Within the top 5 gainer stocks on Friday, 3 of them, namely Kluang, Kuchai and Sg Bagan belong to Lee Thor Seng. The remaining two are the high price Panasonic (Rm 38.98) and Nestle (Rm 104.00).
The catalyst is the impending listing of Great Eastern Life Assurance (M) in Malaysia to comply with Bank Negara's ruling that required all insurance companies to have at least 30% local equity participation by 30 June 2018.
Kuchai has 3.032 million share of Great Eastern Holding Ltd (GEHL), the parent company of Great Eastern Life Assurance (M) and Sg Bagan has 1.733 million shares of GEHL.
GEHL is estimated to get about Rm 4.1 billion from this 30% disposal of Great Eastern Assurance (M) and is anticipated to declare a bumper dividend to reward its shareholders.
Kuchai's 3.032 million shares of GEHL is worth Rm 278 million and Sg. Bagan's 1.733 million share of GEHL is worth Rm 159 million. Kluang doesn't have any direct holding on GEHL but it is holding 45.25% of Kuchai and 43.40% of Sg Bagan.
Sg Bagan has 6.46% of Kluang and 12.19% of Kuchai and Kuchai has 27% of Sg. Bagan and 3.16% of Kluang.
I have written somethings on Kluang on 17 February 2017. Click 'One of the most undervalued stocks' for the article.
Kluang Rubber Co (M) Bhd (Rm 4.60)
Kluang's stock price surged on Friday by 26% to form the sub-wave iii of wave (i) of major wave 3 of its mega wave (3).
With net assets at Rm 10.70 I still considered Kluang at Rm 4.60 as very cheap. Its 45.25% of Kuchai and 43.4% Sg Bagan alone is worth Rm 238 million or Rm 3.70 a share. Its Rm 270 million cash as reported in its last quarterly report (30 Sept 2017) is equal to another Rm 4.28. These two items alone is already worth Rm 7.98
Kluang has other available for sale investment as shown in its annual report.
For its quoted shares outside Malaysia, the value stated is Rm 333.5 million (another Rm 5.29 per share). And I suspect the current fair value for these quoted shares can be much higher than the stated value.
But once the current excitement is over, as I have mentioned in my February 2017 posting, holding this stock can be quite frustrating as its share price can remain flat for months.
Kuchai Development Bhd (Rm 2.28)
Kuchai closed limit-up on Friday. Will there be another limit-up on Monday? I don't know. Friday's surge is the sub-wave v of wave (i) of its major wave 3 of mega wave (3). The question here is whether sub-wave v has ended? If not, how high it can go to form its wave (i)?
Sg Bagan Rubber Co (M) Bhd (Rm 3.85)
Sg. Bagan surged in tandem with Kuchai and Kluang on Friday. Before the current up, it has completed its mega wave (1)-(2) and major wave 1-2. The surge marks the starting of its major wave 3.
Priceworth International bhd (Rm 0.295)
Pworth continues to form the sub-wave iii of its wave (v). My target for this sub-wave iii is Rm 0.38, another 28% to go.
KLCI has just completed its mini wave 8. On whether the current run-up is the sub-wave iii or wave (iii), please refer to my previous posting on KLCI.
Dow is about to complete the minor wave v of its mini wave 9. This is a possible point to start the anticipated 15% correction, the major wave 8.
However it is also possible that Dow may extend its current run-up with mini wave 9 having 9 minor waves instead of 5
Or it can also have 9 sub-waves for its wave (v).
The reality is Dow has reached a crucial junction but which routes it will follow only God can tell. That is why the markets can exist.