Market Trends Watch

"Opportunities always come after panic"

When there is panic, there is opportunities. Is just the matter whether are we able to identify it.

Covis-19 clearly create panic to market, many shares had been sell down, market it self don't care whether the company business is effected by the virus or not, price continue to pressure down, this create big discount and opportunities.

As investor we want to know what is the opportunities after Covis-19 settle & under control. Before we aim for the opportunities what is the timing to enter the market?

When Covis-19 likely will under control?

Covis-19 is clearly fear on alkohol & high temperature. The Covis-19 (Coronavirus) start mid-December 2019, which the China is -6 celsius. So, when actually China will turn warm?

On Wuhan weather forecast, March will start to be not so cold & turning warm. We strongly believe Covis-19 will able slowing down on March and under control after April.
*When we are experience enough in the market, we know shares market is always one step ahead the real situation. By waiting until the virus under control probably the company that we want to buy already rebound & will loss the chances.
*We strongly believe, now (15/2/2020) should be a good timing for start invest and we will see good fruit for harvest during virus under control in April.

*All highlight hot country have very little case of SARS & death (SARS is same family group of virus of Covis-19).

*Singapore hot country record high SARS spread record (Singapore is a very crowded city).

*Most of the country recorded high spread record is north side country where the virus is easy to spread in cool temperature.

*SARS under control around July when China is in hot temperature environment.

What industry have the opportunities?

1. Tourism?

*Forget about tourism. this year they will not making good. Example, a hotel room is empty for 2 month, mean the year business 2 month is gone. Another example, flight tiket not sold for 2 month, mean the 2 month business is total gone. For restaurant, people not eat in restaurant today impossible for them to come back tomorrow for ask for eat 2 meal extra.

*All hotel, Aviation, theme park, tourism is not going to pay good dividend this year. Even after the virus is undercontrol business back to normal, they still need to cover the losses in during business is empty.

*Counter to AVOID this year Genm, Genting, Airasia, AAX, Airport, Shang, GCE, Avi, Iconic, Landmark, OWG.

2. Insurance?

Insurance is sell down cause by fear of increase insurance medical claim cases if the Covis-19 outbreak in Malaysia. However Malaysia is a hot temperature country. The virus is not easy to spread in Malaysia.
*The sell down of insurance create big opportunities and discount on the shares price.

*Counter to look at Takaful (now RM5.03) & Allianz (Now RM14.78).

3.Crude oil business?
When Covis-19 virus outbreak it clearly effected the demand of crude oil, e.g. city quarantine, tourism stop, flight reduce, transport on road reduce.

*Crude oil price drop from 08 Jan 2020 (USD65.67) to 15 Feb 2020 (USD52.05).

*We strongly believe, when the virus under control, demand of crude oil will increase.
*Counter to look at Hibiscs (now RM0.895) & Carimin (now RM1.21).

*Crude oil inventory start over supply since the virus outbreak.

4. Technology stock that non-related with the virus?

*Some potential growing technology counter also sell down by virus fear, but clearly it totally not related with each other, this create opportunities.

*counter to look at Krono (now RM0.89) & GHLSYS (now RM1.58).

5. The exchange, the monopoly business, Bursa?

Bursa now is RM5.69. Very rare we will see Bursa trading at below RM6.00.
*Not many opportunities we able to see the PE of the monopoly business (BURSA) PE24.75 is near to ROE24.46. In normal situation the PE is always higher than ROE because of the monopoly business.
*If happen PE is below the ROE, this will be a very great opportunities to grab it.

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SARS vs Coronavirus
*cause by same family of virus.
*SARS during 2003 cases reported higher in cold temperature countries compare hot temperature countries.
*Writer "guess" the virus might not easy spread in high temperature environment.
*SARS under-control after July 2003 (when the north site is in hot temperature season).

KLCI
*Rebound after Jun 2003
*KLCI take 6 month to rebound on the SARS effect.

Opportunities
1. Insurance
*insurance like takaful (drop 30%) & Allianz (drop 18%)
*Market is worry on in case virus outbreak to Malaysia, number of insurance claim will increase that directly give impact to the insurance revenue.

2. Tourism
*Sunreit (Hotel, Shopping mall, Sunway Pyramid...), YTLREIT (hotels)
*Genm (drop 10%)

3. Not disease related by effect price drop (technology)
*Krono, GHLSYS, UWC

***China & HK having very bad experience on SARS outbreak during 2002-2003, they able to control the disease with in 10 months. With the hard & painful experience make them more effective in disease control. Thus, it will be under-control less then 10 month & market have opportunities to rebound.