What If Market Falls (6 June 2017)

Latest news: KUALA LUMPUR (June 6): The FBM KLCI is expected to ride on its current wave and stay above the 1,780-point level today despite the weaker overnight close at most global markets, as sentiment at the local market is picking up pace. The year-to-date foreign buying of Malaysian equity breached the RM10 billion mark at RM10.14 billion after the cumulative purchases for the month of May totalled RM1.47 billion, according to MIDF Research in a report yesterday, which indicates there is still interest among foreign funds in local stocks.

One should consider – when would the market fall, since what goes up, must come down….

Would the following screener work if the general market falls?

Screener.png

My reasoning for the screener:

  • Beta <0.75: Lower correlation with FBM KLCI which may possibly lower the risk of decline, should the general market fall
  • P/E <12.0x: Lower possible risk of overvaluation
  • P/NAV <1.0x: Lower possible risk of overvaluation
  • ROE>8%: Able to generate some return on investments by the ListCos, at least on par with cost of equity 
  • Dividend Yield: Some dividend income to ride out the storm
  • Debt to Total Assets / Current Ratio: Not over-geared companies that have some liquidity buffer

The results of current screening are as follows:

Screener 2.png

Background of the selected companies

Fima Corporation Berhad, an investment holding company, engages in printing and trading security and confidential documents in Malaysia and Indonesia. The company operates through three segments: Production and Trading, Oil Palm Production and Processing, and Investment Holding and Property Management. It also manages and rents commercial properties; produces and processes oil palms; and offers property management services.

Glomac Berhad is engaged in the property development and investment holding company.

The principal activities of LBI Capital are now investment holding, the provision of management services and property investments whereas its subsidiaries and associated companies are principally engaged in property development.

Mercury Industries Berhad is a Malaysia-based company engaged in investment holding and provision of management services to its subsidiary companies. The Company, through its subsidiaries, operates in two segments: manufacturing and retailing and investment holding. It is engaged in manufacturing and retailing of putty, hardener, underseal, paints and its related products.

SHL Consolidated Bhd. is an investment holding company and it provides strategic, financial and corporate planning services. SHL Consolidated Bhd. and its subsidiaries are an integrated commercial and residential property development group, which are also involved in granite quarrying and manufacturing of aggregates, general building construction, earthworks, infrastructure works, the ownership and operation of a golf resort, the manufacture of clay bricks, supply of finished brickworks of wall and other brick structures, the manufacture of aluminum framed doors and windows, the provision of soil and concrete laboratory testing services, the provision of professional construction management and geo-technical services, the marketing and distribution of building materials, rental of properties and money lending business.

Tien Wah Press Holdings Berhad (TWPH) is a Malaysia-based investment holding company. Through its subsidiary, Tien Wah Press (Malaya) Sdn Bhd, TWPH is engaged in rotogravure printing, photolithography printing, trading and printing of tipping paper. Its manufacturing operations are located in Petaling Jaya and Puchong in Malaysia, Vietnam-Singapore Industrial Park and Binh Chieu Industrial Park in Ho Chi Minh City, Vietnam, and Smithfield Sydney, Australia. During the year ended December 31, 2009, TWPH acquired Toyo (Viet) Paper Product Co. Ltd. As of December 31, 2009, TWPH’s subsidiaries were Tien Wah Press (Malaya) Sdn. Bhd., Tien Wah Properties Sdn. Bhd., New Toyo Investment Pte. Ltd., Alliance Print Technologies Co., Ltd., Max Ease International Limited, Anzpac Services (Australia) Pty Limited and Toyo (Viet) Paper Product Co., Ltd.

Tomypak Berhad is one of the leading converters for flexible packaging materials in Malaysia.

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES MENTIONED IN THE ARTICLES.

Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

1 thought on “What If Market Falls (6 June 2017)”

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