Malaysia due to high cost of equipment.
8. Its current production utilisation is reaching 80% and planning to expand.
9. It derives 90% of its revenue derived from foreign markets, i.e. Asia, Middle East, Europe, North America, Australia/New Zealand and South America. It is expanding its customer base in places such as Africa, Russia and Latin America.
10. 85% to 90% of its sales come from the replacement market because industrial hoses last up to eight months before they are replaced.
11. It does not hold stock of its products because production is based on a job order basis, thus preventing overcapacity and price dumping.
12. The market for industrial hoses has a growth of 4% to 5% a year.
13. High dividend yields and debt free
I like reasons No. 7, 8, 10, 13.
Main risks would be 4 and 9.
Its share in global market is only 0.4%.
Its website comes out in the first page of Google when I searched the term "industrial rubber hoses."
It would be a good buy if the global economy is expanding.
August 20, 2011
Faber favours Asia
According to a MarketWatch article, Dr.Marc Faber favours emerging market equities and corporate bonds for the long term, and also gold.
"Faber's own stock portfolio is centered on dividend-paying Asian shares, particularly in Malaysia, Singapore, Thailand and Hong Kong. These include a variety of real estate investment trusts and utilities....he's also turned positive on Japanese banks, brokerages and insurance companies....Faber is convinced that the price of gold will continue rising and that any pullback is a buying opportunity."
"Faber's own stock portfolio is centered on dividend-paying Asian shares, particularly in Malaysia, Singapore, Thailand and Hong Kong. These include a variety of real estate investment trusts and utilities....he's also turned positive on Japanese banks, brokerages and insurance companies....Faber is convinced that the price of gold will continue rising and that any pullback is a buying opportunity."
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