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.