KLCI End of Year Analysis

KLCI Monthly Chart

1500 is hard to crack. Monthly Stochastic has been in the overbought region throughout 2010! Monthly RSI also points to a overbought condition which usually means limited upside in the future. However, with money flooding into the system, the uptrend can be longer than anyone expected.

2011 theme should be inflation. To play the inflation theme, one must buy companies that are involved in producing the raw material such as mining and agriculture and avoid companies that deals with the end users. This is because it is easy for the producer to hike up prices to the manufacturers, but it is harder for the manufacturer to pass on the cost to the end consumers.

For the various Bursa Malaysia sectors, all had a good run in 2010, but now look toppish. They look like in distribution mode for the pass month and two. So, sell into strength because the market cannot always go up.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Up
Finance	Up	Up	Up
Construction	Up	Up	Neutral (-)
Plantation	Up	Up	Up
Property	Up	Up	Up

Concerning IJM/IJMLand, someone really has inside information that cause the great plunge. SC should investigate. The suspension should have started before the trading days begins, not at 12pm. Anyhow, stock trading is always an unfair game, so just keep that in mind.

Interesting Chart: YTLPowr

YTLPowr Daily Chart

A buy signal given. This could be another chance to ride the uptrend.

Disclosure: Long

By the way, the IGB chart turns out to be boring, therefore, I have to let it go.

New SW

4 SW will be listed on 29 Dec 2010:

New Warrants	Expiration	Type	Ex Price	Ratio
CHMOBIL-CF	28/12/2011	Call	HKD 78.0000	20 : 1
WANT-C1	28/12/2011	Call	HKD 6.5000	3 : 1
AIA-C3	28/12/2011	Call	HKD 21.0000	10 : 1
GENS-CD	28/12/2011	Call	SGD 2.2500	6 : 1

New Foreign SW

4 new SW from CIMB will be listed on 21 Dec 2010:

New Warrants	Expiration	Type	Ex Price	Ratio
WYNN-C3	22/12/2011	Call	HKD 16.8800	10 : 1
HSBC-C8	22/12/2011	Call	HKD 75.0000	40 : 1
HSI-CE	29/06/2012	Call	24,000.00	4000 : 1
HSI-H3	29/06/2012	Put	24,000.00	4000 : 1

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Still cannot break.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Neutral (-)
Finance	Up	Up	Up
Construction	Up	Up	Up
Plantation	Up	Up	Up
Property	Up	Up	Up

Interesting Chart: IGB

IGB Daily Chart

May have broken the triangle pattern. May also have cleared the resistance at 2.05. If it can stay above this level by the close of today, then the next resistance is 2.35-2.50.

Disclosure: Long

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Looks like the 1520 is a tough nut to crack. After 3 times, still no success. I'm seeing conflicting signal from the weekly chart. MACD & Stochastic points downwards, EMA points upwards while RSI also indicates upwards. Maybe this indicates a top. I see excessive exuberant in a few counters based on the premium on the warrants. Examples are SPSetia and Pchem. Anyway, no downtrend signal yet.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Up (+)
Finance	Up	Up	Up (+)
Construction	Up	Up	Up
Plantation	Up	Up	Up
Property	Up	Up	Up (+)

New OSK CW

6 new CW from OSK is listed today (9 Dec 2010):

New Warrants	Expiration	Type	Ex Price	Ratio
GENTING-CW	5/8/2011	Call	MYR 9.8000	12 : 1
BURSA-CR	5/8/2011	Call	MYR 7.5000	10 : 1
GAMUDA-CO	5/8/2011	Call	MYR 3.5500	4 : 1
AIA-C2	5/8/2011	Call	HKD 21.0000	12 : 1
ABC-C1	5/8/2011	Call	HKD 4.0000	2 : 1
APPLE-C4	5/8/2011	Call	USD 300.0000	1000 : 1

International Reserves of BNM

Date	MYR (billion)	USD (billion)
15-Nov-10	326.5	105.8
30-Nov-10	326.4	105.8

Source.

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Market still refuse to correct significantly. Europe and US central bank keeps pumping money. The extra money will end up being used for speculation. Maybe the general election is near. Need to keep the voters happy, if not, they will vote you out. So, I'm that happy the market is not dropping but also cautious for any sell off.

Summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Neutral
Finance	Up	Up	Neutral
Construction	Up	Up	Up
Plantation	Up	Up	Up (+)
Property	Up	Up	Neutral

New OSK CW

4 new call warrants from OSK will be listed on 3 Dec 2010:

New Warrants	Expiration	Type	Ex Price	Ratio
AIRASIA-CK	1/8/2011	Call	MYR 2.3000	3 : 1
PCHEM-CA	1/8/2011	Call	MYR 5.0000	5 : 1
IOICORP-CQ	1/8/2011	Call	MYR 5.6000	6 : 1
SANDS-C2	1/8/2011	Call	HKD 16.0000	8 : 1

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Interesting Chart: MHB

MHB DAily Chart

Could be a uptrend in the making.

Disclosure: No position

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Looks like KLCI is going to test the uptrend line (currently at 1430). Based on weekly chart, it is not a bear market yet. If you are holding some positions in call warrants, I think that it is a good idea to consider selling those where the underlying share is at the overbought region. I have closed my position in Kencana and KLK. Hopefully the correction is gradual so that other shares can still be pushed up.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Neutral
Finance	Up	Up	Neutral
Construction	Up	Up	Up
Plantation	Up	Up	Neutral
Property	Up	Up	Neutral (-)

4 SW from CIMB

4 new SW from CIMB will be listed on 29 Nov 2010:

New Warrants	Expiration	Type	Ex Price	Ratio	Call Price
IOICORP-JA	19/08/2011	Bull	MYR 4.9500	8 : 1	MYR 5.3000
MUDAJYA-CC	21/11/2011	Call	MYR 4.0000	6 : 1
KFC-CA	21/11/2011	Call	MYR 4.0000	5 : 1
AMMB-CJ	21/11/2011	Call	MYR 6.0000	5 : 1

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

The bulls are still trying to break out of the 1500-1530 region. If you have winning position, let it ride and take in new position 1 once a week. I'm in Axiata. Hopefully it really runs next week.

Summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Neutral
Finance	Up	Up	Neutral (-)
Construction	Up	Up	Up
Plantation	Up	Up	Neutral (-)
Property	Up	Up	Neutral (-)

International Reserves of BNM

Date	MYR (billion)	USD (billion)
29-Oct-10	324.9	105.3
15-Nov-10	326.5	105.8

Source.

EPF & Plus

I think that most of you all cheered when EPF & Khazanah decided to buy Plus. No more toll hike?

For me, my first reaction was: "There goes my EPF savings"!

Remember Timecom? Well Plus will be the next Timecom for EPF.

My main reason of opposing the buying of Plus is due to my belief of Peak Oil. When oil prices goes higher, do you think there will be any more cars left on the road? There will be less toll to collect for EPF. Therefore, Plus will become a bad investment for EPF & Khazanah.

For this, I'm also bearish on the auto sector, but bullish on companies that makes buses and trains.

By the way, the owners of Plus are very smart people. Somehow, they manage to unload Plus to the EPF contributors and the people of Malaysia. Most importantly, they manage to spin that this is a good investment for EPF.

To the EPF board, suckers!

Invest In Uranium

Besides gold, silver and platinum, I also have uranium in my foreign portfolio (through CCJ).

Why uranium? Read this.

By the way, I'm against a nuclear power plant in Malaysia because:
1. Nuclear waste needs to be stored in a secure place, where can we find one in Malaysia?
2. There is not enough nuclear fuel to go around, price will have to go higher than today's price to satisfied everyone's demand (this will invalidate the main reason of having a nuclear plant).
3. With our government modus operandi of awarding contracts, I expect that the main contractor would have gotten 10% by just subcontracting the work out. So if the nuclear plant cost USD3 billion, USD300 million (or MYR900 million) would have gone into some well connected person bank account.

Inverse ETF/ETNs

I will only give the stock symbol, get the details from Yahoo finance or Google finance.

Short Index: SDOW, SQQQ, SRTY, SPXU, QID, SJF, SJH

Short Sector: SMDD, SJL, SSG, SDD, SDP

Short Finance: FAZ, SEF, SKF

Short O&G: ERY, DTO, SCO, DUG

Please note that some are mimicking x2 or x3 times the underlying index/sector, this means that the gain or loss will be magnified. If you got the timing wrong, it will completely wreck your financial status.

For me, the inverste ETF/ETN has not fulfill my buy signal. This means the index has not shown any sell signal. It could take another 6 months to get one. So wait and observe. 

Q&A: Proton, SPSetia, Parkson

Questions:

What do you think of Proton-CF? the gearing is quite high at 8.76 albeit at slightly higher premium of 11%. 

How about SPSETIA-WB?

Parkson call warrant is really interesting... at > 8 gearing...

Answers:

Proton: May have broken out of 13 years downtrend but weekly chart shows that consolidation is ahead. Proton-CF premium is high for my standard. Additionally, the warrant is making a lower low. I won't touch Proton at this moment. 

SPSetia has had a good run. It should be consolidating it's gain now. Look for base building process at around 4.90.

Parkson: Must not break 5.75. If it does, previous analysis is all wrong. Wait for better signal before trading the warrants. 

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Chart shows a potential double top. However, it is still too early to confirm this until 1400 is broken. If you look at the volume, it is above normal. Nevertheless, it is not an euphoric volume (i.e. extremely high). More and more people are all excited about the stock market now. Last week, my uncle who has not played stock for a long time is all excited about the tips he get but did not buy. No matter what, this is a liquidity play. What is your plan after the money has dried up?

For those who have no US trading account, my advice is to open one now. When the market comes crashing, you wanna be prepared to buy inverse ETFs (ETF that short the market). At this moment, I have no balls to take a bear stand.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Neutral (-)
Finance	Up	Up	Up
Construction	Up	Up	Up
Plantation	Up	Up	Up
Property	Up	Up	Up

Interesting Chart: Axiata

Axiata Daily Chart

Coiling. A major move may be coming.

Disclosure: No position.

Inflation Coming Your Way

QE2 will bring another crisis to us. Look at the prices of food. The poor will suffer when food prices go up. Are you protecting yourself?

Crude Palm Oil Futures Monthly Chart

Coffee Futures Monthly Chart

Corn Futures Monthly Chart

Rough Rice Futures Monthly Chart

Soybean Oil Futures Monthly Chart

Soybeans Futures Monthly Chart

Sugar Futures Monthly Chart

Wheat Futures Monthly Chart

Bursa Malaysia Weekly Summary

KLCI Daily Chart

Overbought condition remains. Inflation play is getting hotter. If you want to trade, then go for commodity related stocks such as plantation, mining and oil & gas sector.

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Up
Finance	Up	Up	Up
Construction	Up	Up	Up
Plantation	Up	Up	Up
Property	Up	Up	Up

8 New Warrants on Nov 8

8 new structured warrants will start trading on 8 Nov 2010:

New Warrants	Expiration	Type	Ex Price	Ratio	Call Price
SIME-JA	5/8/2011	Bull	MYR 7.6000	10 : 1	MYR 7.9000
IJM-CE	8/11/2011	Call	MYR 5.2500	6 : 1
TCHONG-CF	8/11/2011	Call	MYR 5.9000	6 : 1
MHB-CC	8/11/2011	Call	MYR 3.6100	4 : 1
MHB-CB	3/11/2011	Call	MYR 4.8000	3 : 1
MHB-CA	3/5/2011	Call	MYR 4.4500	3 : 1
KENCANA-CE	3/5/2011	Call	MYR 1.8000	2 : 1
MRCB-CF	3/5/2011	Call	MYR 2.0000	2 : 1

The first four is issued by CIMB while the last four is issued by OSK.

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International Reserves of BNM

Date	MYR (billion)	USD (billion)
15-Oct-10	322.7	104.6
29-Oct-10	324.9	105.3

Source.

Gold at USD8,000?

Is gold a bubble? As long as EPF don't have gold in its portfolio, gold is still not a bubble. :p

Gold at USD8,000? What is the logic behind this?

Read Brodsky's thoughts on gold.

Interesting Chart: UMW

UMW Daily Chart

Could be making a move now. Continuing its uptrend. The major resistance is at around 6.90, after that it is 7.70.

Disclosure: Long

Interesting Chart: Parkson

Parkson Weekly Chart

Looks like broken from a triangle.

Disclosure: No position.

Interesting Chart: Digi

Digi Weekly Chart

Announced MYR0.50 dividend, ex-date on 11 Nov 2010. Since the announcement date, the price has moved 60 cents. Based on the chart, it should challenge the all time high of 27.50.

Disclosure: No position

Bursa Malaysia Weekly Summary

KLCI Daily Chart

Are we getting complacent? KLCI keeps going up. Is this to prepare for the listing of Petronas's chemical company? Hopefully, the oil and gas sector is pulled up due to this excitement. Daily KLCI RSI bearish divergence may have been broken based on last Friday's action. I must admit that it is hard to interpret the chart now. I feel uncomfortable buying in a very overbought condition since the anticipated support area is too far from the current price. On the other hand, I have not seen any selling signal. No euphoric buying yet. So, just sitting tight. Remember, big money is made during a big move. Don't go for the ikan bilis profit of 10-20%, aim for above 50% (or 100% if you are trading warrants).

Sector summary:

Malaysia	Monthly	Weekly	Daily
FBM KLCI	Up	Up	Up
Finance	Up	Up	Up
Construction	Up	Up	Up
Plantation	Up	Up	Up
Property	Up	Up	Up

Day of Warrants

9 new warrants will be listed on 29 Oct 2010. The first 5s are from CIMB while the last 4s are from OSK.

New Warrants	Expiration	Type	Ex Price	Ratio	Call Price
BJTOTO-JA	28/07/2011	Bull	MYR 3.6500	4 : 1	MYR 3.8000
WCT-CC	28/10/2011	Call	MYR 3.2000	4 : 1
AFFIN-CD	28/10/2011	Call	MYR 3.0000	4 : 1
YTLPOWR-CB	28/10/2011	Call	MYR 2.1500	2 : 1
AIRASIA-CJ	28/10/2011	Call	MYR 2.3500	3 : 1
GLD-C3	27/06/2011	Call	USD 125.0000	350 : 1
AIA-C1	27/06/2011	Call	HKD 18.0000	6 : 1
MMCCORP-CC	27/06/2011	Call	MYR 2.9000	3 : 1
MAYBANK-CP	27/06/2011	Call	MYR 8.5000	7 : 1

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More Warrants

4 new warrants from AM will be listed on 28 Oct 2010:

New Warrants	Expiration	Type	Ex Price	Ratio
QSR-CA	18/08/2011	Call	MYR 5.1500	6 : 1
WCT-CB	18/08/2011	Call	MYR 3.1000	4 : 1
GLD-C2	18/08/2011	Call	USD 130.0000	380 : 1
APPLE-C3	18/08/2011	Call	USD 300.0000	1350 : 1

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