IOI Corp for example, RM $ 3 - RM 3.10 will be a good entry point taking into consideration potential earnings to fall by about 30%. Let's wait for earnings report card for the next two quarters.
Parkson Holding Berhad is drown together with Hang Seng Index - could not even hold 23% retracement. If HSI could not bottom out, downside risks still exist - less than RM $3?
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Those possibilities sound quite negatives and extremes but anything could happen. However, September and October will be a period of market bottom out, counter rally could happen but once it is fizzles out, be careful of new lows! Long-term buy-and-hold buyer needs to be careful for now. Traders with substantial cash in hand can afford to accumulate some and sell into strength.
2 comments:
Hi turtle,
Just some question to ask.
Wont be it too much if the oil fall till US70-80?
Since most ppl anticipate the 700bil rescue plan which aims to spur the growth of the economy US
Wouldnt this push up the again the oil price or at least maintain the oil price?
How about the dilution of US greenback which causes the investors to hedge with commodities?
What we having now a situation of low growth but high inflation, but since now most of the plans aim to stimulate the growth.
Isnt it this offset will cause higher inflation in future?
Taking IOI as example,
Even the price of CPO begin to fall
let say less than RM1500,
Now ppl already start mentioning the viable of biodiesel project.
Again it will booster the plantation stocks' price or at least maintain the CPO price.
Unless the world's fall to minuscule growth.... is it possible to market timing?
Thank you
Lai Hee,
USD700 billion bailout will be a shot in the arm, uneasiness over potential budget deficits will cause US $ to weaken. Some may go for gold and oil but limit positions by US regulators may be difficult to drive the price over USD 120 per barrel. The situation of deleveraging is not helping in the short term.
When the market finally figure out weak economy, then they will turn to demand destruction again.
Whether oil will fall to US $ 70 - US $ 80 or not, I really don't know. But the target is based on premise of deleveraging.
Inflation will pick up - will cover this topic very soon.
On IOI, most analysts input RM 2,800 in their earning estimate. If CPO falling to RM 1,500, that's a 46% drop. I don't see many analysts call for a sell yet or slashing earning. So be careful, when they offically downgrade to sell, reactions will be violent.
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