Waiting For Pullback

ORNAPAPER BERHAD is a leader in the corrugated boards and carton manufacturing industry. Incorporated in 24th July 1990, with its humble beginning in rented premises the company commenced its business activity as a manufacturer of corrugated cartons. Riding on the economic boom of the early 90s and with a continuous investment programme, a new high-technology production and development facility was made available in October 1996.

The company expanded its operation to become a corrugated board manufacturer. With the existing facilities, the company is able to produce 84,000 M/T of corrugated boards and cartons per annum. Strategic service points have been set up in many states in Peninsula Malaysia to provide service and products with the highest possible quality aiming at complete customer satisfaction and delight. Armed with the latest technologies and innovations from around the globe, ORNAPAPER is in the forefront of corrugated boards and carton manufacturing, lifting packaging standards in Malaysia to a new level.

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My Trading Principles



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

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….

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Capitalizing On Australia’s Ageing Population

Australia’s population is much older today than it has been in the past, and both the number and proportion of older people is growing steadily. In 1964, the median age in Australia was 28.5 years, and 8% of the population (948,100 people) were aged 65 and over. Only 0.4% of the population (50,100 people) were aged 85 and over.

In 2014, the median age had increased by almost a decade to 37.3 years, and the number of people aged 65 and over had more than tripled to 3.4 million. Older people now account for an increasing share of the population—15% of Australians were aged 65 and over in 2014, compared to 8% in 1964. In addition, there has been a ninefold increase in the number of people aged 85 and over, up to 456,600 or 1.9% of the population in 2014.

These trends are predicted to continue into the future, particularly as the baby boomer generation ages. The first baby boomers were born in 1947 and turned 65 in 2012, and will slowly be moving in to the ‘old old’ cohort—those aged 85 and over. Based on population projections by the Australian Bureau of Statistics, by 2064 there will be 9.6 million people aged 65 and over, and 1.9 million aged 85 and over, constituting 23% and 5% of Australia’s projected population respectively Source

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Overdone?

KUALA LUMPUR (May 31): Karex Bhd’s share price hit a low of RM1.83 this morning at 10.08am — also the lowest since its closing of RM2.25 on May 24 this year — after a research house highlighted an opaque outlook for the condom manufacturer as well as contraction in third quarter earnings.

Prior to this, the stock had been at its lowest two years ago, when it closed at RM1.83 on March 19, 2015. Karex’s net profit in the third quarter ended March 31, 2017 (3QFY17) contracted 28.3% to RM6.9 million from RM9.63 million a year earlier, on higher distribution expenses. Source

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Volatility & Companies Trading Below Book

Question of the day – what happens when there is a significant drop in share price volatility (over a period of time) of companies that are trading below book (or net asset value, NAV) ?  Let take a brief look at 3 Malaysian-listed companies:

Company 1 – TA Enterprise

This property company has been trading below its book value or NTA. Since mid 2014, there has been a steady decline in its share price with a corresponding drop in Price / NAV and Average True Range (“ATR”) (a measure of volatility). There was a reversal of trend since early 2017 and has since continued with its upward trajectory. What was evident was that both Price / NAV and ATR had dropped to record low before a counter-trend emerges.

TA_may 17.png

Company 2 – MNRB

This reinsurance company’s share price has been on a declining trend since mid 2014, with a corresponding drop in Price / NAV and ATR. Similar to TA Enterprise, what was evident was that both Price / NAV and ATR had dropped to record low before a reversal in the trend emerges in August 2016.

MNRB_may17.png

Company 3 – Pasdec

Similar to both TA Enterprise and MNRB, what was evident was that both Price / NAV and ATR had dropped to record low before a reversal in the trend emerges in April 2016.

Pasdec_may 17.png

What about this company? 

Daiman has recently reached record low Price / NAV and ATR. One should ask when will a ‘new trend’ emerge? Could this company be in the value trap category? Only time will tell.

Daiman_may17

The above analysis is observation of certain selected companies. As the sample size is small, further research is definitely required on whether the combination of low Price / NAV and ATR will have predictive value of companies’ future share price.

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.

Predicting Price Earnings Ratio

By using regional equity indices’ trailing price earnings ratio (PER), can we form a predictive P/E range for a particular equity index? Let’s explore this question by using Malaysia’s FBMKLCI as the base index and comparing the index to its regional equity indices in the ASEAN region, e.g JCI, SET, STI and PCOMP.

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