FBMKLCI (1,512)
KLCI added 12 points with moderately higher volume. It is possible that the 12 points green candlestick is the first candlestick of sub-wave iii of wave (iii). If KLCI can open with a 'gap' tomorrow and can put on another 10 points or more, then it is quite confirmed that sub-wave iii has started. For sub-wave iii of wave (iii), it is expected to be dynamic with high volume.
Fintec Global Bhd (Rm 0.09)
Fintec gained half a sen today with small volume. Looking at its 1-Year chart, this rebound is likely to be the mini wave vi of (ii).
The nature of business of Fintec I have covered in my past articles, I will not repeat here.
At the end of August, Fintec reported a strong quarterly result for quarter ending 30/6/2020. Earning per share is 16.66 sens and net assets per share is 55 sens.
Profit for the 3 months period of Rm151 million consists of Rm24.214 million from sale of marketable securities and Rm128 million from 'Fair Value gain' on investment securities.
The main contributor to the fair value gain of Rm128 million was its 25.3% holding (517 million shares) in Focus Dynamic Bhd. The share price of Focus improved from 68 sens at 31/3/2020 to 85 sens at 30/6/2020.
For quarter ending 30/9/2020, I have computed the fair value gain of all the investment securities of Fintec and it added up to a staggering Rm698 million. And again the main contributor is Focus with its share price improved from 85 sens at 30/6/2020 to Rm2.22 at 30/9/2020. Focus closed at Rm2.28 today.
With fair value gain of Rm698 million, Fintec is likely to announce an earning of around 50 sens a share and net assets per share of Rm1.00 for its quarter ending 30/9/2020.
Unlike glove stocks, where the earnings are all cash, solid cash, the earning of Fintec is from fair value gain - paper profit. The moment the share price of Focus drops from its current Rm2.28 to Rm0.85, all the fair value gain will just disappeared.
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