How do I see the market today? 14-Dec-2010

Overnight, US market ended flat with DJIA up 18.24p to 11428.56p while S&P gained 0.06p to 1240.46p.

According to Reuters, "The Nasdaq closed lower to end eight straight days of gains on Monday as some large-cap tech stocks slid in a late-day sell-off. The Dow cut its gains and the S&P 500 ended a thinly traded session flat as optimism faded over China's move to tame its growth, and as some technical indicators suggested a near-term pullback could be in the cards". Put it simply, at first investors are excited on China decision to maintain interest rate, but later feels it is better to take profit or sell first.


My view:
China proved to the world once again that its decision is hard to predict as it maintained interest rate despite inflation surge to 5.1%. This is a good news but the effect should already been priced in. Keep watching for the oil price though, as the market may get worry again when it surpassed US$90 and US$95 level. (Currently at US$88.44). Overall, I think today should be slightly bearish for KLCI on the lack of catalysts seen.

Stocks that I STILL find attractive:

1. CRESNDO (Pure proxy to Iskandar investment theme, paid 7 sen dividend in the past 5 Financial Years, undemanding Price/NTA of 0.43x only, got potential to go up to RM2.55)
2. FPI (Trade at attractive historical PER of only 5.85x, strong balance sheet with net cash of RM81.42m or 33.14 sen per share, got potential to go up to RM1.39)

Stocks that I temporary no longer find attractive:

1. SAPIND (14 Sen dividend already gone ex today, short term potential has been realized with the share closed at RM1.33 - exactly same as my earlier estimate)