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Ichi the Killer

Bursa Malaysia stock trading portfolio of nobody really important.

Wednesday, July 30, 2008

EOD Update (30 July 2008)

Was hoping BANENG would retrace to 65c level, but with the huge jump in the Dow last night, seemed like no chance of that happening. Upon opening, it went to a high of 73c and didn't look like there was a chance of it dropping below the 72.0 - 72.5 range. Luckily I didn't rush in though, cos profit-taking (according to Half Bull) later saw it drop to the 69.5 level before closing at 70c. Anyway, I got hit for another 20k at 70.5c ... not sure whether anymore below that, as my broker has not contacted me yet, will only know tomorrow. If short-term weakness brings it down to 65c then could be a chance to round up position to total 50k. Seems like there is persistent buying supporting this counter, but don't think I've got the guts to play too big with it.

Latest purchase:

BANENG: +20,000 (0.705) ... Total (30,000)


/ichithekiller

Tuesday, July 29, 2008

Taking a gamble...

Yes, the title of this post is taking a gamble. That means what I'm talking about below is not considered "investment grade" from a fundamental standpoint and I'm definitely not recommending a buy. In short, I'm just bored and decided to take a punt on a stock that has been acting a bit strange lately, going counter to the overall market trend. From a recent bottom near 30c BANENG has more than doubled in price, hitting a high of 82.5 on 23rd July...before correcting slightly and then moving again.

At the same time, it has also announced that it is exploring options in the Oil & Gas sector. Most of us would know this is the best goreng theme and ordinarily I would also pooh-pooh this kind of "announcement". But the price-volume action doesn't look like it's game over yet. The other thing is it recently sold off its loss-making fabric division. In the notes to its quarterly announcement, it said this subsidiary contributed to RM12 million of losses in the financial year to 31st December, 2007. If BANENG was operating at around breakeven or a slight loss before this disposal (the total year 2007 loss is further affected by a RM3.2 mil one-off loss on disposal), it should by right have no problem recording a profit of at least RM8mil after this disposal, assuming all other things remain equal (a somewhat big if). Note though, that the 2008 Q1 profit doesn't really reflect a big jump in profits, so it's all pretty mysterious. Anyway, following this simple analysis through, based on a tiny share base of 60m, a profit of RM8mil would translate to an EPS of 13.3c ... at 70c it would mean a prospective PE of 5.25 times, before the effects of any supposedly new O&G ventures.

Therefore, with this possible earnings turnaround as a "cushion" I'm thinking it's probably worth a gamble ... just for fun... and just in case the O&G hype turns out to be real. Couldn't pick up much though... seemed to be consistent buying support throughout the day at 69c level. Considering the weak overall sentiment, was hoping it might slip to around 65c ... but no dice. Let's see if got opportunity to pick up cheaper over the next few days.... stocks tend to dive right after I put a foot in due to impatience and boredom.

Latest purchase:

BANENG +10,000 (0.69) ... Total 10,000


/ichithekiller

Tuesday, July 22, 2008

Which part of the cycle are we in now?

Think the Unthinkable

“The terrible, cold, cruel part is Wall Street. Rivers of gold flow there from all over the earth, and death comes with it. There, as nowhere else, you feel a total absence of the spirit: herds of men who cannot count past three, herds more who cannot get past six, scorn for pure science and demoniacal respect for the present. And the terrible thing is that the crowd that fills the streets believes that the world will always be the same and that it is their duty to keep that huge machine running, day and night, forever. This is what comes of a Protestant morality that I, as a (thank God) typical Spaniard, found unnerving.” –Federico Garcia Lorca.

In every kind of disaster, writes Amanda Ripley in her excellent and moving study of disaster psychology (“The Unthinkable: who survives when disaster strikes – and why”, Random House Books 2008), we start in roughly the same place and go through three phases. The first phase is denial. According to a 2005 National Institute of Standards and Technology study drawn from interviews with nearly nine hundred survivors of the 2001 attacks on the World Trade Centre, the average survivor waited six minutes before heading downstairs. One survivor commented, “The building started to sway and everything started shaking. I knew there was something wrong. I ran to my desk and made a couple of phone calls. I dialled about five times trying to reach my [spouse]. I also called my sisters to find out more information.” Despite the physical evidence of smoke and the smell of jet fuel, about one thousand individuals took the time to shut down their computers. Once through the initial shock of the denial phase, we pass into deliberation (“We know something is terribly wrong, but we don’t know what to do about it. How do we decide ?”). Our processes of thought and perception are altered. Eventually we reach the third phase of the survival arc: the decisive moment; “We’ve accepted that we are in danger; we’ve deliberated our options. Now we take action.”
It might appear tasteless to compare the collapse of financial markets with real human disaster. It isn’t meant to be. Happily and hopefully, most of us will never experience the latter, so the threat of financial loss (delivered, or potential) will be more than enough to suffice.

That stock market price action has been so consistently dreadful with such little evidence of a sustainable floor despite flurries of ostensibly positive news (Santander / Alliance & Leicester; some form of formal pastoral care for Fannie Mae and Freddie Mac) could be interpreted as a sign that many investors remain trapped at the “denial” stage of this particular market disaster. Or perhaps many investors, institutional and individual alike, are now mulling their deliberative options. And some, presumably, have already reached the decisive phase, and already pulled the plug on much of their market exposure and initiated the dash for cash. This may or may not prove to be the prudent strategy; only time will tell. It certainly seems to show the merit in the advice that if you’re going to panic, panic early. We would merely hazard the following suggestion: the current market environment is flushing out those investors (supposedly “professional” and individual) who are congenitally unsuited to be making substantial portfolio allocations to the equity markets. The fiendish difficulty for those who decide to be out of the market entirely will be when to decide to get back in.

Classic Buffettology advises us to get greedy when others are fearful. This would ordinarily be sound advice, if somewhat difficult psychologically to execute. But if that blanket exhortation proves to be deficient or at least premature this time around, it will be because the nature of the problems facing financial markets, central banks and commercial banks is off the charts. It feels difficult because many of us have never been here before: only part-way through the historic bust of an extraordinary credit boom, only part-way through a property market correction that could yet last for months if not years, and only part-way through probably the gravest systemic crisis facing the banking system since the 1970s, if not indeed the 1930s. What accelerates and amplifies the downwave in stock markets is the state of our brave and newly inter-connected world where all investors are effectively neurons firing in a vast collective brain. And the global investment brain has suffered a stroke, an ischemic shock triggered by a sudden catastrophic lack of confidence mixed with heady deleveraging.

Citigroup’s Patrick Perret-Green takes up where John Kay of The Financial Times left off some weeks ago, in comparing the evolution of current market sentiment to Elisabeth Kübler-Ross’ “Five Stages of Grief”. The suggestion back in May that it might be time to buy because bankers had “moved on” from denial through to a state of general depression we now know to have been somewhat premature. Here is how Patrick now takes us through the grief arc:

Denial - Credit markets have entered ludicrous levels.
Anger – Why have I lost so much money ? It’s not fair !
Bargaining – Cut rates. Give us liquidity. Give us capital.
Depression – We’re all doomed.
Acceptance – We can’t fight it. Let’s make the best of what we can and prepare.

He suggests, like John Kay did in May, that we are currently in the depression stage. “For doom-mongerers like me this is an event to be welcomed. When the masses, and particularly the popular media, wake up to things it often means that things are close to reaching overshoot territory. This doesn’t mean that things are set to rebound dramatically, far from it. But the pace of decline may ease significantly.. What’s happening to Fannie and Freddie is, perversely, a healthy development. The GSE [Government Sponsored Enterprise] debate has gone on for many years and for far too long there has been a woeful lack of political willpower to address their hybrid status and the explosion of their balance sheets. Only now.. are actions of a far-reaching nature being taken.. More broadly the GSE issue has rammed home the force of our long-term argument that the credit crunch will only be resolved through widespread public sector involvement. As with Scandinavia and Japan in the nineties and noughties, and for that matter the US in the eighties, the problem is too big for the private sector to fix. That means that, thankfully, we are now tentatively beginning to enter Stage 5 – Acceptance.”

Patrick believes, as I do, that the logical outcome from this is higher Treasury yields, notwithstanding the interest rate cuts that the monetary authorities would like to throw at the banking system but from which they are prevented by frustratingly high inflation. All things being equal, then, perhaps the real danger to come is not just lower equity markets (future market direction ? How long is a piece of string ?) but lower government bond markets too. Yes, the economic slowdown and the long-awaited oil price correction would conceivably suppress inflation. But somebody is going to have to pay for all these financial sector bailouts, and while it is gratifying to see Spanish banks stepping up to the plate, it is taxpayers who are ultimately going to get profoundly stuffed (plus ça change..) before this crisis is through. Given the complex and highly opaque outcomes that overhang so many asset classes, has there ever been a better time to be highly diversified by investment instrument, with a reduced dependency on both equity and bond markets, and with an overriding focus on absolute return ? Or to return to the theme with which we began this week: regardless of whether financial market conditions might deteriorate markedly further from admittedly distressed levels, equating, in other words, to potential “money disaster”, do you have a plan ?

http://thepriceofeverything.typepad.com/the_price_of_everything/2008/07/think-the-unthi.html

/ichithekiller

Friday, July 18, 2008

See? Don't panic lah...

Put on some cool shades if you can't take the heat...

www.dita.com

Investors breathe life into Freddie, Fannie

Shares of Freddie Mac and Fannie Mae surge as investors begin to bet that the futures for the two companies aren't as dire as first thought.

By Aaron Smith, CNNMoney.com staff writer
Last Updated: July 17, 2008: 4:50 PM EDT

NEW YORK (CNNMoney.com) -- Reports of the deaths of Freddie Mac and Fannie Mae may have been greatly exaggerated. Shares of the battered mortgage giants soared Thursday. Freddie Mac (FRE, Fortune 500) surged 22% and Fannie Mae (FNM, Fortune 500) jumped 18%. Also on Thursday, Fitch Ratings affirmed 'AAA' long-term issuer default ratings for Fannie and Freddie. But Fitch also chopped Fannie's preferred stock rating and put Freddie on watch for possible downgrade.

The stock surge follows comments from Federal Reserve Chairman Ben Bernanke on Wednesday, who told the House Financial Services Committee that the mortgage companies are "in no danger in failing" because they are "adequately capitalized." Also on Wednesday, the Securities and Exchange Commission took action to limit short-selling of the two firms and 17 other firms unless traders could prove that they had actually borrowed the stocks.

Fannie and Freddie stocks went into a tailspin last week. Shares continued to decline earlier this week even after Treasury Secretary Henry Paulson requested Sunday that Congress remove the credit limits on the amount that Fannie and Freddie can borrow from the Treasury Department. Without counting today's gains, Fannie's stock has plunged 77% so far this year, and Freddie has fallen 80%. Together, these firms back or own some $5 trillion worth of housing debt, or about the half the national market.

Beyond Fannie and Freddie, the battered banking industry also did well on Thursday. JPMorgan (JPM, Fortune 500) jumped 13.5% after reporting a plunge in profit that nonetheless beat analysts' expectations. Shares of regional bank PNC (PNC, Fortune 500) also reported a better-than-expected profit and its stock rose 13.5%. This news followed a more upbeat earnings report from Wells Fargo (WFC, Fortune 500) on Wednesday. The stocks of Citigroup (C, Fortune 500), Merrill Lynch (MER, Fortune 500) and Bank of America (BAC, Fortune 500) also climbed Thursday. Merrill shares then traded lower after the market closing when it reported a nearly $5 billion quarterly loss that surpassed even the worst estimates.

"What has happened is that hysteria has blanked out all rational thought concerning the banking industry," said Richard Bove, analyst for Ladenburg Thalmann, explaining why the stocks have so dramatically in earlier sessions. "The pendulum is never in the middle," added Bove. "It's always at one or the other extreme." Bove does not own banking stocks and his firm does not conduct investment banking business with them.

http://money.cnn.com/2008/07/17/news/economy/fannie_freddie/index.htm?postversion=2008071716

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Tuesday, July 15, 2008

Samsengs all ...

I just saw a video clip of the incident involving the rock band "Carburetor Dung", which happened during the recent PROTES rally at Kelana Jaya. What I saw on the video was absolutely appalling. I'm not talking about what the lead singer did, there will be endless arguments about whether what he did was correct in the circumstances... but surely even if one does not agree, there are better ways to take the matter up with the organisers, instead of turning immediately to violence, aggression and lawlessness??! From several reports and articles online, it seems these hooligans were PAS Youth people, who were fuming that such performances were insulting, were not part of Asian culture and set a bad example to young children. This same bunch cited the same reasons to recently object to performances by Ella and Mas Idayu at some football match.

If that's so.. can I ask is shouting "PUKIMAK! PUKIMAK!" at the top of your voice a good example to children?! Is beating up people you don't agree with part of Asian culture? What about throwing bottles without thinking whether someone innocent could get hurt? Or brandishing sticks while shouting threats, hitting the railings and acting as if the devil has possessed you?

C'mon the guy just showed a bit of his boxers, what he was saying while doing that was not aimed at the crowd, but at the subject matter of the song. Even if one doesn't agree, this is not the right way. It's not like he was raping your grandmother. These are the same bunch of monkeys who are always clamouring about freedom of expression anyway...

I have not seen any official statement from any of the PR parties or leaders condemning this kind of violence (if there is and I've missed it, please let me know). The police should take action against those who assaulted the band members. Above all, PR diehards need to be careful who their leaders and MPs "pakat" with. PR leaders and supporters should always be held to the same high standards of conduct they demand from the BN. Otherwise, if we're not careful, the people may just be walking into a different kind of nightmare.

For some background, check out the articles and links below:

Nothing to apologise, says punk rock band

UPDATED
By Wan Hamidi Hamid and Shannon Teoh

KUALA LUMPUR, July 8 — For Malaysia's seminal punk rock band Carburetor Dung, the ruckus during its performance at the anti-fuel price increase rally in Kelana Jaya, Petaling Jaya yesterday was just a misunderstanding.
Band leader Joe Kidd explained that there was no need for them to apologise over the song "Mari Nyanyi Menjilat" or lead singer Alak pulling down his jeans to show off his boxer shorts to the mainly Malay audience at the Kelana Jaya Stadium.
"The song which is well known among our fans is about anti-corruption. It has nothing to do with the current political issue such as the allegation of sodomy against Datuk Seri Anwar Ibrahim.
"We've always played that song without any incidents. I guess to people who've never seen us, it's a culture shock for them. But for us, we've been writing and performing anti-establishment songs for many years," he told The Malaysian Insider.
Arguably the first punk rock band in the country, Carburetor Dung was formed in 1991. The 43-year-old Joe Kidd is also regarded as a veteran of the alternative music scene in Malaysia, paving the way for hundreds of young bands to emerge a decade later.
Writing in the band's website yesterday, he explained: "Some reports I saw also misquoted the title as 'Liwat' instead of 'Jilat', so if some bloggers made the mistake, I'm sure a lot of the people in the stadium misunderstood too. So many took umbrage lah, thinking that we were making fun of Anwar. Actually I even explained to the crowd the gist of the song before we played it."
The band's bass player Fendi said that the singer would explain every song before blasting into their three-chord frenzy.
"I guess it is up to the political parties and their supporters to think about the whole issue. If freedom of expression is on the agenda, if the parties are supposed to be different from that of the ruling coalition, they have to decide the future of freedom," he said.
PKR Youth's Balik Pulau MP Yusmadi Yusoff defended the band's right to freedom of expression, saying that from this the organisers — Coalition Against Inflation (Protes) — could learn how to prepare their events with more coherence.
"There is no standard form of expression for everyone. But the organisers need a coherent strategy to have an effective campaign. We must encourage a conducive environment for all stakeholders, and for an underground band, perhaps we should have agreed on a song or songs that most resonated with our agenda," he said.
PAS Youth chief Salahuddin Ayub, however, said it would be unfair to lay all the blame solely on Protes, noting that activist Hishamuddin Rais who had engaged performers for the event had taken responsibility for the mishap.
"Everyone has a right to freedom of expression but we still need to look at the sensitivities of people. As we can all agree, the singer pulling down his pants was an embarrassing event," he said.
Yusmadi stressed that in the end everyone came back to hear Pakatan supremo Datuk Seri Anwar Ibrahim speak, showing that there was common ground for all. "I guess we learnt that as a society, we still need to learn how to negotiate our plurality."
Selangor Menteri Besar Tan Sri Khalid Ibrahim yesterday remarked that it was all done in the spirit of the "protest event. So while we protested fuel prices, members of the audience were also protesting against the behaviour of the band."
Meanwhile, the band will continue to play whenever and wherever it is needed, without having to compromise its stance, Fendi added. For example, crowd favourites like "Oppression" and "Boo Hoo Clapping Song" offer their take on social issues such as political hypocrisy and lack of freedom in the country.
Carburetor Dung has been involved in social causes over the years, working with Food Not Bombs which helps to feed the homeless in the city and performing at the annual Press Freedom Day concert.

http://themalaysianinsider.com/index.php/headlines/42-lead-stories/1510-nothing-to-apologise-says-punk-rock-band
-----------------------------------------
And this is from Joe Kidd:

http://ricecooker.kerbau.com/2008/07/05/sunday-6th-july-2008-penghimpunan-aman-sejuta-rakyat/

guys, kami semua OK (Alak ada benjol sikit kat dahi). kami perlu berterima kasih pada pemuda-pemuda AMK (Angkatan Pemuda Keadilan - t-shirt biru) yang rata-rata marah tapi masih cuba sedaya-upaya menyelamatkan kami dari segerombolan pemuda-pemuda berbaju merah yang memang ready to rip us apart. With the help of AMK, we all managed to sneak out of the stadium (separately) after about 20 minutes being under siege.
The problem here is our song “Mari Nyanyi Menjilat”. Macam biasa, Alak did his exposing his underwear thing and of course dalam situasi panas tentang “liwat-meliwat” sekarang, aku rasa that gesture was misunderstood by the people there.
Some reports I saw also misquoted the title as “Liwat” instead of “Jilat”, so if some bloggers made the mistake, I’m sure a lot of the people in the stadium misunderstood too. So many took umbrage lah, thinking that we were making fun of Anwar. Actually I even explained to the crowd the gist of the song before we played it.
The thing is aku rasa Alak was in his “auto-pilot” mode. We have been playing that song for a long time and to a lot of people for years already and Alak have always been doing that to heighten the “satire”. The kids in the scene would get the joke all the time but we can’t expect the same from the public. That’s our mistake.
Anyways, apart from the guys in AMK, we also must thank Tom (Skitzofrenia) who shielded Alak from a lot blows, and in the process also got some benjol-benjol. Much thanks to Mad Yus (Apparatus), Poodien, Mirdza (Relationsheep), Black and many more who were there and helped out.

--------------------

/ichithekiller

Thursday, July 10, 2008

Don't Panic Lah....

Interesting.....

------------------------------------------------------------------------
Don't fret about Fannie and Freddie!
How fragile is this market? A report about a potential accounting change jolted stocks even though oil was lower and the dollar was higher.

By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: July 8, 2008: 11:09 AM EDT

NEW YORK (CNNMoney.com) -- Wall Street needs a glass of milk, some cookies and a hug.
Monday's activity on Wall Street was a classic case of what happens when fear takes over and otherwise rational people panic. Just look at the chart of the Dow to the right.

In the early part of yesterday's trading, stocks were up because investors were finally starting to see some encouraging news on the inflation front. The dollar had gained ground against the euro and the price of crude oil dipped below $140 a barrel. The weak dollar has been cited as a key reason why the price of oil, food and other commodities have surged lately.

But then Lehman Brothers shook the market. Ironically, Monday's financial follies had nothing to do with fears about an imminent collapse of the troubled investment bank. Instead, a widely respected analyst at the firm, Bruce Harting, issued a report about mortgage financing giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), suggesting that there was a chance the two would have to raise an additional $75 billion in capital in the event of an accounting rule change.

As news of this report circulated around trading desks, it caused an abrupt end to Monday's rally. The Dow, up as much as 110 points in the morning, plunged in the mid-afternoon. At one point, the Dow was down nearly 168 points before going on to recover some of its losses and finish the day about 57 points in the red. "It's hard to read the mind of investors on a day-to-day basis,"said Jack Ablin, chief investment officer with Harris Private Bank in Chicago. "So whether the market selloff was justified or not, clearly the $75 billion number got the headlines and investors really honed in on it."

But the strangest thing about yesterday's sudden change of heart on Wall Street is that as scary as some of the Fannie and Freddie headlines were, if anyone bothered to read the Lehman report in its entirety, they would have noticed that Harting went out of his way to point out that the doomsday scenario he described would probably not come to fruition. He wrote that the ramifications of the pending rule change would be "so contrary to all other current capital ratios and policy initiatives that we cannot imagine such an outcome occurring," and added later on his note that an "onerous increase in capital requirements is unlikely" for Fannie and Freddie.
Simply put, this report didn't seem to have enough meat in it to justify the broad market selloff that took place.

It's just another example of how bearish market sentiment is these days. Some investors are looking for any excuse to sell - and they found it with the Lehman note. "The reaction to the report shows you how vulnerable the market is. In the note, he didn't list it as an absolute that Fannie and Freddie would have to raise $75 billion. He actually said it was a small possibility," said Quincy Krosby, chief investment strategist with The Hartford.."This is an indication of investors selling now and asking questions later."

Now don't get me wrong. As I pointed out in yesterday's column, there are plenty of reasons for investors to be nervous. Earnings for the second quarter, especially in the financial sector, are likely to be abysmal. And I'm certainly not suggesting that now is a time to load up on Fannie and Freddie. Both of those government sponsored enterprises are expected to report losses in the second quarter. Clearly, there will be more pain ahead for financial firms. "Unfortunately, this whole notion that the worst of the credit crunch is over remains to be seen. We can't say we're out of the woods," Ablin said.

But as bleak as the outlook may be for financial stocks, investors would be unwise to completely ignore the impact that falling oil prices and a stronger dollar could have on the markets and economy. Krosby said high oil prices are finally beginning to take their toll on markets outside the U.S., which should lead to lower demand for oil and, with it, a further decline in oil prices.

"What is unfolding is an acceptance in the market that there is a global economic slowdown," Krosby said. "A pullback in energy prices should segue into a positive for the U.S. equity market and economy since consumers will have less of a tax on them." Krosby added that if oil prices continue to retreat, large institutional investors that had been betting on energy stocks and commodities will need to put their money elsewhere, and that some beaten down sectors like consumer stocks may wind up benefiting. So while investors should certainly take concerns about Fannie and Freddie seriously, they shouldn't forget that there's more to the market than mortgages.