SPACs High Risk, High Reward

Is it advisable to invest in SPACs? SPACs stands for Special-Purpose Acquisition Companies. These companies are actually shell companies with nothing to show. They don't have any track record, any brand name or any asset. 

Basically, SPACs are meant to promote private equity investments, spur corporate transformation, and encourage merger & acquisitions.

 When you invest in SPACs, it means that you are handling over your money to a team of supposed-to-be professionals who will look for good assets to buy and invest. Obviously, what is most important here is the integrity and competency of the team. 

Competency without integrity is worse than integrity without competency. I wouldn't invest in a company that is either the one or the other. The worst is, when there is neither competency or integrity. Therefore, if you are about to invest in SPACs, you must, firstly, make a study of the management team. When you are convinced that the team is skillful and honest, then and only then, you hand over the team your money. Otherwise it is better to avoid them.

One more thing, don't forget that while the team is looking for qualified assets to buy, the company has to pay the team members their salaries. This means outflow of cash without any inflow. 

In America, there are more failures than successes as far as SPACs are concerned.

Presently we have three SPACs listed in Bursa. They are Hisbicus, Cliq, and Sona. More shall be coming. 

If you are risk-adversed, SPACs are not for you. 

Whatever action you take as a result of reading this article is your absolutely responsibility. 

When a bullish article is not to be taken at face value

The moment you read a bullish article about a certain stock,  do not rush in to buy. Not all bullish articles are meant for you to make money. Many are meant to benefit only a limited number of people. You know what I mean?

Bear in mind that big boys are very powerful. They are capable of manipulating the price;  they are also capable of manipulating the news.

If you don't want to be taken for a ride, you have to be careful; you must not act in haste. Many mistakes are made because of haste.

Check the latest quarterly report; check the balance sheet; check the income statement as well as the cash-flow statement. If you see some red flags that are not highlighted in the report, then that report must be read with skepticism.

Never buy a stock without having a good look at its chart. Never buy in a downtrend, and never ever go against the market. It is much stronger than you. 

If you don't listen to me, I can't help you.

A Glimpse of Heaven on Earth

The Kechara Forest Retreat will be a place like no other, nestled in the deep mountains of Chamang, Bentong, about 1 1/2 hours drive from Kuala Lumpur. This village is being created within the green tropical forest…

The Kechara Forest Retreat welcomes people from all walks of life to visit and practice. Away from the hustle and bustle of the city, it will feature various facilities and buildings designed to serve those who visit…

Click here to read more.

Founders of StemLife exit company

Corporate | SEPTEMBER 11, 2013 by Jose Barrock

Singapore listed Cordlife Group Ltd surfaced as a substantial shareholder in StemLife, buying 49.3 million shares or a 19.9% stake in the publicly traded Malaysian stem cell therapy and life- sciences company.

Interestingly enough the announcements to the local bourse indicates that the sellers are the founders off StemLife Sharon Low Su-Shing and Christina Lim Oi Wah.

According to the company’s latest annual report for FY2012 Low has 11.2% in StemLife, while Lim has 11.19% equity interest in the company.

It is not known how much Cordlife Group paid for the controlling block of StemLife, as the only detail offered was that the deal was done on September 3.

However the market seems to be positive on the entry of Cordlife. StemLife was up five sen to 37.5 sen at 3.50pm giving the company a market capitalisation of about RM92.8 million.

It is n not clear if Low the managing director and Lim the executive director will step down after selling out of the company.

Christina Lim Oi Wah (left) and Sharon Low Su-Shing

Perhaps the writing was already on the wall. In end May this year Low took 12-month sabbatical leave, leaving Lim in charge of the company. This was quite a surprise as Low has been the face of the company since its floatation exercise in October 2006.

It is also noteworthy that StemLife has billionaire businessman Vincent Tan Chee Yioun as a 12.12% shareholder in the company. Other substantial shareholders include Capital Group International Inc with 8.9% and Emerging Markets Growth Fund controlling 5% equity interest in Stemlife.

For its six months ended June this year, StemLife posted a net profit of RM1.5 million from RM8.5 million in revenue. Earnings per share for the six months was 0.62 sen.

StemLife also has a 40% stake in ThaiStemLife Co Ltd.

As for Cordlife Group, Bloomberg has the company focusing on cord blood banking services, including the collection, processing, testing preservation and storage of umbilical cord blood at birth.

A check on Cordlife’s annual report for FY2012 however reveals that as at mid-September last year, Cordlife Group Ltd’s largest shareholder was China Stem Cells (East) Co Ltd with 10.47%. Other substantial shareholders included City Challenge Global Ltd controlling with 9.4%, Coop International Ltd with 8.8% and Wells Spring Pte Ltd with 7.22%

For FY2012, Cordlife posted net profits of S$6.9 million from US$28.8 million in revenue.

Cordlife has a market capitalisation in excess of S$300 million.

MNRB First and Final Dividend of 32% less tax

OTHERS Proposed First and Final Dividend

MNRB HOLDINGS BERHAD

Type	Announcement
Subject	OTHERS
Description	Proposed First and Final Dividend
We are pleased to announce that the Board of Directors of MNRB Holdings Berhad had agreed to recommend the payment of First and Final Dividend of 32% less 25% income tax for the financial year ended 31 March 2013 to be paid on a date to be announced later, subject to approval by shareholders at the forthcoming 40th Annual General Meeting of the Company The above announcement was on 27 June 2013. But todate, no dividend has  been declared. Hopefully, it will do so later.

More about CSL

"China Stationery has always stressed on quality and integrity. We have so far
never strayed from these fundamental principles and goals which have served us
well in the past and which will continue to guide us in the future. We will continue
to work hard to please our customers and ourshareholders." (Excerpt from the speech by the CEO & Chairman)
Click here to read more.
I especially like the last statement: We will continue to work hard to please our customers and our share holders.
The stock price of CSL now stands at 24.5 sen. As shareholders of the stock, are you happy about this?

Dragons or Earth Worms (China-Based Stocks)

When Bursa opened its door to China-based companies for listing, it was expecting for Chinese dragons, but instead it was getting only earth worms. The above screen shows all the China-based companies listed at Bursa. A close look at the screen shows that all the stocks are trading at ridiculously low PEs. Said to be the best stock in the group, Xinguan is trading at PE of 2.32, and a fundamentally sound stock, CSL is trading at PE of 1.34! Today I shall talk about CSL. If you are interested, please read on.

CSL is an integrated plastic stationery company. Its products are sold under its own brands of

Sakura, Nachi and Foldersys.

CSL's IPO price was 95 sen per share. The stock was listed on 24-2.2012. The chart shows that it hit a high of RM1.80 before sliding downhill all the way to the last traded price of 24.5 sen.

What is most interesting about this stock is that is CEO, Chan Fung has been dumbing it as early as 16 Jan 2013. On that day he sold 61,413,500 shares at 90 sen a share. This left him with a balance 831,586,500 shares. His other disposals were as follows:

18.1.13: Disposed 38,586,500 shares at 90 sen per share

21.3.13 Disposed 50,000,000 shares at 60 sen per share

03.5.13 Disposed 60,000,000 shares at 45 sen per share

12.7.13 Disposed 120,000,000 shares at 30 sen per share

25.7.13 Disposed 20,000,000 shares at 30 sen per share

15.8.13 Disposed 160,000,000 shares at 30 sen per share

At this rate of disposals by the CEO, is there any wonder that the stock has dived to such a low level of 24.5 sen? What's ridiculous is that the CEO & Chairman of CSL, Chan Fung, attributed the poor performance of CSL to bad publicity associated to the S-Chips accounting fraud scandal in Singapore. (China-based companies listed in Singapore are known as S-Chips) He said investors should not paint with broad strokes and assume that all Chinese companies are the same. He likened CSL as the elusive thousand-mile horse, hidden among a herd of other, more ordinary horses. He said this and yet he has been disposing off his shares. This is incredible!!!

On paper, fundamentally, the stock is great. AS at 31.6.13 it has current assets of RM2,622,457,000 of which RM2,070,254,000 is in cash. Its current liabilities stand at RM242.86 million of which RM54.4 million is borrowing.

As at 31.12.12, some key statistics of the stock were as follows:

Shares Issued: 1,242,760,588

Par Value: S$0.001

EPS: 19 sen

Dividend Paid: 3.4 sen

NTA: 98 sen

Chan Fung has said that this was a financially sound company. Yes, indeed it is, at least on paper. Its earning for the last six months is reported as 9.64 sen per share. This is slightly lower than the EPS of 10.86 sen for the corresponding period of the previous year.

Before you buy into this stock at below 25 sen per share, please bear in mind that China-based stocks are infamous for creative accounting. A little bit of fancy financial footwork can make everything look rosy. And don't forget that as many as 493 Chinese companies listed on the NYSE have been de-listed, according to data by Shenying Wanguo and The Wall Street Journal.

Now, have a good look at the daily chart of CSL shown below. After a big long slide, the stock has been moving sideway for quite some time with a bias in favor of lowering prices.

Until you see a reversal in the trend, best to avoid it until then. But if you are risk-tolerant, and wish to have some excitement, now maybe a good time to buy CSL. Whatever you do, please remember that you are 100% responsible for your own action.

As usual, you buy, sell or hold at your own risk. Good Luck.

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How To Overcome A Premature Sale

While it's difficult to buy at the bottom, it is even more difficult to sell at the top. Many people make the mistake of selling prematurely. This means that before the stock moves up to its overvalued level or even to its fair-valued level, the stock is sold. How often have you heard your friends said, " After I sold out the stock shot up." 

This mistake of premature selling is made mostly by people who have no knowledge in technical analysis (TA), and have no knowledge about the fundamental aspects of the company behind the stock as well. 

Normally they buy on a tip or on rumors.  As soon as the stock rises and rises more, they are increasingly scared to lose back their gains. So their concern then, is to protect their profits. This make them sell the stock when it dips a little even in the early stages of an uptrend. Actually, they should be buying more at that time. When you are able to overcome  this weakness of selling too early, your profits will be greatly enhanced. 

The price of a stock never moves up in a straight line. It always moves up and down, and up and down. As it moves up, you will see higher highs and higher lows. But when it's in a downtrend, you will see lower highs and lower lows. You cannot see this unless you look at the chart of the stock.

In the stock market, you will do well to remember that it is profitable to follow strength, and never to buy in a downtrend. Thus the saying, " Never Catch a Falling Dagger."

To overcome the weakness of a premature sale, you must know TA, and have a good knowledge of the stock involved, otherwise you will never be able to hold on to it as the price rises.

If you like the above article, you are welcome to add me as a friend at FaceBook

MNRB First & Final Dividend of 32%

MNRB will announce a first and final dividend of 32% for the financial year ended 31.3.2013, latest by end of this month. The stock gapped up with the opening price of RM3.58. It closed at RM3.73 for a gain of 18 sen. Volume transacted was above normal at 863, 500 shares. Going by the chart, the price is likely to improve further.
 AmanahRaya Trustee, the major shareholder of the stock has been selling the stock for quite some time. Despite this, the stock is moving up. Probably institutions are the buyers today. Hopefully, they will continue to buy more, going forward.

KSeng On Verge Of A Breakout

The above daily chart of KSeng shows that the stock is on the verge of a breakout. The overhead resistance is at RM5.34. Once this level is decisively breached, the stock should be on its way to a higher level. This stock is cash-rich and land-rich as well. Most of its lands are in the Iskandar region
where land value has improved immensely in recent years.
The indicators, MACD and Stochastic are in accord with their golden crosses. If the breakout is accompanied by high volume, it (the breakout) is likely to be genuine.

PRK Corp Displays Strong Uptrend

I highlighted PRK Corp on 19 May, 2013 in this blog. The price was then at RM2.02. Last Friday, the stock closed at RM3.13 after it hit a high of RM3.18. This means that the stock has gained RM1.11 in less than 3 months!

The company denied that the management  was in talk with any party for any merger or privatization when queried by Bursa. It is normal for the management to answer in this manner. 

In my opinion, a privatization of the stock is likely in view of the fact that the stock is very much undervalued even at today's price of RM3.13.

Its solid balance sheet showing plenty of cash in the bank, high net tangible assets and good earnings all point to the possibility of a privatization.

The above daily chart clearing displays that the stock is in an uptrend. Technical analysis says that when a trend is in motion, it (the trend) is likely to continue in the same direction. I subscribe to this notion.

How high will the stock go? I don't know. 

It's best to stay with the stock until, the chart shows a reversal of the trend.

If you like this article, join me at FaceBook. Just add me as a friend. Thanks.

Crescendo Value for Premier Quality

Crescendo has a land bank of 2,975 acres, out of which 1665 acres are prime lands in the Iskandar Region. The company is in property development, manufacturing and trading in concrete products, and to a small extent in education. It is moving from medium to high-end products. This means better margins going forward.

As at Jan 31, 2013, its key statistics are as follows:

Paid-up capital: RM195.49 million

Par Value: RM1

NTA: RM 3.07 per share

EPS: 29 sen

Interim Dividend: 4 sen less tax

Final Dividend: 8 sen single tier (x-date 6.8.13; payment 30.8.13)

Current Ratio: 3.15

Quick Ratio: 2.09

Debt/Equity: 0.1558

Debt/Total Capital: 0.1312

Institutional shareholders: Public Mutual Bhd holds 7.44 million shares

Controlling shareholder: Kim Loong Bhd holds 55.73%

Chairman and CEO: Gooi Seong Lim 

From the above statistics, we can easily discern that the company has little debts and a strong balance sheet with good assets in lands.

For the financial year ending  Jan 31, 2014, the company has four on-going projects in the Iskandar region. These four projects are very well-positioned with a full spectrum of products for sale. These products are: medium industrial factories, commercial buildings, shop houses and residential houses. Demand for these products are good. Not only Singaporeans and other foreigners are keen to buy them, locals are keen to buy them as well. Thus, sale is not a problem.

In the past year, some sales were purposely held back for the purpose of better profits. This is reflected in better earnings of 9.23 sen per share for the first quarter ended April 30, 2013. In the corresponding quarter of the past year the EPS was only 6.59 sen.

Land values have always been on the rise. Some of the lands of the company were purchased way back in 2005. If a revaluation of these lands is carried out, the NTA value of the stock is sure to go up. In property counters, NTA (net tangible assets) is an important figure to consider.

Manufacturing and trading of concrete products contributed 34% of revenue. An improvement is expected with more sales to Singapore.

In Education, the campus for the Crescendo International College has been operational since May, 2013. Initial intake was reported as encouraging.

The group's future outlook is good. The 1665 acres of prime land, mentioned earlier, has a gross development value of RM7 billion according to the CEO. 

Recently the stock was traded to a high of RM3.80. It was last traded at RM3.12.

I am long on the stock. I expect it to surpass RM3.80 per share before 2014.

Your listen to me at your own risk, and buy at your own risk as well.

PRESBHD CREEPING UP

This daily chart of PRESBHD shows that the stock is moving up to challenge its immediate resistance at 2.12. Should the resistance level be decisively breached, the stock is likely to move up to a much higher level. EPF has been accumulating the stock. Buy at your own risk.

A Time to Remember

TimeCome started at RM3.49 when the market opened in the morning on Friday, 28.6.2013. It had a gradual uptrend,  and by 4.45 pm the stock was traded at  RM3.65.

 At 4.49 pm, the stock suddenly turned very active. On the sale side were selling of more than 30,000 lots,  and on the buy side were buying of about the same volume. The bid and offer price was at RM3.84. The sudden jump in the price from RM3.65 to RM3.84 was a great surprise to me. I quickly joined in the queue to sell. I keyed in at 4.49 pm to sell 100 lots,  4.50pm to sell 200 lots, and 4.51pm to sell 100 lots at RM3.84. 

When the market eventually closed, I managed to sell only 200 lots. I immediately called my remiser to enquire why the 200 lots I keyed in to sell at 4.50 pm were not sold. 

After some checking, I was told that because at 4.50 pm the computer was in the process of matching the orders, and so some entries to trade at that time were rejected. 

This taught me a valuable lesson. You should not key in at 4.50 pm to either buy or sell if you do want your orders to be rejected.

I was puzzled as to why the price jumped so much at 4.49 pm. Who was the buyer, and who were the sellers? The sellers were probably the small timers while the buyer was probably an institution that wanted to take a substantial take in the stock. 

Nowadays,  one must be extra vigilant at 4.45pm until the market closes on any trading day to make good use of any opportunity to make a fast buck.

Gold Is Unsafe at Any Price: Dicker /By Jeff Macke | Breakout

Another day another beating for gold. The yellow metal fell another 3.5% overnight bringing it to prices unseen for almost three years. The SPDR Gold Trust ETF (GLD) is now down over 25% year-to-date as retail investors find themselves on the wrong side of what is suddenly looking like one of the great boom-bust cycles in precious metal history.

As for what's driving the plummet, MercBloc president Dan Dicker says it's all about Main Street coming to the sudden realization that there is no safety whatsoever in gold. "When the retail customer gets frightened, they get frightened in a hurry and they get frightened for big numbers," Dicker says in the attached clip.

Retail investors are scared for good reasons. Gold is an investment that should have worked when the inflation which was supposed to run rampant due to currency devaluation kicked into high gear. As the inflation thesis gets debunked gold is getting mercilessly hammered. There just isn't a compelling fundamental reason to own gold and the chart is broken. The only thing left to do is hope and panic; usually in that order.

Dicker makes the point that the GLD, as a massive ETF, is forced to buy and sell physical gold holdings as the size of the fund fluctuates. When sellers start dumping the GLD it forces banks to go into the market and sell physical gold into a weak market. The result is what Dicker calls a "cyclical death spiral" that makes calling a bottom an exercise in futility.

Those looking to buy the dip in gold are fighting the trend, a tide of so called "weak-hand" sellers and a broken fundamental investment thesis. The market doesn't give out badges for bravery; hundreds of years of gold trading history suggests there are better places to put your money right now.

Is TDM on fire?

Some weird market activities happened in Bursa in the closing minutes of yesterday's trading. 

BKAWAN, TDM, CBIP, HSPLANT & COSTAL were all traded limits down in heavy volume immediately the clock hit 4.50 pm. On the plus side, we have JCY, up 24 sen, and Star, up 85 sen to

90 sen and RM3.71 respectively. 

TDM was the stock I was focusing on the whole day. It opened at RM4.09 and was traded up to a high of 4.18. In view of the weakness in Wall Street, I had sold some of my TDM shares at the average price of RM4.15 in the morning session.

At 4.45 pm, I saw big volume being quoted on the buy side and sale side at RM2.90. 

Initially, I thought someone was playing the fool with the bids and offer. Then at 4.50 pm, my computer screen blinked, and wow! more than 3 million shares were being done at RM2.90 per share. I couldn't believe what I saw. So I immediately called a remiser to find out what actually happened. I was told that the stock was indeed done at RM2.90 at the close of trading. He also told me that several stocks were also having the same unusual action.

I have no idea what had actually transpired. I think the following scenarios are more impossible than possible:

1. Someone hacked someone's account

2. Stock manipulation by traders

3. A malfunction of the computer

4. Key-in error by traders

5. Liquidation by foreign fund managers

6. Some planation lands in Indonesia are on fire

Bursa should do a through investigation into these unusual market activities and make its findings public.

What can we learn from what had happened? We learned that anything is possible in the stock market. This reminds me of the quote that if you want to achieve the impossible, you have to do the ridiculous. 

FBM KLCI to turn bearish

The DOW closed down 353.87 early this morning. This, coupled with the news that China is experiencing a slowdown will drive the FBM KLCI index down when the market opens. Support at 1742 is not likely to hold. It may come all the way down to 1720.

Three Strategies To Riches

You need a car license to drive. Why? Because your mistakes can be fatal to someone else. Therefore, before you are allowed to drive, you must prove that you are competent in driving, and know the traffic rules as well.

In the stock market, you don't need a license to trade or invest in shares. As long as you are of age, 18 and above, you can open an account with a broker firm and start  trading. You do not need any special education for this purpose. In fact, the more foolish and loaded (rich) you are, the more you are welcome, simply because, your mistakes are only fatal to yourself, and to no others. 

The market is a zero-sum game. For someone to win, some others must lose. That's why you are  most welcome if you are the most foolish and have plenty of money to lose. 

There are many ways to build up wealth. In the stock market, I know of three. They are:

1. Buy low, sell high, 2. Buy high, sell higher, & 3. Buy high and sell low.

The first two strategies are logical, but the 3rd one looks ridiculous. How can one buy high and sell low and still makes a profit? Here's the explanation:

At the end of a bear market, prices will be at very low level with little volume transacted daily. Prices are likely to be moving sideway in a tight range. This sideway movement can continue for months or even up to a year or two. It is during this period of lackadaisical trading that  savvy investors are accumulating shares. 

For those who wish to buy high and sell low, they stay awake and alert. They are waiting for an upside breakout. So as soon as one appears, they buy. This is: buy high. Assuming that after they have bought, the stock moves up, they will buy more to make more as soon as the uptrend starts. As the stock moves up higher, their concern is to take profit. For those who know technical analysis, the best time to take profit is to wait for a downside breakout to sell. This is what I mean to sell low.

I hope the above explanation is clear about the strategy, " Buy high and sell low."

Different times call for the use of different strategies. Your temperament and financial standings will decide which one of the three strategies suits you best. 

For me, I use all of them.

Smartag A Big Disappointment

Smartag is a big disappointment. Quarter after quarter, the company reported negative earnings. Investors of this stock are now cursing and wondering what is happening to the company. Last year, the company said that it had successfully tested its technology at Customs, and yet until today, the company is still running at a loss. 

The chart shows that the stock was traded to a low of 8.5 sen on April 30, May 2 & 3 this year before it was traded to a high of 20 sen on May 22. The stock then drifted down. It was well supported at 15.5 sen. 

On June 7, the stock opened at 14.5 sen, half a sen lower than the previous day's close. It was quickly pushed up to a high of 18.5 sen, and then heavy liquidation of the stock hammered unabated the stock down to 12.5 sen before closing off the day's low at 13 sen. To me, the stock was being manipulated and insiders are trading. What surprised me was that Bursa didn't queried the company of the unusual market activity on that day. 

The stock is now last traded at 10.5 sen with many red candles at its trail. If you wish to dabble in this stock, watch closely, the show is not over yet. Wait until you see a bullish signal before you buy.

Cypark All Set to Move Up

The gap shows eagerness to buy. Be ready for more upside.