Genting call warrant, Genting-CN

Power of Leverage

On 13 Feb I noticed that genting was trading near its support line. I bought some shares of Genting. In my previous posts, I already shared some of my ideas regarding genting on 25 March 2009, 23 Feb 2009, 12 Feb 2009 and 6 Feb 2009. In fact, Genting is still one of my favourite stock.

I was so confident that Genting would rebound after sinking to a price last seen on 28 Oct 2008 ( one of the worst day for Wall Street). Instead of just buying Genting shares, i bought 10000 shares of Genting-CN (call warrant) too to increase my leverage on Genting.

Genting and Genting-cn dropped further down before moving upward.

I sold all the genting-cn shares on 2 Apr 2009 as I noticed Genting had already rebounded from 10 March 2009 low of RM3.08 to 2 Apr 2009 of around RM4.00. It was a 30% rebounce. I was not confident that Genting could keep the upward momentum, so I sold all genting-cn shares to take the profit out of the table.

I was wrong, Genting moved up massively after that, so did genting-cn. I am still happy I managed to get a 10% gain on the genting-cn trade. It was one of my first experiences with call warrants. It was a great one.

PARALYSED

I was partially paralysed on 27 and 28 Apr 2009. As a result i saw with my very own eyes that my portfolio sink RM10,000 and another RM8,000 the next day. I am still learning to control greed and fear.

I would like to share with you guys a quotes from one of the world greatest investor/trader.

“Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes.” George Soros.

Bursa Malaysia Securities Bhd.

Background:

Bursa Malaysia (Bursa) is an exchange holding company approved under Section 15 of the Capital Markets and Services Act 2007. It operates a fully-integrated exchange, offering the complete range of exchange-related services including trading, clearing, settlement and depository services. The wholly-owned subsidiaries of Bursa Malaysia own and operate the various businesses.

Fundamental:

First, it is a monopoly-type of business. Bursa is an easy-to-understand business, it will make more money when exchange-related activities is high. Hence, I would say that Bursa is a good stock for contrarians who buy stock when nobody else wants to buy and sell the stock when everyone else is fighting for it. When the stock market is hot, Bursa doesn't need to spend much on advertisement and promotion but the business turnover will certainly increase. Bursa also doesn't have to increase its workforce too much when the business turnover is increasing. More business but workforce is almost the same. Good business model.

Techical:

I bought 3000 shares of Bursa on 6 Feb 2009 when it was trading at RM5.00. It was near it support level of around RM4.96 and near the bottom of its 3-years price range . Doji appeared on 5 Feb 2009 after coming down from RM5.95 on 7 Jan 2009. From ADX, i noticed that the downward momentum had decreased. RSI and stochastic were in oversold regions. I did not wait till MACD to give me the buy signal as i expected Bursa to move sideway for a while before rebounding higher.

It was disappointing to know that Bursa dropped to RM4.36 after US Dow Jones broke and fall below its 21 Nov 2008 support level of 7449. Dow Jones broke the support 20 Feb 2009 and triggered another massive sell down to reach 6626 on 6 Mar 2009. KLCI also dropped to 847 poitns.

I sold 1000 shares of Bursa at RM5.20 on 1 Apr 2009 after Bursa rebounded 20% from RM4.36 to RM5.20. I was a bit emotionally exhausted after seeing Bursa dropped to RM4.36, so I thought I should took some of the profit out of the trade. RSI and stochastic were in overbought region. MACD was still indicating buy signal but i was not confident that Bursa could keep its upward momentum after rebounding so much. I expected Bursa to trade sideway.

Yes, i was wrong. Bursa continued its bullish momentum. I sold another 2000 shares of Bursa at RM6.20 on 27 Apr 2009. On 27 Apr 2009, KLCI opened in red. Investors and traders were very concern of the outbreak of swine flu in Mexico which already killed more than 100 people. I was thinking that this could be the catalyst to break the bullish momentum and for the traders to take the profit out of the table.

I was glad i made this decision, Bursa closed at RM6 on 27 Apr 2009 and dropped another 15sen to RM5.85 the following day on 28 Apr 2009.

At the same time, i was also very disappointed that I did not close most of my long positions when i was thinking the bullish momentum would be broken. As a result, my portfolio value decreased by more than RM10,000 on 27 Apr 2009. This is really a good experience for newbie like me.

YTL Cement Bhd

Background:

The principal activities of YTL Cement Berhad include the manufacture and supply of Cement products, Concrete products, Quarry products and provision of related services to the construction sector.

YTL Cement is the nation's largest producer of ready-mixed concrete, through its subsidiary Buildcon Concrete Sdn Bhd. Buildcon Concrete currently operates more than 50 batching plants throughout Peninsular Malaysia. In response to increasing market demand, YTL Cement acquired a 100% ownership of C. I. Readymix Sdn Bhd to complement its strategic market coverage.

YTL Cement Berhad operates a 1.2 million tonne per annum Integrated Cement Plant in Bukit Sagu, Pahang; as was a Clinker and Blast Furnace Slag Grinding Plants at Westport, Klang, and Pasir Gudang, Johor, each of 500,000 m/t per annum capacity.

Fundamental:

For the last 5 year, YTLCMT was trading within the range of RM2.00-RM6.20 and its 5-year PE range was within 4.91-20.28 and 5-year average PE was 11.30. I bought 2000 shares of YTLCMT at RM2.230 on 5 Feb 2009 when i noticed that YTLCMT PE was 5.85 which was half of its 5-year average PE. Its dividen yield was 5.37%. It was near the bottom of its 5-year price range. I like the dividen so much that i bought another 2000 shares of YTLCMT on 20 FEb 2009 as it is going to ex-dividend (2nd interim dividend of 7.5% single tier) on 6 Mar 2009. It was backed by very good management team too.

Technical:

RSI and stochastic were indicating oversold signals. MACD and ADX were flat on 5 Feb 2009. For bollinger band, it was oversold too. The price as moving sideway after a week of selling down from RM2.44.

I sold YTLCMT when it was trading near its resistance level of around RM2.60. RSI and stochastice were indicating overbought signals. I was expecting YTLCMT to move sideway then.

I also noticed that Lafarge Malayan Cement Bhd (LMCEMNT) was moving up a lot (>10%) on 5 & 6 Feb 2009. Analysts were positive on cement producer due to government stimulus plan. Comparing to LMCEMNT, YTLCMT was not moving up as fast as LMCEMNT so i decided to open my long position on YTLCMT instead of LMCEMNT. I was expecting YTLCMT to respond to the analysts' recommendation.