Thursday, April 19, 2018

Maybank going to give goodies ?

Yesterday came the same news again for Maybank in Financial Daily:

Malayan Banking Bhd (Maybank) is preparing to spin off and list its Etiqa insurance arm on the local stock exchange, sources with knowledge of the matter said on Wednesday. Etiqa, which operates in Malaysia, Singapore, the Philippines and Indonesia, is estimated to be worth at least US$1bn, two sources said. It would have a bigger market value than insurance peer Syarikat Takaful Malaysia Bhd, which is valued at about US$700m.  As part of the transaction, Maybank's investors are expected to receive shares in the insurance company in proportion to their existing holding in the bank, the sources said, adding that no new money is expected to be raised in the listing. (Financial Daily)

The same news came on 2014, it's has been 4 years since last updated but never materialized. During these 4 years, Maybank stock price went through 2 major cycle. Down from $9+ to $7+, then up again from $7+ to today's $10+. It's a good investment return if one keep on adding more stocks when it went down in price and hold into it under recover. The return is about 15% per year.

What's investor need to do now? If you own the stock, I would suggest hold it as long as possible until you get the new company's shares. Even if during this period, the stock price going down, you can still expect dividend yield of about 5% plus. However, I don't think the stock price will go down at the moment, as a lot of investors are waiting for the goodies. (You know what I mean)

Disclaimer clause:
I do hold some unit of Maybank at time of writing, this is not the suggestion to buy or sell the stock. It's base on my personal opinion that the stock is a five star rating and worth for long term investment.

p/s: added on 28 May 2018: 
Due to the change of Government after 9 May 2018, the above scenario may not happen since everything now change and GLC now will be revised all the contract and decision made during previous Government. I expect the outflow of foreign fund may continue for sometime, hence, now Maybank is sell on strength until it reach RM9.00 again.

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Monday, April 16, 2018

Check List before and after you purchase a Stock

It's quite some time I never write here.

Recently, received few inquiries about investing in stock market. Is it good time to put money in stock market now? We are currently at the second half of bull market (I think since 2008 till now, we don't have any meaningful correction) and I will consider market now more towards Technical. (You must refer to chart for trending). If you want to put money in stock now, bear in mind to play short term, or I call it speculate. (The first half of market already past, where people purchase blue chips stock to keep, now just waiting suitable time to sell, that is real investment)

It's fine to speculate in stock market, provided you have your own check list to protect your position. However, if you do not have any, below are sample of check list for those who like to play short term. Usually, if a broker / friend recommend a stock, first, I will check on below:

1. Check Daily and Monthly chart for 10 Days moving average line, is it trending up? (example of below chart showing moving average trending up)

2. Change to weekly chart, is the latest bar Green?

3. Check daily chart, for the last 10 days, is it more than 6 days in Green?

The answer must YES for all 3 items, then it's safe to enter this stock.

After you have purchase the stock, then cross check on below list again:

1. After purchase, the stock price below your buying price for 5 days or below 10% of your buying price --> Sell

2. The stock price consistently down for 3 days, or 1 week down for 4 days --> Sell

3. If you notice in any day, volume increase 2 to 3 times more than average daily volume and stock price close near day low --> Sell

4. From the daily chart, if the 10 days moving average line flag toward down --> Sell

5. Weekly chart, after price high and volume increase, then following week, weekly chart show black bar (no matter small bar / big bar) --> Sell.

The above 5 points must be checked on daily basic, once you notice any of scenario happen, just sell the stock. This will protect your holding in the volatile market.