HUAAN

Won't talk too much about this, except to say that it's actually an interesting counter in a pretty good sector, in the right country. At the right price at the right time, it would be a good long-term buy. For those who bought it recently thinking it would give direct exposure to the Chinese steel sector (from the earlier announced acquisition of a stake in a Chinese steel company), note that this new investment has apparently been deferred. Reasons given were:

1. Caution in view of US downturn.

2. Unfavourable time to go to banks for financing for a deal like this.

Note that the deal has been deferred, not terminated, so it could still happen ... later. As for now, the link to the Chinese steel sector will still be an indirect one, ie. through its metallurgical coke product. Also good to note, the Chinese themselves are being cautious despite their still white-hot economy and construction sector. Hmmm .....

/ichithekiller

Adding to TA-WB

TA seems to be coming out of a third correction base with the last high at 1.25. It looks like the low of 0.975 on 10 March, 2008 was the point at which the downtrend was broken and reversed into an uptrend. I know nuts about technical analysis but this is what I can see from the chart. If the trend continues, the next move up should see it crossing 1.25 this time.

With a conversion price of 1.00, TA-WB looks like a reasonable bet to achieve a decent rate of return over a shorter term. This is of course backed by the so-called safety net that TA is one of the largest owners of undeveloped land within the KLCC vicinity. Any resumption of the property boom will impact this area the most. The recently announced record price of RM2,000 per sq ft for bare land paid by YTL offers some indication that values are still intact in this sub-sector. On top of that, the confidence of several developers of high-end condos in the area who are selling on a "By Special Invitation Only" basis at super-high prices only seems to support this view.

Some may be uncomfortable that the -WB expires in June 2009. However, my take is that at current prices of the mother and warrant, the premium is not high, given that the exercise price is already in the money. All in, I'm taking the view that it's a calculated risk worth taking and have added some more to yesterday's initial purchase...

Latest purchases:

TA-WB: +20,000 (0.30) ... Total 50,000

BCTTECH: +10,000 (0.17) ... Total 37,000


/ichithekiller

Mid-Day Update (15 May 2008)

SSTEEL closed up another 56c at 3.76 (day high 3.78) on 13 May. This was the biggest 1-day gain in an 8-day streak. Sold a few quite early at 3.36 and 3.34. Yesterday, other steel stocks joined in the sector rally, while SSTEEL moved to a high of 3.96 before closing up only 4c at 3.80. Today (as of now) it's down 16c to 3.64... most other steel counters correcting as well.

Latest purchase:

TA-WB: +30,000 (0.295) ... Total 30,000

Latest disposal:

SSTEEL: -1,000 (3.34), -2,000 (3.36) ... Balance 2,000


/ichithekiller