Tuesday, August 19, 2008

Foreign investors unloading ahead of By-election?

My schedules have been rather very hectic recently. Knowing some of the "friends" have been coming back regularly to see what I have to say, let me make a few brief comments. Yup, by now, many are cutting their rating on Malaysia, selling Malaysian stocks.

(TheEdgeDaily)KUALA LUMPUR: Shares of KNM Group Bhd fell to their lowest in 10 months yesterday, on speculation that a foreign shareholder of the company is reducing its stake due to the higher political risk in the country.

This is despite the outlook of the oil and gas process equipment manufacturer being described by fund managers as bright considering that crude oil prices are expected to be sustainable in the long run.

"One of the major shareholders is selling down. It’s a portfolio change in terms of country risk," an analyst told The Edge Financial Daily yesterday.

A fund manager said KNM’s fundamentals remain intact in the long term because oil prices are expected to be sustainable, albeit at a lower level. KNM officials declined to comment when contacted.

Yesterday, shares of KNM dropped 11% or 18 sen to finish at RM1.46 with 32.99 million shares done. The stock traded at a daily high of RM1.64 at 9am, and sank as low as RM1.38 as at 2.44pm. Shares of KNM which have declined 37.74% this year, touched a one-year high of RM2.48 on Jan 2 this year, and hit its yearly low of RM1.23 on Aug 21 2007.

Volume has also increased significantly since last Friday. A total of 15.3 million shares were traded last Friday and another 33 million traded yesterday.

Filings to Bursa Malaysia show that US-based FMR LLC, and Bermuda-registered FIL Ltd (Fidelity International Ltd) have sold down their equity interest in KNM. Both FMR and FIL had disposed of 6.55 million shares in KNM between Aug 4 and 12 this year. According to filings, Fidelity still has another 407 million shares representing 10.29% of the company

Public Foreign goes below RM 10 this morning. Hmmmmmm.....

I was a bit puzzled with comments like political uncertainties lead to sell down. Uncertainties is not the same as unstable, right?

If Anwar wins, will he be able to solidify opposition further? With stronger opposition, more competition will it be good for Malaysian? I am not sure what policy that will frighten foreign investors. Come on, tell me your fear? Are you fear of civil war? Will civil war a high probability event? To me, LOW.

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