"GOOD" or "BAD" INSIDER NEWS ??

Is the insider news may affect the stock price of company? The answer from me is YES. The bad insider news may affect the stock price badly, below two examples may show the cause and effect. Those of the link provided in Example 1 and 2 below is belong to a writer named robertl in I3 investor website. Here let us observe Example 1 first.

Example 1:
XINQUAN, the Hollow Story (First shot) 星泉空城计 (第一炮)
Link: http://klse.i3investor.com/blogs/ncnscscn/88989.jsp

XINQUAN, the Hollow Story (Second shot) 星泉空城计 (第二炮)
Link: http://klse.i3investor.com/blogs/ncnscscn/89011.jsp

Here we see what happen on closed stock price of XINQUAN in this few days:

31 Dec : RM 0.635
04 Jan  : RM 0.560 (-11.81%)
05 Jan  : RM 0.520 (-7.14%)
06 Jan  : RM 0.540 (+3.85%)

Both of the article was posted at 2/1/2016 (Saturday) and 4/1/2016 (Monday) respectively. Amazing on the stock price of XINQUAN? Seem like some of the investors affected by the BAD INSIDER NEWS and starting to dump their holding shares to market.

Example 2:
OMG : After XINQUAN, next HEVEA! 星泉风暴即将席捲亿维雅
Link: http://klse.i3investor.com/blogs/heveatimetoalight/

HEVEA, Internal Cracks Emerging 亿维雅，股东内鬨
Link : http://klse.i3investor.com/blogs/heveatimetoalight/89220.jsp

Let we see again what happen on closed stock price of HEVEA when affected BAD INSIDER NEWS today:

31 Dec : RM 1.62
04 Jan  : RM 1.70 (+4.94%)
05 Jan  : RM 1.73 (+1.76%)
06 Jan  : RM 1.63 (-5.78%)

Both of the article above in example 2 is posted at same date 6/1/2016 and this news made HEVEA rewind after few days of uptrend. Today, HEVEA closed at price RM 1.63, it was decreased RM 0.10 (-5.78%). I made homework on HEVEA today too and discovered the fundamental of HEVEA is good but the current price may slightly high for me, lower price on it may give me a good catch.

Example 3:
Stock Pick 2016 - Koon Yew Yin
Link: http://klse.i3investor.com/servlets/pfs/54015.jsp

Ok, the Example 1 and Example 2 above are BAD INSIDER NEWS. Now, let us refer GOOD INSIDER NEWS. Mr.Koon shows his interest to join the I3 investor competition at 3/1/2016 (Sunday). His portfolio may become a good example of GOOD INSIDER NEWS to some of the investors. Now, let us check the stock price of the five stocks in this few days.

CANONE      - RM 4.56 > RM 4.88 (+7.02%)
CHINWEL    - RM 2.10 > RM 2.31 (+10.0%)
FAVCO         - RM 2.74 > RM 3.00 (+9.49%)
FLBHD          - RM 2.88 > RM 2.96 (+2.78%)
TGUAN-WA - RM 2.14 >  RM 2.49 (+16.36%)

Mr.Koon is a famous investor last year and his previous marvelous record is LATITUDE and V.S INDUSTRY bring him massive of return in one year. I believe most of the investors had heard his name last year and then I believe most of the investor may follow Mr.Koon's portfolio too.

My view on the strategy applied by both investing master Mr.Koon and Mr.Cold Eye is one classified as HOT side and another belong to COLD side respectively. Even their main target alike making money in stock market but the way and strategy used is different. Lastly, each of the successful investor has his or her own way and strategy to trade, but we cannot "copy" it and the way we can do are "learn" it. Don't be a "Herd" and affected by the insider news even it is "GOOD" or "BAD", just trust the intrinsic value of company.


本文只供参考。共勉之。

马来西亚产业要泡沫了吗？

Koon Yew Yin is a retired Chartered Civil Engineer and one of the founders of IJM Corporation Bhd and Gamuda Bhd. Mr. Koon was a former member of the Board of Engineers for 3 terms and a committee member in SIRIM for the drafting of the Malaysian Standards for Cement and Concrete. He was Secretary General of the Master Builders Association, Malaysia for 9 years. He is also well known for his philanthropic activities benefiting young students and various charitable organizations. The most successful stocks this few years which Koon Yew Yin holding are Latitude Tree and V.S. Industry.


My purpose of writing this article is to help you improve your investment skill.

In my previous article titled ‘An Important Investment Lesson’ I said that you must frequently look at company announcements and when you see any company showing a sudden jump in profit, you should find out more about the company before you rush to buy the share.

After you have verified that the company will surely make more profit in this year than last year, you can buy the share if it is still selling cheaply in terms of P/E ratio.

Moody’s report of slow property sales

Malaysian demand for residential property is set to slow further in 2015, according to a forecast by Moody’s. A report issued by the ratings agency on 5th Feb this year said property demand will be affected by cooling measures introduced in 2013 and weak buyer sentiment.

According to Jacintha Poh, assistant vice-president and analyst at Moody’s, property sales in 2015 should be dampened by anticipated higher mortgage rates, as well as the implementation of the 6% Goods and Services Tax (GST) in April.

Company announcement can be misleading.

Quite often company announcement of quarterly profit can be misleading especially property companies. For example: The recent profit announcement by Hua Yang attracted my attention. Its 4th Quarter EPS was 11 sen and its annual EPS was 41.9 sen and the share is currently selling at about Rm 2.10. Moreover, I was further tempted to buy after I read T A Securities’ buy recommendation as posted on the latest issue of The Edge.

I looked at Hua Yang’s announcement in Bursa and I found out more details of the company.  In summary, it has trade and other payables of Rm 142 million, short term borrowings of Rm 79 million and long term borrowing of Rm 192 million.

Share capital Rm 264 million and reserves Rm 202 million=total net assets Rm 466 million.

Hua Yang EGM on 2nd June 2015

The most worrying announcement is that it is calling an EGM on 2nd June 2015, to seek shareholders’ approval to buy a piece of land for Rm 120 million cash. They have to increase their bank borrowing to pay for the land. It looks like the Board of directors does not know that there is already an oversupply of properties in the market and they do not seem to realize that it will take about 7 years to complete the development of the land before they can see any profit.

When you see property companies showing good profit in their latest announcements, it is important to find out if the good result is solely due to the presale of their properties.

Another example: Asian Pac Holdings Bhd or Asiapac showed incredible results for the 1st Quarter 2015 as follows :

With profit of RM369 Million and EPS of 0.3748 sen this company is a winner!!. How can the revenue of Rm 60 million produce a profit of Rm 369 million?

Should you buy the share selling at 27 sen? The answer should be a resounding “NO” as the higher profit is due to revaluation of assets and not from actual trading operation.   Hence such results are not sustainable and there will not be a repeat in the next quarter.

Be Careful: When you see property companies showing good profit in their latest announcements, it is important to find out if the good result is solely due to revaluation of assets or due to the presale of their properties.

I talk to a few developers recently and almost all of them told me that they have difficulty in selling their condominiums. They cannot completely sell all their condominiums which are currently open for sale. The worst damaging effect is that they have to construct the whole high rise building even if a small percentage is presold.

Unlike developing terrace or detach houses, the developers can hold on to the vacant land if the houses are not presold and holding vacant land will cost less interest charges than holding completed condominiums.

No more opportunities for speculators:

A few years ago until recently when property prices were rising, speculators could easily make profit by putting small down payments and sell their bookings before the construction completion. Now speculators cannot do it because property prices are falling.

Avoid buying property shares in general because their profit growth prospect is not so bright. There might be a few exceptions that I do not know.

以上全部摘自：Koon Yew Yin's Blog
http://klse.i3investor.com/blogs/koonyewyinblog/77821.jsp