Sentiment for global stocks remained cautious in the past week. Global financial markets succumbed to a sell-off in mid-week as concerns over potential credit tightening measures in China and euro debt fears in Ireland returned to haunt investors.
Key bellwether indices had rallied earlier, rising above levels just before the Lehman Brothers' bankruptcy-precipitated global financial crisis, fuelled largely by expectations of a second round of quantitative easing by the US Federal Reserve.
Now that the US Fed has indeed announced a US$600 billion (RM1.87 trillion) bond purchase programme, investors are locking in some gains from the rally and are looking for fresh leads.
For the moment, the possibility of further tightening policy in China that could result in slower growth is prompting caution.
South Korea's second interest rate hike in the past four months last week added fuel to such speculation ' as are renewed jitters over high budget deficits and sovereign debt default for the eurozone's periphery economies. Ireland is under pressure to seek financial help from the EU-IMF to prevent a wider contagion.
We suspect markets will continue to drift sideways pending fresh leads. In particular, investors will be looking for evidence on the strength of the global economy, especially in the US.
On the home front, the FBM KLCI drifted lower in a holiday-shortened trading week, but recouped all of its intra-week losses last Friday, when the index posted a one-day gain of 9.4 points. The benchmark index ended the week at 1,506.1, up 6.2 points or 0.42%.
Having previously advanced almost 230 points ' or about 18% gain year-to-date ' it is probably healthy for the market to consolidate for a while.
Our model portfolio underperformed the benchmark index last week. Total market value for our basket of 17 stocks advanced 0.22% to RM529,575. Six of the stocks in our portfolio closed higher, seven ended in negative territory while four traded unchanged for the week.
Shares of Pantech Holdings attracted some trading interest ahead of the ex-date for the company's 1-for-5 bonus and 2-for-1 ICULS rights issue, which has been fixed on Nov 24.
The ICULS are priced at 10 sen apiece and comes with a free warrant for every 10 ICULS subscribed. It carries a 7% coupon and a 6-to-1 conversion rate while the warrants have a 10-year maturity and exercise price of 60 sen.
We believe the terms are attractive and the corporate exercise should earn shareholders positive returns. (Please refer to our report on Pantech published in last Friday's The Edge Financial Daily for more details)
DiGi was our best-performing stock for the week, gaining 4.7% to close at RM25.60 while Maybank was up 2.3% to RM8.96 and AmFIRST REIT rose 1.6% to RM1.18. At the other end, Green Packet (down 4.3%), Tanjung Offshore (down 2.5%) and HELP International Corp (down 1.7%) were among the bigger losers.
We received dividends from Pantech (1.5 sen), AmFIRST REIT (4.81 sen) and Maybank (44 sen) totaling RM3,827 last week, thereby raising our cash holdings to RM173,044.
Including our large cash reserves, the total portfolio value was up by a lesser 0.16% to RM702,619. Last week's gains boosted our model portfolio's cumulative returns since inception to 339.1% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 132.8% over the same period, by some distance.
Our total profits are very substantial at RM529,575, of which RM344,014 has already been realised from previous shares sales.
For prudence's sake, our model portfolio continues to hold quite a significant amount of cash ' for which no interest is imputed ' making up about 24.6% of our total portfolio value. We kept our model portfolio unchanged and will continue to monitor the market for opportunities.
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.
Key bellwether indices had rallied earlier, rising above levels just before the Lehman Brothers' bankruptcy-precipitated global financial crisis, fuelled largely by expectations of a second round of quantitative easing by the US Federal Reserve.
Now that the US Fed has indeed announced a US$600 billion (RM1.87 trillion) bond purchase programme, investors are locking in some gains from the rally and are looking for fresh leads.
For the moment, the possibility of further tightening policy in China that could result in slower growth is prompting caution.
South Korea's second interest rate hike in the past four months last week added fuel to such speculation ' as are renewed jitters over high budget deficits and sovereign debt default for the eurozone's periphery economies. Ireland is under pressure to seek financial help from the EU-IMF to prevent a wider contagion.
We suspect markets will continue to drift sideways pending fresh leads. In particular, investors will be looking for evidence on the strength of the global economy, especially in the US.
On the home front, the FBM KLCI drifted lower in a holiday-shortened trading week, but recouped all of its intra-week losses last Friday, when the index posted a one-day gain of 9.4 points. The benchmark index ended the week at 1,506.1, up 6.2 points or 0.42%.
Having previously advanced almost 230 points ' or about 18% gain year-to-date ' it is probably healthy for the market to consolidate for a while.
Our model portfolio underperformed the benchmark index last week. Total market value for our basket of 17 stocks advanced 0.22% to RM529,575. Six of the stocks in our portfolio closed higher, seven ended in negative territory while four traded unchanged for the week.
Shares of Pantech Holdings attracted some trading interest ahead of the ex-date for the company's 1-for-5 bonus and 2-for-1 ICULS rights issue, which has been fixed on Nov 24.
The ICULS are priced at 10 sen apiece and comes with a free warrant for every 10 ICULS subscribed. It carries a 7% coupon and a 6-to-1 conversion rate while the warrants have a 10-year maturity and exercise price of 60 sen.
We believe the terms are attractive and the corporate exercise should earn shareholders positive returns. (Please refer to our report on Pantech published in last Friday's The Edge Financial Daily for more details)
DiGi was our best-performing stock for the week, gaining 4.7% to close at RM25.60 while Maybank was up 2.3% to RM8.96 and AmFIRST REIT rose 1.6% to RM1.18. At the other end, Green Packet (down 4.3%), Tanjung Offshore (down 2.5%) and HELP International Corp (down 1.7%) were among the bigger losers.
We received dividends from Pantech (1.5 sen), AmFIRST REIT (4.81 sen) and Maybank (44 sen) totaling RM3,827 last week, thereby raising our cash holdings to RM173,044.
Including our large cash reserves, the total portfolio value was up by a lesser 0.16% to RM702,619. Last week's gains boosted our model portfolio's cumulative returns since inception to 339.1% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 132.8% over the same period, by some distance.
Our total profits are very substantial at RM529,575, of which RM344,014 has already been realised from previous shares sales.
For prudence's sake, our model portfolio continues to hold quite a significant amount of cash ' for which no interest is imputed ' making up about 24.6% of our total portfolio value. We kept our model portfolio unchanged and will continue to monitor the market for opportunities.
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.
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