Friday, May 2, 2008

Bursa ..... honey I shrunk the kids

Bursa was really badly beaten after reaching the high peak at RM 16.00 ++. Today 2 May 2008 at 5.58pm Bursa is trading at RM8.95 one of the biggest down in for overall KLCI index. This blue chip counter shed almost 45% since the the day when US declared the credit squeeze. The impact was even greater after political turmoil as the Opposition won huge by capturing 5 states in Peninsular Malaysia. Bursa used to be a favourite security as the company gives good returns in terms of dividend yield and capital appreciation.
Shrinking Earning

The shrinking earning in Bursa Malaysia Berhad has led to major concern among its major shareholder. I thought of purchasing the share when it is around RM 9.00. Since the local KLSE is traded quite low comparatively to previous year, i am alittle skeptical whether Bursa will still be able to sustain its growth and the dividend payout. If you look at the EPS history

DEC 2007 3 Quarter (10.7 cents)
APRIL 2008 4 Quarter (9.50 cents)
APRIL 2008 1 Quarter (8 cents) <<<<<<<<<<<<<<.......Now
Recall from the previous 1st quarter in 2007 Bursa EPS was 13.5cents, now drop to 8 cents which is 40.7%. Scince this is a growth counter the value of price drop by 45% can have the same co-relationship with the sharp drop of EPS which is by 40%.

Positive Point
Dividen: RM 0.85 <<<..... Base on the Div/P it is estimated about 9%++ as for the price today. I am seriously thinking of buying the counter since they paid so much