New Call Warrants

4 new call warrants from CIMB will be listed on 29 Jul 2010:

New Warrants	Expiration	Type	Ex Price	Ratio
MAYBANK-CO	28/07/2011	Call	MYR 7.7000	6 : 1
PBBANK-CN	28/07/2011	Call	MYR 11.8800	8 : 1
TM-CM	28/07/2011	Call	MYR 3.2000	3 : 1
KPJ-CA	28/07/2011	Call	MYR 3.2000	5 : 1

Ten Stock-Market Myths That Just Won't Die

From the WSJ:

1. This is a good time to invest in the stock market.
   
2. Stocks on average make you about 10% a year.
3. Our economists are forecasting...
4. Investing in the stock market lets you participate in the growth of the economy.
5. If you want to earn higher returns, you have to take more risk.
6. The market's really cheap right now. The P/E is only about 13.
7. You can't time the market.
8. We recommend a diversified portfolio of mutual funds.
9. This is a stock picker's market.
10. Stocks outperform over the long term.

Read the full article.

Skill vs Luck

It seems that investment requires more luck than anyone wants to admit it. Didn't you always encounter this: When you got it right, you have the skill. However, when you got it wrong, you have bad luck.

Read this 42-page analysis of skill vs luck: Untangling Skill and Luck.

World Market Weekly Summary

Looks like the end of the world has been avoided! It looks like there will be no major sell off in this coming 1 month period:

World	Monthly	Weekly	Daily
S&P500	Down	Neutral (+)	Neutral
DJI	Neutral (+)	Neutral (+)	Neutral
NasdaqComp	Neutral (+)	Neutral (+)	Neutral
Nikkei 225	Down	Down	Down
Kospi	Up	Up	Up
SSECI	Down	Down	Neutral (+)
HSI	Neutral (+)	Neutral	Up (+)
TWII	Neutral	Neutral	Up
STI	Up	Up	Up
JKSE	Up	Up	Up
SENSEX	Up	Up	Up
AORD	Down	Down	Neutral
NZX50	Down	Down	Down
FTSE	Down	Neutral (+)	Up (+)
DAX	Up	Up	Up
RTSI	Neutral (+)	Neutral (+)	Up (+)
Bovespa	Neutral (+)	Neutral (+)	Up (+)

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

Still going up. Not overbought yet.

Construction Index Weekly Chart

Construction could be the next hot sector. Breakout from a 11 months resistance line!

Ok, I got this feeling that I'm missing out on this train. Oosh! When one believe in the bad fundamentals, it is hard to put in money into the market. I cannot believe that the investors can be fooled twice on this stress test thingy. I guess that as long as no one panic, the valuation can still be fantasized. CRE did not collapse. Dollar did not collapse. Inflation is still mild based on official statistics. China property did not collapse. My investment strategy is based on these events and it is painful if one missed out the so called bull market rally.

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

BJCorp-JA

BJCorp-JA
Borned on: 16/07/2010 09:00 AM
Died on: 22/07/2010 04:13 PM

Total living time: 5 trading days

BJCorp-JA should be given an entry in the Malaysian Books of Record for having the shortest lifetime in the derivative category.

Comparing call/put warrants against bull/bear warrants, the odds are better for the issuer of bull/bear warrants. Bull/bear warrants gives the buyer no hope if you get the direction wrongly. At least for the call/put warrants, you can still hope for the direction to go back to your way. Anyhow, it is a swift death to those that holds BJCorp-JA when it was terminated.

If you want to speculate on these bull/bear warrants, make sure that the premium is <2%. Bursa Malaysia Warrant Calculator may prevent you from over-paying. The cost for the calculator is definitely less than then cost of your mistake.

Shark Loan

Have you heard of shark loan? I know of loan shark. So, what is shark loan? Click on this link to know about it.

How widespread is this shark loan in China? If the property price stops rising, will we have a collapse greater than we think? Just something to ponder.

International Reserves of BNM

Date	MYR (billion)	USD (billion)
30-Jun-10	309.8	94.8
15-Jul-10	309.9	94.8

Source.

World Market Weekly Summary

I'm seeing mixed signals for markets around the world. S. Korea, Singapore, Indonesia, India and Germany are still going strong while the rest are weak. No strong sell signal from NYSE & Nasdaq yet. Will we have a repeat of Sept-Oct meltdown? I surely hoped not. However, I'm on the look out for opportunity if it happens.

World	Monthly	Weekly	Daily
S&P500	Down	Down	Neutral
DJI	Down	Down	Neutral
NasdaqComp	Down	Down	Neutral
Nikkei 225	Down	Down	Down (-)
Kospi	Up	Up	Up
SSECI	Down	Down	Down (-)
HSI	Down	Neutral	Neutral
TWII	Neutral	Neutral	Up (+)
STI	Up	Up	Up
JKSE	Up	Up	Up
SENSEX	Up	Up	Up
AORD	Down	Down	Neutral
NZX50	Down	Down	Down (-)
FTSE	Down	Down	Neutral
DAX	Up	Up (+)	Up (+)
RTSI	Down	Down	Neutral
Bovespa	Down	Down	Down (-)

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

KLCI still going up. I still believe that this upward movement will not last. Moreover, we already have18 months of upward movement without any serious correction. This doesn't feel right.

Summary:

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

New Callable Bull Certificate

4 new callable bull certificates are listed today (16 Jul 2010). This is a new derivative instrument from CIMB. This is also called bull warrant in Hong Kong. Basically, it is a deep in the money call warrant that will be delisted if it hits the callable price. Bursa Malaysia explains this nicely here. The details:

New Warrants	Expiration	Type	Ex Price	Ratio	Call Price
BJCORP-JA	15/04/2011	Bull	MYR 0.9800	2 : 1	MYR 1.0600
GENTING-JA	15/04/2011	Bull	MYR 5.8000	10 : 1	MYR 6.1500
GAMUDA-JA	15/04/2011	Bull	MYR 2.5500	5 : 1	MYR 2.7000
AIRASIA-JA	15/04/2011	Bull	MYR 1.0000	2 : 1	MYR 1.0500

You can use my Bursa Malaysia Warrant Calculator to compute the premium easily.

World Market Weekly Summary

Market seems to have stop sliding down. Most probably it is not yet time for a major sell off. I think that we will have a rebound, especially for the US market as there is a election coming on.

World	Monthly	Weekly	Daily
S&P500	Down	Down	Neutral (+)
DJI	Down	Down	Neutral (+)
NasdaqComp	Down	Down	Neutral (+)
Nikkei 225	Down	Down	Neutral (+)
Kospi	Up	Up	Up (+)
SSECI	Down	Down	Neutral (+)
HSI	Down	Neutral (+)	Neutral
TWII	Neutral (+)	Neutral (+)	Neutral (+)
STI	Up	Up (+)	Up (+)
JKSE	Up	Up	Up (+)
SENSEX	Up	Up	Up (+)
AORD	Down	Down	Neutral (+)
NZX50	Down	Down	Neutral (+)
FTSE	Down	Down	Neutral (+)
DAX	Up	Neutral	Neutral (+)
RTSI	Down	Down	Neutral (+)
Bovespa	Down	Down	Neutral (+)

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

A buy signal was given in the daily chart. However, the weekly MACD is negative. Therefore, I don't think that this is a strong buy signal. KLCI may still go up, but it wont' go far. Is it because of the impending election (Sarawak and GE) that the market is kept afloat?

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

The Fifa world cup final is at its final leg. After Monday (I'm sure most of you will have a sleepy head on Monday), most probably KLCI stock market will be back to normal. The trading volume is generally on a decreasing trend since Dec 2009. By the way, watch out for a possible formation of a H&S on the KLCI chart. The left shoulder during Nov/Dec 2009, the head during Apr/May and another possible right shoulder that is forming now.

What Is Money?

Money, an object that we used everyday but never give it any deep thought. When I was small, my understanding is that money is created by Bank Negara Malaysia. Then I discover that different nations have their on bank negara. I always thought that money is the one that you can see and hold. What ever extras that you have, you can ask the bank to hold it on your behalf.

But, that is not the entire truth. Apparently, money is also debt! The amazing thing is that the majority of the money is created by banks and not by the central bank. The amount of physical money that we see and hold pales in comparison as the total amound of credit/debt that is created by the banks. Mind boggling eh? They don't teach you at school about this, luckily we have the Internet.

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International Reserves of BNM

Date	MYR (billion)	USD (billion)
15-Jun-10	314.3	96.1
30-Jun-10	309.8	94.8

Source.

World Market Weekly Summary

The sky is falling! The sky is falling!

World	Monthly	Weekly	Daily
S&P500	Down (-)	Down	Down
DJI	Down (-)	Down	Down
NasdaqComp	Down (-)	Down	Down
Nikkei 225	Down	Down	Down
Kospi	Up	Up	Neutral (-)
SSECI	Down	Down	Down
HSI	Down	Down (-)	Neutral (-)
TWII	Down (-)	Down	Down (-)
STI	Up	Neutral	Neutral (-)
JKSE	Up	Up	Neutral (-)
SENSEX	Up	Up	Neutral (-)
AORD	Down	Down	Down (-)
NZX50	Down	Down	Down
FTSE	Down (-)	Down	Down
DAX	Up	Neutral (-)	Down (-)
RTSI	Down (-)	Down	Down (-)
Bovespa	Down (-)	Down (-)	Down (-)

Bursa Malaysia Weekly Summary

KLCI Daily Chart

Looking at the daily chart, I think that KLCI will consolidate at around the current level. It can still go either way - up and down. However, downward probability is higher.

Summary of the sectors:

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