Friday, June 12, 2015

Latest action: Sold Parkson and bought back CMPH

I sold Parkson Retail Asia for a loss of 10%.

There are 3 risks which have surfaced since I last bought it and out of which, I think 2 will have really undesirable consequences which I didn't account for when I brought it. So I cut loss.

1) Ringgits continue to weaken, although I expect weak currency to continue, the pace which it is weakening is leading to a more scary second reason

2) (

Possible downgrade by rating company Fitch. Although it is not a sure thing, and consquences unknown, it is seldom pleasant when a downgrade occur. Capital flight when US raises interest rate is a real threat with real percussion to the economy. It never rains but pour for Malaysia recently, with the 1MDB scandal and Mahathir's Salvos all unnecessary distractions. The constant flow of bad news from Malaysia Airline is  not helping matters.

3) The third and last straw is the possibility of MER outbreak. I already exposed to Retail play through LMIR, I do not want to stretch myself. 

The last reason is not related to Parkson's business but my gut feel that the market correction is too shallow. 

As for CMPH, I sold it earlier simply to lock in profits and I have already said I do not find anything fundamentally wrong  with the company. The close to 20% correction since I last sold it allowed me to increase my holding to 7 lots with no extra costs, so I buy. I was lucky, it was falling so quickly in that 2 days that I keep wondering if there is some bad news breaking. It took really a leap of faith to go back in again. Luckily, the rise is also as quick in the last 2 days with no bad news reported. 

Let's keep fingers crossed about Greece. 

Also, it is too short a message to write in a new post, but I think Currency is the next crisis rather than US interešt hike. 

So do examine your portfolio to prevent overexposure to EM currencies.

Singshipping with its revenue reported in US should be insulated in this currency mess, if any. 

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