FBMKLCI to Rebound Soon?

After 4 weeks in 2016, our index suffers a lot of setbacks and continue to slide down after the windows dressing in December 2015. Panic, panic everywhere. Regardless our local market, foreign market also facing the same turmoil. I truly felt that the market is volatile, headless creature directionless. It is neither bull or bear, they call it Monkey Market (this year is a Monkey Year for Chinese), as the chart bounces up in a day, and bounces down in another day. 

Mr Monkey Market

In this post, i just want to gather and share some of my view regarding to the local market and some of the global market. I need to confess that my macroeconomic view is not good. But just hear me out. Hope you can gain some knowledge from my sharings. At least there are some things that we should be take note of prior to making any investment decision.

1. FBMKLCI

Lets look at our FBMKLCI for this year.

FBMKLCI Daily Chart

This is a FBMKLCI daily chart. The chart had been in a bear market. In 1 January 2016 until 22 January 2016, index had dropped from 1686.82 to 1625.21, a drop of 3.79%. Look at the SMA200 had cross over SMA50 in June 2015. The gap between SMA50 and SMA200 is quite far. Currently the index is oversold by looking at RSI and the Bollinger Band on 21 January 2016. On Friday, there is a bullish engulfing and our index rebounded to the middle band partly because our our Bank Negara Malaysia's announcement on 21 January 2016. Our Bank Negara Malaysia announces the decrease in the Statutory Reserve Requirement (SRR) Ratio from 4.00% to 3.50%, effective from 1 February 2016[1]. 

Let's Ride the Wind and Gainvest Together

These few days, i had been hearing a lot of bad news circulating around. A lot of bad auras and bad atmosphere around the air. First will be the oil price. Oil price had been plunging and plunging, continue to break new low. From around USD110 in mid of 2014, plunging to now around USD32 in only 2 years. And a lot of forecast from big financial groups, such as Goldman Sachs forecasting that the Brent Crude Oil will be below USD20[1].

Brent Crude Oil as of 12 Jan 2016 10.02pm

A lot of big companies had been hit by the low crude oil prices, especially the Oil and Gas Companies. Some of them are already planning for the worst if the Brent Crude Oil stays low. Lesser and lesser projects from the Oil and Gas Industry. 

Second will be the USD/RM forex. Our Ringgit had weakened a lot, from USD/RM of RM3.2 to now USD/RM of RM4.3773 in 2 years. Our weakening RM had impacted a lot on the heavy industries which are importing their raw materials from overseas. Till now, there is still no sign of recovering. As USD had increased their interest rate, Malaysia expected to have a lot of money outflow from the country. When there is money outflow from our country, our Ringgit will be weaker and weaker. 

USD/MYR as of 12 Jan 2016 9.59pm

The international reserves of Bank Negara Malaysia amounted to USD95.3 bil as at 31 December 2015 compared to USD115.9 bil as at end 2014[2]. In just 1 year, our international reserves had dropped 17%. If US is going to increase the interest rate for the second time, i think the international reserves will be even lower. With higher USD, a lot of companies are suffering lesser profit or even losses as some of the raw materials are denominated and transacted in USD.

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LIIHEN - Time to Shine

LIIHEN is an integrated furniture manufacturer involved in a vast range of wood-base activities under one roof. From UV Robotic finishing product to Solid Dinettes, Buffets and Hutch to Bedroom set, Office Furniture to Utility Shelves, Occasional to Shoe Rack and etcs[1]. LIIHEN is also located in Muar in the state of Johor, whereby HOMERIZ is there also. To date, LIIHEN's products are well spread over 50 nations across the continental, such as America, Africa, Asia, Australia and Europe. Through its subsidiaries, LIIHEN is engaged in the manufacture of furniture (Lii Hen Furniture Sdn Bhd-100%, CT Haup Heng Sdn Bhd-100%, Favourite Design Sdn Bhd-100%), manufacture office and residential furniture (EF Furniture Sdn Bhd-100%), manufacturing of furniture cmponents, processing and kiln drying of rubber wood and timber (Mayteck Kilang kayu Dan Perabut Sdn Bhd-100%), property investment (Kejora Juara Sdn Bhd-100%), investment holding (Lii Hen Plantation Sdn Bhd-90%) and planting, cultivating, milling and dealing in agriculture and forest products (PPL Plantations Sdn Bhd-80%)[2].

LIIHEN products [1]

After POHUAT released a quite-good result, i am looking at LIIHEN. LIIHEN will be announcing the last quarter, Q4 result in February 2016. That is why i am attracted to LIIHEN. If compared against its peers, LIIHEN will be the last company to announce the Q4 result, and i do think it is LIIHEN's time to shine. Why? Let's look at the analysis.

POHUAT - Post Q4 2015

POHUAT continues to POP HUAT with the Q4 result. You can refer to my first post on POHUAT posted on 29 November 2015, with the link, http://gainvestor10sai.blogspot.my/2015/11/pohuat-pop-huat.html

1. Fundamental Analysis:

POHUAT Q4 2015 Result

POHUAT's Q4 result had increased 43%, comparing with 2014 Q4 RM11,049k and 2015 Q4, RM15,851k. The revenue for Q4 increased 30%, from RM108,116k to RM140,179k. 

The revenue and net profit had been increasing 20% and 65% consistently from 2014 to 2015. POHUAT was picked due to its growing business in US and Canada, as well as the strengthening USD against RM. And the result was proving that the pick of POHUAT is correct. The revenue mostly generated in Vietnam (67%), Malaysia (33%) and South Africa (1%). If compared to 2014, Vietnam and Malaysia had increased by 29% and 7% respectively. Do remember that there is a fire incident on 24 August 2015 which i will talk about it later.

Revenue and Net Profit for POHUAT

Vietnam is manufacturing home furniture for US market while Malaysia is manufacturing office furniture for Canada market. The revenue increased in Malaysia and Vietnam signifies that the demand for US and Canada market had increased[1]. If compared to 2014, the higher gross margin is mainly attributable by the higher level of production, improvements in margin of the products shipped, particularly those from Malaysian factories and the higher proceeds realised from the stronger US Dollar denominated sales. POHUAT's current net cash is RM37,458k, with the net cash per share of RM0.1755 (2014: RM0.1756) Net cash had doubled up while the shares had  been doubled up as well. In my opinion, POHUAT is doing very good already.

Summary of December 2015

Today is 31 December 2015, the last day of 2015. And 2016 is just a few hours away.

Same as every month, i will do a simple analysis on my Gainvestor Portfolio for December

Again, this statistics does not mean anything, it does not mean any hold/buy/sell decision, it is just to summarize and track the Gainvestor Portfolio.

Summary of Gainvestor Portfolio for December 2015

Congratulations to those who managed to ride on the wind of my stock picks. And i hope i can help more people to ride on the wind in the coming months.

Lets look at the movement of our index.

FBMKLCI daily chart for 2015

After a volatile year, FBMKLCI opened its 2015 at 1757 and ended at 1693, reduced 3.78%. Our FBMKLCI, i can say had been performing quite well, despite the volatile oil price, depreciating Ringgit Malaysia, the threats from the Fitch to downgrade Malaysia and political issues. 

If you like my way of analysis and you haven't join me in my facebook, appreciate if you could like my FB page, https://www.facebook.com/gainvestor10sai/?fref=ts

Thank you^^

Well, more to come from me in 2016 and hope everyone had GAINVEST and PROFIT from the market. Let's set a target and together let's try to beat our 2015's record!