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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Michael who wrote (15129)	3/23/1998 8:50:00 PM
From: Stitch	Respond to of 18056

Michael; Re:SIDBY price target; Earlier this month I had an estimated price recommendation of 2.50Rm before the most recent earnings information came out and bank sale particulars. Since I then I have a new target price of 3.50Rm. Apparently even this may be too low insofar as the market is concerned as the stock shows resiliency (up Monday 14 sen to 4.44Rm.) I agree that it is still premature to buy this or any Asian stock IMO. I am targeting to buy new lows which I think will be seen as the banking drama unfolds. I will let you know when I do buy. (Note: All bets off if China devalues.) Today we are getting a new growth estimate and budget moves here in Malaysia in a speech from Anwar. Yesterday the market moved up in anticipation. I give up on trying to understand investor sentiments on these day to day movements here but remain convinced that Malaysia will be an early recoverer. This is a long term view. Here is an article that appeared last week of interest that reflects another opinion on the valuation. Sime Darby's future remains bright despite recent losses, says analyst By Azlina Aziz The Star KUALA LUMPUR, March 18 -- Having discarded its banking operations, Sime Darby Bhd can now be regarded to be "cleaned" from a burden, and is in a much better position to concentrate more on its other businesses. An analyst said despite the Group's recent losses, its future remained bright as it still has its own value and good assets. He said Sime Darby was quick to admit that it was not an expert where banking is concerned, but does better in its traditional businesses like plantations, trading and manufacturing. The admission coming now is good, the analyst added. Sime Darby Group Chief Executive Tan Sri Nik Mohamed Nik Yaacob, on the release of the group's result recently, had said: "Obviously, we are good at planting oil palm and building tyres, selling motocars and heavy equipment and manufacturing tyres ... but not in banking. Once we are out from the financial businesses, we will concentrate on the other core businesses." Sime Darby had suffered a loss of RM676.2 million. Trading of its shares on the Kuala Lumpur Stock Exchange (KLSE) suspended on March 3, was resumed today, opening 50 sen lower at RM3.70. Its pre-suspension price was at RM4.20. The Group requested for a suspension in trading due to various corporate transactions such as the merger negotiations with Rashid Hussain Bhd (RHB) concerning its 60.35 per cent subsidiary, Sime Bank Bhd. RHB, finally sealed the negotiations on March 10, with the acquisition of the entire share capital of Sime Bank for RM852.24 million. Sime Bank, which suffered a loss of RM1.8 billlion for the half year ended Dec 31, 1997, needs RM1.2 billion in fresh capital to stay afloat. The analyst said by concentrating on its other businesses, especially those operating overseas, the Group would be in a better position to absorb part of its recent losses. However, he did not rule out the possibility that in the short to medium term, the Group's operations would come under pressure due to the current economic downturn. Meanwhile, another analyst said players on the KLSE were curious as to whether or not the requotation of Sime Darby could provide some interest for the otherwise drifting market. Uncertainty also lingers over RHB's expected announcement on how Sime Bank Bhd's recapitalisation will be funded, he said. "The lower opening price this morning was already expected but in the longer term, it (the counter) is a good buy because the Group had managed to sell the bank," he said. He said Sime Darby's prices are not likely to fall to below the RM3.50 level.