Index may find it hard to breach all-time high

(TheStar-March 15, 10)PETALING JAYA: The FTSE Bursa Malaysia KL Composite Index (FBM KLCI) may find it difficult to breach its all-time high of 1,516 points this year although the index is currently just 13% shy of that record.

While the stronger ringgit and government initiatives generally are expected to boost market sentiment, aggressive monetary tightening measures in the region could exert pressure on the index.

http://biz.thestar.com.my/news/story.asp?file=/2010/3/13/business/5856504&sec=business

This article conincides with my thinking to review what kind of strategy should I adopt as KLCI seems to have limited upsides. The market is selling for 16.59X which is very close to its historical 10-year average.

From money flow point of view, Ringgit appreciations is a short term catalyst. To break the previous all time high, yes I could agree that it will take at least a few attempts. The real catalyst under this environment is EARNING! If the 2010 earning is able to grow between 10 - 15%, the fair value of KLCI is around 1,450 to 1,525. In view of this, I'm going to hold on to my positions but will not want to add new positions aggresively. So, timing is not that critical to me whether 1,450 target will be attained in 1H '10 or 2H '10. I still do not feel at this point to chase laggards as sharp corrections will trigger sell down across the board. In short, I'm taking a defensive stance for now.

Malaysia has most number of billionaires in South-East Asia

I'm still trying to catch up news, this news is interesting. Why Malaysia has the most number of billionaires in SEA while we have one of the smallest population and economy. Talking about "smartness", we are behind Singapore. Talking about populous, we are way behind Indonesia, the Philippines and Thailand.

In case you miss this article, here is the link http://thestar.com.my/news/story.asp?file=/2010/3/11/nation/20100311205652&sec=nation

If you want to see the complete list, here is the link

http://www.forbes.com/lists/2010/10/billionaires-2010_The-Worlds-Billionaires_Rank.html

The Malaysian billionaires/ranking in the world:-

1. Robert Kuok /33th
2. Ananda Krishnan / 89th
3. Lee Shin Cheng / 189 th
4. Quek Leng Chan /277th
5. Teh Hong Piow / 277th
6. Yeoh Tiong Lay / 421th
7. Vincent Tan / 828 th
8. Syed Mokhtar Al-Bukhary / 655 th
9. Tiong Hiew King/ 939th

The numbers of billionaires in SEA

Malaysia / 9
Indonesia / 7
Singapore / 4
Thailand / 3
the Philippines / 2

Let's look some samples of the businesses that these guys own.










My comments:-
My first impression of the businesses that they own are from old economy - property, banking, consumer products(franchises), concessionaires, media or telecommunication. These businesses are favorable at the macro level during their times. During the rapid development stage, property, banking and concessionaires are the natural winners. We are quite lucky that Malaysia happens to be one of the largest plantation producers in the world. Call it anyway you want - either luck or foresights, they certainly have both of them!

Second, they are sharing succeses with public. Listing their company will enable them to raise capital in large amount to grow their companies. They have been able to grow their wealth by acquiring great businesses at the right time. The investing community will certainly reward their efforts, i.e. market capitalization will grow in tandem with shareholders equity.

Third, these guys are certainly "stick-to-knitting". They know their area of competency and rarely acquiring businesses outside their competency.

Fourth, they are certainly well connected, either with other successful businessman or the government. The certainly commanding high level of moral authority - trustworthiness.

Lastly, these guys certainly have their own circle of influence to take care of their day-to-day running of the businesses.

Stronger ringgit boosts Bursa

Nice to see Bursa broke through 1,300 while I was away from the country.



Since I'm kind of tired after traveling whole day and just landed, I will get straight to the point. Where are we heading? I think it should go to RM $ 3.10 to 1 USD. KLCI should be heading to 1,450. 1H 2010 or 2H 2010? Not sure on the timing, will need to think over the weekend.

Is anyone cares that the recession is over?

With a lot of sideways movement lately, there are not many exciting news to comment. So I'm just going comment on some old news, it does not seems to excite anyone when a number of countries already out of recessions(not technically) but certainly turned positive for the last quarter. Malaysia economy grew 4.5% in Q4 '09 and now most analysts are forming a consensus of 4-5% growth for 2010. The bullish camp is aiming for 6%. Since the Bursa has already gone up by almost 50% since it bottomed out about 10 months ago in March '09. It's interesting to note how forward looking the market is sometimes.

(theStar 24-Feb-2010)PUTRAJAYA: The economy grew at a faster pace than expected in the final quarter of 2009 as a combination of government spending, a lower inflation rate and accommodative monetary policy helped boost domestic demand.

Gross domestic product (GDP) expanded 4.5% in the fourth quarter (Q4), the first positive growth after three consecutive quarters of contractions while for the full year, the economy contracted by 1.7%.

The positive news surprised economists, who were expecting an average growth of 3.2% for Q4 as shown in a Bloomberg survey. For 2009, a separate Bloomberg survey showed economists expected a contraction of 2%.

CIMB Investment Bank Bhd economic research head Lee Heng Guie told StarBiz there would be an upwards revision of the GDP figures for 2010 in light of the Q4 data plus Asia’s growth prospects.

“We’ll be revising the numbers, most likely in the region of 4% to 5% (from 3.5%) for 2010 especially given the expansion in the services and manufacturing sectors,” he said.

http://biz.thestar.com.my/news/story.asp?file=/2010/2/25/business/5741357&sec=business

Turtle bought 500 shares of Genting Berhad

Turtle bought 500 shares of Genting Berhad at RM $ 6.29. There are a plenty of research reports about this stock but my views will be given over the weekend write up.

Buffett Says U.S. Housing Will Recover by Next Year

Buffett does not make prediction very often, since he is making a call we had better pay attention:

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits.”

The worst housing decline since the Great Depression has left one in five U.S. mortgage holders owing more than their houses are worth. Record foreclosures last year flooded a real estate market already glutted with unsold property, causing new construction to fall to the lowest in at least 50 years. The fall in homebuilding is the only fix unless the U.S. decides to “blow up a lot of houses,” Buffett joked.

“People thought it was good news a few years back when housing starts -- the supply side of the picture -- were running about two million annually,” said Buffett, the chairman and chief executive officer of Omaha, Nebraska-based Berkshire. “But household formations -- the demand side --only amounted to about 1.2 million.”

Berkshire, which owns a real-estate brokerage, a business that constructs pre-fabricated houses and units that make products used in homebuilding, has suffered amid the slump. Profit at Clayton Homes, the pre-fab housing business, fell about 9 percent to $187 million before taxes, while earnings at carpet manufacturer Shaw Industries fell 30 percent.

http://www.bloomberg.com/apps/news?pid=20603037&sid=aPiB9cWQpGQo

Just a short comment on local Bursa, I saw people were very eager to take profits yesterday as it breached through 1,280. I thought the sellers were making a mistake by selling out too soon especially it has just cracked a resistance line.

Turtle Portfolio update - March '10

Just updated some of the records. Added $ 888 March saving and XDL shares acquisition.