Koon Yew Yin's stock: Spotlight on LII HEN today!

Author: chongkc1957   |   Publish date: Mon, 16 May 2016, 09:33 PM 

---

Following my post below, LIIHEN has gone up 12%! Koon Yew Yin may be accumulating shares in LII HEN now!

LII HEN (TIME TO SHINE) - Important key points from gainvestor (42% upside)

Author: chongkc1957   |   Publish date: Thu, 17 Mar 2016, 09:55 PM

Gainvestor published a very detailed write-up on LII HEN. Thumbs up!
The Key points:

In summary, Furniture stocks will record positive growth in 2016 as long as the USD/MYR still maintains above 4.00.


Net cash 50 Sen per share! Can pay dividend until 2020!
Target price for LII HEN is 3.17! 42% upside from 2.23 now!
Fully recommend reading his Full article; http://klse.i3investor.com/blogs/gainvestor10sai.blogspot.com/89387.jsp
___________________________________________________________________________

Where do we go from here? Ringgit movement is one important catalyst. Ringgit has weakened by 5% from low of 3.83.


The Star has a good article on ringgit outlook. All points towards higher US dollar and weaker ringgit.

Saturday, 14 May 2016

What the market is trying to tell investors

BY M. SHANMUGAM

There are several signs that have emerged which need some monitoring.

At the top of the list would be the price of oil that has a close correlation to the ringgit and the economy.

Ironically, when crude oil plunged below US$30 per barrel, the ringgit weakened significantly on the view that Malaysia was an exporter of energy and it impacted the country’s revenue. 

However, in recent months, oil prices have recovered to about US$45 per barrel levels but the ringgit is continuing to see volatility. One reason is that the market is not convinced that crude oil will stabilise at current levels. 

Conventional economic theory reasons that when oil prices fall, it should strengthen economic activity because the cost of doing business comes down. The International Monetary Fund estimates that for every US$20 drop in price per barrel of crude, the global economy should grow by 0.5%.

However, this is not happening because the major economic superpowers of the world are going through their own problems. 

This points to China’s economic health, the second major concern that could spark off a crisis for Bursa and the world.

Nobody can authoritatively put a finger on the state of the debt levels of China, especially those held outside the financial sector. The latest figure being bandied about is that the non-financial sector debt is 279% of gross domestic product, according to data from the Bank of International Settlement.

However, the optimists contend that China’s strong growth supports borrowing. Also, the country is seeing high inflation, which in the longer term will cause debt to erode. In the process of growing the economy, China has adopted an approach to weakening the yuan to export its way out. Every time the yuan weakens, the ringgit falls.

The third indicator is the highly likely scenario of the US raising interest rates in the second half of the year from the current band of between 0.25% and 0.5%. It is a measure which, if materialises, will exert pressure on the ringgit.

The headline numbers show that the US economy is still in the stage of recovery. The unemployment rate in the world’s biggest economy has ticked up slightly to 5% from 4.9% previously based on April numbers, but wage rates are still steady, meaning people are still getting paid well.

People’s earnings are growing at an estimated 2.5% based on latest numbers, which means that inflation will kick in. 

At the moment the possibility of the US Federal Reserve raising interest rates will not likely happen in the next month or so but there is a strong possibility may happen by the year-end as inflation starts to tick up.

This would cause an outflow of funds from emerging economies such as Malaysia and the ringgit would come under pressure. 

The fourth catalyst is also tied to the US. This time, it is the fear of Donald Trump becoming the next president. Trump prefers a strong dollar and has hinted of a haircut for those holding US dollar debt papers.

Although Trump has come out to state that he was misquoted on the US dollar debt paper issue, it has spooked investors holding US$14 trillion of US debt papers.

And finally, the last possible catalyst to cause a global shock is the possibility of Britain leaving the EU or better known as Brexit. Increasingly, the chances of it happening are remote. Nevertheless, nobody can tell for sure until the referendum on June 23.

All the five economic events will have a bearing on the ringgit. Everything points to the US dollar appreciating in the future, leaving the ringgit in defensive mode. _______________________________________________________

Time to buy export stocks such as LII HEN? Koon and his followers seem to think so!