Market update & observation

What should we observe???

·         Investors are taking profits after DJIA increase for the 7^th consecutive days. Yesterday DJIA closed on green as Bank of America shares helped to squeeze out the gains in the 8^th straight days. From 28 Jan to 9 Feb, the Dow increased from 11,823.7 to 12,239.9 within 8 consecutive trading days.

·         Investors are anxious about inflation everywhere. China increased interest rate for the second time 2 days ago and may increase for the 3^rd time in four months. Instead of increasing interest rate, Federal Reserve Chairman Ben Bernanke lowered bond yield to curb inflation.  

·         China will announce its inflation data tomorrow.

·         Federal Reserve Chairman Ben Bernanke said the world’s largest economy, US remains weak despite a drop in unemployment rate earlier.  Investors may have doubt on the stability of US economy after the comments.

Let’s work out something on Malaysia market….

 

Are we on the 5th wave? Or we are still in the pullback of the 4th wave? It could be neither of them.
As there are many uncertainties blowing in the market, many confirmations have to be made technically before we conclude it. Anyhow, the first critical point to observe is the 1,500 psychological level. As of 4:47pm FBM KLCI was 1,509.50, which dropped 26.57 points or 1.73%. FBM KLCI February future was bearish as well, dropping 23 points from 1,525 from Wednesday close to 1,502.
If it happens, I'm eyeing on the 1,480 and 1,430 support lines. Otherwise, 5th wave will continue. Resistance is lying in between 1,545 and 1,560.

(Sources: Bloomberg, the Edge)

Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.

 

Dialog Group: Attractive Dialogues…..

·         11 analysts are covering the stock and 10 are BUY calls and only 1 is SELL.

·         Average Target Price: RM2.48, representing 13% potential upside compared with the current price of RM2.20

·         Comparison between relative peers

Companies	Dialog	Sapcres	Kencana
Market Capitalization	4.32b	4.69b	4.8b
Price	2.17	3.68	2.62
Revenue y-o-y growth (%)	3.13	-5.64	-4.45
EPS y-o-y growth (%)	28.07	38.25	37.86
ROE (%)	25.24	19.09	24.76
Dividend Yield 12 m gross (%)	1.44	1.89	0.19
P/E	34.72	23.87	25.19

·         The most interesting point is the company currently has about 307m of retained earnings (RE) where its capital share only amounts to about 200m. There is potential that the company will distribute to shareholders. Last year, the company announced bonus issue of 2 bonus shares for existing 5 shares held on 13 January and subsequently its result released on 9 February with RE of about 315m and share capital of 141.

·         EPF acquired about 19.84 million of Dialog’s shares in January, increasing its stake to 13.83%. On the other hand, EPF disposed 5.44 million shares of its peer Kencana in January, decreasing its holdings to 6.24.

·         Dialog’s earning result will be out soon. Last year, its 2Q result released on 9^th February on Bursa Malaysia.

(Source: Bursa Malaysia)

Disclaimer: The company analysis that appear in this blog is merely facts gathered from different sources and the author's personal view. It is not a buy or sell recommendation. The author do not guarantee the accuracy of the facts being presented. Please consult your investment advisors before acting on any information provided by the analysis above.