Investment Idea - Mar 2011

Last few months, we talk about price increased for Petrol, Gas and Sugar. Many want to know how to take advantage of this. On my Jan's mail, I also suggested at least 3 good stocks that will benefit from this price increase, they are TWS, Pchem and MHB. (refer to below my Jan's mail)

This is not a tips, I just share my thought on how to pick good stock that will benefit from current economy scenario. Again, to remind all, the first thing bear in mind is:

Know the company before Invest.

Ask yourself what's the company's business, how's the company making money in the past? (if company not making profit, just forget about it) Can they still making money more than before in the next 10 years?

For example, TWS ($7.20 on Jan), we know it's the plantation stock, so plantation is hot, especially all commodity price going high. There are so many plantation stocks list on Bursa, what's so special about TWS? Last year, TWS's  profit came from Palm Oil and Sugar, but this year it going to make profit from rice as well after took over PadiBeras. This is something like the plane suddenly put on additional engine, of course it will fly high after quarterly result announcement.

Similar to MHB and Pchem, the current high oil price will going to benefit these company. (remember, not any oil and gas company, we need to choose the best) PM. Najib have mentioned, he want to make the nations rich, one of the way is through Oil and Gas industry to make Malaysia regional hub. In short to medium term, these company will show very good profit.  

Two more company, Tenaga (RM6.23) and GENM(RM3.31) can keep in your watch list. I am not telling you to buy now, but time will come for it's share price to fly. You may monitor it until one day when it start to move, just buy it without hesitate. 

Last, never buy a stock base on rumour or tips. Remember to do your own research, internet is very convenience now.

Investment Idea - Feb 2011

In the beginning of Feb, our local market show some small correction, this create many opportunities. I do share the a topic at my blog:

Buy when stock price up or when stock price down? (remember, the choice is yours if you not agree with my point)

My view, it's very dangerous to average down (buy when it continue to go down). The best is buy when the price start to go up after the share price find the bottom. But how to do that? 

Today, I am going to share with you how I do this. For those who are interested, register an ID in Stock Games at CIMB web site:

http://www.itradecimb.com.my/

Select Tools --> Stock Games

Many will ask, why play Stock Games? This is my secret weapon where it help me to Buy Low and Sell High.

Let say you plan to buy a X stock at $2.80, so when first day down it hit 2.80, sign on Stock Game and buy @ $2.80 for 1000 share. Use Stock Game to "average down", the more it down, the more you buy. So, when you buy it with real money? I will keep on buying with Stock Game until one day if I notice the X stock start to move higher 7% from my lowest buying record.

Let's assume X stock move all the way down in few days:

$2.80 ----> Stock Game buy

$2.58 ----> next day, use Stock Game buy again

$2.39 ----> buy with Stock Game

$2.22 ----> buy again with Stock Game

$2.25 ----> Buy with Stock Game, the stock price rise a bit, but no action, as it rise less than 7% from previous buy point

$2.01 ---> Buy again with Stock Game

$2.21 ---> Buy with Stock Game & REAL MONEY

We use the Stock Game to buy with Cost Averaging Down Method (never use this method with Real Money, as you might end up losing all without cut loss) and buy with Real Money at $2.21, although we can not buy at the lowest, but it's more safe to start accumulate when stock start the up trend again. So you can now decide how many shares you want to buy with Real money and continue to add even the price move up to $2.30 or $2.40. (you need to add fast, as many experience trader always act fast) I think it's more cheaper if you buy at first down of $2.80.

You can do the same when stock move up very high at time when you want to sell.

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Investment Idea - Jan 2011

It's come to beginning of the year 2011, the best time to plan for our investment strategy. There are many ways to invest in stock market, but we always should remember Rules number one, “Not to Lose money in Stock Market”. Here to share with you some of the method use by investors:

One of the way is buy for dividend, investor can consider good stock which pay high dividend such as REITs and Banking stock. (Maybank or Public Bank) This type of investor are happy with return better than FD in bank, capital gain of course is just additional bonus.

If someone bought Maxis last year, today the price is still around RM5.35, no lose or gain. However, he earn the dividend pay by Maxis about RM0.28. Smart investor may think that he do not want to lost opportunities as many other good stock are actually moving up. He may opt to sell Maxis and buy other counters but keep Maxis in the list, until one day if the stock price moving up, he will buy again.

For some investors who want to take a ride on the current Super Bull, can buy the counter with clear up trend. Someone ask me what's the stock on your list now? I gave him 3 stock name last week and he was quite happy with it:

Pchem RM5.90

MHB RM6.01

TWS RM7.20

If you want to chase these 3 stocks, still no problem, go ahead, but beware to sell when market start to turn down. Investor can choose if he want dividend or ride on the Super Bull. 

Happy Investing!

Investment Idea - Dec 2010

Dear investor,

Sugar, Petrol and Gas price going to increase again, meaning another round of inflation is coming, we can benefit from our investment as well!
Choose the Industry leader that going to benefit the most among the same industry! Never buy the industry loser. (the loser can go burst anytime)
For example, AirAsia and MAS was showing good result, then we can consider invest in AIRPORT. (just check the price of AIRPORT, it already more than double since last year)

Another example, sales of vehicle improved, UMW, Honda, Toyota, Proton all shown good result, but all cars need to pay for TOLL company, hence we can consider PLUS.
This is the idea of how we choose best of the best. (I am writing this not to tell you to buy AIRPORT or PLUS right now, it just example how we set the investment strategy)

Last week, CIMB research mentioned about KLK, a leader in Palm Oil industry. There are many points mentioned on the research report, you may refer the attachment. If I were to invest in KLK, I will buy Batu Kawan instead of KLK. The reason is because Batu Kawan hold 46.57% of KLK, meaning:
1 BKAWAN share = 1.1628 KLK share + “Others Assets” 

Batu Kawan price at RM16.30 as of last Friday, KLK is RM21.38. Hence, Batu Kawan having great value than KLK. What happen if Batu Kawan share price going down? For sure I will buy more if the price fall below RM16. (never buy the stock if you dare not buy more when the price go down, it's the indication you don't understand the company or not choosing the great company)

p/s: this is not recommendation to buy any stock, the intention is to show the way of choosing great business, as many just choose the cheap instead of choose the value! I plan to invest in Batu Kawan and keep it for 3 years!
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Market Update after Petronas Chemical IPO

First, would like to congra those who got the IPO shares of Petronas Chemicals, the shares will be listed on 26 Nov 2010 .

Today, got another breaking news,  S. Korea and N. Korea seem to start the War. If the War really happen, what should we do as investors? To me, this will be the opportunity, as in my past 16 years at stock market, there are few of them, Gulf War, Iraq War, 911 ... the fact is, stock market going up again after the incident.

Below strategy that I used and let me share it to you:
- This is time to be real investor, only invest in great business (profit with high return) that we understand.
- Treat you are buying a business, not buying a stock
- Avoid company with high debt and accounting fraud
- The company's profit should be in cash and predictable
- Do not think of buying stock for 5 minutes if you are not prepare to invest for 5 years

I like to share points on my blog, as human is forgetful (that's why Market always up and down), so I write down all the points so that it will remind me what to do when I faced the similar problem in future and I don't mind to share with all who really understand and would like to success in stock market.
Below my latest blog:

1. Do not too emotion in stock Market 

2. Petronas Chemical Part 1 

3. Petronas Chemical Part 2 

4. Asia top 200 best companies 

5. How to build retirement income for life 

Happy Investing! 
.

介于产业与股票之间 产业投资信托股

Mon, 17 Nov 2008 - 冷眼分享集 - updated data on 1 Mar 2011


当你驾车经过吉隆坡市区，仰望高楼大厦时，你心里是否曾经这么想：假如我拥有一座这样的大厦，收取租金，长期有稳定的收入，那是多么理想的事。市中心的办公大楼，每座动辄以亿令吉计，有能力购买的人，毕竟少之又少。但这不等于你与这些大楼无缘。通过购买产业投资信托股票，你其实也有机会拥有这类大楼的 一部分——尽管只是微不足道的一部分。

在马来西亚股票交易所挂牌的上市公司中，就有一类叫产业投资信托股(REITS)。由于这类股票上市的历史最短，又只有区区的14 家，投机气氛不如别类股票那么热络。所以一般投资者都不大注意。实际上，假如你留意的话，你一定会发现，这类股票的周息率(D/Y，就是股息回酬巴仙率)，比大部分股票都高。

REITS 就是REAL ESTATE INVESTMENT TRUSTS 的缩写，中文为产业投资信托股。历史悠久收入稳定这类股票在外围股市有相当长的历史，也是寻求稳定收入的投资者的宠儿。这类公司的营业模式其实很简单：它收集了投资大众的资金，以收购大宗的商业性产业，如办公大厦、购物中心、工厂、酒店等等，交由一家产业管理公司去管理，管理公司负责收租及维 修建筑物，从租金中扣除管理费后，将结存的租金净额分发给投资者。

政府规定：产业投资信托公司必须将90%以上的租金，分发给信托股股东。为了鼓励更多产业信托公司成立，当局规定，信托股的股息只需缴税10%。产业投资信托股的概念其实很简单，收集大量的资金，以收购大宗产业供出租，把收到的租金分发给信托单位持有人。这其实跟单位信托大同小异，只不过单位信托投资于股票，而产业信托投资于产业而已。产业投资信托为有意投资产业的人士提供了另一条投资管道，不但更容易做到，手续也更简单。

让我们比较买屋子和买产业投资信托股的优劣点：
大马产业信托(AMFIRST)昨天公布本财务年上半年的业绩，半年每单位净利为4.87 仙。该信托宣布把盈利全部发给股东，每股派息4.87 仙。假如该信托下半年保持上半年的表现，则全年每单位净赚9.75 仙，该信托曾许下诺言，在未来三年中，将全部盈利派给股东，则每单位股息为 8.775仙(已扣税)。

以该信托目前1.17 仙的股价计算，周息率为7.5%，比定期存款的利息高两倍。假设你有计划买屋子作为投资，又假设你的投资额为50 万令吉，假如你以50 万令吉在八打灵购买一间双层排屋出租，每月可收到租金1 千500 令吉。假如你以每股1.17 仙，买进大马产业信托股票，50 万令吉可买到RM500,000÷RM1.17=427,300 股，以每股8.775 仙的股息计算，你一年可以收到RM37,495 的股息，平均每个月的股息收入为RM3,124 令吉，比排屋租金高两倍。

不单是大马产业信托，其他产业信托股，以目前的股价买进，大部分都可以取得7%以上的周息率，其中亚天产业信托(ATRIUM)，以目前1.02 仙左右的股价计算，周息率高达8.58%。产业信托的股息回酬比产业租金高，而风险则比股票低，可说是介于产业与股票之间的投资产品。

假如你手头有多余的资金，一方面担心股票的风险太高，另一方面又嫌定存和买屋收租回酬太低，一个折衷的办法，是购买产业投资信托股票。回酬高于定存利息但在买进之前，最好对全部14 家产业信托股，进行研究，比较各家所拥有的产业、租户是谁、租金回酬率、负责数额，以及每单位预期可得之股息。作个比较之后，再从中选择你最有信心的股项，买进作为长期投资，可以赚到比定存利息高两倍的回酬。

Axis Reit - Higher income to follow?

Below article appeared in The Edge Financial Daily on January 28, 2011.

Axis REIT has done quite well in terms of expanding its assets portfolio over the past few years and, as a result, has been gradually raising its income distribution to unitholders. We expect this trend to continue in the current year. Based on the estimated distribution of 17.5 sen per unit for 2011, investors will earn a fairly attractive gross yield of 7.4% at the prevailing price of RM2.36.

Expanding assets portfolio 
It was the first real estate investment trust (REIT) to be listed on the Bursa Malaysia in August 2005 and was reclassified as an Islamic REIT in December 2008. The trust focuses primarily on assets within the office and industrial sectors. Its properties are located in Petaling Jaya, Shah Alam, Klang, Prai, Johor and Kedah.

From the initial five properties on listing, Axis REIT now owns and manages 26 properties worth over RM1.16 billion. Five properties were acquired last year, including two logistics warehouses in Seberang Prai that were completed in 1Q10. The latest acquisitions — Tesco Hypermarket in Johor, Axis PDI Centre and Axis Technology Centre — were completed in 4Q10.

The trust’s earnings have been expanding in tandem. Income before tax (excluding fair value adjustments for assets) has grown steadily, from RM26.4 million in 2006 to RM52.6 million last year. In 2010, Axis REIT successfully renegotiated an average rental increase of 8.9% for leases due during the year, which accounted for some 18.5% of the total net lettable area under its management.

The value of its portfolio of properties too has been trending higher. For instance, in 2009 the trust recognised revaluation gains of some RM19.1

million. The valuation for its stable of properties rose by another RM45.6 million last year.

Investors made smart gains
REITs are typically viewed as low risk investments with relatively slow capital appreciation. Their main attraction is steady, higher than market average yields. Nonetheless, unitholders for Axis REIT have not done too shabbily relative to the benchmark index, the FBM KLCI, over the past year.

Indeed, investors in the REIT would have made a capital gain of 22% since the start of 2010. Over the same period, the FBM KLCI was up 19%. Including the income distributed totalling 16 sen per unit for 2010, unitholders would have made returns totalling 30%.

More yield accretive acquisitions in the pipeline
Axis REIT intends to stick to its strategy of acquiring yield accretive properties whilst promoting rental growth for existing assets through enhancements.

For the current year, there are three transactions pending completion including its first asset disposal. The trust is in the midst of completing the sale of North Port Logistic Centre for RM14.5 million on expectations that the property has limited upside to future rental growth. The sale will net gains totalling RM760,000. The trust intends to re-deploy the proceeds towards more yield accretive properties.

The two acquisitions pending completion are for a warehouse-office (D8, Port of Tanjung Pelepas) in Johor and an office building (Axis Eureka) in Cyberjaya for a combined RM81.2 million.

Furthermore, the trust is planning to add five more logistics warehouses in Johor and the Klang Valley as well as two more office blocks in Cyberjaya — estimated to be worth some RM365 million in the current year. It is also looking at the acquisition of Axis Technology Centre 2, consisting of a 6-storey office block, single-storey warehouse and car parks.

Some of the asset enhancements currently underway are the upgrade/facelift for Crystal Plaza, Fuji Xerox and Infinite Centre as well as the expansion of some 7,000 sq ft of net lettable area for a new penthouse level in Menara Axis. Other enhancements on the drawing board for the current year include that for the Cycle & Carriage complex and Kayangan Depot.

Income distribution expected to rise further in 2011
As such, we expect its earnings will continue to trend higher in 2011, lifted by full-year contributions from the five properties acquired last year as well as partial contributions from proposed new asset purchases this year.

Distribution per unit in the current year is estimated at roughly 17.5 sen per unit. That would earn unitholders a relatively attractive yield of 7.4%. Axis REIT is currently trading at roughly 1.2 times its net asset value of RM2.01 per unit.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.