Yes, the bull is definitely down, perhaps almost dead.
At the rate investors are reacting negatively to data that are merely 'work-in-progress', the market will indeed be gravitational, so this comes as no surprise.
Negative interpretation of data release by sundry parties, be it official or otherwise, have continued to sunk the market on a daily and weekly basis. I called this phenomenon as the ' Too Close to the Board' phenomenon.As you are always in the thick of the market, you failed to see the big picture akin to "seeing the trees for the woods". Amateur scenario builders fresh from graduate schools have also caused the market to come down with their dire self-fulfilling predictions. Are they in cahoots with short sellers?
A perpetually weak US market and a sickeningly 'black hole' Europe filled with potential sovereign debt culprits is laying the EU to a ruinous future as the Euro plunged to its lowest rate viz-a-viz the USD.
Closer home, expect the market to trade in a narrow band. When bad news comes from Europe of Wall Street, expect morning falls as arbitrators and short-sellers dominate.Comes afternoon, selling should ameliorate as bargain hunters slowly crawl out. Blue chip selling will depressed the indices but they almost always recover perhaps a few notches down. But all is not lost.
If you are here for the long haul, pick a few good blue chips.
If you look at the major pillars supporting the Malaysian economy,a few could maintain quite well just like a bear in winter.Look at hotel and commodity trading stocks like Tradewinds(M) Berhad. Tourism and staple commodity distribution is a sure bet for the nation right now. With a clutch of major world class hotel chains and selling staples like sugar and rice, not much can go wrong here, especially at about RM3.20 per share.
The other clear pick would be MRCB. A giant in the making in the mixed property development sector, it's book value will grow some more if it should get choice land parcels to develop in KL,Selangor and Johor. Apart from that its involvement in green technology and highway development will stand it in good stead.
Once the water rationalisation project can be resolved, relatively cheap counters such as KPS,KHSB and JAKS could be good plays. The Pahang-Selangor Water Transfer Project, which is an impetus for these counters to move, must be resolved. A Japanese funder is involved. PM Najib is not going to let the Japanese down by appearing as a global bad boy to them. So, watch these counters closely.
Also look at PPB. The counter will move up ever slowly as more issues get resolved with the incomprehensible tax evasion issue in Indonesia. I expect Robert Kuok's massive influence to play its role in the solution of this barbed matter. It will be a win-win situation where the Indonesian authorities and Robert will come out smelling like bouquets of roses. Watch my word on this !
Also do not forget the gaming stocks which are traditionally defensive stocks. BJ Sports Toto, BJ Assets, Genting Berhad and Genting Malaysia are good buys. Just ignore some of the downgrades. I think Kok Thai is worth more than what his silence is projecting. As for Vincent, BJ Sports Toto and especially BJ Assets should gain if the Ascot license gets through.
The Electrical and Electronic Sector is also showing impressive numbers. Data from the first quarter of 2010 was good. Do not expect a straight line 45 degrees jump for such counters as many 'growth issues' may not be on terra firma.
This is the time to buy rationally. Traders can benefit.
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