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When
the Glove Sector was killed off by certain Local Funds since the start
of last week, coupled with some incompetent reports from select
"professionals", you might be asking, since the funds have left Gloves.
Where would they go next? What is the next thematic / rotation play?
I
can with great certainty share with you, regardless of which sector
they move to, it wont move up and these Local Funds wont be able to make
money from that sector. The Glove Sector is the one supporting the
KLCI index, it is also the one that is supporting the other ancillary
sector (be it healthcare or indirectly linked such as Bursa due to high
volume). Gosh, even the water, electricity, natural gas consumption by
these Glove Manufacturers are supporting the utilities sector for the
government when other industries have slowed down as a result of the
pandemic. I like this message by Principal Asset:
Her
views were echoed by Principal Asset chief investment officer Patrick
Chang, who said that the FBM KLCI has largely been driven by the
healthcare sector, which has seen medical glove manufacturers, in
particular, raking in bumper profits amid the Covid-19 pandemic.
Compared
with its regional peers, he said the KLCI has been the biggest
outperformer in ASEAN year-to-date, having only been down by about 6%
compared with Thailand (down 22%), Singapore (down 22%) and Indonesia
(down 25%).
These countries, he noted, do not have a massive glove sector like Malaysia does.
"Glove
makers are making historic amount of profits as we speak - this tells
you at the end of the day that it is backed by fundamentals.
- Tech ? Down
- Banking ? Down
- Plantation ? Down
- Wood? Down
- Consumer? Down
- Utilities ? Down
- Telco ? Down
The
list goes on. Banks don't even give Local Funds the yield anymore. So
where are the Funds going to park your funds in search of yields? Your
best bet is for the Glove players to be generous with their dividend
this year and fill in the gap left by other Blue Chip stocks. Hence, if
Funds continue selling down and creating nonsense justifications to play
down the sector, trust me, even the Glove Sector cant save the Fund's
performance this year. Why? Glove Players would probably need to use
their cash holdings to support their share price.
So, now where else do you turn to? Sure,
one can artificially prop up some of these sectors last minute to try
to beautify your Index. However, the market will not respond to your
nonsense. In fact, the market always punishes greed, pride &
laziness. You may want to rotate out and switch to other sectors,
but no one is following you. So you are just playing with yourself. And
if you are playing with yourself, the share price will not go up. This
is because all market participants need to be on the same page for a
company share price to rise. Its as simple as that.
This
is my message to Macquarie's unbelievably incompetent and questionable
Research Report Downgrade of Top Glove yesterday. This has caused such a
reputation dent to your Bank that if I am senior management or the CEO
of the Bank, I would summon the head of research to reprimand how his
action brought disgrace to the organisation. Why am I saying this? Just
look at what Macquarie send to my mailbox this morning.
My message to Macquarie - After
adding salt to injury in the market yesterday, you have the nerves to
reiterate outperformance on Bursa stock to promote your call warrants on
Bursa. How dare you email me with his garbage? Bursa's share price and
volume has been reaching record high because of Gloves sector. If you
want to say Gloves sector's supernormal profit in 2021 will never repeat
itself and its a one off, hence justifying pegged to 2022/2023
normalised ASP earnings, do the same for Bursa. Downgrade to
underperform as well and pegged it to 2022/2023 normalised Average Daily
Volume. Be Consistent in your message - Macquarie. Dont be joke.
Ps: McQ, just bring back the previous Glove Analyst - Denise Soon
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