Wow ! KLCI is really strong and moving to try to close on the positive.
Tuesday, September 30, 2008
11:14 am - Market Report on DJIA -777 plunge by Bill Wermine
Dear Traders,
There has been threats by George Bush that if the congress does does not pass the bailout bill the world financial system will collapse. Bush used the same tactics to scare the public and congress to authorize the invason of Iraq. His action was based on lies as Iraq was never a threat to the US and had nothing to do with 9-11 and had no weapons of mass distructions.
Bush with his chronies Bernenke and Paulson are lying to the public again by using fear and panic to force the congress to agree to a plan which is ill conceived. They have got the media behind them to brainwash the public.
This plan is not in the public's interest but in the interest of the super rich, the well connected and the banking establishment. The insiders will engineer a stock market panic to scare the public into agreeing with their plan. The super rich insiders will buy the shares sold by the sheep who are caught up in fear and doom and gloom
Do not be fooled- never sell a low. Smart money will take the other side of your trade.
Michael Moore who is a thorn in the side of Bush and his band of crooks and thieves wrote an interesting analysis which I share below.
Also, I am happy to be living in Malaysia where the markets and the economy are run more prudently than in the US, UK and Europe. Malaysian banks are not caught up in the mortgage sub prime collapse which was engineered by the investment banks on Wall St to enrich the priviledged few.
Continue to hold quality KLSE shares and do not panic !
Keep your cool
Bill
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.
No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:
"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. "Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages. "At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees. "Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."
Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.
The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.
And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!
Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.
Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?
It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.
This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!
I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:
1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.
2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).
3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.
When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!
Yours,Michael MooreMMFlint@aol.comMichaelMoore.com
P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.
P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.
There has been threats by George Bush that if the congress does does not pass the bailout bill the world financial system will collapse. Bush used the same tactics to scare the public and congress to authorize the invason of Iraq. His action was based on lies as Iraq was never a threat to the US and had nothing to do with 9-11 and had no weapons of mass distructions.
Bush with his chronies Bernenke and Paulson are lying to the public again by using fear and panic to force the congress to agree to a plan which is ill conceived. They have got the media behind them to brainwash the public.
This plan is not in the public's interest but in the interest of the super rich, the well connected and the banking establishment. The insiders will engineer a stock market panic to scare the public into agreeing with their plan. The super rich insiders will buy the shares sold by the sheep who are caught up in fear and doom and gloom
Do not be fooled- never sell a low. Smart money will take the other side of your trade.
Michael Moore who is a thorn in the side of Bush and his band of crooks and thieves wrote an interesting analysis which I share below.
Also, I am happy to be living in Malaysia where the markets and the economy are run more prudently than in the US, UK and Europe. Malaysian banks are not caught up in the mortgage sub prime collapse which was engineered by the investment banks on Wall St to enrich the priviledged few.
Continue to hold quality KLSE shares and do not panic !
Keep your cool
Bill
Let me cut to the chase. The biggest robbery in the history of this country is taking place as you read this. Though no guns are being used, 300 million hostages are being taken. Make no mistake about it: After stealing a half trillion dollars to line the pockets of their war-profiteering backers for the past five years, after lining the pockets of their fellow oilmen to the tune of over a hundred billion dollars in just the last two years, Bush and his cronies -- who must soon vacate the White House -- are looting the U.S. Treasury of every dollar they can grab. They are swiping as much of the silverware as they can on their way out the door.
No matter what they say, no matter how many scare words they use, they are up to their old tricks of creating fear and confusion in order to make and keep themselves and the upper one percent filthy rich. Just read the first four paragraphs of the lead story in last Monday's New York Times and you can see what the real deal is:
"Even as policy makers worked on details of a $700 billion bailout of the financial industry, Wall Street began looking for ways to profit from it. "Financial firms were lobbying to have all manner of troubled investments covered, not just those related to mortgages. "At the same time, investment firms were jockeying to oversee all the assets that Treasury plans to take off the books of financial institutions, a role that could earn them hundreds of millions of dollars a year in fees. "Nobody wants to be left out of Treasury's proposal to buy up bad assets of financial institutions."
Unbelievable. Wall Street and its backers created this mess and now they are going to clean up like bandits. Even Rudy Giuliani is lobbying for his firm to be hired (and paid) to "consult" in the bailout.
The problem is, nobody truly knows what this "collapse" is all about. Even Treasury Secretary Paulson admitted he doesn't know the exact amount that is needed (he just picked the $700 billion number out of his head!). The head of the congressional budget office said he can't figure it out nor can he explain it to anyone.
And yet, they are screeching about how the end is near! Panic! Recession! The Great Depression! Y2K! Bird flu! Killer bees! We must pass the bailout bill today!! The sky is falling! The sky is falling!
Falling for whom? NOTHING in this "bailout" package will lower the price of the gas you have to put in your car to get to work. NOTHING in this bill will protect you from losing your home. NOTHING in this bill will give you health insurance.
Health insurance? Mike, why are you bringing this up? What's this got to do with the Wall Street collapse?
It has everything to do with it. This so-called "collapse" was triggered by the massive defaulting and foreclosures going on with people's home mortgages. Do you know why so many Americans are losing their homes? To hear the Republicans describe it, it's because too many working class idiots were given mortgages that they really couldn't afford. Here's the truth: The number one cause of people declaring bankruptcy is because of medical bills. Let me state this simply: If we had had universal health coverage, this mortgage "crisis" may never have happened.
This bailout's mission is to protect the obscene amount of wealth that has been accumulated in the last eight years. It's to protect the top shareholders who own and control corporate America. It's to make sure their yachts and mansions and "way of life" go uninterrupted while the rest of America suffers and struggles to pay the bills. Let the rich suffer for once. Let them pay for the bailout. We are spending 400 million dollars a day on the war in Iraq. Let them end the war immediately and save us all another half-trillion dollars!
I have to stop writing this and you have to stop reading it. They are staging a financial coup this morning in our country. They are hoping Congress will act fast before they stop to think, before we have a chance to stop them ourselves. So stop reading this and do something -- NOW! Here's what you can do immediately:
1. Call or e-mail Senator Obama. Tell him he does not need to be sitting there trying to help prop up Bush and Cheney and the mess they've made. Tell him we know he has the smarts to slow this thing down and figure out what's the best route to take. Tell him the rich have to pay for whatever help is offered. Use the leverage we have now to insist on a moratorium on home foreclosures, to insist on a move to universal health coverage, and tell him that we the people need to be in charge of the economic decisions that affect our lives, not the barons of Wall Street.
2. Take to the streets. Participate in one of the hundreds of quickly-called demonstrations that are taking place all over the country (especially those near Wall Street and DC).
3. Call your Representative in Congress and your Senators. (click here to find their phone numbers). Tell them what you told Senator Obama.
When you screw up in life, there is hell to pay. Each and every one of you reading this knows that basic lesson and has paid the consequences of your actions at some point. In this great democracy, we cannot let there be one set of rules for the vast majority of hard-working citizens, and another set of rules for the elite, who, when they screw up, are handed one more gift on a silver platter. No more! Not again!
Yours,Michael MooreMMFlint@aol.comMichaelMoore.com
P.S. Having read further the details of this bailout bill, you need to know you are being lied to. They talk about how they will prevent golden parachutes. It says NOTHING about what these executives and fat cats will make in SALARY. According to Rep. Brad Sherman of California, these top managers will continue to receive million-dollar-a-month paychecks under this new bill. There is no direct ownership given to the American people for the money being handed over. Foreign banks and investors will be allowed to receive billion-dollar handouts. A large chunk of this $700 billion is going to be given directly to Chinese and Middle Eastern banks. There is NO guarantee of ever seeing that money again.
P.P.S. From talking to people I know in DC, they say the reason so many Dems are behind this is because Wall Street this weekend put a gun to their heads and said either turn over the $700 billion or the first thing we'll start blowing up are the pension funds and 401(k)s of your middle class constituents. The Dems are scared they may make good on their threat. But this is not the time to back down or act like the typical Democrat we have witnessed for the last eight years. The Dems handed a stolen election over to Bush. The Dems gave Bush the votes he needed to invade a sovereign country. Once they took over Congress in 2007, they refused to pull the plug on the war. And now they have been cowered into being accomplices in the crime of the century. You have to call them now and say "NO!" If we let them do this, just imagine how hard it will be to get anything good done when President Obama is in the White House. THESE DEMOCRATS ARE ONLY AS STRONG AS THE BACKBONE WE GIVE THEM. CALL CONGRESS NOW.
8:58 am - U.S. Stocks Plunge After House Votes Against Bailout Plan
U.S. Stocks Plunge After House Votes Against Bailout Plan
By Eric Martin
Sept. 29 (Bloomberg) -- U.S. stocks plunged and the Standard & Poor's 500 Index tumbled the most since the 1987 crash after the House of Representatives rejected a $700 billion plan to rescue the financial system.
The Dow Jones Industrial Average slid 778 points for its biggest point drop ever as $1.2 trillion in market value was erased from American equities. The MSCI World Index of 23 developed markets slid 6.9 percent, the most in 21 years.
Wachovia Corp. tumbled 82 percent after the bank was sold to Citigroup Inc. in a deal brokered by the Federal Deposit Insurance Corp., sending shares of Sovereign Bancorp Inc. down 72 percent and National City Corp. 63 percent lower. Goldman Sachs Group Inc. and Morgan Stanley, the two largest Wall Street securities firms, fell more than 12 percent. General Motors Corp., Chevron Corp. and Intel Corp. sank more than 10 percent each as all 30 Dow average stocks lost at least 2.8 percent.
``We've completely decimated confidence in the markets,'' said James Dunigan, managing executive of investments at PNC Wealth Management, which oversees $66 billion in Philadelphia. ``I appreciate their wanting to be a watchdog. On the other hand, if the kitchen's on fire, you don't want it to spread to rest of the house.''
The S&P 500 decreased 106.59 points, or 8.8 percent, to 1,106.42. The Dow slid 7 percent to 10,365.45. The Nasdaq Composite Index declined 199.61, or 9.1 percent, to 1,983.73, its steepest plunge since April 2000. Twenty-five stocks fell for each that rose on the New York Stock Exchange as 2 billion shares were traded on the floor, 35 percent more than the three- month average.
Four-Year Low
The S&P 500 sank to its lowest level since October 2004 as all 10 of its industry groups tumbled at least 4.2 percent. Campbell Soup Co. was the only stock in the benchmark index for U.S. equities to advance. The Dow average's retreat was its steepest on a percentage basis since the first trading day after the September 2001 terrorist attacks, sending the 30-stock gauge to an almost three-year low. A gauge of expected stock-market volatility climbed to a record.
Congressmen voted 228 to 205 against the measure to authorize the biggest government intervention into markets since the Great Depression, extending the S&P 500's decline in September to 14 percent, its worst month since the collapse of hedge fund Long Term Capital Management 10 years ago. The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
`Unimaginable'
``They've got to come up with something or the damage is unimaginable,'' said Henry Herrmann, Overland Park, Kansas-based president and chief executive officer of Waddell & Reed Financial Inc., which manages $70 billion.
Benchmark indexes extended earlier declines spurred when Wachovia joined three European banks in requiring government- orchestrated rescues.
Sovereign Bancorp, the second-largest U.S. savings and loan, plunged $6.04 to $2.33. National City, Ohio's biggest bank, lost $2.35 to $1.36.
State Street Corp., the world's biggest money manager for institutions, tumbled 27 percent. Fifth Third Bancorp slid 44 percent and CIT Group Inc. declined 25 percent, while Bank of New York Mellon Corp. lost 27 percent.
Morgan Stanley dropped $3.76, or 15 percent, to $20.99, a 10-year low. The fifth-largest bank-holding company, seeking to shore up investor confidence after borrowing costs climbed and its stock fell by half, agreed to sell a 21 percent stake to Japan's Mitsubishi UFJ Financial Group Inc. for $9 billion. Goldman Sachs declined $17.29 to $120.70.
`A Nightmare'
The S&P 500 Financials Index slid 16 percent, its steepest tumble since the gauge's creation in 1989. American Express Co., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. lost more than 10 percent each.
``It's pretty much a nightmare,'' said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``This is the worst we've seen it since the credit mess started. Until we know exactly why they didn't pass it, we're going to be selling off for a while.''
Wachovia, Citigroup
Wachovia sank $8.16 to $1.84. The FDIC helped arrange the takeover of Wachovia's banking operations by Citigroup, the largest U.S. bank by assets. Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in a statement. The all-stock deal equals about $1 a share for the Charlotte-based bank, ranked sixth by assets in the U.S. All depositors will be protected, according to the FDIC
Citigroup lost $2.40 to $17.75. The New York-based bank plans to cut its own dividend in half and raise $10 billion in capital as it takes on Wachovia's senior and subordinated debt.
An index tracking the performance of stocks the U.S. Securities and Exchange Commission banned investors from selling short retreated 12 percent today.
Energy producers posted the second-biggest drop among 10 groups in the S&P 500 after financials, losing 11 percent for their steepest tumble since 1989. Crude oil plunged $10.52, or 9.8 percent, to $96.37, leading commodities including copper and corn lower on concern global economies will slow after the failure of the bailout plan in Washington.
Exxon, Apple Tumble
Exxon Mobil Corp., the largest U.S. energy company, dropped $6.59, or 8.2 percent, to $74.06. ConocoPhillips, the third- biggest U.S. oil company, fell $6.93, or 9.1 percent, to $69.31.
Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, lost $10.60 to $53.22. Copper fell 5.5 percent to $2.9065 a pound on the Comex division of the New York Mercantile Exchange.
Apple Inc. dropped $22.98, or 18 percent, to $105.26 on the Nasdaq Stock Market, its steepest loss in eight years. The maker of the iPod media player, iPhone and Mac computers was cut to ``equal weight'' from ``overweight'' by Morgan Stanley analysts, who predicted a 10 percent slump in the shares and said the stock's price doesn't yet reflect slowing demand.
The VIX index of U.S. options, as the Chicago Board Options Exchange Volatility Index is known, rose 34 percent to a record 46.72. The VIX gauges the cost of using options as insurance against further losses in the stock market.
Today's sell-off extended the S&P 500's decline from an October record to 29 percent. Financial firms in the S&P 500 lost half their value over the same time, dragged down by more than $591 billion in losses from the collapse of the subprime mortgage market. Third-quarter earnings at S&P 500 companies declined 3 percent on average, according to analysts' estimates compiled by Bloomberg, weighed down by a 56 percent slide in profits at financial firms.
`Unwind Into Chaos'
``There's a real opportunity for this thing to totally unwind into chaos if we can't get some real direction from Washington,'' said Russ Kamp, chief executive officer of Invesco Quantitative Strategies, which manages about $461 billion in New York.
A gauge of financial-services companies in Europe's Dow Jones Stoxx 600 Index slid 9.8 percent, the steepest retreat since the gauge was created in 1991, after three banks in the region required government-orchestrated rescues.
Belgium, the Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Brussels and Amsterdam-based Fortis, Belgium's largest financial-services firm, to restore confidence in the bank. Bingley, England-based Bradford & Bingley Plc, Britain's biggest lender to landlords, was seized by the U.K. government after the credit crisis shut off funding. Hypo Real Estate Holding AG, Germany's second-biggest commercial-property lender, received a 35 billion euro loan guarantee to fend of insolvency.
Borrowing Costs
The euro interbank offered rate, or Euribor, rose 10 basis points to 5.24 percent, the biggest jump since June, the European Banking Federation said today. Singapore's benchmark rate for three-month U.S. dollar loans rose to the highest level in eight months.
``It's critical that we get something done here,'' Jeffrey Saut, who helps oversee $190 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a Bloomberg Television interview. ``The credit system is seizing up.''
Traders booed on the floor of the New York Stock Exchange as the closing bell rang.
The Dow average swung by more than 200 points during fifteen trading days in September as the government seized the two largest U.S. mortgage-finance companies, Fannie Mae and Freddie Mac; Lehman Brothers Holdings Inc. filed for bankruptcy; Merrill Lynch & Co. agreed to sell itself to Bank of America; American International Group Inc. was taken over by the Treasury; and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.
Treasury prices surged, sending two-year note yields down 39 basis points to 1.71 percent. The dollar fell against the yen, while rising against the euro and climbing the most against the British pound in 16 years.
By Eric Martin
Sept. 29 (Bloomberg) -- U.S. stocks plunged and the Standard & Poor's 500 Index tumbled the most since the 1987 crash after the House of Representatives rejected a $700 billion plan to rescue the financial system.
The Dow Jones Industrial Average slid 778 points for its biggest point drop ever as $1.2 trillion in market value was erased from American equities. The MSCI World Index of 23 developed markets slid 6.9 percent, the most in 21 years.
Wachovia Corp. tumbled 82 percent after the bank was sold to Citigroup Inc. in a deal brokered by the Federal Deposit Insurance Corp., sending shares of Sovereign Bancorp Inc. down 72 percent and National City Corp. 63 percent lower. Goldman Sachs Group Inc. and Morgan Stanley, the two largest Wall Street securities firms, fell more than 12 percent. General Motors Corp., Chevron Corp. and Intel Corp. sank more than 10 percent each as all 30 Dow average stocks lost at least 2.8 percent.
``We've completely decimated confidence in the markets,'' said James Dunigan, managing executive of investments at PNC Wealth Management, which oversees $66 billion in Philadelphia. ``I appreciate their wanting to be a watchdog. On the other hand, if the kitchen's on fire, you don't want it to spread to rest of the house.''
The S&P 500 decreased 106.59 points, or 8.8 percent, to 1,106.42. The Dow slid 7 percent to 10,365.45. The Nasdaq Composite Index declined 199.61, or 9.1 percent, to 1,983.73, its steepest plunge since April 2000. Twenty-five stocks fell for each that rose on the New York Stock Exchange as 2 billion shares were traded on the floor, 35 percent more than the three- month average.
Four-Year Low
The S&P 500 sank to its lowest level since October 2004 as all 10 of its industry groups tumbled at least 4.2 percent. Campbell Soup Co. was the only stock in the benchmark index for U.S. equities to advance. The Dow average's retreat was its steepest on a percentage basis since the first trading day after the September 2001 terrorist attacks, sending the 30-stock gauge to an almost three-year low. A gauge of expected stock-market volatility climbed to a record.
Congressmen voted 228 to 205 against the measure to authorize the biggest government intervention into markets since the Great Depression, extending the S&P 500's decline in September to 14 percent, its worst month since the collapse of hedge fund Long Term Capital Management 10 years ago. The defeat of the legislation set off a scramble among the plan's backers for additional support before another vote, which likely won't come until later in the week.
`Unimaginable'
``They've got to come up with something or the damage is unimaginable,'' said Henry Herrmann, Overland Park, Kansas-based president and chief executive officer of Waddell & Reed Financial Inc., which manages $70 billion.
Benchmark indexes extended earlier declines spurred when Wachovia joined three European banks in requiring government- orchestrated rescues.
Sovereign Bancorp, the second-largest U.S. savings and loan, plunged $6.04 to $2.33. National City, Ohio's biggest bank, lost $2.35 to $1.36.
State Street Corp., the world's biggest money manager for institutions, tumbled 27 percent. Fifth Third Bancorp slid 44 percent and CIT Group Inc. declined 25 percent, while Bank of New York Mellon Corp. lost 27 percent.
Morgan Stanley dropped $3.76, or 15 percent, to $20.99, a 10-year low. The fifth-largest bank-holding company, seeking to shore up investor confidence after borrowing costs climbed and its stock fell by half, agreed to sell a 21 percent stake to Japan's Mitsubishi UFJ Financial Group Inc. for $9 billion. Goldman Sachs declined $17.29 to $120.70.
`A Nightmare'
The S&P 500 Financials Index slid 16 percent, its steepest tumble since the gauge's creation in 1989. American Express Co., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. lost more than 10 percent each.
``It's pretty much a nightmare,'' said Michael Nasto, the senior trader at U.S. Global Investors Inc., which manages $5 billion in San Antonio. ``This is the worst we've seen it since the credit mess started. Until we know exactly why they didn't pass it, we're going to be selling off for a while.''
Wachovia, Citigroup
Wachovia sank $8.16 to $1.84. The FDIC helped arrange the takeover of Wachovia's banking operations by Citigroup, the largest U.S. bank by assets. Citigroup will absorb as much as $42 billion of losses on Wachovia's $312 billion pool of loans, the FDIC said in a statement. The all-stock deal equals about $1 a share for the Charlotte-based bank, ranked sixth by assets in the U.S. All depositors will be protected, according to the FDIC
Citigroup lost $2.40 to $17.75. The New York-based bank plans to cut its own dividend in half and raise $10 billion in capital as it takes on Wachovia's senior and subordinated debt.
An index tracking the performance of stocks the U.S. Securities and Exchange Commission banned investors from selling short retreated 12 percent today.
Energy producers posted the second-biggest drop among 10 groups in the S&P 500 after financials, losing 11 percent for their steepest tumble since 1989. Crude oil plunged $10.52, or 9.8 percent, to $96.37, leading commodities including copper and corn lower on concern global economies will slow after the failure of the bailout plan in Washington.
Exxon, Apple Tumble
Exxon Mobil Corp., the largest U.S. energy company, dropped $6.59, or 8.2 percent, to $74.06. ConocoPhillips, the third- biggest U.S. oil company, fell $6.93, or 9.1 percent, to $69.31.
Freeport-McMoRan Copper & Gold Inc., the world's largest publicly traded copper producer, lost $10.60 to $53.22. Copper fell 5.5 percent to $2.9065 a pound on the Comex division of the New York Mercantile Exchange.
Apple Inc. dropped $22.98, or 18 percent, to $105.26 on the Nasdaq Stock Market, its steepest loss in eight years. The maker of the iPod media player, iPhone and Mac computers was cut to ``equal weight'' from ``overweight'' by Morgan Stanley analysts, who predicted a 10 percent slump in the shares and said the stock's price doesn't yet reflect slowing demand.
The VIX index of U.S. options, as the Chicago Board Options Exchange Volatility Index is known, rose 34 percent to a record 46.72. The VIX gauges the cost of using options as insurance against further losses in the stock market.
Today's sell-off extended the S&P 500's decline from an October record to 29 percent. Financial firms in the S&P 500 lost half their value over the same time, dragged down by more than $591 billion in losses from the collapse of the subprime mortgage market. Third-quarter earnings at S&P 500 companies declined 3 percent on average, according to analysts' estimates compiled by Bloomberg, weighed down by a 56 percent slide in profits at financial firms.
`Unwind Into Chaos'
``There's a real opportunity for this thing to totally unwind into chaos if we can't get some real direction from Washington,'' said Russ Kamp, chief executive officer of Invesco Quantitative Strategies, which manages about $461 billion in New York.
A gauge of financial-services companies in Europe's Dow Jones Stoxx 600 Index slid 9.8 percent, the steepest retreat since the gauge was created in 1991, after three banks in the region required government-orchestrated rescues.
Belgium, the Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Brussels and Amsterdam-based Fortis, Belgium's largest financial-services firm, to restore confidence in the bank. Bingley, England-based Bradford & Bingley Plc, Britain's biggest lender to landlords, was seized by the U.K. government after the credit crisis shut off funding. Hypo Real Estate Holding AG, Germany's second-biggest commercial-property lender, received a 35 billion euro loan guarantee to fend of insolvency.
Borrowing Costs
The euro interbank offered rate, or Euribor, rose 10 basis points to 5.24 percent, the biggest jump since June, the European Banking Federation said today. Singapore's benchmark rate for three-month U.S. dollar loans rose to the highest level in eight months.
``It's critical that we get something done here,'' Jeffrey Saut, who helps oversee $190 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, said in a Bloomberg Television interview. ``The credit system is seizing up.''
Traders booed on the floor of the New York Stock Exchange as the closing bell rang.
The Dow average swung by more than 200 points during fifteen trading days in September as the government seized the two largest U.S. mortgage-finance companies, Fannie Mae and Freddie Mac; Lehman Brothers Holdings Inc. filed for bankruptcy; Merrill Lynch & Co. agreed to sell itself to Bank of America; American International Group Inc. was taken over by the Treasury; and Washington Mutual Inc. was seized by regulators in the biggest U.S. bank failure in history.
Treasury prices surged, sending two-year note yields down 39 basis points to 1.71 percent. The dollar fell against the yen, while rising against the euro and climbing the most against the British pound in 16 years.
Monday, September 29, 2008
10:21 am - Market Report by Bill Wermine
Dear Traders,
The world stock markets are on hold and are yet to resume their downtrends until the powers that be in Washington decide on the bailout. The cartoon below expresses
my feelings. No matter what they decide the bear is in control and will claim more victims.
The world stock markets are on hold and are yet to resume their downtrends until the powers that be in Washington decide on the bailout. The cartoon below expresses
my feelings. No matter what they decide the bear is in control and will claim more victims.
Just the way we like it, a bailout with no strings attached.
Former Republican house speaker Newt Gingrich weighed in on the Wall St bailout " I find it inconceivable that the Treasury and the Federal Reserve could manage the whole economy of Wall St. And yet that is what Paulson is proposing. I think that is an undertaking of such gigantic delusion that is will be a nightmare," Gingrich declared.
US Treasury chief Paulson and Bernanke have used every trick in their book to prevent a bear market from materializing on Wall St, before the presidential election which now threatens to eject the Republicans from the White House. They have been unsuccessful
Notice the attached Dow Futures chart which is in a relentless downtrend. I would like to see a high volume panic capitulation which is evidence of professional buying before committing to the long side of the Dow. Even then it would be a short term trade with careful risk management
The Federal reserve has tried to put a floor under the stockmarket by slashing the federal funds rate 325 basis points from a year ago to 2 % today, far below inflation. Futures traders in Chicago are betting on a 1/4 point cut on the Fed Funds rate in October as perhaps their final bullet to halt the downwave.
In my opinion it will fail: The reason is that Wall St, and the US financial insiders/ powers- Masters of the Universe have been running perhaps the biggest pyramid scam in all of history being the subprime mortgage scam. The pyramid is collapsing- major financial houses such as Lehmen/ Bear Sterns are bankrupt. Washington Mutual, a 150 year old bank failed- being the largest bank failure in US history. Depositers in InDi Mac Bank in California are still waiting to get back their deposits after it failed. The list goes on- AIG failed being taken over by the government/ Fannie May etc etc.
The housing market in the US continues to collapse with the highest foreclosure rate since the 1931 depression. This is destroying the wealth of the Middle class whose house is their only asset.
If you have assets/currencies in the US I suggest you exit. There is a possibility the US could declare an emergency- impose exchange controls and you could not get your money out. The US mint last week suspended the sale of American Eagle/ Buffalo gold coins. In 1932 Presendent Roosevelt in the US declaired an emergency and made it a criminal offense to hold gold coins or bars. There is a huge demand for gold in the US as a safe haven. Gold dealers are selling their stock of gold coins in some places at a 10 % premium to the gold price.
Open a Phillip Wrap account in Singapore where you can hold any currency cash deposit you wish - ie AUD/ Euro/ BRL. One of my clients opened a Wrap Account and placed his funds in the Lion AUD fund. This fund only invests in short term commercial paper and AUD Treasury bills. It is super safe and for AUD Lion Fund to fail there would have to be a nuclear holocaust and Australia would cease to exist. There are no Fannie May or mortgage bonds in this portfolio. If Obama wins that could ignite some furious trends in the currencies and commodities should benefit.
Continue to run your short US Dollar/Long Euro positions. Hold quality KLSE shares focusing on shares such as Dutch Lady/ F & N and Nestle which I hold for myself and clients. We still have to eat and these companies have solid balance sheets, are well managed and will survive the current volatility. Unlike the Dow, the KLSE had a capitulation last week, selling has dried up, and a solid base is forming from 1000 to 1050. Near term target 1200. I am looking at the CPO market. If the US Dollar collapses on a hint of an Obama victory that would benefit plantation shares and the CPO futures. CPO is forming a floor, there is evidence of professional buying in this environment of maximum doom and gloom, bad news, extreme fear. Reward is the greatest when uncertainty is at the maximum.
Have a good week
Bill
Sunday, September 28, 2008
11:18 am - Chart of the Week - Dialog
Buy when it comes back to the support at rm 0.90 - rm 0.92 with stop loss at rm 0.85
Friday, September 26, 2008
10:08 am - Trading Book by Stuart McPhee
Dear Trader,
My friend and colleague, Stuart McPhee, has just released his new book 'Trading In A Nutshell, 3rd edition'. Daryl Guppy wrote the forewordfor him. This is good value and I highly recommend his very reasonably priced products.
Stuart is the real deal. He walks the walk rather than talk the talk. He trades shares and futures in the Australian market and his focus is on Discipline and having a Trading Plan- without which you are a dead duck. He is also an honest man and keeps his word.
Several of our Traders Club members including myself and Martin/ attended his seminar on Trading Plans in the Concord Hotel in 2004 and it helped our trading results .
Acknowledging that there are thousands of trading books out there, he decided to do something a little different with this book. He hascreated a little trading bundle to accompany the book, however it is only available from his website - not in bookstores. He has included about 10 hours of multimedia training, both video and audio tutorials on a bonus CD to compliment the book.
The bonus disc contains a number of useful items, including: Supplementary instructional videos corresponding to the charts withinthe book to further explain his trade examples and strategies. > 7 hours of audio interviews with him answering his subscribers' toptrading questions, including how he trades his two different methods.> Two additional PowerPoint presentations on chart patterns and reversal signals from his Triple your Trading Profits Workshop.
You can read more about it athttp://www.1shoppingcart.com/app/?Clk=2602942Make sure you grab a copy to empower you to compile that trading plan you need. Before you ask what is different in this book from the othertwo editions, please go and watch the video from Stuart at http://www.1shoppingcart.com/app/?Clk=2602942
I know having a library full of quality trading books is essential and has helped me - I also know this book will be a valuable addition foryours.
Regards,Bill
PS: If you wait to buy the book in MPH you will only get the book - nothing more and not have the chance to get the bonus products. You will also have the opportunity to deal directly with Stuart.
My friend and colleague, Stuart McPhee, has just released his new book 'Trading In A Nutshell, 3rd edition'. Daryl Guppy wrote the forewordfor him. This is good value and I highly recommend his very reasonably priced products.
Stuart is the real deal. He walks the walk rather than talk the talk. He trades shares and futures in the Australian market and his focus is on Discipline and having a Trading Plan- without which you are a dead duck. He is also an honest man and keeps his word.
Several of our Traders Club members including myself and Martin/ attended his seminar on Trading Plans in the Concord Hotel in 2004 and it helped our trading results .
Acknowledging that there are thousands of trading books out there, he decided to do something a little different with this book. He hascreated a little trading bundle to accompany the book, however it is only available from his website - not in bookstores. He has included about 10 hours of multimedia training, both video and audio tutorials on a bonus CD to compliment the book.
The bonus disc contains a number of useful items, including: Supplementary instructional videos corresponding to the charts withinthe book to further explain his trade examples and strategies. > 7 hours of audio interviews with him answering his subscribers' toptrading questions, including how he trades his two different methods.> Two additional PowerPoint presentations on chart patterns and reversal signals from his Triple your Trading Profits Workshop.
You can read more about it athttp://www.1shoppingcart.com/app/?Clk=2602942Make sure you grab a copy to empower you to compile that trading plan you need. Before you ask what is different in this book from the othertwo editions, please go and watch the video from Stuart at http://www.1shoppingcart.com/app/?Clk=2602942
I know having a library full of quality trading books is essential and has helped me - I also know this book will be a valuable addition foryours.
Regards,Bill
PS: If you wait to buy the book in MPH you will only get the book - nothing more and not have the chance to get the bonus products. You will also have the opportunity to deal directly with Stuart.
Thursday, September 25, 2008
10:54 am - CIMB Research with List of Mega Sales of Companies at Deep Value
Still, look at the price, volume chart of these counters. If you see a stage 1 going to stage 2, take a pick and know where are the support for these counters.
Wednesday, September 24, 2008
11:24 am - Goldman Gets Buffett's Backing in $7.5 Billion Fundraising Plan
Goldman Gets Buffett's Backing in $7.5 Billion Fundraising Plan
By Christine Harper
Sept. 24 (Bloomberg) -- Goldman Sachs Group Inc. won the backing of Warren Buffett, the world's preeminent stock-picker, as the Wall Street firm seeks to raise cash from investors whose faith in the investment-banking business model has been shaken.
For Goldman, Buffett's endorsement came at a price. Berkshire Hathaway Inc., led by the 78-year-old billionaire, is buying $5 billion of perpetual preferred stock with a 10 percent dividend. Berkshire also gets warrants to buy $5 billion of common stock at $115 a share at any time in the next five years. The common stock closed yesterday at $125.05, providing Buffett with an instant paper profit of $437 million.
``It's a hell of a deal for Buffett,'' said Brad Hintz, an analyst at Sanford C. Bernstein & Co. who rates Goldman stock ``market perform.'' ``The key thing for Goldman is making it through the credit cycle, and they're doing the right stuff.''
Goldman Chief Executive Officer Lloyd Blankfein is turning to Buffett, the second-richest American after Microsoft Corp. founder Bill Gates, to boost market confidence even though the investment bank hasn't reported a quarterly loss since it went public in 1999. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 have fueled fears about firms that rely on bond markets for funding.
In addition to raising money from Buffett, Goldman said it plans to sell at least $2.5 billion of common stock to the public. It will be the firm's first common stock offering since 2000. No details of the planned offering were disclosed in a statement released by the New York-based company yesterday.
Bernanke, Paulson
Goldman surged in trading after the close of the New York Stock Exchange, following the announcement of the agreement with Buffett. The shares, which closed at $125.05 in composite trading, jumped as high as $138.88, an 11 percent increase, at 5:50 p.m. in New York.
``At this point you're better safe than sorry, I think that's the moral of Lehman,'' said David Hendler, an analyst at CreditSights Inc. in New York. ``Everything's different because of the extraordinarily weak market conditions, as vividly described by our Treasury Secretary and Fed Chairman'' in congressional testimony yesterday, Hendler said.
Federal Reserve Chairman Ben S. Bernanke joined Treasury Secretary Henry Paulson in urging skeptical lawmakers yesterday to quickly pass a $700 billion rescue for financial institutions, saying the U.S. economy will shrink if markets don't begin functioning normally.
Wall Street's biggest firms lost investors' confidence this year as writedowns and losses on mortgage assets and other high- risk, high-yield loans swelled, wiping out profits and eroding shareholder equity at companies including Merrill and Lehman, both based in New York.
Fickle Funding
Bear Stearns Cos., the smallest of the five biggest U.S. securities firms, was forced into a government-assisted fire sale to JPMorgan Chase & Co. in March after losing access to short- term funds in the markets. JPMorgan, the third-largest U.S. bank by assets, is based in New York.
Lehman's collapse and Merrill's sudden sale this month reignited concern that Wall Street's depreciating assets and reliance on fickle bond-market funding mean the industry's ability to generate profit has diminished.
The decision to seek a cash infusion marks a reversal for Goldman, which this week transformed itself from the biggest U.S. securities firm to the nation's fourth-largest bank holding company. Less than a year ago, Goldman was posting record profits and awarding record bonuses: Blankfein and his two top deputies reaped payouts totaling more than $67 million apiece in 2007.
The company, while suffering from a decline in trading and investment banking revenue, has booked $4.9 billion of losses on devalued assets, a fraction of the writedowns taken by rivals such as Citigroup Inc., Merrill and Morgan Stanley.
The Oracle
``The investment will further bolster our strong capitalization and liquidity position,'' Blankfein, 54, said in the statement. Berkshire's commitment ``is a strong validation of our client franchise and future prospects,'' he said.
Known as the ``Oracle of Omaha,'' Buffett has become a cult figure among investors, drawing 31,000 people to an Omaha arena for his annual shareholders meeting this year. Mutual funds and individuals mimic his stock picks in an effort to duplicate his success, and an academic study in 2007 found that using this strategy for 31 years would have delivered annualized returns of about 25 percent, double the return of the S&P 500.
Buffett transformed Berkshire over four decades from a failing textile manufacturer into a $200 billion holding company by buying out-of-favor stocks and companies whose business and management he deemed superior. In the process, he became the second-richest man in the U.S., according to Forbes magazine.
`Affirmation'
Buffett is ``getting very attractive terms, but Goldman is getting very attractive affirmation of their value from an investor with Warren's stature,'' said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, which manages more than $3 billion, including Berkshire shares.
The last time one of the biggest U.S. securities firms received an investment from Buffett was in 1987, when New York- based Salomon Inc. turned to him for a $700 million infusion to fend off an unwanted takeover.
The Goldman warrants Buffett is buying may themselves be worth $1.8 billion, according to Scott Roth, management partner at Severn River Capital Management, a $200 million hedge fund based in Greenwich, Connecticut. He said he calculated that Buffett is getting the preferred stock, plus about 11 percent of stock through the warrants, for $3.2 billion.
In contrast, Morgan Stanley agreed on Sept. 22 to sell as much as 20 percent of itself for about $8.4 billion to Mitsubishi UFJ Financial Group Inc., Japan's largest bank.
Bank Conversion
Both Goldman and Morgan Stanley said this week that they are converting to bank holding companies supervised by the Federal Reserve, a move that allows them permanent access to borrowing from the Fed and permits more flexible accounting for some assets.
``It's a good move for Goldman, but at a very expensive price,'' said Roth, referring to Buffett's investment. Roth said he's betting on an increase in shares of Goldman, where he worked more than a decade ago. Buffett's getting ``more value than when he bought Salomon.''
Berkshire's preferred stock in Goldman can be repurchased by the investment bank at any time at a 10 percent premium, according to the terms of the agreement. The stock's 10 percent dividend offers a lower yield than securities issued by Merrill Lynch in April and by Citigroup Inc. in May, Bloomberg data show.
``Goldman Sachs is an exceptional institution,'' said Buffett in the statement. ``It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.''
Leverage Ratio
Buffett and Goldman have long-standing ties. Buffett has a close relationship with Byron Trott, a Goldman banker based in Chicago, and has singled him out for praise in his annual reports to shareholders.
Goldman's stock has dropped 42 percent since the start of 2008 and 19 percent since the beginning of last week. The cost of credit default swaps used to insure against a default in the firm's debt jumped 0.9 percentage points to 3.8 percentage points yesterday before the Buffett announcement, according to broker Phoenix Partners Group in New York. At that price, it cost $380,000 a year to protect $10 million of Goldman debt for five years. Last week the price reached a record $685,000.
One concern for investors has been the firm's leverage, or the amount of assets held with every dollar of shareholder equity. Goldman owned $23.70 of assets for every dollar of shareholder equity at the end of August, making the firm dependent on raising debt in the markets to help finance its $1.08 trillion balance sheet.
With an additional $7.5 billion of equity, the leverage ratio will drop to 20.3 times. That's more consistent with the level regulators will likely allow for commercial banks, which are overseen by the Fed, Bernstein's Hintz said.
By Christine Harper
Sept. 24 (Bloomberg) -- Goldman Sachs Group Inc. won the backing of Warren Buffett, the world's preeminent stock-picker, as the Wall Street firm seeks to raise cash from investors whose faith in the investment-banking business model has been shaken.
For Goldman, Buffett's endorsement came at a price. Berkshire Hathaway Inc., led by the 78-year-old billionaire, is buying $5 billion of perpetual preferred stock with a 10 percent dividend. Berkshire also gets warrants to buy $5 billion of common stock at $115 a share at any time in the next five years. The common stock closed yesterday at $125.05, providing Buffett with an instant paper profit of $437 million.
``It's a hell of a deal for Buffett,'' said Brad Hintz, an analyst at Sanford C. Bernstein & Co. who rates Goldman stock ``market perform.'' ``The key thing for Goldman is making it through the credit cycle, and they're doing the right stuff.''
Goldman Chief Executive Officer Lloyd Blankfein is turning to Buffett, the second-richest American after Microsoft Corp. founder Bill Gates, to boost market confidence even though the investment bank hasn't reported a quarterly loss since it went public in 1999. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 have fueled fears about firms that rely on bond markets for funding.
In addition to raising money from Buffett, Goldman said it plans to sell at least $2.5 billion of common stock to the public. It will be the firm's first common stock offering since 2000. No details of the planned offering were disclosed in a statement released by the New York-based company yesterday.
Bernanke, Paulson
Goldman surged in trading after the close of the New York Stock Exchange, following the announcement of the agreement with Buffett. The shares, which closed at $125.05 in composite trading, jumped as high as $138.88, an 11 percent increase, at 5:50 p.m. in New York.
``At this point you're better safe than sorry, I think that's the moral of Lehman,'' said David Hendler, an analyst at CreditSights Inc. in New York. ``Everything's different because of the extraordinarily weak market conditions, as vividly described by our Treasury Secretary and Fed Chairman'' in congressional testimony yesterday, Hendler said.
Federal Reserve Chairman Ben S. Bernanke joined Treasury Secretary Henry Paulson in urging skeptical lawmakers yesterday to quickly pass a $700 billion rescue for financial institutions, saying the U.S. economy will shrink if markets don't begin functioning normally.
Wall Street's biggest firms lost investors' confidence this year as writedowns and losses on mortgage assets and other high- risk, high-yield loans swelled, wiping out profits and eroding shareholder equity at companies including Merrill and Lehman, both based in New York.
Fickle Funding
Bear Stearns Cos., the smallest of the five biggest U.S. securities firms, was forced into a government-assisted fire sale to JPMorgan Chase & Co. in March after losing access to short- term funds in the markets. JPMorgan, the third-largest U.S. bank by assets, is based in New York.
Lehman's collapse and Merrill's sudden sale this month reignited concern that Wall Street's depreciating assets and reliance on fickle bond-market funding mean the industry's ability to generate profit has diminished.
The decision to seek a cash infusion marks a reversal for Goldman, which this week transformed itself from the biggest U.S. securities firm to the nation's fourth-largest bank holding company. Less than a year ago, Goldman was posting record profits and awarding record bonuses: Blankfein and his two top deputies reaped payouts totaling more than $67 million apiece in 2007.
The company, while suffering from a decline in trading and investment banking revenue, has booked $4.9 billion of losses on devalued assets, a fraction of the writedowns taken by rivals such as Citigroup Inc., Merrill and Morgan Stanley.
The Oracle
``The investment will further bolster our strong capitalization and liquidity position,'' Blankfein, 54, said in the statement. Berkshire's commitment ``is a strong validation of our client franchise and future prospects,'' he said.
Known as the ``Oracle of Omaha,'' Buffett has become a cult figure among investors, drawing 31,000 people to an Omaha arena for his annual shareholders meeting this year. Mutual funds and individuals mimic his stock picks in an effort to duplicate his success, and an academic study in 2007 found that using this strategy for 31 years would have delivered annualized returns of about 25 percent, double the return of the S&P 500.
Buffett transformed Berkshire over four decades from a failing textile manufacturer into a $200 billion holding company by buying out-of-favor stocks and companies whose business and management he deemed superior. In the process, he became the second-richest man in the U.S., according to Forbes magazine.
`Affirmation'
Buffett is ``getting very attractive terms, but Goldman is getting very attractive affirmation of their value from an investor with Warren's stature,'' said Tom Russo, a partner at Gardner Russo & Gardner in Lancaster, Pennsylvania, which manages more than $3 billion, including Berkshire shares.
The last time one of the biggest U.S. securities firms received an investment from Buffett was in 1987, when New York- based Salomon Inc. turned to him for a $700 million infusion to fend off an unwanted takeover.
The Goldman warrants Buffett is buying may themselves be worth $1.8 billion, according to Scott Roth, management partner at Severn River Capital Management, a $200 million hedge fund based in Greenwich, Connecticut. He said he calculated that Buffett is getting the preferred stock, plus about 11 percent of stock through the warrants, for $3.2 billion.
In contrast, Morgan Stanley agreed on Sept. 22 to sell as much as 20 percent of itself for about $8.4 billion to Mitsubishi UFJ Financial Group Inc., Japan's largest bank.
Bank Conversion
Both Goldman and Morgan Stanley said this week that they are converting to bank holding companies supervised by the Federal Reserve, a move that allows them permanent access to borrowing from the Fed and permits more flexible accounting for some assets.
``It's a good move for Goldman, but at a very expensive price,'' said Roth, referring to Buffett's investment. Roth said he's betting on an increase in shares of Goldman, where he worked more than a decade ago. Buffett's getting ``more value than when he bought Salomon.''
Berkshire's preferred stock in Goldman can be repurchased by the investment bank at any time at a 10 percent premium, according to the terms of the agreement. The stock's 10 percent dividend offers a lower yield than securities issued by Merrill Lynch in April and by Citigroup Inc. in May, Bloomberg data show.
``Goldman Sachs is an exceptional institution,'' said Buffett in the statement. ``It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.''
Leverage Ratio
Buffett and Goldman have long-standing ties. Buffett has a close relationship with Byron Trott, a Goldman banker based in Chicago, and has singled him out for praise in his annual reports to shareholders.
Goldman's stock has dropped 42 percent since the start of 2008 and 19 percent since the beginning of last week. The cost of credit default swaps used to insure against a default in the firm's debt jumped 0.9 percentage points to 3.8 percentage points yesterday before the Buffett announcement, according to broker Phoenix Partners Group in New York. At that price, it cost $380,000 a year to protect $10 million of Goldman debt for five years. Last week the price reached a record $685,000.
One concern for investors has been the firm's leverage, or the amount of assets held with every dollar of shareholder equity. Goldman owned $23.70 of assets for every dollar of shareholder equity at the end of August, making the firm dependent on raising debt in the markets to help finance its $1.08 trillion balance sheet.
With an additional $7.5 billion of equity, the leverage ratio will drop to 20.3 times. That's more consistent with the level regulators will likely allow for commercial banks, which are overseen by the Fed, Bernstein's Hintz said.
Tuesday, September 23, 2008
Monday, September 22, 2008
5:03 pm - KLCI is getting weaker as it move higher !
This is due to professional are selling at these level !
10:45 am - Market Outlook by Bill Wermine !
Dear Traders,
Five years ago Warren Buffet called CDS (credit default swaps) financial weapons of mass distruction. He directed his insurance arm of Berkshire Hathaway (BKK) to exit the business. The gut wrenching turmoil in the credit markets this week proved that Buffet was right. The collapse of Bear Sterns, the sale of Merrill Lynch to Bank of America, bankruptcy of Lehman Brothers, and the meltdown of AIG were all related to CDS that led to the fall of these financial giants. AIG received an emergency $85 billion loan from the Federal Reserve on 16 Sept to stave off bankruptcy and prevent a nuclear explosion in the CDS market and a possible world wide financial panic.
This is leverage in reverse and the government was forced to step in to meet the margin call. The US taxpayers are now on the hook for over USD 3890 for each man woman and child. The government will monitize this debt by printing money . That is why you should be out of the US Dollar and into Gold and commodities.
CDS profit when housing prices go up and as long as the house buyers pay their mortages, the sellers make a killing. Unfortunately, the US is in a major recession with massive job losses, factories closing, auto sales in a collapse, roaring inflation and over 10 % of Americans are in default or behind in their house payments.
The US Governement can not take care of their returning disabled Iraq war veterans many of whom live on the streets. The government tries to cover this up and deny it but the public seems to be getting smarter so Obama has a chance to win. If he does expect the US Dollar to collapse and our plantation shares/Man Hedge Fund to go up
(check out http://www.intrade.com/ ) This is a bookmaker in Ireland wher you can place bets on anything including the US election. This is real time real money. Today Obama took a big jump and is now leading McCain.
I like the AUD - (Our AUD Man funds were up 2.8 % last week recovering a bit from the August loss). Plantation companies should also perform but avoid banks, construction and property companies, REITs, bonds, and deal in only the highest quality blue chip consumer shares with dividends.
We have had massive selling of Plantation shares as Crude Palm Oil has lost half its value in the last 6 months. - Everyone is bearish. Last week CPO
hit a monthly support and bounced over 200 points. Plantation shares were up across the board over 10 %. Tom Williams of TradeGuider calls this pushing through supply. It is important to look at monthly and weekly charts to gain a better view. The palm oil charts are definitely positive as professionals load up in this pessimistic and fearful environment. There is strong evidence of hidden potential buying.
How do we navigate this financial storm and avoid going down with the ship like Captain Smith in the Titanic?
Consider Man Investments- new capital guaranteed fund to launch on 29 September. This can be your financial lifeboat. Learn to trade on line- Jupiter Securities offers the cheapest commissions in Malaysia - only .05 or RM 8 + clearing fees. Those graduates of our Master the Markets/TradeGuder users are equipped to making quick profits even in this environment. For the more adventurous try the CI and CPO futures. Give Martin a call on this. He is looking for 2 more futures brokers and will train you.
Five years ago Warren Buffet called CDS (credit default swaps) financial weapons of mass distruction. He directed his insurance arm of Berkshire Hathaway (BKK) to exit the business. The gut wrenching turmoil in the credit markets this week proved that Buffet was right. The collapse of Bear Sterns, the sale of Merrill Lynch to Bank of America, bankruptcy of Lehman Brothers, and the meltdown of AIG were all related to CDS that led to the fall of these financial giants. AIG received an emergency $85 billion loan from the Federal Reserve on 16 Sept to stave off bankruptcy and prevent a nuclear explosion in the CDS market and a possible world wide financial panic.
This is leverage in reverse and the government was forced to step in to meet the margin call. The US taxpayers are now on the hook for over USD 3890 for each man woman and child. The government will monitize this debt by printing money . That is why you should be out of the US Dollar and into Gold and commodities.
CDS profit when housing prices go up and as long as the house buyers pay their mortages, the sellers make a killing. Unfortunately, the US is in a major recession with massive job losses, factories closing, auto sales in a collapse, roaring inflation and over 10 % of Americans are in default or behind in their house payments.
The US Governement can not take care of their returning disabled Iraq war veterans many of whom live on the streets. The government tries to cover this up and deny it but the public seems to be getting smarter so Obama has a chance to win. If he does expect the US Dollar to collapse and our plantation shares/Man Hedge Fund to go up
(check out http://www.intrade.com/ ) This is a bookmaker in Ireland wher you can place bets on anything including the US election. This is real time real money. Today Obama took a big jump and is now leading McCain.
I like the AUD - (Our AUD Man funds were up 2.8 % last week recovering a bit from the August loss). Plantation companies should also perform but avoid banks, construction and property companies, REITs, bonds, and deal in only the highest quality blue chip consumer shares with dividends.
We have had massive selling of Plantation shares as Crude Palm Oil has lost half its value in the last 6 months. - Everyone is bearish. Last week CPO
hit a monthly support and bounced over 200 points. Plantation shares were up across the board over 10 %. Tom Williams of TradeGuider calls this pushing through supply. It is important to look at monthly and weekly charts to gain a better view. The palm oil charts are definitely positive as professionals load up in this pessimistic and fearful environment. There is strong evidence of hidden potential buying.
How do we navigate this financial storm and avoid going down with the ship like Captain Smith in the Titanic?
Consider Man Investments- new capital guaranteed fund to launch on 29 September. This can be your financial lifeboat. Learn to trade on line- Jupiter Securities offers the cheapest commissions in Malaysia - only .05 or RM 8 + clearing fees. Those graduates of our Master the Markets/TradeGuder users are equipped to making quick profits even in this environment. For the more adventurous try the CI and CPO futures. Give Martin a call on this. He is looking for 2 more futures brokers and will train you.
Hold on to you hat for a wild ride next week
Bill
10:22 am - Time to get rid of your stocks in your portfolio
If there is a time to get out now, this is it.
Sell on any rebound of KLCI. A lot of counters like Bursa is showing potential hidden selling or upthrust.
Saturday, September 20, 2008
11:03 am - Chart of the Week - KNM
You have some decent volume coming in. Put your stop at the pivot low rm1.00. Get in before 10 am.
10:57 am - With KLCI recovery and short term bullish, you can swing in for a quick profit.
Almost all blue chips counters are worthwhile. Here is one counter - Commerce Asset. Put your stop below rm6.75. Get in before 10 am.
Friday, September 19, 2008
11:31 am - There is a COG for KLCI !
The question remained is there a follow thru on MOnday next week !
The high volume is confirmed yesterday !
Thursday, September 18, 2008
Wednesday, September 17, 2008
3:24 pm - KLCI continue to move sideway or downward !
FKLI futures does not like the news on the political scene in M'sia.
9:40 am - KLCI continue to slide downward.
At this junction, there is a limit to how much KLCI can slide. There is support at 1000.
Tuesday, September 16, 2008
Monday, September 15, 2008
4 pm - M'sian shares dive on ISA scare
KLCI continue to dive without any recovery until it may hit 900.
Wong Choon Mei Sep 15, 08 3:02pm
Malaysian shares have taken a dive, losing 1.52 percent at the midday break, amid increasing fears of rising political turmoil following a government crackdown last week.
MCPXA mass rally planned for tonight by the opposition alliance Pakatan Rakyat is also keeping investors on the sidelines, dealers said.The planned gathering is to protest the arrest of three civilians under the draconian Internal Security Act (ISA) after market-close last Friday.“There are many factors keeping share prices down, including weak overseas sentiment because of the plunge in Lehman Brothers shares in the US, but for the local market, it is mainly the ISA,” said Malaysian Investors Association president Dr PHS Lim when contacted.“How can you arrest a journalist who was just reporting the situation? How can investors expect to get any transparent and accurate information?” he asked. “This is the core of it - not just whether Pakatan or Barisan takes over the government - but whether we can have a strong regime that can provide a stable, fair and transparent environment for business people and investors.”Sin Chew Daily journalist Tan Hoon Cheng, opposition politician Teresa Kok and MalaysiaToday editor Raja Petra Kamarudin were detained under the ISA, which allows for detention without trial. However, the arrests triggered unexpectedly fierce domestic and worldwide condemnation. The furore has since pressured Abdullah into releasing Tan, who had exposed racist comments made last month by Umno chieftain Ahmad Ismail against the Chinese community.Kok, the DAP MP for Seputeh, and blogger Raja Petra remain in police custody.Disagreement over viewSecond Finance Minister Nor Mohamed Yakcop told reporters over the weekend that the action was necessary to ensure the long-term stability of the country and, at the same time, shore up investor confidence."There might surface some issues related to investments and the inflow of funds over the short term. Investors will wait and see over the next day or two,” he was quoted as saying by Bernama.“But over the long term, there should be no problems. Investors from within and outside the country would like to see political and social stability to enable them to conduct their business in a stable environment."Nevertheless, industry experts disagreed with the minister.Said Lim: “I disagree with him completely. We won’t see investors coming back perhaps until after a new general election. Whoever takes over must show convincing authority in parliament. “This is the only way to have stability because we don’t have transparency. We are not like Japan yet, where the bureaucracy is mostly neutral and separate from the politicians.”Lim expects the benchmark Composite Index to stay weak in the short term, possibly breaching the psychological 1,000-point level soon. However, he expects strong support at 900 points, but warns against technical rebounds.“Shares prices are now very cheap but because of the uncertainty, nobody dares to buy and get stuck. At this point, I don’t see any prospects for a sustainable technical rebound,” he said.The Kuala Lumpur Composite index plummeted to 1,028.17 points, down by 15.86 points at the midday break.
Wong Choon Mei Sep 15, 08 3:02pm
Malaysian shares have taken a dive, losing 1.52 percent at the midday break, amid increasing fears of rising political turmoil following a government crackdown last week.
MCPXA mass rally planned for tonight by the opposition alliance Pakatan Rakyat is also keeping investors on the sidelines, dealers said.The planned gathering is to protest the arrest of three civilians under the draconian Internal Security Act (ISA) after market-close last Friday.“There are many factors keeping share prices down, including weak overseas sentiment because of the plunge in Lehman Brothers shares in the US, but for the local market, it is mainly the ISA,” said Malaysian Investors Association president Dr PHS Lim when contacted.“How can you arrest a journalist who was just reporting the situation? How can investors expect to get any transparent and accurate information?” he asked. “This is the core of it - not just whether Pakatan or Barisan takes over the government - but whether we can have a strong regime that can provide a stable, fair and transparent environment for business people and investors.”Sin Chew Daily journalist Tan Hoon Cheng, opposition politician Teresa Kok and MalaysiaToday editor Raja Petra Kamarudin were detained under the ISA, which allows for detention without trial. However, the arrests triggered unexpectedly fierce domestic and worldwide condemnation. The furore has since pressured Abdullah into releasing Tan, who had exposed racist comments made last month by Umno chieftain Ahmad Ismail against the Chinese community.Kok, the DAP MP for Seputeh, and blogger Raja Petra remain in police custody.Disagreement over viewSecond Finance Minister Nor Mohamed Yakcop told reporters over the weekend that the action was necessary to ensure the long-term stability of the country and, at the same time, shore up investor confidence."There might surface some issues related to investments and the inflow of funds over the short term. Investors will wait and see over the next day or two,” he was quoted as saying by Bernama.“But over the long term, there should be no problems. Investors from within and outside the country would like to see political and social stability to enable them to conduct their business in a stable environment."Nevertheless, industry experts disagreed with the minister.Said Lim: “I disagree with him completely. We won’t see investors coming back perhaps until after a new general election. Whoever takes over must show convincing authority in parliament. “This is the only way to have stability because we don’t have transparency. We are not like Japan yet, where the bureaucracy is mostly neutral and separate from the politicians.”Lim expects the benchmark Composite Index to stay weak in the short term, possibly breaching the psychological 1,000-point level soon. However, he expects strong support at 900 points, but warns against technical rebounds.“Shares prices are now very cheap but because of the uncertainty, nobody dares to buy and get stuck. At this point, I don’t see any prospects for a sustainable technical rebound,” he said.The Kuala Lumpur Composite index plummeted to 1,028.17 points, down by 15.86 points at the midday break.
10:08 am - Market Oulook by Bill Wermine.
Dear Traders,
US Dollar primed to fall !
The ruling party in the US has engineered a massive manipulation in concert with central banks around the world as well as the Saudi/ UAE and Kuwati central banks to raise the value of the US Dollar, drop the oil price, boost the Dow Jones inorder that McCain wins in November. The Republicans will do all in their power to keep power.
Ruling parties and the priviledged class around the world want McCain to win. He is good for business, he and the conservatives want more wars which is good for the defense contractors and the chronies who support him including big oil, big pharma, investment banks and big tobacco.
The problems the US Authorities can not seem to fix are the on going housing collapse, credit crises, rising trade deficit and the downswing in the export sector which is now suffering with the rise of the US Dollar. Europe, Australia, China and Asian countries and Malaysia are much stronger economically and fiscally than the US so once the euphoria of the dollar bulls has run its course.
The US citizens have a negative savings rate, are loaded with credit card debt and are watching their main asset their house plummet in value. Unemployment is now at an 8 year high and rising as whole manufacturing industries move to China, East Europe and other Asian countries. The US is turning to socialism and bailing out the deadbeats and debtors. The Chinese on the other hand have a high savings rate, are turning to capitalism and their economy continues to expand. This should support the AUD
Should the Federal Reserve lower interest rates next week, that could cause downside in the US Dollar. With the hurricane in Texas, this might give the Fed Reserve an excuse to lower interest rates to provide liquidity in this disaster. Already price gougers are selling petrol at USD 25 per gallon, there are over 1,000,000 who are evacuated and need emergency support- the US government will print more money to support these potential voters.
I know this is very contrarian because the financial press and most analysts are super bullish on the US Dollar and say the credit, housing, employment crises is almost over I forecast a turning point in the US Dollar very soon.
US Dollar Index Future ( US Dollar versus a basket of currencies) Note attached chart with high volume up bar at the right end of the chart which is a signal of weakness. The dollar did drop on Friday night in New York.
For our TradeGuider members, I highly recommend you check out http://www.vsaclub.com/ . Every week they trade real time using VSA. Last week they did 8 trades in 4 hours on currencies/ e minis/crude oil and made several thousand dollars real time.You could follow these trades and place in your own account.
This is a members site and there was no marketing only trading. I watched them for 3 hours and it was the real deal.
Have a good week and expect more ranging as insiders and smart money continue to buy quality shares selling at bargain prices. I continue to like Warren Buffet type of shares. My indicators show selling has dried up with these shares so ownership has gone to strong hands who refuse to sell
Bill
US Dollar primed to fall !
The ruling party in the US has engineered a massive manipulation in concert with central banks around the world as well as the Saudi/ UAE and Kuwati central banks to raise the value of the US Dollar, drop the oil price, boost the Dow Jones inorder that McCain wins in November. The Republicans will do all in their power to keep power.
Ruling parties and the priviledged class around the world want McCain to win. He is good for business, he and the conservatives want more wars which is good for the defense contractors and the chronies who support him including big oil, big pharma, investment banks and big tobacco.
The problems the US Authorities can not seem to fix are the on going housing collapse, credit crises, rising trade deficit and the downswing in the export sector which is now suffering with the rise of the US Dollar. Europe, Australia, China and Asian countries and Malaysia are much stronger economically and fiscally than the US so once the euphoria of the dollar bulls has run its course.
The US citizens have a negative savings rate, are loaded with credit card debt and are watching their main asset their house plummet in value. Unemployment is now at an 8 year high and rising as whole manufacturing industries move to China, East Europe and other Asian countries. The US is turning to socialism and bailing out the deadbeats and debtors. The Chinese on the other hand have a high savings rate, are turning to capitalism and their economy continues to expand. This should support the AUD
Should the Federal Reserve lower interest rates next week, that could cause downside in the US Dollar. With the hurricane in Texas, this might give the Fed Reserve an excuse to lower interest rates to provide liquidity in this disaster. Already price gougers are selling petrol at USD 25 per gallon, there are over 1,000,000 who are evacuated and need emergency support- the US government will print more money to support these potential voters.
I know this is very contrarian because the financial press and most analysts are super bullish on the US Dollar and say the credit, housing, employment crises is almost over I forecast a turning point in the US Dollar very soon.
US Dollar Index Future ( US Dollar versus a basket of currencies) Note attached chart with high volume up bar at the right end of the chart which is a signal of weakness. The dollar did drop on Friday night in New York.
For our TradeGuider members, I highly recommend you check out http://www.vsaclub.com/ . Every week they trade real time using VSA. Last week they did 8 trades in 4 hours on currencies/ e minis/crude oil and made several thousand dollars real time.You could follow these trades and place in your own account.
This is a members site and there was no marketing only trading. I watched them for 3 hours and it was the real deal.
Have a good week and expect more ranging as insiders and smart money continue to buy quality shares selling at bargain prices. I continue to like Warren Buffet type of shares. My indicators show selling has dried up with these shares so ownership has gone to strong hands who refuse to sell
Bill
8.34 am - Malaysian stocks seen lower on politics, US troubles
Malaysian stocks seen lower on politics, US troubles KUALA LUMPUR, Sept 15 (Reuters) - Malaysian stocks are set for a rocky start to the week as investors focus on political uncertainty and the fate of troubled U.S. investment bank Lehman Brothers. Malaysia's opposition leader Anwar Ibrahim plans to hold a rally on Monday to protest against a government crackdown widely seen as a move to derail his plans to take power. Organisers say 30,000 supporters are expected to attend the rally held on the eve of Anwar's bid to lure 30 MPS from the ruling party to join his opposition bloc and form government. [ID:KLR278268]. U.S. stock index futures tumbled on Monday, as talks to secure the future of Lehman faltered, and other financial players also faced a troubled future. See "With the U.S. financial markets in trouble, we haven't seen much foreign interest here as well, and this trend is likely to continue for now," said a dealer at a local brokerage house. "And to add to that is the domestic political uncertainty, which has dampened the sentiment even further," he said. Malaysia's benchmark index has fallen about 28 percent so far this year as foreign investors shunned Malaysian equities after resurgent opposition parties inflicted heavy losses on the ruling coalition in a March 8 general election. Dealers said continued pressure on heavyweight planters, such as Sime Darby and IOI Corp, amid falling crude palm oil prices, will also weigh on the index.
Sunday, September 14, 2008
2:48 pm - Chart of the Week - Air Asia
I did talk about Air Asia on Thursday about bullish formation. Today is the buy signal. Put your stop below rm1.05.
Friday, September 12, 2008
9:37 am - KLCI is likely to move sideway too !
Let's see if there is a follow thru in the afternoon.
Thursday, September 11, 2008
10:17 am - Air Asia had a 5 day line change.
However, the volume is low ! Be careful. Air Asia is trending due to falling crude oil prices.
Wednesday, September 10, 2008
2:38 pm - Foundation Course - Sept 15,16 2008
Dear Traders,
When the news is bad, when doom and gloom is the prevailing sentiment, confidence low and political uncertainty is the flavor of the day and stock markets have fallen dramatically the risk is actually low. Many high quality good dividend paying companies are selling at bargain levels. Even Steve Forbes the billionaire investor spoke yesterday in Singapore that the investment structure in Malaysia is stable and there is no reason to be caught up in panic. The panic will pass.
On 15/ 16 September, Mon and Tuesday we are holding our regularly scheduled Master the Markets Foundation course at my office in Phillip Capital Mgt. The brochure is attached.
Only 3 people have signed up because most investors have deserted the market and are not interested in potential profits to be earned. The 3 investors who signed up are learning some methods to enter the market during this uncertainty when risk is low and few others are brave enough to enter. I congratulate them. We will focus on the method which applies to the current market
Because, Martin and I gave our word that we will hold this course, we will hold it even though we will lose money. In life just as in markets not every trade is a winner and thew show must go on.
Any graduates are welcome to attend FOC (Please bring your notes- if you do not have the notes the charge is RM 20 ) and if you refer a guest, in appreciation I will give you 4 audio interviews CDs by Jack Schwager, who interviews 4 Market Wizards, to those persons who refers a guest. These interviews cost USD 99 and give great insight into professional trading.
Let me know as soon as possible .
Have a good day
Bill
When the news is bad, when doom and gloom is the prevailing sentiment, confidence low and political uncertainty is the flavor of the day and stock markets have fallen dramatically the risk is actually low. Many high quality good dividend paying companies are selling at bargain levels. Even Steve Forbes the billionaire investor spoke yesterday in Singapore that the investment structure in Malaysia is stable and there is no reason to be caught up in panic. The panic will pass.
On 15/ 16 September, Mon and Tuesday we are holding our regularly scheduled Master the Markets Foundation course at my office in Phillip Capital Mgt. The brochure is attached.
Only 3 people have signed up because most investors have deserted the market and are not interested in potential profits to be earned. The 3 investors who signed up are learning some methods to enter the market during this uncertainty when risk is low and few others are brave enough to enter. I congratulate them. We will focus on the method which applies to the current market
Because, Martin and I gave our word that we will hold this course, we will hold it even though we will lose money. In life just as in markets not every trade is a winner and thew show must go on.
Any graduates are welcome to attend FOC (Please bring your notes- if you do not have the notes the charge is RM 20 ) and if you refer a guest, in appreciation I will give you 4 audio interviews CDs by Jack Schwager, who interviews 4 Market Wizards, to those persons who refers a guest. These interviews cost USD 99 and give great insight into professional trading.
Let me know as soon as possible .
Have a good day
Bill
Tuesday, September 9, 2008
3:16 pm - KLCI cannot break below 1060
Remember below 1060, KLCI is confirmed head and shoulder pattern. Target is 930.
8.31 am - Malaysian stocks seen following global markets up
Malaysian stocks seen following global markets up KUALA LUMPUR, Sept 9 (Reuters) - Malaysian stocks are set to edge higher on Tuesday, boosted by hopes that the U.S. government's bailout of its mortgage giants will provide continued respite from turmoil in global financial markets. But dealers said gains could be restricted by some profit taking in financial stocks, such as Bumiputra Commerce ;, which gained 3.1 percent on Monday, outperforming the key Composite Index ; which closed up 0.50 percent. "There is no news inflow on the domestic front, so the market is likely to follow the international trend," said a local brokerage house dealer. "However, we can see some profit taking today, which could check the rise in the index," she said. Dealers said concerns on domestic politics may curb trading as investors await the Sept. 16 deadline set by Anwar Ibrahim, a former deputy premier and now the opposition leader, to topple the government. "Politics has been hurting the Malaysian market all year along, and investors would remain cautious at least until the outcome of this deadline, before formulating their future strategies," said another dealer. Malaysian stocks have shed more than a quarter of their value so far this year as foreign investors ditched Malaysian assets after a March 8 general election significantly changed the country's political landscape.
Monday, September 8, 2008
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