Buy, Buy, Bye?

Citigroup is by far one of the few foreign research houses left which are still very bullish on Malaysian stocks. Their year end target for the KLSE CI is 1,449. (JP Morgan 1,500). Citigroup's buy call somewhere in mid-April (as mentioned here previously) has the following excerpts which I reproduced below:

"The Malaysian stock market is highly unlikely to fall much further after the government's election upset last month".

"On top of the fear of a US-led global recession, the market had priced in the worst outcome of Malaysian politics".

"A lot of bad news is already in the price, we urged investors to start positioning".

At that time of writing, KLSE CI was at 1,256 points and the highest it went up after the advice was 1,305 points. It is interesting to note that Citigroup has made another buy call today advising its big investors to start accumulating Malaysian stocks now as it believes the market valuation is at attractive levels and the political situation is not as bad as being perceived. ...."matter will be solved...be cool" (I wonder who said this?) How now? Do you agree? Citigroup's client would probably say: Buy some more ah?, haven't even sold my earlier stocks yet! Are you trying to fool me some more?

Everyone seems to be confused these days!! We are living in exciting times! For the records, the market closed at 1,134 today while the intraday low was 1,120. Below is the said bullish report.


BT: CITIGROUP said now is the time for big investors to start accumulating Malaysian stocks, given their rock bottom prices and prospects of them rebounding once the political horizon becomes clearer." This is one of the best country to be in. The value is so cheap that we think some stocks are more attractive than others in the region. It's the sentiment that is clouding the market," Citigroup's head of Malaysia Research Choong Wai Kee said in a market outlook briefing. Citigroup recommends investor to buy shares in plantation, bank, telecommunications and property. "The market is trading at 11 times of next year's earnings after a 25 per cent fall this year. It looks very attractive. But no one looks at valuation now unless there is improvement on politics," he said. The broker has turned more bullish on Malaysia as it was convinced that recent policies, including the cut in petrol subsidy and the rise in power tariff are setting the country on the right path.The US bank also believes that there will not be a change in the federal government. He said foreign investors seem to have great misconception on Malaysia's political situation, which resulted in their negative view on local shares.

* Mr Bala, which SD is the correct one lah?

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* Philippines's inflation jumped to 11.5% in June (government's forecast was 10.4% - 11.2%). Peso fells to a 9 1/2 month low of 1USD: 45.685 peso.


* Indonesia's central bank raises its benchmark interest rate for the third month in a row to 8.75% from 8.5% to cool prices.


* Bloomberg: Vietnam's currency controls are forcing foreign investors into black market to obtain dollar. Apparently, you could change at least 7% more for dong to dollar in the black market. 1USD:16,846 dong. Traders expect dong to weaken to 20,600 to the USD by next year.


* Bursa lost approximately RM450,000 worth of opportunity cost for yesterday's "suspended trading" based on RM1b trading for the last 2 weeks.