Tuesday, July 03, 2007

Construction took the limelight

Dow closes 120 pts up, but STI only up 19 points. Quite disappointing, actually...

More news on construction stocks. CSC announced today that their wholly owned subsidiary, L&M foundation specialist pte ltd, had been awarded sub-contracting work from M/S Sambo Geo-Tosfoc Co Ltd for foundation engineering works for Marina IR. The contract is worth S$54 million and is expected to be completed this Nov, 2007. This 54 million contract is in addition to the S$240 million (Marina IR too) announced on 21st May.

There is also soil investigation works for Sentosa IR amounting to S$6 million. Total order book stands at approximately $387 million. This is good news indeed, but I think most of it had been factored in since the news of the 54 million contracts had been reported much earlier (but is not officially confirmed) and gave rise to the price increase from 0.400 to 0.420 range.

CSC closed at all time high of 0.470, intra day high of 0.480. Let's see if tmr it will close at flag target of 0.475.

Lian beng announced that it had acquired a 40% interest in the share capital of Rocca investment pte ltd. As such, Rocca becomes a wholly owned subsidiary of Lian beng. The core business of rocca is in the development of mixed property. I wonder how investors will react to this (maybe they already had...seeing how the price jumps from 0.420 to 0.435 range). Lian beng closed at 52 weeks high of 0.495 (intraday high of 0.515) with very high volume.

Yongnam also broke resistance to close at 0.520, intraday high of 0.535, with high volume. Contracts announcement are pending so all construction stocks are rallying strongly, regardless of general market sentiment. If you didn't own any construction stocks...you better have a good reason, haha :) Last time, govt announced that more contracts for IR will be released between June - July period. We just started July, so I guess any Fri now, we should be looking at trading halts for the construction stocks. Even before they halt, 'insiders' should already know and will probably cause a big jump in price with big volume. That happens the last few times.

Straits asia didn't go up despite the excellent buy signal. If it didn't go up, should come down. Perhaps it's still finding base before it can move up again. Must close at/above 1.54 before we can see more upside. Let's see how this works out.

Swiber finally closed lower after 3 consecutive days of furious rallying. Might as well. Too fast too much isn't good for anybody. Swiber single handedly wiped off most of my losses, but I must not be sentimental towards any stocks. If it broke uptrend, I will not hesitate to dump it. That must be the way. I'm saying this in case I got too sentimental towards any particular stocks.

I think it's time to think of an exit strategy. All the gains are just in paper if I didn't sell and take profit. I'm nearing my square one status (zero losses) so I guess now is a good time to start thinking how to exit and convert my paper gains into realised gains to really wipe off my losses. Once it hits less than 1k losses, I'll start to sell some of my holdings already. The weaker one goes first

1. yellow pages
2. straits asia or choffshore (depends)
3. part of csc (i'm holding 25 lots)

The rest I'll probably hold first and ride out the uptrend. It will be jittery times ahead as I will try to protect my capital first (gains can wait). My first priority is to erase my losses, all others can wait. My stronger holdings (pac andes, swiber) i'll hold on first. Construction stocks should probably do well, at least till end of this year.

Sell on your way up, and sell when you can, not when you have to.

Dow up 46 points, europe all green. (nervous times ahead with 4th july, independence day for US....terrorist must be planning for a big one)