March Update

It has been a while since the last update. Here is the summary of the transactions done:

1) JTiasa sold at RM1.69 for a paltry 7% return. It was a good sell in the end. Just take a look at its current price of RM1.37.

2) Purchase of additional 2000 units of Inari at RM3.30. This makes Inari to have a weightage of 33% of the total portfolio. Such high dependence is highly risky but as long as you know what you are doing, it should not be a problem. I am confident that Inari will be higher in two years time. 

Some comments on the market:

The oil price is really tanking and it seems that bad news are all over the oil sector. Being a major oil exporter, Malaysia is naturally impacted. Petronas just announced to slash 1000 jobs and to reduce capex by 15 to 20 billion ringgit. This will have major effect on the economy. 

AirAsia is finally gathering some steam and moving north. All the provisions for AirAsia Indonesia and Phillipines have been done last financial year so that they can start afresh this financial year. Look forward to a sustained rally. It would not surprise me if it goes back to RM2.50. 

Then there is the risk of "Brexit" in June. I personally think the risk is minimal but market will be trading sideways or slightly down until then. Then we can have chance to buy in before June. 

Lastly, as of now, Huat Fund is really low in cash and looks like this:

Happy New Year 2016

It has been a long time since I updated this blog. In the past two months, I have been trigger happy, adding some new members to Huat Fund as well as increasing holdings in Inari.

Welcome, 

Fibon, Maybank, OCK and Jaya Tiasa. 

The short rationale behind these purchases:

Fibon: This is a speculative purchase to get short term gain.

Maybank: This is a move to shift into dividend orientation, Maybank at this price is really attractive because its overseas operation is till growing yearly. Long term buy.

OCK: The company recently expended into Myanmar and will reap the rewards soon. Medium term buy.

Jaya Tiasa: This is also a short term buy to gain revenge over the earlier loss. 

Huat Fund is running low on cash after adding all these new members. It is a pity because the current China fiasco presents a good opportunity to accummulate more stocks. 

Huat Fund looks like this today:

Second Annual Review FY2015

Today Huat Fund turns two. Fortunately, Huat Fund has been able to achieve the minimum return rate of 10% for the second consecutive year.

At the end of the first year FY2014, Huat Fund's fund size was RM84k due to a market correction at that time. Lesson learnt from that episode is to keep calm during the correction and do not follow the selling crowd. During FY2015, Huat Fund duly recovered and the current fund size is RM119k.


For FY2015, Huat Fund has return of RM35k, equivalent to a 41.6% return rate. The current paper gain is RM12k. This time round, the all the stocks in the portfolio are in the green with Inari being the main contributor.

 FY2015 proved to be an active year for me as there are opportunities abound in volatile times like this. Being active is not necessarily good as I would have pocketed another RM10k if I had not sold the stocks in March this year. The total realized stock profit and stock dividend are RM14k and RM2.3k respectively. Below is a summary of the realized stock profits for this year. Note that Westport has been sold (I did not write an update on that).

For the year ahead, I would expect USD-MYR exchange rate to recover to sub-RM4.00 because ringgit is undervalued at the current rate.

Globally, China is clearly slowing down and the world is still looking for the next source of growth. We can expect a stagnant market in the next 12 months.

Meanwhile in Malaysia, more banks(CIMB, RHB and Affin) are doing VSS at the moment in an effort to reduce their cost. Companies in other fields are doing the same as well. The outlook for local market is gloomy as people will spend less and feel that their ringgit is "smaller". The property sector will remain subdued. We can expect more rebates =). For the next Financial Year, I will focus on stocks that can withstand cost cutting measures and also recession. In fact, I have already have one such stock in Huat Fund right now. Make a guess!

Adopting wait and see approach

During my CFA class last weekend, my lecturer of the day Mr O shared with us his view of the current outlook for Malaysia. I sort of agree with him that the next 12 months will not be good for Malaysia because:

1) Fitch is planning to downgrade the credit rating of Malaysia from A- to BBB. This would cause the Malaysia Government Bond 's yield to spike above 5%. This coupled with a high foreign bondholding would mean that the yield might spike further and ringgit will fall further if some foreign funds decide to exit in exodus. See you at 4.00?

2) GST is not a April fool's joke. With the implementation of GST, the consumer mood will deteriorate. The country's GDP will be affected as well based on the experience in Japan and Singapore. Lets hope Malaysia will not experience technical recession at the end of the year.

3) The Kelantan flood repair bill has not come in yet. Nobody knows as of now the extent of the destructions brought by the worst flood in some time. The government will have to foot the repair bill soon. 

4) The oil price will probably linger at 50USD level for the next one to two years at least. Although Malaysia has become a net oil importer according to the government, we still depend a lot on oil revenue. In 2014, the government receive at least RM 60 billion from Petronas. Other than that, due to the capex cut, there are less projects for the downstream and upstream companies in Malaysia. Hopefully these companies can stay profitable in the mean time.

Based on the few points above, I have decided to sell 

- all 40000 units of Hovid @ RM 0.43

- some 8500 units of Inari @ RM 3.33 

- all 1500 units of Inari - WB @ RM 1.47

- all 3000 units of Westport @ RM 3.70.  

*I have actually forgotten to sell Jaya Tiasa. It will be done tomorrow.(Update: JTiasa has been sold as planned @ RM 1.70 each

So Huat Fund looks like this today:

Wa si CFA Candidate

Certified Financial Analyst (CFA) is a program that I found out a few years ago and I have always wanted to study it. Finally I got the chance to enroll in a part time workshop locally after returning to Malaysia and I am proud to say that I am a candidate for the level 1 exam in June this year.

CFA emphasizes a lot on the ethical investing. For example, the interest of clients always come first and we should take the last bite of any cherries. As a matter of fact, as a candidate or Charterholder of CFA, I am not allowed to give guaranteed returns for that is not realistic in the real world and thus considered not ethical.

Therefore, the objective of Huat Fund will have to be altered. Previously, I guarantee a 10% annual return on Huat Fund. Now, I will try my best to achieve a 10% annual return on Huat Fund.

Meanwhile, a little update on Huat Fund. Paper gain increases as the market improved over the last few weeks. Bulk of the gains come from Inari. SK Petro is almost near my 30% target and Hovid is finally showing some sign of life after hibernating for the past half a year. I suspect the renewed interest in Hovid is due to the fall in ringgit as most of it's export products are priced in USD. Heck, even Pestech and QL have broken even. Jaya Tiasa remains the problem child. Huat Fund looks like this today:

Oil Price update

Oil price just dipped below 50USD barrier today. It would be interesting to see how far it will drop further. My guess will be not much more and a upwards correction will be forthcoming soon. Although I firmly believe that oil price rise back to probably 70-80USD level, I am not holding SKPetro for long. I am looking at 30% profit at most.

Today Inari finally went ex-right. The day has finally arrived. Hopefully the market will stay good until it reached RHB's target price of RM3.41 .

In the meantime, Huat Fund swings back into paper gain zone:

In Anticipation of Inari Rights

As announced in the this post, I have used the proceeds from Cypark to average up on Inari shares. Today i bought additional 2000 units of Inari shares @ RM3.19.  With total 12000units I would be entitled to 1500 Rights share. In my humble opinion, the money raised through this Rights Issue will be well spent. To recap, the money will be used to fund new plant as the capacity of current plants are fully optimized.

The Huat Fund looks like this today!

Fund Portfolio at 04.08.2014
	Name	Purchase Date	Purchase Price	Current Price	Unit	Current Value (RM)	P/L ex Dividend (%)	Dividend (RM)	P/L inc Dividend (%)
Cash	Hle-Broking			15706.7
Stocks	Inari	24/02/14	2.45	3.16	12000	37920	29.1	270	30.0
	Sunreit	04/10/13	1.40	1.42	5000	7100	1.6	282.75	5.7
	Jaya Tiasa	24/04/14	2.74	2.43	2000	4860	-11.4		-11.4
	Westport	09/05/14	2.75	2.83	2000	5660	2.8		2.8
	QL	07/07/14	3.60	3.46	3000	10380	-3.8		-3.8
	Hovid	14/04/14	0.38	0.455	40000	18200	18.3		18.3
Total value of current Stocks				84120.00	84.3	%		552.75
Total cash in Hlebroking				15706.7	15.7	%
Total				99826.70
Original Capital				50000.00
Addition to original capital				20000.00
Total Capital invested				70000.00
Current paper gain				10583.27
Total profit including current paper gain				29826.70	42.6	%
Total dividend				1105.1

Huat Fund grows - capital injection

After investing in QL last week, the cash holding in this fund was quite low and stood at about RM 5k . At the moment I do not intend to sell any stocks in the portfolio since these stocks still have quite some upsides in them. Some comments on these stocks:

Inari - this company is still growing very fast organically. The recently in Oct 2013 completed factory #5 in Penang is now almost fully utilized at 85%. The rights issue announced will be used to fund another expansion and the rights issue is at reasonable price. Will buy more to average up.

Sunreit - this company is quite undervalued due to the impending launch of renovated Putra Place. Earnings and dividend will improve once it is operational.

Cypark - the renewable energy quota for this year will be released soon. Will be interesting to see how many Megawatts this company wins.

Westport - One of the long term buys. Proxy to the economic growth of Klang Valley industries.

Jaya Tiasa - One of the long term buys. Proxy to the palm oil consumption worldwide.

Hovid - One of the long term buys. Proxy to increasing healthcare cost in Malaysia and its' export markets.

QL - New addition.

Since the cash holding in this fund is low, I decided to solicit some extra capitals and expand the fund size in order to grow it further. Starting 15th of July 2014, Sister Ying will inject RM 20k into Huat Fund with the same return rate i.e. guaranteed 10% annual return with capital protection. After this capital injection, the cash holding increases to RM 25k. This could come handy in the next few months if and when the market corrects.  

Marching Inari

The stocks in the portfolio are having a great run in March. OCK and Inari started steaming ahead. When stockmarket is having a run, everybody thinks of himself as a stock expert. I am fully aware of this and thus will only stick to my principle of investing in good growth stocks and also wait patiently for my target price to be matched before jumping in.

Another important lesson I have learnt recently is to average up. Previously I will wait and do nothing when my stocks rise and get more attention from funds. So I basically do nothing even though I know the stock is good and will keep rising. As the stock rises further, the regrets within grow. The wise way is to buy more of the stocks as it rises. However, this should only be applied to fundamentally strong company with good prospects.

Due to the potential and impending mainboard-transfer of Inari, I have decided to add more of Inari. So I bought another 5000 units @ RM2.65. So the portfolio looks like this today.

Financial assets at 26.03.2014
	Name	Purchase Date	Purchase Price	Current Price	Unit	Current Value	P/L ex Dividend	Dividend	P/L inc Dividend
Cash	Hle-Broking			24224,58
Stocks	OCK	27.12.13	0,78	1,06	5000	5300	35,2		35,2
	Sunreit	04.10.13	1,40	1,36	5000	6800	-2,7	188,8	0
	Cypark	22.10.13	2,17	2,75	3000	8250	26,7		26,7
	Inari	24.02.14	2,30	2,83	10000	28300	23,2		23,2
Total Stock				48650,00	66,8	%
Total cash				24224,58	33,2	%
Total				72874,58
Current profit				8452,05
Total profit				22874,05	45,7	%
Total dividend				473,94