Digi: Is this a Solid Beginning for 2012?

Two false starts. That is what happened to Digi when trading resumed during the new year. On 3 January, it touched RM3.89 before falling back to RM3.81.

Ibex style

Then yesterday, it went out bungee jumping without a rope after touching a new high of RM3.95. Then is lost its pants to close at RM3.79.

Today, it started more somberly. Every step it took was more sure footed like a mountain ibex. From a good 2 sen start at RM3.81, it is now hovering at the RM3.85 to RM3.86 divide.

By day's end, Digi touched RM3.88 and sat there prim and proper with a 9 sen gain.

Time for Myself

This year I have set time for myself.

From Monday to Friday, it is time for myself. To do what I want and to fulfil family obligations.

This year, I have to chart a path for my son's tertiary education and to support the growth of my daughter's career.

This year, I intend to do local travel before proceeding beyond the national borders.

This year, I intend to read more of the Bible and through it to know more about myself.

This year, I intend to see more of my parents.

As for Saturdays and Sundays, I devote these two days to teaching the students who are still under my tutelage.

As for the stocks, I must practise patience for good entries and exits.

Easier said than done but I must attempt to ensure there are more hits than misses.

Berjaya Foods: Defreeze?

A Gathering Storm

In slumber mode for a long time, Berjaya Foods finally reared its head. It started gathering buyers and there was an apparent push to RM1.05.

This is a good start for the new year given the rights issue must be completed by the first quarter of 2012.

To make the rights attractive, Berjaya foods must be sprung to at least RM1.30 to ensure full uptake.

Roasty Flavour profits

I am sure this counter is well controlled by some majority shareholders given the long dull period of inactivity which is so convenient for them to collect the stock.

Frappacino

If the buying trend does not subside, expect action on this counter. Maybe some angpow for you to spend by 20th January?

Is this an uptrend indicator?

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.