Saturday, January 31, 2009

2009 Equity Market Rules By The BEAR'S.

Chinese New Year celebration already enter its 6th days. As usual we will be travelling around asking people what did they foreseen in the coming future for the KL Composite Index? Some of them even suggest that this year the KL Composite Index might be eyeing 550 points level ......

Some of them even show me a predictions from Guru Master of Feng Shui. They even mention to me that when was the time that the market will behave negatively. According to what they mention here the Bear's will concur the equity market for at least 8-10 months and the Bull's will fight back only for 2-3 months only. Some even told me that the economy won't be recover until year 2011 or year 2012.

Other suggest there will be another financial collapse in banking system especially in the U.S. or maybe in Europe. Gee .... this kind of news still floating around and it suggest that we still need to go for a biggest battle in the financial market wars in terms of capabilities to stay alive in equity market.

What ever is going to happen this year, it will be a tough year for the equity market. The Bear's is predict to take over the Bull's through out the year of 2009. It won't be an easy market to survive. If we are not careful enough, we might not being able to help ourselves if we being slaughter by the Bear's.

Friday, January 30, 2009

KL Composite Index Still Weak. Consolidation Mood.

Early in the morning the Dow Jones Industrial Average finished 2.70% lower, ending a three-session streak of gains. The DJIA was down -226.44 point to close at 8,149.01 point. As long as the DJIA still stay above the 8,000 point then it still consider alright for the financial market.

The KL Composite Index still trading with low volume recorded this morning. Without the volume back up, it is hard for the share prices to move up. What we need in this market was a market leader and a volume build up. Then only we can consider to trade with market. With this kind of momentum it is hardly for us to make any gains out of it.

No doubt the U.S. House of Representatives has approved an $819 billion stimulus plan recently, it is still early to say that this plan will work at it best. The 44th U.S. President, Barack Obama still needs to do more in order to stimulus their economy or else their financial instruments will face a collapse in near terms.

Thursday, January 29, 2009

Nikkei 225 Show Some Positive Sign.

Nikkei 225 is the latest index to touch the Parabolic SAR. An indicator to buy appears but it is still early to tell whether this is the right time to enter to the market.

The volume created in KL share market is still very low. Some of the counter shows some promising sign but not yet that convincing.

Hang Seng Index just open today and it's still need few more days before anything that we can confirm its uptrend. Singapore Straits Times also the same, need few more trading days to confirm it.

Anyway a careful watch on how the market will react will basically based on how the Dow Jones Industrial Average performance this few days. Currently the KL Composite Index still staying inside a comfortable zone but with the volume still low it is very hard for it to move higher.

Dow Jones Industrial Average Showing Some Positive Sign. A Buy ?

Dow Jones Industrial Average today show some sign of recovering. Up +200.72 point to close at 8,375.45 points. Base on the charts the most important indicators for short term emerge. Parabolic SAR appears at bottom for the first time since the last Parabolic SAR appears on top on 09.01.2009.

Accordingly it should be a call to buy for the DJIA. How about the regional stock market around the world especially the Hang Seng Index, Nikkei 225, FTSE and Singapore Straits Times.

If the indicators show the same sign as the DJIA then I would call it a buy for this market but we need to a few days to confirm that the trend have change.

Sometimes in order to wait for the confirmation, we would have miss the bandwagon again but to be sure that we would not be riding up to the hill and all the sudden falls into black hole where by we can't even make some gains instead we have to bear more losses. A careful approach is needed at this moment as we don't want to be catch alive and throw like a dead fish.

This week and next week will be a crucial week to look into if the DJIA still have the capabilities to move higher and withhold it strongest support of 8,000 points. Right at this moment some of the Malaysian share prices are still trading at lows. We still can consider it is cheap but again if this rally really appears it would be another short terms plays. Time to accumulate on weakness ?

At this moment, monitoring the movement will be the right way to find out whether the Malaysian share prices still have hope to move forward. Anything can happen these few trading days, just stay and look out for opportunity.

Wednesday, January 28, 2009

Royal Bank of Scotland Prediction Accurate.

Well today is the third day of Chinese New Year. The beginning of first trading days for the Malaysia share market. Nothing special for today's trading. During this first two days of holidays I managed to take my time to reorganised my files in my computer. All the sudden I found one special article that I have received before the financial crisis strike.

I was amazed by this article as this article already warn us what is really going to happen to the financial market. During that time I don't really care that warning because I did not believe that this is going to happen? Let us share the article that I have received in the month of June 2008.

19/06/2008
Fund managers respond to the RBS prediction of a fully-fledged stock market crash. By Paul Farrow

Fund managers have reacted strongly to the forecast by the Royal Bank of Scotland of stock market crash and warn investors not to act in haste and panic. The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist. But Richard Buxton, fund manager at Schroders, says Mr Janjuah's comments are 'alarmist'.

"If you strip out anything stocks related to oil, energy and mining in the FTSE you will see that the market is already down by 30 per cent over the past year. We are in a bear market which has been masked by the performance of those sectors."

Buxton points out that many UK shares closely connected to the slowing economy are down between 50 and 80 per cent over the year already and it is too late for investors who have yet to protect their portfolios. They will merely crystallise losses, he says.

"Yes, we are in for a tough time and there may be another sell-off but average earnings are cheap and an awful lot of the bad news is already priced in. It is too late to sell, investors need to look through the volatility - I am investing aggressively on downturns. Any falls will be temporary - the falls are simply pushing down on a spring in valuation terms."

Robin Geffen, chief investment officer at Neptune Asset Management says that he finds it 'amusing' that the grim outlook from RBS has emerged just days after the beleaguered bank completed its Rights Issue.

He echoes Buxton's sentiments. "The RBS analyst is a bit late with his forecast, about a year and half late. We have already had a bear market in many areas of the market. The guy has got the financial world confused with the real world where the consumer is real and the building of infrastructure is real.

Any parallels to the stock market crash in the late 1920's are ga-ga." Geffen argues that there is value and opportunities to be found - he has around 10 per cent in cash and is selectively adding to his portfolios. "I still like emerging market, oil, gas and mining stocks."

The RBS report warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century. "Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

Yet Martin Walker, fund manager at Invesco Perpetual says the market has de-rated to such an extent that he can't envisage the market falling much from here. "Much of the market is trading on historic low valuations, aside from the resource and basic materials. Even if those sectors fall by half it will not make a massive difference to the overall fall in the FTSE."

Walker is keen on the pharmaceutical stocks such as Glaxo Smith Kline and Astra Zeneca because they are uncorrelated to the economic cycle. "There are also great opportunities to invest in companies that are growing profits and growing sustainable dividends. BT is yielding 7.5 per cent - and it is a safe yield – that's fantastic value."

Leading portfolio manager John Chatfeild-Roberts at Jupiter admits that the US economy which is teetering on the brink of a recession is a concern and that stagflation (stagnant economic growth and rising inflation) remains a real threat to all Western economies. But he is looking to invest and make the most of the volatility.

He has recently increased his exposure to Japan which he reckons is the one major economy in the world that will benefit from the re-emergence of inflation. He adds: "The portfolios remain very underweight the UK, which is still in the early stages of a significant consumer slow down. We are underweight financials and have no direct property exposure.

On the other hand, we favour a variety of energy, infrastructure and emerging market plays and think that the current risk/reward ratio of investing in good quality corporate bonds to be very favourable. We will look to increase our exposure to these securities where appropriate. We do expect volatility to pick up over the summer months and look forward to taking advantage of this across the portfolios."

The origin of this article (Telegraph.co.uk)

Believe It or Not ? Just Believe It.

Monday, January 26, 2009

Year Of Ox Looking Very Un-Bullish.

If the global economy fails to recover in 2009, the housing bubble or credit crunch may not be to blame. It could be a lack of fire. Chinese fortunetellers say fire - one of the five elements mystics believe form the basis of the universe - is essential to financial well-being. And fire is nowhere to be found in the mythology of this coming Year of the Ox, the Chinese lunar year that begins Monday.

"Fire is the driving force behind economic growth. Without it, the market lacks momentum," said Raymond Lo, a Hong Kong master of feng shui, the ancient Chinese practice of trying to achieve health, harmony and prosperity through building design, the placement of objects and auspicious dates and numbers.

Chinese soothsayers see a deepening recession, millions more losing their jobs, and stocks and home prices continuing to fall. That's more or less in line with what some economists are predicting, but some fortunetellers are throwing in other dire predictions - massive earthquakes, rising U.S.-Russian tensions and trouble for President Barack Obama.

Obama, born in the Year of the Ox, is taking office in a particularly bad year for his Chinese astrological sign. The ox sign is in direct conflict this year with a traditional Chinese divinity called the "God of Year," considered a bad omen. Obama also is the 44th president, a number the Chinese deem extremely unlucky, because "four" is pronounced the same as "death" in Chinese.

"The new U.S. president is not having good luck this year. His honeymoon will only be short-lived," said fortuneteller Alion Yeo, predicting Obama may even face impeachment in his first year in office. "The Year of the Ox looks slightly better and less dire than last year, but it will still be bumpy."

Yeo also predicted that the U.S. mortgage crisis would worsen and the stock market would plunge to new lows. But Malaysian numerologist Weng Shi Ming suggested Obama's birth year would offset his bad luck. Weng said the symmetry of 1961 is "the perfect mix of ying and yang," rendering Obama "immune to the effects of 44."

The ox, one of 12 animals in the Chinese zodiac, symbolizes calm, hard work, resolve and tenacity. According to legend, the ox allowed the cunning rat to ride on its head in a race to determine the animals' order. Shortly before the ox crossed the finish line, the rat leaped off to claim victory. The Year of the Rat was marked in 2008.

The lunar new year is the biggest annual festival for ethnic Chinese, who make up about one-fifth of the world's population. It is a time of lavish spending, when loved ones exchange "hong bao," or red envelopes stuffed with money. But this year's festivities will likely be more subdued amid the economic slump.

Joey Yap, a feng shui expert in Malaysia, saw no economic recovery before 2010. "It will be a daunting year. We haven't really reached the peak of the problems yet," Yap said. "We haven't tasted the main dish, and will most likely experience it during the second half of the year."

But feng shui master Lo saw a glimmer of hope. The combination of two elements changes every lunar year, and this time it's two earths, the element that represents harmony and peace. Not since 1949, when the world order was settling down after World War II, has an Ox Year seen two earth signs. "It is a year for healing ... from the turbulent time the world has experienced," Lo said.

Associated Press writer Eileen Ng in Kuala Lumpur contributed to this report.

*** GONG XI FA CAI ***

Sunday, January 25, 2009

Obama Won't Save Us

By Lara Wozniak

If he does, he won't be re-elected. There are too many financial problems for one man, even a US president, to solve. On Tuesday night President Barack Obama gave, yet again, an upbeat, awe-inspiring speech about a new beginning. You've no doubt read the text or at least heard the sound bites.

But what does it mean to the financial world? Precious little.

Full disclosure here. I voted for Obama. And if you read my story the day after he was elected, you would know I'm deeply happy, if mildly surprised, that he is the US president. I want nothing more than to see him succeed.

But I don't hold my breath. Let's start with the financial world. On the day of the inauguration, Bank of America, the biggest US lender by assets, watched its stock drop 29% to $5.10 on concerns that the company needs at least $80 billion to restore capital to adequate levels. This news far overshadows any speech. Meanwhile, the second-biggest US bank by assets, Citi, witnessed its share price fall 20% to $2.80 in regular trading.

Stocks should have all been stable or up - buoyed by the good news of the end of the Bush era and a fresh start. But even Obama's beautifully crafted inauguration speech promising change on all fronts couldn't save the day.

And that's because the problems are so deep, and so out of his control, we now need more than just words to turn things around. But ironically, my guess is that words will also be used to hurt him, as the world's media uses the power of commentary to turn public opinion against him.

In my mind there are two types of journalists: Those who took up the pen in some wind-swept and interesting pursuit of always being critical without having to actually do anything. Weaned on the Hunter S Thompson school of journalism they see the world through grey-tinted lenses coated in sarcasm. These journalists are back in a pub, waiting patiently for Obama's first mis-step so they can fire off a barrage of "no we can't" articles.

The second type of journalist doesn't thrive on failure, but has witnessed so many lies and horrors, that they have become jaded for self-protection. They may be singing Obama's praise now, but once the confetti is swept away, and the day-to-day work begins, they will take up their natural tone, which is to assume the press secretary is spinning lines (and let's be honest here, if you were to define spin it would be (1) 50% our side of the story, 50% selectively ignoring other facts; (2) lying).

So the media, which is currently Obama's ally, will become his foe, and that will cause damage. But even if the media had no sway over popular opinion, popular opinion will no doubt turn against Obama. That's because his constituency is hurting or will be hurting.

Obama has inherited a mess both on the domestic and international fronts, and cannot be expected to solve all the problems overnight. Yet, people will expect just that and will quickly lose patience if they don't see improvements, especially (or even solely) on economic and social issues.

If you lose your job and have no hope of finding one in your immediate vicinity, if you lose your house because you can't pay your mortgage, if you run up an enormous credit card bill that you'll be paying until you retire, if you can't actually retire, you're not going to re-elect this president. Constituents aren't going to be happy that their way of life must change.

The reason we're in this mess is because so many people used their homes like ATM machines and thought credit cards were a license to buy above and beyond their earning capacity. The basic maths lesson will be learnt, but by the next generation (which will grow up understanding what Chapter 11 means), not this one.

But there is still hope.

The financial mess is fixable; but it will take time. And it will be painful. My hope is that Obama fully realises this. His proposed $825 billion package of federal government investments that includes dozens of spending measures ranging from $200 billion in fiscal relief to help state and local governments, to $6 billion to extend broadband to rural areas (a 21st century version of Depression-era rural electrification) may be a kick-start to the economy but it won't fix things immediately.

Two-thirds of the total value consists of spending, with one-third for tax cuts - the spending will take time to trickle down, and the tax cuts won't be long-remembered by voters. So what Obama needs to do is to act not like a politician, but be daring. If he does his job with no hope of re-election - makes tough choices that are for the long-haul and not the short-haul, the world will be a better place.

That means letting the Big Three automakers fail, so that a new industry with no legacy costs and a goal of creating an alternative vehicle that uses no petrol (As in zip, nada, none; not less) can be created. In one extremely painful move he will erase wars with unions, and possibly wars in the Middle East. He will also create a rust-belt with no immediate job prospects, which would ensure no re-election.

Obama needs to sort the housing problem. There were 2.25 million home mortgage foreclosures last year. Worst of all, one out of every six homeowners owes more on their mortgage than their house is worth. Giving homebuyers a tax credit and buying up foreclosed mortgages is a start, but again, it's going to take time to sort that mess.

The Obama team has suggested ways to use some of the remaining funds from the $700 billion bailout programme that was passed in early October for handling the housing problem. One idea is to commit $50 billion to $100 billion to reduce the number of preventable foreclosures.

There's two political problems there: (one) sadly, that won't be enough and (two) it's going to really irritate people who didn't over-leverage themselves to see their neighbours bailed out. But it may need to be done. Given problem number one, Obama is going to have to force banks receiving bailout assistance to implement mortgage foreclosure mitigation programmes rapidly (this is in the works, but it needs to be stepped up, pronto).

That won't help the share prices of those banks, which will lead to a repeat of the abovementioned problem number two. It is going to really irritate people who didn't over-leverage themselves AND own bank stocks.

In the banking sector, Obama needs to force more draconian measures alongside the bailout money. The banks are effectively nationalised already, but to go the full hog is to invite the intrusion of American bureaucracy. That means the best and the brightest won't want to become bankers. At the same time, the best and the brightest need to be reined in.

The age of masters of the universe needs to end and bankers need to become servants of the universe - people who are well paid for acting prudently and responsibly as bankers should, not paid mind-numbing figures for outsmarting the regulators, rating agencies and auditors. That means, this bailout money needs to come with a mighty big stick.

Don't nationalise the banks, just control them. Indeed, a few indictments may be in order. The ever-so-nutty Jim Cramer recently invited Obama to call him and ask who on Wall Street should be indicted or fired. Such a call might be worth making, but, in the end, it won't get Obama re-elected.

Article from Mr. Jesper Lee (Cimb)

Friday, January 23, 2009

Post CNY Rally. Will There Be Any Rally ?

Will there be a rally after Chinese New Year ? Through out my experience for the past few years, seldom we face on the last day of trading before Chinese New Year arrive, the KL Composite Index register a huge drop in index.

I still can remember each year before Chinese New Year the share market will act quietly with most of the share prices hovering around at their level.

Every year before Chinese New Year I will buy some of the share to keep it for post Chinese New Year rally but this year I feel that it will not going to be this way.

Usually most of the time after we celebrated Chinese New Year the share market will move slowly and close with a gain. It usually maintain about one to two weeks only.

This year I don't have this kind of confident whether our share market will behave like what it use to be ? The sentiments out there still fragile and anything can happen within second. Talking about the confident level that I have right now is still very low compare to previous few Chinese New Year.

Base on the charts and indicators the KL Composite Index still have a little big hope if the current 860 points didn't break at all as this level stand as a support line for the KL Composite Index to move in a consolidation way but the index must close and move higher each day.

Thursday, January 22, 2009

Any Obama Effect For World Financial Market To Move On ?

Well the share market stage a technical rebound after the Dow Jones Industrial Average (DJIA) climb to close higher in the early morning. The DJIA climb up +279.01 points to close at 8,228.10 points. With this climb up, was it because of the "Obama Effect" ? As long as the DJIA able to stay above 8,000 points then it will be a relief to global financial market.

Based on the KL Composite Index movement right now, it is still too early to predict where the KL Composite Index is heading to. At these moment indicators still didn't poised any positive sign yet with the total volume recorded was lower.

Chinese New Year is coming. Most of the Asian share market will be close for long holiday. DJIA and the European Market will act as the Big Boss for next week indicators.

Yesterday the Bank Negara plays an important role in helping out to stabilize the Malaysia share market. The announcement of reducing the Key Interest Rate to 2.5 percent is really helping in reducing the current crisis face by the businesses. We are hoping that the Bank Negara will keep on continuing its current performance in helping out this country.

Wednesday, January 21, 2009

Singapore In Worst Ever Recession.

Article from Mr. Jesper Lee (Cimb)

Singapore's economy shrank more than expected in the fourth quarter, prompting the government to declare the nation was in its worst ever recession and fanning expectations that the central bank will let its currency weaken.

The Singapore economy shrank in the fourth quarter at a seasonally adjusted, annualised pace of 16.9 percent, deeper than advance estimates of a 12.5 percent contraction, detailed government data showed on Wednesday.

The government said it now expected Singapore's economy to contract between two and five percent this year, slashing its forecast further from an already downgraded outlook of a range of minus 2 percent to plus 1 percent published just three weeks ago.

"The Singapore economy is going through its sharpest, deepest and most protracted recession," the Trade Ministry's second permanent secretary Ravi Menon said at a media briefing. Singapore's central bank said on Wednesday that its monetary policy stance of zero appreciation in the Singapore dollar announced last October was intact and it had no plans to review monetary policy ahead of a scheduled policy meeting in April.

But analysts said the gloomy economic forecasts and grim fourth quarter data increased the likelihood the central bank will loosen policy and let the Singapore dollar slide. "I'm bearish for the Singapore dollar. It's worse than I expected," said Irene Cheung, currency strategist at Royal Bank of Scotland in Singapore.

"I expect monetary policy to remain accommodative -- they should have recentered the band earlier, but they might still do it -- the sooner the better." Singapore manages monetary policy by adjusting the value of its currency relative to those of its main trading partners in an undisclosed band. The Singapore dollar (SGD=D3) stood at 1.5037 against the U.S. dollar by 0050 GMT, compared with 1.51 before the data.

The government expects key non-oil domestic exports will shrink 9-11 percent this year, while total trade, which includes entreport activities, may plunge 17-19 percent. From a year ago, fourth quarter gross domestic product, or the value of all goods and services produced in Singapore, fell 3.7 percent following a drop of 0.2 percent in the third quarter.

Singapore last reported three straight quarters of economic contraction in 2001 after the dotcom bubble burst in the United States, badly hurting the city-state's key electronics sector. The economy grew 1.2 percent for all of 2008, slowing sharply from 7.7 percent expansion in 2007. The government said manufacturing output in the fourth quarter shrank 10.7 percent from a year earlier, while services contracted 0.1 percent.

Biggest Inauguration Day Drop For DJIA..

This morning The Dow Jones Industrial Average suffered its biggest Inauguration Day drop in its 112-year history Tuesday, falling 332 points or 4% to 7949.09 points, its lowest level since Nov. 20. Meanwhile, the S&P 500 lost 5.3%, and is now down 11% in the first 12 trading days of 2009; the Nasdaq shed 5.8%. Accordingly this is a disastrous for the global financial market.

Financial stocks tumbled 16.7% Tuesday, registering their worst single-session decline since a 17% drop Dec. 1. Ongoing weakness in the financial sector has rekindled pessimism in the broader market. People are worried about the banking system.

With this kind of selling activities and heavy volume created, we might enter another wave or another round of selling that would turn very bad. The 8,000 point strong level that should poised as a support also has been broken. After this Inauguration Day, the 44th U.S. President will face one of the toughest financial crisis in all decades.

Tuesday, January 20, 2009

January Effect Not Materialise.

World Financial Market performs badly this morning. It seems that they are going down further. "January Effect" didn't really materialise. How about the Chinese New Year Rally ? According to the charts reading it is better to put your money under the pillow rather than trying to catch cheap counters.

There is no indication that the share market is heading for better days. LCL Corporation Berhad, once a darling stock among speculators investor. Last few days this counter has been creating new low and today LCL drop another RM 0.055 to close in the afternoon session at RM 0.58 per share. LCL performance can be consider quite bad compare to the others.

Before the global financial crisis hit, LCL was one of the favourite counters among the speculators player but today LCL is hitting new lows. What really happen to this counter ? Recently OSK Research has downgraded LCL Corporation Bhd to a neutral at RM 0.735 from trading buy with a reduced target price of RM 1.09. With this downgrade it surely will post a little impact on LCL.

With today most of the share prices hitting at their lows, it would be better to monitor for a few more days. Whether they are going to stay at their recently low or creating more new low, the worst of all the global financial crisis seems just only half way and it still have long way to go.

Windfall Tax For Palm Oils To Be Lifted ?

There is some new development happening in Malaysia local news especially for the plantation counters. Yesterday there was a news coming out stated that the Malaysia's government is considering a request by domestic palm oil producers, including Sime Darby Bhd and Kuala Lumpur Kepong Bhd, to scrap a windfall tax after the price of the commodity slumped.

This is good news as it would help the Malaysian share market if this becomes a reality. The time has arrive for the government of Malaysia's to reconsider this request as it can help the local plantation company and even the Malaysia bourse. The tax was introduced last July 2008 when the price of palm oil was almost double the current level.

The tax was applied to planters when they sold palm oil for more than RM 2,000 (USD 560) a metric ton, and at a time when the vegetable oil fetched RM 3,575 on the Malaysian market. Palm oil for April delivery now sells for RM 1,860.

Whether this would be an "Ang Pow" news for the share market, we will have to wait further for the Government of Malaysia's to announce their decision. It is time for us right now to pay a little bit of attention for the plantation counters. Who knows ?

Monday, January 19, 2009

Malaysian Share Market Stay At Negatif Bias.

Today turnover is quite low with nothing to look forward. Most of the shares were down. Basically based on previous Chinese New Year, one week before Chinese New Year arrive, the share market reaction usually behaves quietly or we can call it as a consolidation move.

KL Composite Index today was down -6.19 points to close at 890.28 points. Base on the chart reading, it is still not a good sign. As being recommended last week; stay at the sidelines would be a wise choice and decision in order to determine how the global financial market will behave during this few days.

Tomorrow will be the day of the newly president-elect Barack Obama take on the White House. It would very interesting to watch how the Dow Jones Industrial Average will react accordingly.

A huge move up or just a side way movement only. Currently the world share market performance still indicates a very slow movement. We need to watch also after Barack Obama has officially enter the White House, how the DJIA will react ?

Right at this moment there isn't any fantastic news to support the global financial system. What we can hear everyday is just lots of retrenchment workers from the big firm and big company. It seems that things are getting worst and worst.

Sunday, January 18, 2009

Barisan Nasional Lost Again. What Would Happen To KL Composite?

PAS candidate Mohd Abdul Wahid Endut yesterday won the Kuala Terengganu parliamentary seat by-election with a majority of 2,631 votes. Mohd Abdul Wahid, 52, garnered 32,883 votes, while Barisan Nasional (BN) candidate Datuk Wan Ahmad Farid Wan Salleh obtained 30,252 votes.

This is a major blow for our waiting Prime Minister to be: Datuk Seri Najib Tun Razak. After all his efforts and hard work, still he has no choice but to accept the decision. For Barisan Nasional and UMNO it was a setback. This loss seems to be an indication that the future next general election will be very hard to fight.

At these moments and from yesterday results the current standing for parliaments seats now stand at Barisan Nasional 137 seats while the Pakatan Rakyat now gains another seats to become 83 seats. Independent 2 seats. Total parliament seats 220 seats.

Tomorrow the Malaysia share market will open. We will see whether this election result will have significant impacts on the share market. With 2,361 votes different, it shows that the people in Malaysia have lost their confident towards current government.

With all the full force being concentrate in Kuala Terengganu for a parliamentary by-election and still the Barisan Nasional cannot win this small by-election, we can simplified that; it is actually a disastrous results for Barisan Nasional. Whatever it is, tomorrow we will know the answer.

Saturday, January 17, 2009

Scomi CEO Denies Involvement In US Investigation.

The Chief Executive Officer of Scomi Group Bhd, Shah Hakim @ Shahzanim Zain, said he has not been involved in any further investigation into the alleged nuclear proliferation network since 2004.

He was making reference to an article in The Straits Times (Singapore) on Friday, Jan 16, in which he was said to have been designated by the US State Department together with 12 other individuals for alleged involvement in nuclear proliferation.

In a statement issued by Scomi today, Shah Hakim reiterated that he has not been involved in any further investigation into the alleged nuclear proliferation network since the investigation by Polis Di-Raja Malaysia (PDRM), International Atomic Energy Agency (IAEA) and other autorities in 2004.

Shah Hakim also said he was not notified of the action taken by the US State Department against him. It was reported that the sanctions by the US government meant that individuals designated by the censure order are banned from any involvement of business with the US government. In the statement, Scomi also highlighted that on Feb 20, 2004, the PDRM issued a press statement absolving Scomi from any violation of laws under the Non-Proliferation Treaty or the Additional Protocol thereto.

"At such time, the company was informed that the IAEA, US Government and other foreign authorities had ceased their investigations into the company, being satisfied that it had been deceived into manufacturing the semi-finished machine parts," Scomi said.

Moreover, the then US Under-Secretary of State for Arms Control and International Security, John Bolton, had made a statement that the United States did not blame the company for the sales and understood that the company may not have known where the goods were bound and that the hallmarks of the international black market was that reputable companies could be made use of in this manner.

This statement was reported in the local daily, The Star on Feb 18, 2004, Scomi said. Scomi added that upon further queries, it was also informed that the designation of Shah Hakim by the US State Department was in respect of his personal capacity and did not involve the company.

Notwithstanding the above assurances, legal advice is currently being sought in addition to clarification from the US State Department, it said. Scomi said it will make appropriate and complete disclosure to the Exchange in a timely manner upon new developments in this matter.

Article from Bernama.com

Friday, January 16, 2009

Scomi Chief Among 13 On US List For Alleged Role In Nuclear Proliferation

US slaps sanctions on KL businessman. The US sanctions do not apply to listed companies such as Scomi Group. But several bankers say that the unwelcome designation of its CEO and main shareholder by the US could hurt the group's efforts to expand its engineering and manufacturing business overseas.

Its core activities include oil and gas and building monorail systems. Currently, it is pursuing contracts for monorail projects in India and the Middle East. Mr Shah Hakim did not respond to a request for comment for this report, and the US State Department statement did not detail the grounds on which the Malaysian businessman was designated under the censure order.

But regional intelligence officials said that the businessman's designation is related to fund transfers from Libya and Lebanon to finance the manufacture of centrifuge components manufactured by a Scomi subsidiary.

Ever since the nuclear-smuggling ring was exposed in late 2003, Scomi executives have maintained that they were never involved in any nuclear proliferation activities.

They also insisted that the company was misled by Mr Tahir, who was a key associate of Dr Khan, into manufacturing centrifuge parts for unspecified overseas customers involved in the oil and gas industry. Mr Tahir's wife was a one-time shareholder of Scomi.

The Malaysian government at the time also cleared Scomi, in which Datuk Seri Abdullah's only son Kamaluddin is a major shareholder, of any wrongdoing. The Malaysian government has yet to publicly comment on the latest sanctions. But diplomats and regional intelligence officials said that the US sanctions have raised doubts over those assertions.

The nuclear smuggling ring was exposed in October 2003 when European intelligence officials intercepted a Libya-bound shipment of centrifuge components produced by a Scomi subsidiary.

After a lengthy international investigation, Mr Tahir was detained under the ISA, after the Malaysian police discovered that he secretly brought seven Libyan technicians to be trained to operate high-technology machines at the Scomi-run facility to produce centrifuge parts. Mr Tahir was released last year after the Malaysian government declared that he no longer posed a security threat to the country. He continues to reside in Malaysia.

Article from Mr. Jesper Lee (Cimb)

Property Counters Behave Like Big Boss.

This is something very new for us. It seems that it have several times where by when the world share market experiencing a fall the third liners counters would trying hard to go against it (move up). Either we can call it a Chinese New Year rally or a January Effect that really didn't bring any huge changes to the Malaysia share market.

Base on the individual charts, the third liners (property counters) are performing tremendously compare to the KL Composite Index. Blue Chip shares are consolidating while the second liners behaved just like a follower.

It is hardly to calculate where the KL Composite Index is heading to right now because what really happen to the index yesterday (down 16 point) and the world financial market indicators, shows that they are still in a critical level.

Either we want to make a short term or medium term investment we must at least have some confident towards the global financial market or else we might loss everything that we have invested.

No doubt there were some rotational play, putting our money inside right now would seem to be putting our money on the casino tables. Either you gains or maybe you might loss everything. What ever it is, a careful approach needs to be implement on how we are going to trade in this situation.

Right at this moment with next week would be the last week to trade before Chinese New Year, I'm still monitoring the whole financial news and the market before any decision can be make.

Thursday, January 15, 2009

Dow Jones Technical Speaking - 8,000 Support Must Hold.

Article Courtesy From Mr. Jesper Lee. CIMB

Holding just above 8100 support. DJIA declined another 248 point last night to close at 8200 point. The Index reached as low as 8140 point last night before buying support kicked in.

This is not a surprise as the critical support for the DJIA is at 8000-8100. Break below 8,000 is very bearish, likely indication that wave “5” down-leg has kicked in already.

If wave “5” has started and assuming wave “5” equals length of wave “1”, DJIA could target 6,600 before bottoming.

Volumes rising. Trading volumes has been rising the past one week and this is not a good sign. The daily chart shows two bearish patterns, bearish rising wedge and a longer term descending triangle formation.

Based on the triangle formation, break below 8000 support would target DJIA at 6,600 eventually.

This is in line with our wave count projections. However, DJIA might not reach these levels as it is likely the “Plunge Protection Team” is expected to provide market support at the 8,000 levels.

Weekly chart looks bearish. DJIA’s weekly chart looks negative. RSI failed to breakout while MACD is hooking downwards. Key support level is at 8,000-8,100 points. If MACD reverses and confirms its “dead cross”, this would be very bearish and likely confirmation wave “5” down-leg has kicked in.

World Stock Markets Tumble in Morning Session.

Latest Updated for the KL Composite Index until Mid-Afternoon. Based on the chart the KL Composite Index touches the critical points. That should confirm that staying at the sidelines should be the right way to approach.

Critical moments like this shouldn't be treat as an opportunity to accumulate shares rather a moment to monitor the next course of world financial market. Rotational plays might emerge but it is not worth it if anything goes wrong with global financial crisis.

Many analysts have mention that most of the banks around the world still need more capital injection in order to stay alive and some of them might even report record losses. A loss that can wipe out the entire bank capital.

With the global recession hits around most of the countries it will hurt bank earnings because of bad debt. Yesterday sentiment was bad in Wall Street's after a U.S. government report showed retail sales dropped 2.7 percent last month, more than double the decline economists had expected and providing alarming evidence that American consumers are slashing their spending amid the global slump.

KL Composite Index Touches Its Critical Points.

A check on the KL Composite Index yesterday suggested that index is nearing the critical points. This time the Parabolic SAR reading is at 910 points. With yesterday DJIA closing down the KL Composite Index has breach its momentum tuning. It will either move into a consolidation movement or going down further. A rotational play might occur with most of the speculative counters still have some players inside.

Yesterday evening market was lovely with the UEMLand leads the third liners to move higher a bit. MRCB also take this opportunity to move higher. Although its look very tempting when most of the property sector are moving, still we need to respect the Dow Jones Industrial Average (DJIA). With their indicators entering the critical zone, a proper approach on how to minimize our financial risk will be the major concern for us.

Yesterday or early in the morning the DJIA tumble -248.42 points to close at 8,200.14 points. Luckily there was an indicator to alert us in advance about the weakness of the world financial markets are facing now. Most of the world financial markets are in a critical level.

Whether this fall would be an opportunity to accumulate, we have to be well prepare for the worst. Right now I'm staying on the sidelines. Ability to read the indicators couple with the world financial news would be the most useful tools to use and to generate an awareness among us. I might be lucky this time but next time it might turn to be the other way round. My 15 percent share that I have not yet sold is HeveaBoard.

With this huge falls, there is still a different about 750 points from the DJIA previous new low recorded at 7,449.38 points. It not far away. It would be a disaster for the world financial markets if the previous low was broken ! Anyway the Obama effects that most of the people are talking about seems to be not working at all.

Wednesday, January 14, 2009

KL Composite Index Must Stay Above 900 Points Level.

How the KL Composite Index doing now ? Base on the latest data from yesterday close, the KL Composite Index still managed to stay away from the critical points level (Parabolic SAR). Current reading shows that the KL Composite Index needs to avoid touching the 907 points in order to stay on course for the rally to continue.

If the point of 907 being touches, it still didn't pose any alarming stage provided that the KL Composite Index manage to hold on at the current level for few days before any attempt to move higher or even move down. I would expect the KL Composite Index to move sideways (consolidation) until Chinese New Year.

With the world financial market still weak and full of uncertainties. Staying at the sideline would be the best strategies to adopt at this moment.

Whether there will be a rally after this Chinese New Year, it would be another matter. The most important element now is people have been going around talking about the Kuala Terengganu parliamentary by-election on Saturday. Whether this by-election will determine the people choices for Barisan Nasional or Pakatan Rakyat ? Some even mention that if the Barisan Nasional cannot win this by-election then the next general election will be a difficult times for Barisan Nasional.

If Pakatan Rakyat manages to win this by-election it would be a disaster for Barisan Nasional because this by-election is being held in Kuala Terengganu and not in Permatang Pauh. So next week results will likely to have little impacts on whether our Malaysia share market will maintain the current levels or move the other way round.

Tuesday, January 13, 2009

World Financial Index Indicators Still Bad. Stay Out.

World financial market seems to be getting worst. With more negative news still flowing out, it is impossible for the share market to move forward. Today the KL Composite Index went down -9.87 points to close at 913.70 points.

Currently the index still stay in the safety channel provided there is no major movement in the index in these few days. If there is a huge movement on the index (going down) then the indicators might poise an ugly picture.

Crude Palm Oil (CPO) prices today tumble across the board with the March 09 contract prices down RM -158.00 to close at RM 1,830.00 per tonne. This huge tumble today also a bad indicator for the Palm Oil counters.

In my previous article, a cautious approach on how to trade with the current momentum should be applied in order to stay alive or to maintain our current positions. Currently with most of major financial market showing a negative sign, it is better to stay out from the share market and wait for a better indicator and leads before any decision can be made.

Dow Jones Industrial Average Not Doing Well.

Dow Jones Industrial Average already entering the critical points. To my mistake I didn't notice that actually last Friday DJIA already touches the Parabolic SAR points (moving down or consolidation move). The signal already appear but I can't see it because of the Double Top line that I draw mistakenly cover the signal.

DJIA yesterday down -125.21 points to close at 8,473.97 points. The DJIA already went down for 4 days, a slightly rebound might occur anytime. That also including the Hang Seng Index, Nikkei 225 and Singapore Straits Times which we saw they also went down for a few trading days until now.

Crude Oil prices stay at below USD 40 per barrel. This is another indication that this is not a good sign for the share market (oil and gas counters). Right at this moment we need to be cautious. Trade with a careful analysis. We might seeing some rotational play after this run up. At this moment I will re-examine the whole situation before making any new portfolio (buying) into the Malaysian share market or I might not create any new portfolio at all.

Monday, January 12, 2009

Hang Seng and Singapore Straits Times Moving Down ?

Wah Lahhhh. Third liners have started their engine with some of them have started to move higher in the evening market. The Malaysia share markets especially the property sector have ignored the world stock market movement. Even though Hang Seng Index registers a sharp drop of -406.44 points, still the third liners in Malaysia share market is performing just like a hero.

Equine Capital Berhad under the property sector is moving higher and close higher from yesterday closing. The counter went up RM +0.065 to settle at RM 0.425 per share. Consider well done for a counter that is below RM 0.40. Mainly today market performance is on the property sector.

With today KL Composite Index closing up +4.50 points at 923.57 points, the index still well above its comfortable level. To be frank we still in the safe zone but if we want to check the performance of world financial market today, the performance towards closing is still negative. Hang Seng Index today touches its critical level. That is not a good sign. Singapore Straits Times also touches the critical points today with the Nikkei 225 already touches its critical points on last Friday (Parabolic SAR).

With this kind of sign, I have no choice but to sell off about 85 percent of my shares. I'm selling it not because I believe that the Malaysian markets movement are over but it is because I'm now sitting at about 11K profit with some 15 percent shares still unsold. We still have to be cautious with world financial market performance because we don't know how the world financial market will react in this few days.

I'm still very positive on Malaysia share market but only for this week only. Basically one week before Chinese New Year approach, the share market will behave quietly and move into a consolidation move. This is from my past experience in monitoring the movements on the Malaysian share market.

Tonight Dow Jones Industrial Average performance will determine my next course of investment (short term). It will be an interesting story if the DJIA is going down (touching the critical points). I didn't expect a selldown but rather a consolidation move to side ways.

World Share Market In Consolidation Move ?

Base on the chart if we check the world stock market performance, its looks like they are moving a bit negatively. This week will be the best week to monitor if the current world stock markets still have any hope to advance. But I'm doubt about it.

Still need to monitor closely before any suggestion being made. Nikkei 225 already touches the critical point but we cannot determine that the Nikkei 225 market has gone or finish. We need to monitor at least for a week before we can get a conclusion on that matter.

Malaysia share market still in a comfortable level compare to other financial market. Last week I did mention that the share market will react differently if they ignore what really happen in U.S financial market.

This morning not every counter is moving but at least we have some leaders to make sure that the share market is still stay on course. (i.e E&O Property).

I would like to make a suggestion that this week would be the final week for me to be cautious because the indicator for the world financial market is not really good at all. Any new positions (buying) in the share market will be treat as a battle of survival within profit and loss. Just stay cautious.

Saturday, January 10, 2009

Dow Jones Industrial Average At Critical Points ?

Today I'm on my way back from Thailand. Now still in Suvarnambhumi Airport. Waiting for my flight back to Kuala Lumpur.

Yesterday the Dow Jones Industrial Average (DJIA) closed down -143.28 points. According to charts reading, an indicators call Parabolic SAR shows that if Monday the Dow Jones still go down, it would be a bit difficult for the DJIA to move up.

A check on the regional market shows that Hang Seng, Singapore Straits Times are moving near to a week signal with Nikkei 225 already touches the turning point - the Parabolic SAR point.

What did you means by Parabolic SAR? Parabolic SAR is an indicator to determine whether the market is heading for consolidation or moving upwards or downwards. If the Parabolic stays at below then the market will likely to move up or consolidate but if the Parabolic appears on the top then the market is going down or consolidate.

Actually is an indicator to determine whether it was a right time to be in the market or not. Basically any selling that still going on in Wall Street's might not be a good indicator for the world financial market. I was hoping that because of the 20th January 2009, President-elect Barack Obama will be taking over as a new president from currently U.S. President George.W.Bush, the U.S. financial market momemtum will sustain at present level.

Friday, January 9, 2009

E&O Property. The Evening Market Leader.

Well done today. The Malaysian share market closed higher. Went up +8.55 points to close at 919.07 points. Although the volume created is not much but for a few speculative counters to move and leads the markets were enough to build more confidents towards the market.

E&O has become the evening market leader. Went up RM 0.125 per share and closed at RM 0.69 per share. Well it breaks its recently high. Still looking forward to reach RM 0.80 per share. This huge move really helps the share market to move higher follow by UemLand and KNM.

Ranhill also help a little bit. If we watch closely, mostly the share price increases have something to do with Property and Contructions sectors. I would prefer the property sectors as most of them are following E&O.

What will happen to our share market next week ? Basically it will based on how the Dow Jones Industrial Average performance tonight. But if we want to examine the movement of today Malaysia share market performance I would rather call next week will be a better week to looks at. It will be an interesting market with some outstanding performance by some of the shares.

Dow Jones Still Play An Important Part ?

This morning turnover traded was very low. A consolidation move by the KL Composite Index. The Dow Jones Industrial Average fare better yesterday with the DJIA down only -27.24 points. A check on the charts suggests that DJIA should stay above the 8,500 points level or else ............ the charts will turn ugly. This is quite important in order to make new assessment on how the world financial market will react ?

Malaysian market is holding quite well this morning with some of the speculative counters still show some sign of building up its base before any attempt to push the share higher but with the volume recorded was low, it might take sometimes to move up unless there is a market leader to push up the market.

Nevertheless from today movement the share market still have potential to move further.

Crude Palm Oil futures is holding well today this morning after losing quite a lot after touching the RM 2,000 level. Yesterday the Crude Palm Oil prices closed at Rm 1,865 per tonne. Today the CPO already crosses Rm 1,900 level. Currently up about RM 75 to RM 80 per tonne. Hopefully these prices will maintain above the RM 1,900 level.

Thursday, January 8, 2009

Bears Are Taking Over Bulls ?

KL Composite Index down -17.10 points to closed at 910.52 points. Today turnover is not much. Merely about 391 million shares traded. In the evening the share market behaved quite stable even though Hang Seng and the Nikkei 225 continue to slide further.

Strong support seen at KNM Group Berhad at the price of RM 0.485 for the whole evening. Lately there are so many negative news flowing out in the Internet with some of them still mention our global financial crisis is still far away from over. Please read this article appears on Malaysian Finance Blogspot (here) - We are in a bear market rally, which kinda just started...... But please don't be too negative about it.

The sentiment that we are playing along with the market right now are just for a short term only. We are not going for a medium to long terms.

Actually I quite agreed with Mr. Dali statement (Malaysian Finance Blogspot) but I will play along with the market according to the charts reading and indicators couple with the performance of the world financial market.

Tomorrow the share market will open with T+3 for Tuesday turnover of 765.43 million shares. Players who had brought the share on Tuesday will not stand a gain as the buying on Tuesday market just merely can cover their buying charges only.

Today I'm still watching how our share market is going to react in these two days after recently huge gains. Whether it is a correction or it is The End? Will the Dow Jones survive tonight ?

Right at these moments, I still maintain my call on buying on weakness although there are many bloggers out there start to feel that The End of the market. Anyway its your calls whether this market still got potential to go up for another a week or two.

Any of my statement here is just for sharing our points of views and it didn't means or suggests a call to buy and sell. It is written accordingly for my own assessments only. Good Luck.

KL Composite Index Taking A Rest. An Opportunity ?

A healthy correction today. Today should be the day to digest the recently gain made by the KL Composite Index. After the recently gains made by most of the shares, today we will consider whether was it the right time to accumulate now?

With some bad news still circulating around the world financial market. It is hardly to take note that whether the share market manage to digest all sort of unhealthy news. Based on the charts the world share market movements still intact.

What ever it will be we still have about two weeks more before Chinese New Year arrive. With January 20 is getting nearer and Barack Obama will be taking over as the new President of the United States. I don't think there would be any major impact to hamper the Wall Street's.

It is quite important to monitor today's movements as the market is taking an opportunity to digest the T+3 on last Monday turnover of 845.96 million shares. Remember, at this moment the Malaysian share market still intact with the uptrend channel still on the run.

Wednesday, January 7, 2009

KNM Group Berhad Breaks The RM 0.50 Level. Well Done.

Well this morning the market movement show more promising sign to advance further. The volume is building up. Although the index added up again with 10.26 points to close at 932.49 points, any correction that will emerge to correct the current 55 points gains from the start of New Year until now will be treat as a correction to cool down a little. The bulls are still in control of the market.

If there is any correction to emerge, the market will likely to stay at this level (above 900 points) and some rotational play will likely to emerge.

KNM, MRCB and E&O are moving well today and one of them will likely be a market leader. Just watch particularly the third liners. There are maybe some follow through buying.

Today was my first day I took some profit for the year 2009. Well it was KNM (almost to 20 percent profit). Sold it off at RM 0.505 , still left some for higher target. From the chart point of view this counter still have potential to move up to RM 0.60 level.

My expectation for the KL Composite Index is to reach 960 to 980 points and then I will make a calculation based on the chart whether there is still more rooms to move forward. To calculate where the high is, it is not an easy job. It will base on many factors to make this kind of call. Well I'm just only a human being, just like you all out there. Trying to enhance my skills and make some investment with a good return. So anything can go wrong if my calculation is wrong.

Tuesday, January 6, 2009

KL Composite Index Upside Still Intact.

Sometimes it is not that I want to go against those who think that KNM got problem. It is just that how they are going to elaborate the terms nicely. Don't tell me that KNM share price crash because of some unhealthy insider news.

If the share prices of KNM fell sharply before financial crisis then I would agreed with their statement. But don't mention it when the share market are in a crisis. Usually my investments is solely on how the share prices behaved and how they support their share prices or being support by funds or investors.

Today the share market react positively with some roller coaster move to digest its recently huge gains in share prices and the KL Composite Index. With this kind of correction, it is healthy for the market as this would be another add up power or fuel for most of the speculation counter to move.

Crude Oil Prices is breaking the USD 50.00 at this moment. Whether it can hold at this level or not, the crude oil prices is steadily make it ways to moves further up. A trend reversal for crude oil prices ? Usually when the crude oil prices move up, the share market will react positively.

Crude Palm Oil prices also move sharply up in these few days. Today the Crude Palm Oil close at RM 1,980.00 per tonne, nearly RM 2,000.00. A good sign that will spur the Malaysian share market. Still remember my article on January 2, 2009. (Will KL Composite Index Start The New Year With A BANG ?). Inside the article I did mention about commodities. Read it and you will understand.

Right at this moment I cannot point out when the market is going for a correction or not. It will solely depends on how our market would react when time has arrive (overbought) and the arrival of Chinese New Year. I can only send a message when is the right timing to accumulate into the share market.

Barack Obama is planning to announce another USD 775 billion to help the US economy. Obama's estimated USD 775 billion plan could serve as the next step in the recovery efforts. While most of the Fed's programs have been aimed at boosting lending, Obama's economic stimulus plan is aimed primarily at job creation and consumer spending. Hopefully this news will spur up the Dow Jones Industrial Average further and will lead to the world financial market to go up further.

Indicators Pointing To North. Accumulate On Weakness

Yesterday I was not watching the movement for almost all the share prices because I was travelling to Chiang Mai and to Chiang Rai, Thailand. I just updated my info from my remisier. Well yesterday it was a great day with the KL Composite Index climb 26.30 points.

When the market closed, I did make some study on overall our market movements and performance. As I use to say that in order for the market to move we need to have a leader and higher volume done.

Yesterday IOI Corporation Berhad has become the leader for the market. UemLand also plays a significant role in bringing up most of the third liners to move up.

With volume reaching almost 850 millions, indeed the sign was there, the stronger sign that the share market is tend to move up. With the whole sentiments came alive, the KL Composite Index has started to move to another new territory.

REMEMBER - I would rather call this is a short term to medium term plays. It is not for long terms. Maybe one or two months plays.

There is still time to catch this bandwagon but all we need to do is we have to be very disciplines. Accumulate only when the share prices retreat. Accumulate on weakness. The trend has just started, so any fragile news will have an impact towards this market.

In share market we use to say that share market is all about taking risks. What really happen to WCT Engineering today, it is sad that they have lost a contract. Still we need to watch WCT this few days if the prices go down even cheaper, it might be a trading opportunity but we must be very careful.

Monday, January 5, 2009

KNM Group Berhad. 13,000,000 Units Accumulated by EPF.

Early in the morning I have posted some article about KNM (written by Mr. Dali). What I disagree about that this thing shouldn't be mention at all if there is nothing to support the statement that Mr. Rock mention. Here was his comment that he left on Mr Dali article in Malaysian Finance Blogspot. I think I need to answer some of his question if you all don't mind. It might be true and it might be wrong also. Just make your judgement.

The Rock has left a new comment on Mr Dali post "What's Shaking KNM":

I have been following KNM since early 2006. Made some small money. Recently I reviewed it again and asked around - what's happening to the price? Well the inside news is a total shock to me. No analyst or newspaper have a clue to what is really happening in the company or to its financial backers.

While it's probably not going to be a Transmile, but the people (a few of them, not just one) who have dealings with KNM advised me to stay away from the company.

One of the worse thing that happened to them was that the promoter's strongest financial backer decided to pull the plug ! That's is when u see the share price started to crash ! It has nothing to do with foreign funds. This is a local guy.

Jackie Lee : Point no.1 - Share price started to crash? This is nonsense. If we check on all the share prices, there are many counters facing the same situation since July 08 until now ever since the KL Composite started to move downtrend. KLK from as high as RM 19.00 drop to RM 7.00 in six months, would you call they are facing some problems ?

Second is KNM overpaid for Borsig. When a PE firm sells you something you got to ask WHY WHY WHY ? It was done at almost the peak of the oil cycle. Any acquisitions done in 2007 or even 2006 will be costly to the buyers. Look at Rio Tinto now trying to swallow their USD38 bil debt for buying Alcan ! It can actually bring down Rio if they can't get refinancing or the economy gets worse from here.

Jackie Lee : Point no. 2 – Who will know when you done a transaction it was at its peak of oil cycle. I think during that time most of us never knew that oil prices will reach USD 147 per barrel in July 08 and drop until USD 35 per barrel in December 08. This is what we call business. Sometime you win, sometime you lose. Right at this moment the global financial crisis just only started. It is only 4 months old. Would there be any problem during this short time of period for Borsig ?

The 3rd point is I was told KNM is linked to a political figure whose fortune has taken a turn for the worse since the March 8 general election. This point is related to the first point.

Jackie Lee : Point no. 3 – You was told KNM was linked to a political figure. Can I ask you a question, did any of the project that has been awarded to KNM has been taken back since March 8 general election. Political figure is easily to get some contract. Without the political figure I don’t think it is a problem for them because we must remember that the government’s is still the Barisan Nasional not Pakatan Rakyat.

Don't ask me to reveal the names of the no.1 and no.3 guys. If you think what I say here is credible - good. If not - it's your problem. I have bought Transmile shares before it crashed and suffered massive losses when the fraud was announced. Lesson learnt : when in doubt - don't touch.

Jackie Lee : You brought Transmile share during their share prices are higher. I think probably at RM 10.00 to RM 12.00, so it not a surprise if you suffer a lost at this level. KNM Group Berhad at RM 0.40 to RM 0.45 per share what do you expect ?

They are so many other clean stocks/companies to buy/invest. Why bother with a stock just because it was the darling of the analysts, whom none have had business dealings with KNM !! My sources are people who actually have had dealings with them. It is not based on newspaper or desktop analysis. You need to have an inside track in the current crisis before you jump in and put your money at risk. The low tide will expose more fraud.

Jackie Lee : Market is going for a trend reversal and EPF is accumulating the shares. 13,000,000 unit. I think EPF is wiser in making any decision in terms of their investment. KNM also lauching a share buy back programs at about RM 0.40 to RM 0.70 per share. Now their treasury share is about 36,290,200 units. At RM 0.40 over cents still cannot buy for short term play ?

MY advise - wait for a few more months and see if any more funny business surfaces. No point trying to jump in now hoping to catch at the bottom when we just don't know where and when is the bottom ! Just trying to be helpful...caveat emptor.

Jackie Lee : Because of this unreliable source or rumours, it has hamper many player to go in and make some profit out of it. This is a share market and anything can happen. I didn’t blame on The Rock for leaving a comments to Dali’s. He is just trying to give his concerns over KNM. It is just that RM 0.40 to RM 0.45 is indeed very cheap and if the counter went up to RM 0.70, it would be so disappointed that we were left out from this upwards bandwagon.

Today KNM Group Berhad share prices close at RM 0.48 per share.

KNM Group Berhad Facing Insider Problems ?

When I was reading a few article posted by some of the share market bloggers I have found out a few special article written by Mr Dali (Malaysian-Finance Blogspot) about KNM Group Berhad. Someone from outside is referring something fishy is going on inside KNM Group Berhad. They even mention that better not to buy any of this KNM Group Berhad counter's because someone told them not to do so.

It started when Dali in his article Portfolios According To Outlook For 2009 (December 30, 2008) recommended KNM Group was in his shopping list (stock picks) for 2009. Someone by the name of Wang left a message to Dali.

Here was his comments - it seems dali has no idea what is happening to KNM.. I wonder why he still recommends this counter among his top picks... You know what they say? share price never lies... dali, quickly retract ur call before its too late... hahaha... anyway, its a typical fund manager's blind favorite...sigh... check KNM account please... a fraud is brewing... dali...

Dali Responded to Wang on January 1, 2009.

Wang, if there is something you like to share, please do, but do not make statements without any elaboration. If there is a fraud brewing, please at least hint what it is all about. I could say that your mother is not a woman, and stop at that. That would surely piss you off, but if I offer some proof or logical deduction, you may thank me for it.

Right now, I cannot thank you but feel a bit pissed off. Hope you understand, looking forward to your elaboration or deduction.

Life is not always one smart person and the rest are idiots, so don't try to make yourself out as the one smart person. If someone wants to rip us off, we can only guard ourselves with publicly available information.

We cannot be going around to their rigs and check that they are actually drilling, or pore through the books and confirm with their auditors, rig managers, technology officer, etc... that they are doing their job.

Your comment about fund managers being typical idiots is also uncalled for, unless you justify or elaborate why buying this stock makes them a typical idiot fund manger. I will write about why I like KNM a bit later. Look forward to hearing from you.

Please read further on this article What's Shaking KNM (January 02, 2009) by Dali. This is to understand further more on KNM future. To be continue ..............

Saturday, January 3, 2009

KL Composite Break The Major Resistance. Start Your Engine.

Yesterday without any hesitation when the market make a move in the first 30 min, I foreseen there is some promising move from the KL Composite Index together with some of the speculative counters.

I place my order without thinking whether this market movement was a purely one or not. I used to say that this market seems to be heading north. (Accumulate more KNM and Equine)

Based on the chart and my last month article (Malaysia Stock Exchange. Accumulate on Weaknesses ?) on December 21, I did mention that we can start to accumulate any of our favourite shares in a preparation for a Chinese New Year Rally. Right at the moment I would prefer to accumulate any shares that usually stay at the Top 20 most active shares.

Couple with yesterday volume created and with the share prices increase, indeed the time has arrive for the share prices to move forward but remember this is just a technical rebound. A reversal trend that would last a while for just a few months. Maybe 2 to 3 months.

Yesterday night I made a research on where is the next course of KL Composite Index might be heading to and how long it will stay at upper level when the KL Composite Index reach its peaks ? If we examine the past and historical data, usually towards the Chinese New Years and after Chinese New Year the market will stay at least until March or April. (March UMNO election)

Let us re-examine the chart during 1997 Asian Financial Crisis. This is just a guidance for us to understand the share market behaviour. Many of the analysts might not agree with the way I compare the current 2008 World Financial Crisis with the 1997 Asian Financial Crisis. The crisis that occurs during 1997 crisis is totally different from the current 2008 crisis. This one I have to agreed with most of the analysts if we want to make a comparison between both of them but in crisis we need to understand that a crisis are always a crisis.

Share market never really understands whether the crisis is big or small. As long as the crisis strike and it is big within the region or the any parts of the world. Share market is the first place to react negatively. How it will react ? It depends on all other aspect as well. (i.e financial rescue)

No doubt the crisis is different but if we take a look on the charts pattern it look almost the same. Previously few of my trade did help me a lot in terms of guiding me how to trade according to past historical chart. It helps a lot.

Today I'm still surviving in the share market not because I'm clever or intelligence or I'm very good in watching the share market movements but it is because I always follow the chart guidance. Charts are only a guidance to show us when is the right time to trade but it is not a tool to show us when is the right time to buy or to sell any of the shares.

REMEMBER - These upwards are just a trend reversal for a few weeks only and it is not that the Bulls are coming back strong. It is just that the Bears are taking a rest after having a long fight with the Bulls for almost one year (downtrend). NEED TO RESPECT the BULLS because this coming Chinese New Year is an OX year.