You Can RUN, But You Can't Hide

Since my last post, KLCI was being pushed up by selective counters related to the government and at the same time has heavy influence on the KLCI. But it can't ignore the world forever as the global exchanges records continuous declines for the past few days. As such, all previous gains by KLCI the past week has been erased as the KLCI declined more than 50 points or 3.46%

Hang Seng index has dropped more than 1000 points since last 2 days and their darling oil stocks like SINOPEC, PETROCHINA and CNOOC are being pushed down by bearish outlook on the world markets. HK-CW has taken a beating in the KLSE as their mothershares in HSI falls from grace, touching below the 25000 resistance. It closes at 24450 points today, down by 1386 points of 5.37%.

DJIAs dropped 277 points triggered by Citibank's announcement of write-offs of bad loans, cessation of dividends and also possible lay-off of it's staff to bring the company back to it's feet. It doesn't help that a couple of days from now, Merryl Lynch will also be posting it's result and analysts expect the same fate as Citibank. Even when Citibank released the announcements of it's losses with news of new investments from Asian and Arab funds, DJIA continued to slide to lower levels.

Point of Entry.

It would be a good time to pick up some good counters if the market were to drop some more. I've been eyeing Maybulk for some time now and also been waiting to accumulate more YTLPOWR and this may be the chance for me to do so. Maybulk has been dropping in line with the Baltic Dry Index(BDI) as it dictates the shipping prices of the industry. Since Maybulk's main business is shipping, the counter moves with the BDI. At present moment, the BDI has been falling day by day from it's high of 11000 to the present 7300. Once it stabilises would be the best time to get Maybulk shares without fear of it dropping more.

Entry points can also be made on HK-CW shares if one has an appetite for high risk high gain plays. Shares like SINOPEC, PETROCHINA and even CNOOC have dropped by a lot last 2 days reaching last years lows, and it would be a good time to accumulate some now if the market were to go on a rebound. Risky though as the HK-CW has an expiry tag and if the market decided to slide more before it can recover at prices you have bought, your money is as good as gone.

Plantation shares which was boosted last week like SIME, IOICORP and financial stocks like MAYBANK, COMMERZ will be picked up by the pre-GE rally fellas again to re-boosts KLCI index once the current downtrend expires. Meaning we all might have a 2nd chance to catch the ferry of mindless speculation for the GE. As warned before though, these play is speculative just like it was last week when it was boosted, any shaky world events like DJIA plummeting can't keep the counter afloat due to lack of fundamentals.