Last week was another bad one for global equities as developments in Europe continued to dominate headlines despite better-than-expected economic numbers in the US. On the local front, Bursa Malaysia’s designation of Harvest Court Industries Bhd also affected sentiment for retail and penny stocks.
Concerns over the widening eurozone debt crisis — which is stalking one country after another — remained pivotal, with attention shifting from Greece to Italy and now to Spain.
Bond yields in Italy and Spain rose last week as worries grew over the ability of eurozone leaders to contain the crisis. A Spanish government bond auction ended with a euro era high average yield just under 7%. US officials have also started warning that the debt crisis could affect US economic growth.
Indeed, the selloff came despite a number of better-than-expected economic reports from the US last week, including data on retail sales, industrial production, manufacturing activity and jobless claims. The latter showed the number of people applying for unemployment benefits dropped to a seven-month low. US home building also fell less than expected in October.
However, investor attention remained firmly set on the other side of the Atlantic.
On the local front, Bursa Malaysia’s classification of Harvest Court knocked the wind not only out of the sails of the former high-flying stock, but also penny and retail stocks in general. It was a move lauded to prevent excessive speculation, but some would argue that it was a little late in coming.
Harvest Court’s shares had surged some 30 times in the space of just about a month — hitting a high of RM2.14 on Nov 14, before trading restrictions were imposed. Its shares have hit limit down twice after being re-listed from a one-day suspension, but resumed its rally on Friday, rising 31% to RM1.36, still a third down from its peak.
Over the past week, the FBM KLCI lost 14.4 points or 1% to close at 1,454.4.
Portfolio review
Stocks in our model portfolio outperformed the benchmark index substantially in the past week. Total market value for our basket of 17 stocks was up by 0.71% to RM379,850, compared with the FBM KLCI’s 1% loss. Eight stocks in our portfolio chalked up gains, seven had losses while two were unchanged.
Bumi Armada Bhd was our top gainer for the week, rising 5.6%. This followed the announcement that the oil and gas player will be added to the MSCI Malaysia Index effective end-November.
DiGi.Com Bhd continued to chalk up good gains, rising 4.6% last week, ahead of its share split exercise. The stock will trade ex today for a subdivision of one ordinary share of 10 sen into 10 ordinary shares of 1 sen each. DiGi’s shares also traded ex last week for a 37 sen dividend, which we have added to our pool of realised profits.
Other notable gainers include two of our REITs — Al-’Alqar KPJ REIT (up 3.5%) and Al-Hadharah Boustead REIT (up 3.4%). The losers were led by Pantech Group Holdings Bhd warrants (down 8.3%) and CIMB Group Holdings Bhd (down 4.8%).
Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lesser 0.41% to RM659,803.
Last week’s gains boosted our model portfolio’s cumulative returns since inception to 312.4% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 124.9% over the same period, by some distance.
Our total profits are very substantial at RM499,803, of which RM399,793 has already been realised from previous shares sales.
We kept our portfolio unchanged last week.
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.
This article appeared in The Edge Financial Daily, November 21, 2011.
Concerns over the widening eurozone debt crisis — which is stalking one country after another — remained pivotal, with attention shifting from Greece to Italy and now to Spain.
Bond yields in Italy and Spain rose last week as worries grew over the ability of eurozone leaders to contain the crisis. A Spanish government bond auction ended with a euro era high average yield just under 7%. US officials have also started warning that the debt crisis could affect US economic growth.
Indeed, the selloff came despite a number of better-than-expected economic reports from the US last week, including data on retail sales, industrial production, manufacturing activity and jobless claims. The latter showed the number of people applying for unemployment benefits dropped to a seven-month low. US home building also fell less than expected in October.
However, investor attention remained firmly set on the other side of the Atlantic.
On the local front, Bursa Malaysia’s classification of Harvest Court knocked the wind not only out of the sails of the former high-flying stock, but also penny and retail stocks in general. It was a move lauded to prevent excessive speculation, but some would argue that it was a little late in coming.
Harvest Court’s shares had surged some 30 times in the space of just about a month — hitting a high of RM2.14 on Nov 14, before trading restrictions were imposed. Its shares have hit limit down twice after being re-listed from a one-day suspension, but resumed its rally on Friday, rising 31% to RM1.36, still a third down from its peak.
Over the past week, the FBM KLCI lost 14.4 points or 1% to close at 1,454.4.
Portfolio review
Stocks in our model portfolio outperformed the benchmark index substantially in the past week. Total market value for our basket of 17 stocks was up by 0.71% to RM379,850, compared with the FBM KLCI’s 1% loss. Eight stocks in our portfolio chalked up gains, seven had losses while two were unchanged.
Bumi Armada Bhd was our top gainer for the week, rising 5.6%. This followed the announcement that the oil and gas player will be added to the MSCI Malaysia Index effective end-November.
DiGi.Com Bhd continued to chalk up good gains, rising 4.6% last week, ahead of its share split exercise. The stock will trade ex today for a subdivision of one ordinary share of 10 sen into 10 ordinary shares of 1 sen each. DiGi’s shares also traded ex last week for a 37 sen dividend, which we have added to our pool of realised profits.
Other notable gainers include two of our REITs — Al-’Alqar KPJ REIT (up 3.5%) and Al-Hadharah Boustead REIT (up 3.4%). The losers were led by Pantech Group Holdings Bhd warrants (down 8.3%) and CIMB Group Holdings Bhd (down 4.8%).
Including our cash holdings, for which no interest income is imputed, our total portfolio value was up by a lesser 0.41% to RM659,803.
Last week’s gains boosted our model portfolio’s cumulative returns since inception to 312.4% on our initial capital of just RM160,000. We continue to outperform the FBM KLCI, which was up by about 124.9% over the same period, by some distance.
Our total profits are very substantial at RM499,803, of which RM399,793 has already been realised from previous shares sales.
We kept our portfolio unchanged last week.
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.
This article appeared in The Edge Financial Daily, November 21, 2011.
