Digi: The January Defect?

When global news turn positive,punters will play up stocks-especially day traders who will square off their position by day's end.

New benchmark at RM3.95

Also, this is driven by the more than anticipated January effect. Fund managers will have been given their war-chest to play into stocks to spin profits for their stakeholders.

And so it seems.

Yesterday, market went down marginally but today, it took off whirl-wind like pushing stocks to high heaven. Look at Genting, massive non-stop punting push the stock to beyond RM11.32. Similarly Digi shot up to no man's land of RM3.95. And then the sellers arrived to profit take all the way down until crimson colour rules these stocks.

Digi finished lower by 2 sen to RM3.79 while Genting was pruned by some 10 sen to RM11.14.

I go up, I go down

The bigger boys also had their gains trimmed such as BAT, Dutch Lady,KLK and Nestle.

Lousy day for trading. What January effect....more like a maddening January defect!

Adventa: Loss Recognition

Dismal Future?

 Despite rising revenue to RM430 million, representing an uptick of 25%,brought about by high shipments and better prices, Adventa experienced a dismal net profit of RM4.2 million in fiscal year ended October 2011. This is an 88% drop from RM35 million earned in the foregoing year.

After writing off exceptional losses of RM9.23mil, the current quarter ended Oct 31 closed with a first time quarterly loss of RM3.66mil, with pre-tax profit standing at RM5.57mil before exceptional losses.

Adventa blamed the losses to a small fire incident at one of the factories. A damaged storage unit took a hit loss of RM2.12mil in fixed assets while goods damaged came up to RM4.61mil.

“While insurance claims are processed, these are written off as a loss. In addition, an investment bond of RM2.50mil which was part of a CLOP arrangement loan five years ago was declared a total loss in October 2011 upon maturity by the trustees and this is written off in this quarter,” it said.

As at fiscal year ended Oct 31, its total borrowings rose to RM189.28mil, compared with RM130.6mil, while cash and cash equivalents dwindled down to RM13.3mil from RM41.5mil recorded previously. Last December, the group issued RM30mil in nominal value Islamic medium-term notes from the Islamic commercial papers/Islamic medium-term notes programme with a give-day tenure.

Moving forward, the group said the erratic dynamism of commodities and currencies created a difficult environment for management control in cost and sales prices.

“To find a sure formula to manage these factors well is a challenging task in view of the commodity and foreign exchange markets reacting very sensitively to news with less valuation based on fundamentals,” it said.

So, it is rough waters for Kelantan-based Adventa until better times come. Otherwise, do not expect magic here!

PPB: The Waikari Chinese Acquisitions

Waikari Sdn Bhd, a full-fledged subsidiary of Federal Flour has proposed to take a 20% interest in two Chinese-based comapanies namely-Dongguan Yihai and Yihai Zhoukou. Both are local flour millers.

Experience, Infrastructure and Customer Base

Federal Flour is 80% owned by PBB.

Penetrating China Piggyback Style

Why these investments at a lowly 20%?

According to PPB, this is to tap of the vast network of Wilmar in China especially its existing infrastructure and broad customer base. Riding on Wilmar's experience in China, PBB expect to navigate the procedural  and legal complexities and vagaries of trading in the various provinces as each apparently are governed by its own set of legal frameworks. Moreover flour consumption per capita is expected to increase in the burgeoning Chinese market. This is also in line with PBB strategy to expand its market share overseas.

The Chinese economy is also expected to be resilient despite the government easing of an overheated property market through interest administration.

Given the bright scenario and the realistic market penetrating strategy via taking minority equities in these local flour milling outfits, PPB expects it to offset for lower Wilmar dividends and to contribute to its bottom line, by and by.

International Bottom line Considerations

So, have a hard look at PPB and buy on weakness.

Go Go Genting!

"Go Go Genting!'. That is the sign on the sides of their buses.

Good start for 2012

I believe this must be a good year for the group sans the not too rosy reports from equity account associate Genting Manila.

Genting Singapore should continue to provide the lion share of profits with some from Genting New York. As for UK, just getting marginal profits should see the group through.

Genting Malaysia back home as well as the plantation arm should be stable earners.

With that, it is no wonder that the stock was punted up to RM11.20 at this morning session on heavy buying well beyond 34,000 million shares.

With the Dragon Year in waiting, Genting should go, go, go again.........up and up again.

Control and Command Freaks!

My DUMC senior pastor started the new year sermon by conducting an experiment on the congregation.

He distributed a rubber band to all of us.

The rubber band should be placed on your left wrist. If you have a complaint in your heart or have verbalized it, then you would have to shift it to the right wrist.

Any redemption at the end of the day will allow the rubber band to get back onto the left wrist.

I doubt many mortal can really pass this test. Not if done with absolute sincerely, and it will not be sustainable.

My reasoning?

 It is not how good we are but how we are build emotionally.

Stoic, we are not. No Man of La Manca are we!

The basic reason is a majority of us are control freaks save for a good minority of victims!

 Dealing with a control freak can take a lot out of you. The way they command attention and make demands makes it almost impossible for you to reject them except at your behest which could range from foul words to other forms of embarrassing anti-social behaviors.

They take over your will and you are rendered virtually opinionless much less a brain to work with. Soon, you've become the control freak's life-long zombie serf!

So, how does one stop this ?

Unless they are optimally incommunicado on the gray matter level, reasoning is the best way. Doesn’t work with me because the person is a freaked out savage where slave driving is the norm.  There is just no private time or private space. You are at the beck and call of King Ramses or a devilish Jezebel! You are fully stressed out by the end of the day!

Most controlling personalities have a fear of rejection or failure.  They do not know how to lose. So they become belligerent. They should be shown the psycho analyst couch pronto!

Dividend for you this 2012

Schroders predicts that 2012 will be dividend play in Asia.

Asian Dividend Performer in 2012

Why?


Returns of investments in Asian stocks have yielded 66% return on the long run for them.


Moreover both global and domestic factors will be underpinning this strategy.


As long as the Eurozone sovereign debt issue remains prickly, the forerunner of global dividend payout will no longer be Europe but gravitate towards Asian stocks.


Despite the romance with capitalisation gains, traditionally dividends has been the bedrock of long term returns globally as it reflects the actual dynamics of the economics of the day.


Schroders research has shown high dividend yielding stock has outperformed he market for the last 20 years!


The opportunity cost for entry now is low and payout should be good for yet many years to come.


So, I am going with Schroders' this year!

Look out particularly for CIMB,Maxis,Digi,GAB,BAT,Sime,MBB and other high yielding stocks in 2012 if you are playing Bursa KL.

Revel at the Urban English Carvery

Yes, at Hotel Istana, you can revel at a choice of lamb,beef and chicken roasted and be served in thin servings as your heart would desire.

The lamb was heavenly though the beef tasted ordinary. The chicken was just not up to par.

The soup was potato and leak and it was salty.

Some of the bread selections especially the garlic bread, pizza and a few pieces of crusty bread chips was great, to say the least.

The smoked salmon was noteworthy with its side dips of mustard and wasabi.

Some may like the fettucinni but I felt it was too spicy to my liking. Made in Malaysia?

There was a good choice of potatoes and I like the red Japanese ones best.

The dessert is really good especially the caramel and cheese cake.

To spice up the meal, we topped it with a maitai and a grenadine cocktail. The maitai was a little stiff but the grenadine was great!

There should have been fruits. That was sorely lacking!

All in all, the last restaurant meal we had for 2011!