Monday, September 22, 2008

HDFIV Report Card @ 22 Sept 2008

HDFIV is currently beating KLCI by 8.39% (15 Sept 08: 6.96% at a loss of 14.40% (15 Sept 08: 15.96%) while KLCI suffered a loss of 22.79% (15 Sept 08: 22.47%. KLCI dropped below 1,000 points last week and managed to rebound with plantation sectors playing a major role.

Our fund has managed to widen the gap with KLCI's performance with IOI's price rebounding due to stronger CPO price.

We did a minor reshuffling of portfolio to take advantage of our relatively larger fund size. We will allocate a small portion of our fund for short term trading to take advantage of prices yo-yoing in the uncertain market. Downside of such strategy is of course limited as the prices that we are going in are still attractive in terms of value. We have bought 1,500 units of BJTOTO at RM4.38, averaging down our cost per unit from RM4.74 to RM4.50 (10% cheaper) and at the sametime raising our exposure on BJTOTO from 10% to 28% of our fund. We have also disposed of 1,400 units of IOI at RM4.60 with losses of RM467. We are willing to realised loss as the strategy is to sweep back the stock at at lower price with expected profits to be made. This is a short term trading strategy deployed to take advantage of price movements but subject to (1) our fund is relatively big to be able to allocate a small percentage for shor term trading; and (2) prices we go in for short term trading has to make sense in terms of fundamental.

Asset Allocation:
Cash remained at about 20% after our portfolio reshuffling to incorporate short term trading strategy.

Generally, in my opinion, the investors are pretty tired with the political development. In fact, if Datuk Seri Anwar Ibrahim is unable to topple the Governement by his self-imposed deadlines, guess the market might settle down with some short term stability. Market will be very much driven by development in the US. At the time of writing, Dow Jones IA and regional markets have been showing positive results due to the huge plan by the Government to save the dying investment banks in the US.

We have cash and will continue to average down our holdings.

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