Thursday, December 16, 2010

Today's outlook 16-Dec-2010

Overnight, US market ended slightly lower with DJIA down 19.07p to 11457.47p while S&P lost 6.36p to 1235.23p.

According to Reuters, "U.S. stocks suffered a third straight late-day sell-off on Wednesday, suggesting it may be difficult to chalk further gains as the year comes to a close... Sentiment on the volatile day started lower after Moody's warned Spain its debt rating could be downgraded...However, those concerns were later offset by positive U.S. data on industrial production and regional manufacturing. The data boosted stocks going into the afternoon, but markets were unable to hold those gains."

My view:
So, we are now on the decision point between these factors:
+ve = US Industrial Production rose more than expected at 0.4% (expectation = 0.3%)
+ve = US Manufacturing Output rose 0.3%
-ve = Possibility that Moody may downgrade Spain debt rating

Overall, I think today should be slightly bearish for KLCI as investors are likely to use the Europe debt concern as a reason to take profit.

Stocks that I STILL find attractive:

1. SCIENTX (Please check my previous post, earnings for 1Q2011 rose 33.6%, 6 sen dividend just approved at AGM, got potential to go up to RM1.99)
2. CRESNDO (Pure proxy to Iskandar investment theme, paid 7 sen dividend in the past 5 Financial Years, undemanding Price/NTA of 0.44x only, got potential to go up to RM2.55)
3. DRBHCOM (HwangDBS Target Price at RM3.55, historical PER of 7.49x now means it is still trading at huge discount compared to other conglomerates in Malaysia, got potential to go up to RM3.00)

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