Where is the Bottom for KPS?

There was light selling all day but in the end it amounted to a substantial volume. From RM1.25, it slided to RM1.11 before finishing off at RM1.13. There was really no sell-down.

I think there are serious collectors bargaining off weak holders. If it goes down further tomorrow perhaps to the RM1.00 mark, it will be in oversold position and the price may just bounce!

Just because Pahang has not corporatized does not jeopardise the water transfer project. Agreements would have to be signed first between the state governments of Pahang and Selangor. That will take time. The Federal Water Commision will only operate in the final quarter of 2007. By then, the Federal Treasury may have signed the loan agreement with the Japanese Bank. It is certainly foolhardy to expect things to happen overnight.

There are other projects for KPS like the Western Corridor toll Highway. This will impact upon KPS's share prices once the project gets tendered.

So it is just a rough patch for KPS. Best to hold on to your shares.

Quote of the Day:

Heartsong

Depression on the Bursa?

So the market took the cue from Wall Street and went down more than 11 points. Second liners which were chased up recently lost all their gains. Look at KPS; it is at RM1.17 - a price it attained in February. Don't look at Genting-it is down to a new hellish low. RCE is holding well with very heavy volume.

There was not much change in the direction in the afternoon session. Prices went down but managed to finish off-lows. All in all, a very depressing market!

Quote of the Day:

Heartsong

Hubline Hogs the Line

It was barely a month hen this counter announced a share split where each share will be subdivided into 5 twenty sen shares. Subsequent to that 2 shares will be proffered as bonus shares for every 5 shares held.

Effectively, it means you would have 7 lots of shares after the completion of the exercise. The counter has been going down the last couple of months and was hovering at the RM2.00 price range last Friday. Suddenly out of the blue, it rocketed up and continues to attract buyers. It is close to the RM2.50 sen mark today with heavy volume. I guess the company has got all the necessary approvals for the split and bonus exercise.

A small shipping company providing coastal shipping service to Sarawak, Hubline, then EOX was not really a great stock after it sold its oxygen and gas business. Thanks to the downsizing of the Bakun Dam project, it bought into shipping.

Let us speculate a bit on Hubline's potential pricing. If the maximum price the share will go is RM2.50, then after ex- the price should be 36 sen per lot.

Do you want to invest in this counter cum or ex or not at all?

Quote of the Day:

Heartsong

Life's Interruptions

We are subjected to interruptions in our lives. There are career interruptions. There are holiday interruptions and what have you.

A death of a loved one is always an interruption. We have to readjust our lives to the new situation. The loss of a life partner can indeed be painful and the time needed to get over it is often long and arduous.

Interruptions in studies when one change course in mid-stream or failed in our examinations is another thing to reckon with. There will certainly be costs involved.

Career interruptions is equally painful when you are bypassed by nepotism and you have to leave the organisation to seek your fortune elsewhere.

Whatever the interruptions, be resolute and pray to God and all things will come into place if only you believe and trust in Him.

Second Board - Just Waiting for Godot

So the KLSE is up, breaking all time records. Fantastic volume and value. Blue chips being chased up to the steeple of their net worth. Second liners moving albeit, less animated.

But what about the Second board? Once the playground of punters way back in 1991 and in1997, today it is as silent as a cemetery. Only a few counters are trading the ringgit category. the rest are all puny stocks. There is just no interest to hold them. Poor shareholders are burnt beyond belief. They know they have been made the ' laughing stocks' for the last decade or so.

So, what do you see the chances of the Second Board counters moving like their counterparts on the Main Board? Unlikely?

I hope they see some action soon, now that most of the shares on the Main Board are highly priced.

Or are they all waiting for Godot?

Dutch Courage Bursa ?

I am really surprised at the guts shown by fund managers and their derring-do pushing the market. Obviously there are gamblers in the market and they are there for trading gains. Will this market sustain or will it go into a tail spin when some bad news overwhelms the world markets?

There is a saying. When the fishmonger, butcher and the taxi driver starts talking about shares; you better watch out. This is the clearest sign that the market is going to turn turtle.

RCE Juggernaut?

Looks like RCE is on a big move today, amassing volume and strength. It went up almost 5 sen but settled down for a 2 1/2 sen gain when trading ends.Do you think these buys are short term investment buys or speculative buy?

If it is short-term investment buys, then the counter may go up steadily. If it is mere speculative buy, then when T+3 arrives, expect 'lorry loads' of delivery and for the price to go down the next few days.

Buying of RCE continues to be strong today (24 April 2007). Let us see when selling pressure will start?

Happy trading on RCE.

Another Mirage?

Bursa went up this morning as if nothing serious is happening in China. So the impending interest rate rise in China which will make funds more costly to dabble in the stock markets seems to affect only China?

Talk about contagion effect. It looks like the market will believe what it believes. Until the news of the interest actually materialised, I think the markets elsewhere would operate as if they are closed economies; which is not the case. So what gives?

I believe this morning upward bias is because shares have become cheaper and some fund managers have money in the kitty to buy in. Speculators may be more cautious as yesterday was quite a jolting experience!

We would have to wait until the witching hour to see whether the market has found its legs and is ready to climb somemore. Gentings, KPS and RCE look good this morning. hope they can sustain in to the afternoon.Quote o f the Day:"Don't Talk unless you can improve the silence." Unknown. Heartsong

Predicting the Market

As I look at the Malaysian stock market, I am very suspicious especially of the recent run-up. Breaking the 1,314 psychological level set in 1994 has been an obsession. It has been breached. Today market went down 18 points in early morning trade. So what next?

For those who bought into Gentings and Resorts, the best thing to do is not to look at their on-going prices but to lock up the stocks. Look if you still want to bargain buy at lower prices.

As for KPS,it looks like there is something afoot given the heavy buying pressure yesterday. Unfortunately it was only a momentary bubble which fizzled out. It is now going down the tube. The last time I looked it was RM1.37.

Observing the market is no fun.

Quote of the Day:

" We can only do no great things; only small things with love." Mother Theresa

Heartsong

Rolling War Wagon KPS

It has been a long time I have blogged on KPS. Ever since I chanced upon the underlying value of this counter way back in November 2006, I have been observing its price movement and volume keenly. And it has performed true to form. It has broken out from its Rip Van Winkle state and have rocketted upwards from 38 1/2 sen to above RM1.50 in a short period of 5 months.

There are many rumours in the market. The main ones are the Water Transfer project from Pahang and the Western Tolled Highway. Then there is the bonus possibility of Perak siphoning water as well to Selangor. The last rumour to hit the market is the possible takeover of Puncak Niaga by KPS. All these are good for KPS shareholders.

So what remains in the horizon is for the rumours to come true. The Water Transfer project is a matter of time. The earlier agreement between Kumpulan Darul Ehsan Holdings and KPS will most possibly be nullified now that water is both a state and federal matter following constitutional amendments which was passed. So KPS may be negated a bit here since it is no longer the honcho for the waterworks project per se. Any how, all is not lost.

The corporate takeover of Puncak Niaga is interesting. How is KPS going to fund this purchase? Not through a 100% loan as it would impact upon its operating and dividend capacities. I see a rights issue as well as warrants thrown in as sweeteners. To do a rights issue, KPS shares must go beyond RM2.50.

We are only a ringgit away from that level. Any news will push KPS up. It could be an announcement of the agreed water rates for the water transfer project; potential early discussion with the Perak Goverment on another water transfer project or the tendering of the Western Corridor tolled highway project.

I am watching for this to happen.

Heartsong

The Gentings-Resorts Poser

Both counters went ex-subdivision on 11 April 2007, amassing huge gains. Gentings added 50 sen and Resorts took in 28 sen. However, on the following two days, the mood turned nasty and they sold both counters down the river. Gentings went as low as RM8.35 and Resorts to RM3.40.

Why is there this contrasting scenario before the subdivision and after the subdivision of the shares? No facts have changed. The negative news of UK 's intention to subject betting licences to additional taxes or for that matter the uncertainty of the Sentosa Island casino licence has not changed. The market is fickle!

The only logical explanation is that those who had the extra lots wanted to dispose of them because there believe there was no longer any “up-side news”. To play safe,they will just hold a lot or two as keepsakes and locked away all the profits. Similarly, some Singapore fund-managers could have sold on Day 1 because of the good profit margins. Then, there are the jittery sellers who saw the breaching of the 1,300 level as Bursa Armageddon and have been liquidating. Other than that, there is just no good reason for the selling pressure.

Both Gentings and Resorts are solid blue-chips and should pay well in the medium term. As we take cognizance of the downsides of both counters, let us not be unduly disturbed by short-term analysis. Analyses are based on static facts but the market is dynamic. Anything can happen. To me, both counters are dynamic and resilient.

From time to time, I will make my comments on both theses counters. The important thing is to look for the new support price of both counters. It appears that the support price of Gentings is RM8.75 and Resorts -RM3.50.

Resorts had never offered an IPO to the investing public except for a restricted bumiputra public offer way back in the late 80s. At the current price level, Resorts is now going for RM3.50–dirt cheap by any standard. Good to collect for the medium term.

As for Gentings, when was the last time you could confidently buy up a lot or two? Just like Resorts, it is rather inexpensive at RM8.75. The Bursa seems to have run out of good counters at this point of time and my belief is, Gentings still possess good ‘intrinsic value’. So do not hesitate, invest in this counter.

For your information, I have seen the market collapsed during the First Gulf War and during the Asian currency meltdown in 1997. Believe me, on both occasions, the counters that rebounded the fastest were gaming stocks like Gentings, Resorts, B-Toto and Tanjong. Also during recession, these are the best defensive stocks. Dividend-wise, Gentings and Resorts have been paying fair dividends.

The world is Gentings’s and Resorts’s oyster. Good news can be created by the dynamic Gentings Group when opportunity arises. A changing scenario can impact prices again towards a northerly direction for both counters.

Quote of the Day:

‘All progress occurs because people dare to be different.’ Harry Milner

Heartsong

Comet Bursa

After the first attempt yesterday, it broke the 1,300 points today; adding 8 points in the process. The Composite Index at the end of today’s trading was 1,306.34. Well done Bursa!

Now comes, the hard part. Can Bursa sustain itself? I think fund-managers have been buying the last two days. Most were Singaporean funds buying up Genting and Resorts World before the share-split tomorrow.

KPS could not sustain itself after the adrenaline buying rush yesterday. It surrendered five sen to close at RM1.25 on a volume of 48,057 lots; just about half of what was done yesterday.

It would be interesting to see whether the market can hold up tomorrow now that the psychological level have been quite convincingly breached; or will the achievement be a flash in the pan or as brief as a puff from a cigarette?

Quote of the Day:

"The grand essentials of happiness are: something to do, something to love, and something to hope for." Allan K. Chalmers

Heartsong

Tug of War

The market was lackluster all day long. With the lack of buying support, I believe we are going to have one of those days where we can presumably doze off or go for extra long coffee breaks.

At the final bell, it was Genting and BAT that saved the day shoring up the index to close 6 points up at 1,277.48. All other counters were a tussle and a wrestle between the bargain hunter and the reluctant seller.

Meanwhile, a report of ‘water-play’ in The Star should stir up some excitement. Both Aseambankers and TA Securities reported that imminent announcements on details and call for tenders for the Selangor-Pahang inter-state water transfer project will impact positively on counters such as Gamuda, Puncak Niaga, Kumpulan Perangsang Selangor and Hiap Teck.

KPS saw a Red Sea of sellers when trading begun. From an initial trade of RM1.26, KPS was shoved down to RM1.21 almost immediately. Thenceforth it floated lazily between RM1.22 to RM1.24 throughout most of the day, ending 1 sen up at RM1.24. Volume was 62,061 lots.

As tomorrow is Friday, I expect to see more see-saw action unless there is good news locally or abroad to bolster prices.

Quote of the Day:

“A smile confuses an approaching frown.” Unknown

Heartsong

Treading Water with KPS

KPS started well opening at RM1.26 before sellers came in to moderate the price to RM1.22 to RM 1.23 most of the morning. By late afternoon, buying support buoyed the price back to RM1.30. However, as I speculated rightly, sellers came in again to erode the price back to RM1.23 by the evening close. There was heavy buying particularly at RM1.25 and RM 1.28. KPS closed up 3 sen to RM1.23. The volume traded at closing time was 98,316 lots and the calculated weighted average price done was at RM1.25.

There was a slight buying bias at the close which should augur well for KPS tomorrow.

How will KPS perform tomorrow? Let us watch.

Quote of the Day:

“What makes men chase women they have no intention of marrying? The same urge that makes dogs chase cars they have no intention of driving.” Unknown

Heartsong

Selling Down the KPS Gravy Train

Easy come, easy go. The higher you go, the harder the fall. KPS was ramped up and then profit takers came in to sell it down the river from RM1.42 to RM1.09.

The logic is plain and simple. For a trade to take place, there must be a buyer and a seller. As for the buyer, he is either a person who ‘knows’ what is in store for KPS on the medium term or just another ignorant and greedy speculator on the make. It will be hard for the speculator who liquidated out of fear when the price slumped or when the time for payment comes and he has to let go. I believe that was what happened to KPS. Too many speculators had jumped on to the bandwagon!

KPS overshot its runway when it triple jumped from 92 sen to RM 1.12 to RM1.42. The current price of RM1.20 is about right and there was alot of buying support at the RM1.10 - RM1.14 level.

All morning, KPS was trying to find its legs. Initially,it seems as if there was no bottom. It was sinking lower and lower with each passing minute. Looking at the trend this morning, it looks like the support level will possibly be RM1.10. There was continuous heavy selling of KPS between 9.30 to 10.00 am. Force selling? Can this support price be sustained?

Thank God, the buying support came after 3 pm, and KPS went up to RM1.20 for a 9 sen gain. My reading is: If it can go up slowly from now on, picking 5 to 10 sen a day, KPS should go beyond RM 1.50 by the middle of April. Volume was heavy, beyond 70,000 lots.

I believe the buyers today are genuine and they are fundamentalists or know what is in store for KPS in 2007. As such, I will expect them to “lock up” KPS for quite sometime to await the “good news”. This will automatically cause a supply shortage which will then allow KPS to climb to a higher plane on a more sustained basis.

Market closed well today. We should see a better trading day tomorrow.

Quote of the Day:

“Love Thy Neighbour but don’t get caught!” Unknown

Heartsong

She’ll Be Coming Round the Mountain…

I really loved positive prediction and evaluation of Bursa. This morning, over the radio, I heard that the market’s support level is 1,220 and it may go out to as high as 1,260. Optimism is good but we should not go overboard. As whether it will reach 1,300 is anybody’s guess but it definitely will not be soon. Market ascent does not go up in a straight line. Like the experienced mountaineer, they rest at many point stations before they actually ascent to the peak. This is a good analogy to go by. In the event that prices do go up too steeply in a normal market, profit taking will come in naturally to level off any congestion.

KPS is one such stock. Its price went up almost 100% by the close of last week’s trading. Hence, this will be a week of base-building and consolidation. Weak holders will throw out their shares and there will be new accumulation at this level of RM 1.15-1.18. By 11.45 am, some 66,000 lots have changed hands.

Meanwhile, market rumour is that an international tender for the 44.6 km tunnel works for the Pahang-Selangor raw water transfer project could be called soon, as the Government plans for work to start in early-2008. This would be a positive development which could lead to the roll-out of other main packages of the estimated RM9bil project. KPS could benefit from the early start of this project as it is involved in some packages.

KPS ended down 11 sen to RM 1.11 after heavy unloading by speculators and weak holders. Volume done was 124,000 lots. Market was generally weak and ended down 0.57 points.

Let us hope there will be a change of mood tomorrow.

Quote of the Day:

“Happiness is an attitude. We either make ourselves miserable, or happy and strong. The amount of work is the same.” Francesca Reigler

Heartsong

Has KPS Cross the River Jordan?

After yesterday near debacle at the hands of the bears, Bursa needs a shot in the arm today. Are the bulls ready to lock horns and ram down the nasty bears? Or are they full of ‘bull’ themselves?

Outsiders have taken the lead for the past two days. The bulls should make their presence felt. Fund managers should look at the big picture. They must know the market will have hiccups off and on. Avoid looking for 'needle in the haystack' speculative explanation why the market is up one day and down the next. Look at fundamentals. Play the market according to your own rules. Play medium term.

So today, the index gained 10.98 points to 1, 246.87. With regards to KPS, the rumour in the market is that the Selangor State Government is actively negotiating water rates with the Pahang government. Also, the MB of Selangor did mention in a news item that the Federal government is talking to the Japan Bank of International Cooperation on the billion dollar water development loan. If all goes well, KPS should grow strong and fat in price before the middle of the year. The other rumour is the KPS consortium has clinced a stake in the privatisation of the West Coast Highway. Both these rumours need confirmation .

The New Straits Time’s resident chartist gave his comment today that KPS needs to consolidate before moving upwards. He gave the trading band up-limit at 1.27 before it could go higher. I believe he may be right here. The indigestion by weak holders and speculators was already showing when trading resumed in the afternoon.

Well, it looks like the NST chartist is right. By closing bell, KPS shares slumped to RM 1.22. I believe a new foundation is being built at the RM 1.20 level and bargain hunters have brought down the price from weak holders by the closing bell. I hope my reading is correct. The rate KPS's price fall from a high of RM1.42 to RM1.22 must certainly have create great agony and fear in the many who bought into KPS today. This will dampen KPS‘s price for a while before it can break new ground. I think it is accumulation phase for KPS in the next 5 trading days.

For whatever reason the stock has been going up, be it the highway or the waterworks project, my thinking is this: to mobilize itself for either project, I believe KPS has to raise capital through a rights issue. It may also be giving some convertible warrants as sweeteners. To my mind, KPS is not a churned up counter without any basis. It should go beyond two ringgits if it wants to go for a rights issue at RM1.00 per share soon.

A new week awaits on Monday. Will we see many April fools even on the second day of April?

Quote of the Day:

“The more you complain, the longer God let you live.” Unknown

Heartsong

Rock-A-Bye Bursa

The market was suffering from low energy syndrome. Yesterday's poor finish made everyone morose and lethargic. No one was in a buying mood. Sellers dominated the market from the opening bell. It looks like fund managers will need crates of Red Bull to rejuvenate their strength today. That is the most apt description of market today.

As the trading day proceeded, most counters were like hogs, wallowing in think red numbers. Even the strong counters caved in. Seems those who bought into Resorts and Genting were having indigestion and needed ENO.

After languishing for most of the day, the index finally went into positive territory at the close. It closed at a paltry 0.65 to 1,235.89 but we should be happy for that. Tomorrow is Friday again and we really hope the market will get up and go. Two days of rest yesterday and today is more than adequate,my friends!

Except for Resorts World, most of the market leaders today are new. We have such outsiders like Negara, SAAG and BIMB hogging the limelight. A breath of fresh air, however, came in the forms of KPS and KHSB which appeared on the radar screen in the afternoon with huge gains. KPS and KHSB both tacked on 28 sen.

So how much do you think KPS will go since it made a triple jump today? There must be some fantastic corporate rumour out there (that I do not know as yet) that is propelling KPS from a mere 70 sen on Monday to RM1.17 today. The appearance of KHSB is another indicator that it has something to do with the Selangor State government. It must be that gigantic Pahang-Selangor waterworks project getting the green-light!

Will KPS and KHSB be the darling Clementines tomorrow? Together, let us watch them perform tomorrow.

Quote of the Day:

"A dress is like a barbed wire. It protects the premises without restricting the view. " Unknown

Heartsong

Pos Malaysia Berhad

If the Annual General Meeting on 3^rd April 2007 passes all the resolutions brought before it, Pos Malaysia & Services Holdings Berhad (PSH) will be restructured and a new creature will take over its listing status. The new entity will be known as Pos Malaysia Berhad (PMB). The circular to shareholders indicated that the restructuring is aimed at providing direct exposure of shareholders to PMB, the main operating vehicle; apart from achieving greater operational efficiency.

Through this corporate exercise, shareholders will receive a capital repayment of RM1.50 per share and be offered a lot of PMB shares. So is this a good deal?

PSH has been giving out quite a fair bit of dividend since 2003. In 2003, it declared a dividend of 4% less 28% tax for year ending December 2002. In 2003, it gave out a dividend of 5% less 28% tax for year ending December 2003. PSH became generous and declared a dividend of 7.5% less 28% tax for year ending December 2004. For year ending December 2005, PSH declared a final dividend of 10% and a special dividend of 5%. No dividends have been declared for year ending December 2006.

The trading profile for PSH for the year 2006 and 2007 is normal. The highest price it attained was in November 2006 when it touched RM5.60 and the lowest was in May when it sunk to RM4.06. In 2007, the highest price was RM5.05 while the lowest was RM4.20. It is not a punter’s stock. Today (29 March 2007), it is trading at RM4.74.

At this price, with the capital return of RM1.50, the adjusted price will then be RM3.24 – fairly priced to attract investors to this counter especially those funds intending to procure GLC interests in Malaysia. PMB should be able to maintain its dividend payout.

Is PMB worth holding on to after the restructuring?

If you put RM3, 240 into a fixed deposit, it should bring you an interest income of RM 119.88 per annum. Let us assume PMB pays out a yearly dividend of 7.5% minus 27% tax. That will mean the dividend income accruing to you will come to RM 54.75 net tax. This is a loss of RM65.13.

Assuming there is a capital gain of about 10%, then we can factor in RM324 and add the potential dividend of RM54.75 bringing in a return of RM 378.00. If this is the scenario, then it may be worthwhile to hold on to the stock. Otherwise sell it on strength and wait for a good opportunity to buy into better dividend paying stocks.

Quote of the Day:

“Patience with others is Love, Patience with self is Hope, Patience with God is Faith.”
Adel Bestavros

Heartsong

Downhill Racer

After closing on weakness yesterday, market went slaloming downwards from the word “Go!” this morning.

Most market leaders were comatose all day long except for Resorts World which added 70 sen at the close. The news that Genting has bought over Singapore’s interests in Star Cruises and Casino could have buoyed this stock. Maybank perked up 10 sen while penny stock KPS moved up 7 sen to 89 sen on a historical volume of 150,000 lots at the close. Almost every other blue chip turned crimson red and headed south.

It was a dog day afternoon trading session. Loses were marginally reduced when the market closed at 1235.24, down 11.93 points.

Tomorrow is Thursday and I believe buyers may come in the afternoon if the first session remains weak.

Quote of the Day:

“Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” George Patton

Heartsong