sticky downward

i've always enjoyed reading P.Gunasegaram's column since his days in the Edge, although it seems to me now in the star, his words are not as 'sharp' as his the Edge day.

Sticky downward is the phenomenm he recited on saturday. An example he gave is the fresh milk that he buys. As milk price is dominated in US dollar, when US dollar is strong or price of raw material up, the business people increase the price of fresh milk. But when raw material price drop or as Malaysia ringgit strengthen, like right now, the milk price is not going down as fast, or not going down at all. Milk price is one thing that i can feel the diminshing buying power of Ringgit. When i was in university, i loves to consume 1 litre of goodday fresh milk per day. At that time, it was selling at around RM2.99. Nowaday, it easily fetch a RM6.45 price tag, an increase of over 100%. surprisingly, during rare occassion, it is sold at discount at RM4.99. How come such huge different? A 'sticky downward' theory can explain it. The business owner simply having a very high margin, and hike up the price to maintain their margin when price of raw material goes up, but after that keep maintaining the price on an elevated level. Another example related to this is that while goodday is selling at RM6.45, dutch lady fresh milk, most of time, is sold at RM4.99. Is it the raw material price of goodday is so much higher? Since both of them source their milk locally, i don't see why the price of raw material is the answer to this.

My babies are consuming dutch lady frisolac. Again, since less than 2 years ago, price has increase almost by RM15 for frisolac 1. that is almost 40% price increase. Despite that currently RM is very strong, frisolac's price is still high upon the sky.

i have never buy stock based on this sticky downward theory. However, it is interesting to see if i should buy into a company that has such business occurance. Let's buy into Dutch Lady!

Zhulian is up 6.99%

Zhulian is top gainer today, surging to 2.45 or 6.99%. good, since this is the last counter that i targeted and it is up. My wife has bought into it recently

dividend is good, growth seems at least stable if not marvelous.

OSK foreign market seminar at penang 23 April

Busy lately, so didn't post much. Anyhow.
There will be a seminar organize by OSK Investment Bank

Friday, 23 April 2010
Wawasan Open University
Lecture Theatre 1, Level 5,
54 Jalan Sultan Ahmad Shah,
10500 Penang

Agenda:
5.45pm Registration & Dinner

Welcome Remarks

Precious Metals Trading
- Ms.Mandy Lam
Managing Director – Business Development
OSK Futures Hong Kong Limited

Hong Kong Stock Market Outlook
- Mr.Tan Swee Koon
Research Analyst
OSK Securities Hong Kong Limited
Singapore Stock Market Outlook
- Mr. Leng Seng Choon
Co-Head of Research
DMG & Partners Securities Pte Limited

US Stock Market Outlook
- Mr.Tony Petrilli
CEO, ViewTrade Holdings USA
Q & A Session

haio post split and bonus

Hai o continual surges post bonus and split yesterday has surprised me on the upside. Yesterday it up 8%. Today it up another 4.49%. Now its price at RM4.89

by right, post bonus and split, based on price of RM10.5, would be RM4.16 only. The earning prospect of this stock is really so good? wow

haio vs supermax

I ended up buying some haio at RM10.76 after selling out supermax at RM6.08. Haio entry price is not exactly nice, but it prevented me to get odd lots post bonus issue so i think still worth it. Today haio at RM10.58, not bad considering that people would have sell out by now coz it is too late for ppl to buy in to be entitled for bonus share. But let's just see what happen after the ex date 16 march. on the other hand supermax drop to RM5.81. From this fiasco i think the choices made by me is good enough, that i sell out supermax at profit. But it would have been better if instead of buying in supermax in the first place, i kept on accumulating Haio. Haio, with is strong dividend and resilient business with high growth potential, has ended up performing better than supermax lately.

i have also confirmed that now monthly investment limit into yuran koperasi tentera (which has a >12% annual return) has been increased from RM300 to RM700. Naturally, i increase my limit.

how high is koperasi tentera yuran and akaun simpanan khas

for my deposit towards the end of december 2009, early january i already get the 'interest'

surprising it turns out to be per annum

yuran 10%

akaun simpanan khas 5%

really good to serve as a super savings account

supermax

the news today that supermax propose 1 for 4 bonus shares confirms my banker's friend rumour on this issue. But even with that i will still opt to sell out. My buying into supermax is purely trading driven and i not intend to hold it long term. Reason being my current strategy is to buy high growth company with high dividend, of which supermax does not meet the latter criteria

The rationale behind the bonus issue was to increase the capital base of the company to a level which would better reflect the current scale of operations as well as enable shareholders to have increased equity participation through greater number of shares. Let's see whether this bonus issue will have the same effect observed on Haio, where it stock has kept surging up to RM10.7 with PE of 17x at the moment owing to its bonus 1 for 5 ex date 16 March

mean while NTPM continue to have its major shareholder buying its stock.