Unsinkable LPI

It really punches through today!

After announcing a bonus of one share for every two shares held, London Pacific Insurance saw hyper-space action this morning ramping up its price to RM 20.68 for a RM 2.18 increase.

Tracing its share from the prior 13th GE period in 2013 to the effects of  oil slumping in mid 2014 till today, the price did have short-term weaknesses every now and then but every time there was positive news, it ran ahead of the pack.

I expect some price correction as we approached the ex-date.

Assuming someone has 1000 shares, would it mean that  he will be better off with an additional 500 shares at a new price?

His holding at current price is RM 20,000. If he sells it today, he will reap RM 20 K.

However, if he doesn't, then this will be his risk scenario.

If the theoretical ex-price is about RM 10.00 per share, then his holding of 1.5 K shares will be worth RM 15 K. He will then take on a paper loss of  RM 5 K.

However, in the event that it ends at yesterday's price of RM 18, then his 1.5 K holdings will translate to a cool RM 27 K.

If and when this comes true, then it will one super bonanza of RM 9 K for such a holder!

So can this one Teh Hong Piow stock be the one with the kapow effect?

Doldrum Oil Prices

Crude Gold No More?

It's approaching the end of January 2015 and yet there is no respite.

OPEC has met and refused to cut production and shale oil is still rattling the market.

The Saudi King has changed and King Salman is in charge.

So, what is the crude oil position today(29 January)?

As expected, oil prices opened up weak in Asia after record US stockpiles sent it tumbling to near six year lows in the previous session.

To most analysts, the outlook truly looks bleak.

On Wednesday, the US reported record high inventories elevating further anxieties in the market.

According to the US Energy Information Administration (EIA), domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, their highest since the government began keeping records in 1982.

"The market expects stockpiles to keep rising, pushing front-month prices further down as refineries enter maintenance season and are likely run at lower utilisation rates," ANZ said in a morning note on Thursday.

Brent crude traded at US$48.60 (RM176) a barrel at 0131 GMT (9.31am Malaysian time) while US crude was at US$44.43 a barrel, both close to six year lows.

As a corollary, Swiss bank UBS said in a note on Thursday that cheap oil would not have a major boosting impact on Asian economic growth.

"Big, big drops in oil; small effects on economies... Cheap oil should give a small boost to Asian GDP, but not really enough to warrant major changes in growth forecasts," it said.

Researchers at Energy Aspects said in a note to expect a "a new normal  in the making for China-slower and less oil intensive growth".

They added that "oil consumption in China will become more efficient, leading to slower demand growth of around 0.2-0.3 mb/d (million barrels per day) compared to expectations of above 0.5 mb/d."

So, for the whole year of 2015, what can you see through the looking glass, Alice?"