The Kuala Lumpur Composite Index (KLCI) rose to its highest level in nearly eight months with trading volume hitting a new record at over two billion shares, Asian markets, which climbed to 16-year highs, were aided by continued gains in their currencies that were led by the Chinese yuan, which hit a new post-revaluation high Last week.
Then property counter become another theme play by punter.
The question is: what happen next?
If you recall 1993 stock market bull run when the stock market is going up. The direct beneficiary is stockbroking firm and restaurant.
When stock trading volume goes up. The main beneficiaries are stock broking industry as their brokerage income would increase. Other profession like engineer would resigned to become a remisier. The only landscape difference is now the commission rate can be negotiated to substantially lower than in 1993. In 1993, commission rate is fixed at 1% of the transaction value but now commission can be as low as 0.3%, A 70% drop.
Punter might remember that in 1993, a stockbroking house market value can be as high as a commercial bank. At that point of time, we do not have universal broker. Now, a stockbroking company can become Investment Banker to collect deposit even brokerage margin has substantially lower. I do not understand why the outgoing Southern Bank Berhad substantial shareholder never negotiate to buy back it stock broking arm and Merchant Bank to form an Investment Bank. CIMB, which itself a leading Merchant Bank and it stockbroking arm a leading institutional trader, do not required Southern Bank Bhd's stockbroking arm and merchant bank. This is a poor exits strategy advised by a foreign adviser.
Another landscape different is now punter can directly buy a counter call Bursa Malaysia rather than punt on individual stock broking firm. If they unable to pick a counter. However, Bursa Malaysia shares price has rise substantially compare with stockbroking company.
If you see punter and retailer earning substantial money from the stock market. They will take their lunch in expensive restaurant and eat something like shark fin on a daily basis. You would find you unable to get a place in such restaurant during lunch time. Thus, I feel TT Resources Bhd is a good bet if stock market continues to rise.
TT Resources Bhd own Tai Thong Restaurant, It also own bridal houses. Other business included : Gloria Jeans Coffee and San Francisco Stake house.
Update: Brokers to gain from big turnover
Brokers are holding large stash of cash
Link: Investment Advisor
TechnoratiTag: Business Commentary competitive Economics Economy Malaysia Opinion finance Shares Stock Market klse
4 comments:
TT chinese restaurants are doing fine but its western operation is not doing too well. I think the controlling shareholders is VT's brother, is corporate governance an issue. Btw, I do think TT is a good punt, small market capitalisation. I think they are the only restuarant listed after eden fall out.
Listed restaurant seems to do better before listing.
Correct, Berjaya Group 's Vincent Tan's brother Danny Tan is one of the substantial shareholder and it corporate office located in Dijaya hq.
However, I think the founder of the company is still managing the company, at least the chinese restaurant.
Peter,
Which listed security brokering firms will see earning improvement in the recent increase in volume? Do you think the chuck of business goes to UB or bank's security firm?
Thanks
The recent increase in volume was cause by retailer rather then institutional investor as majority of the gainer are low cap stock.
However, if the market able to keep it momentum, every stockbroking firm will be gainer eventually.
The question is who will rise first and who will rise later.
If you have limited capital, buy penny stock as you have limited by your own resouces.
If you intended to take over a stockbroking firm and have limited capital, buy the counter which has low market capitalization. Thus, it all depend your intention and your own strength and resources.
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