Wednesday, 25 November 2015

KL: Aiming Solution Engineering

Solution Engineering (KLSE: SOLUTN) is a listed company in Bursa Malaysia. The company manufactures laboratory-scale equipment for (tertiary) education and research purposes. The product covers a wide range of research field, including heat transfer, separation processes, process control etc.

I understand that a number of universities purchase their lab-scale equipment from this company, both local and overseas university. University of Malaya is an example. When I did my bachelor and saw the company logo on the lab-scale equipment, I did a brief study on it. At that time the company was losing money continuously, so I have little interest in it. Had it not because of "Cold Eye" (an investment expert in Malaysia) who accumulated this counter, I believe it will continue to remain undiscovered. He now owns 4.92% of company share, which is just shy of the 5% where the investor is required to report to Bursa Malaysia as a substantial shareholder.

Last week, the share jumped with high volume followed by low volume adjustment. I noticed it has the typical movement that I was looking for, similar to INARI not long ago.

The steps are the same:

1. Price soared with high volume
2. Adjustment with low volume
3. Buy in

As simple as that.

During the adjustment process, the lowest traded price will usually be higher than the price before soaring (i.e., RM 0.395 in this case). However, yesterday it has gone down to RM 0.390. I would like to observe for a few more days before making a decision.

Friday, 13 November 2015

Catalyst: The myth behind cholesterol‏

Another TV show that I feel like to write something about.

Australian Broadcasting Corporation (ABC)'s Catalyst programme once broadcasted a two-episode of 1 hour documentation titled "Heart of the matter", explaining the "cholesterol drug war". It was more than 2 years ago. I wasn't aware of this until recently, when Sydney Morning Herald reported about  60,000 people quit cholesterol medicine after viewing "unbalanced" TV program. Sensational, isn't it?

ABC has now removed the video from its Catalyst website due to the pressure from related authorities. Being sceptical about the medicine industry, I went on-line to find these videos, and thankfully, it can still be viewed (at the moment of writing).

The programme explains about how the "weak hypothesis" of the link between cholesterol and heart attack can  become today's medical dogma. I do not deny that the programme is biased, but if this is the truth that has been concealed for decades, what is wrong with being biased?

WARNING: The following videos in this video may utterly change your view on cholesterol.

Sunday, 8 November 2015

KL: Buy back INARI's son

A good horse will not turn back to eat the old grass (direct translation from a Chinese proverb 好马不吃回头草). This is true for a good horse. However, I am certainly not one of the good one.

INARI, my old buddy which I have sold Oct 2014 during the big drop -- a pain when looking back. Ridiculously, I targeted RM 2.70 (before the second right issue ex) at the time of buying. I went up to as high as RM 3.30 (before ex) and I didn't sell. It wasn't until the big drop that I finally sold at a price well below my target price. This happened before, and history has repeated itself.

Anyway,INARI price soared with volume recently:


This is a very nice pattern, so I follow these steps that I used to do:

1. Price soared with high volume
2. If got adjustment, wait for it and adjustment must come with low volume
3. Buy in after a few trading days

As simple as that.

I intended to buy INARI-CW. But looking at INARI-CW, only CI and CJ have some "attractive features". However, I ended up buying INARI-WB as CI and CJ cannot play:

1.CI banker's is a scrooge, queuing only 500 lot for each price bid! **

**Conspiracy theory: I know conspiracy theory is a cliché nowadays, but could this imply that the banker has no confidence to earn money from this CW, hence the low volume queue?

2. CJ itself has "acceptable" volume for each price bid, but nobody trades it, hence no volume. CW with no volume -- cannot play.

INARI, I am back by buying your son!

Wednesday, 28 October 2015

Ringgit depreciation: what will I do?

A lot of people are (discussing about) converting MYR to foreign currency. You can see this from the foreign currency account offered by some banks, e.g., Maybank and Public bank. This was what I thought a few months ago. I have a second thought now: I decided to do nothing.

Firstly, the current exchange rate is about 4.2. I believe there is really not much room left for depreciation.

Secondly, it is really too little too late to convert to foreign currency now. This should have been done before it broke 3.8.

Thirdly, I speculated that the BNM will raise the overnight policy rate in September's meeting, as a move to "save" the currency. But BNM kept the interest rate unchanged. On surface, it shows that BNM does not want to intervene the movement of MYR. On a deeper level though, perhaps they see that MYR will go back to its reasonable value after those "exogenous factors" are gone?

Finally, I can profit from the KLSE to cover the currency depreciation. :D

Now that MYR seems to stabilize around this value, which is not that bad. A possible trend is to lingering around this point for sometime before changing direction. Whatever direction it goes, MYR should still be "safe" in a few years to come.

Wednesday, 21 October 2015

KL: FGV call warrants analysis

I traded FGV once -- on the first day when it was listed publicly. The IPO price was RM 4.55, but opened much higher on the first trading day. I bought @ RM 5.39 early in the morning. Seeing that the trend did not going well, I sold on the same day @ RM 5.40, incurring a small loss after brokerage fee. That was more than 3 years ago. Luckily I was determined to sell at that day, or else?

Now that FGV seems to rebound from the bottom. I am interesting to catch a rebound, thus I studied FGV call warrants.

*Credit to the Macquarie Group, an Australian based company, for having the very useful website Malaysia Warrants to enable me to summarize this in a few minutes.

Based on how I choose a call warrant, I look for CW with >180 days expiry. Thus the choice comes down to C6-C9. For low premium, FGV-C6 and C8 (newly listed) stands out. C6 has a lower premium and higher gearing but C8 has a lower conversion ratio. Although FGV-C9  has high gearing (also newly listed), the premium is way too high. Therefore, C6 and C8 will both be a good choice.

Both C8 and C9 were issued yesterday. Hence you can see the style of CW issued by different issuers. 

1. Macquarie exercise price is really high, while RHB is really nice.
2. Macquarie CWs always have relatively shorter expiry date.
3. A conversion ratio of 3.4 for a share price of RM 1.7x is too high. I am very impressed with the CW issued by RHB, for having such a low conversion ratio!

Disclaimer: at the time of posting, the author does not have any FGV nor FGV call warrants.

Saturday, 17 October 2015


It will be very rare of me to share a TV programme, but Australian Broadcasting Corporation (ABC)'s Q&A has impressed me so intensely that I think I should write something to promote it. Q&A is broadcasted live on ABC every Monday at 9:35 p.m. AEST.

Q&A invites a panel of 5 to answer questions from the audience which is made up of the public. While you would expect most of the issues discussed are about Australia (politics), there are other general topics that are "borderless".

Despite getting funding from the government, Q&A can discuss all kinds of issues openly, including criticism to the current government. No censor. No manipulation. No brainwash.

Below are some topics that I found interesting:

The discussion about death on 18 May 2015, minute 1:14

Death, something that we perceive as being in the distance, but in fact it is always just around the corner. The panel has given some insightful opinions on this topic.

The discussion about marriage equality and religion on 8 Jun 2015, minute 11:30

Dr. Cornel West talked about "Revolutionary Christianity". His view on religion has impressed me. Religion has increasing become something that, in my opinion, is used as a tool to manipulate the public. It's sad to see that religion has been twisted in so many different ways and levels, but it's glad to see that there are people whose mind remain open and wise. His response gained an applause from the audience -- when you can gain an applause from a public audience regarding a topic like this, you know how good the answer is.

A full hour of discussion on mental health issue 5 Oct 2015

I have to confess about my admiration to one of the panel Fay Jackson, with her ill condition yet she still has the courage and bravery to turn public. Bravo!

A full programme of Q&A can be found on ABC Q&A Website.
For the latest 4 episodes of Q&A, you can view it with closed-caption on ABC iView.

I hope you will enjoy the programme as I do.

Saturday, 10 October 2015

2015 Q3 Review

KLCI has not been performing well for this quarter. It took a roller-coaster ride to drop continuously in August before it finally rebounded in September. This round of adjustment is worse than Oct and Dec 2014, probably similar to Aug 2011 in terms of magnitude and pattern.

The Oct 2014 experience which cost me to vomit out everything is still lingering. Perhaps because of this, I have learnt from the past and "escaped" relatively unscathed in this adjustment.

On the bad side, I bought back SIGN not long after selling it.

On the good side, I bought MYEG-CK @ RM 0.055 in the morning of 25 Aug -- the lowest point of adjustment when KLCI was touching 1503. It wasn't an easy decision. The famous market quote of "buying fear, selling greed" is easier said than done. Seeing KLCI dropping everyday, it is tough to do the opposite. But if you have the confidence to do the opposite, the return can be very rewarding in a very short time.

The biggest lesson to learn from this big drop is to walk off after selling. My emotion remains wavering after selling. Making decision under this condition does not do me any good. If I could just walk off for 1-2 weeks after selling, things would have been much better now.

Past experience offers a chance to improve in the future. And this is a very good experience for me but to learn to walk off next time or history is destined to repeat itself.