Since my last update on KLCI on October 25, KLCI has formed a complex corrective wave (ii) of abc-X-abc and has started the sub-wave i of its wave (iii). If KLCI con continue to move higher next week, we can assume that wave sub-wave iii has started.
But if KLCI were to continue with its side way movement next week, then it is still stuck in its sub-wave ii.
Fintec announced its quarterly earning on Thursday evening after the end of the trading session.
Earning per share is 61.52 sens. Net assets increased from 35 sens to 91 sens a share.
Despite fantastic figures reported, Fintec started today's trading at 11 sens, went to a high of 12 sens and closed the day at 10.5 sens gaining only 1 sen. It shows that investors pay no attention to 'paper gain' unless and until it is realized with solid cash on disposal.
Further checking revealed that the fair value gain was mainly contributed by its holding in Focus Dynamics that has its price increased from 85 sens on 30 June to Rm2.22 on 30 September. The fair value gain for its 517 million (before the 1:3 share split) Focus was Rm708 million. It should be noted that at today's closing price of 65.5 sens ( after the 1:3 share split) for Focus, the fair value lose due to focus at per today is about RM131 million
Looking at Fintec's 10-year chart, since its March's bottom of around 2 sens, it has completed its major wave 1-2.
From the 1-year chart, the 12 sens high recorded this morning is likely to be the end of sub-wave v of wave (i) unless Fintec can move higher next week for a higher sub-wave v.
If Fintec starts to move lower next week, then today's rebound is more likely to be the mini wave 2 of C of major wave 2 that has a potential low of 5 sens. This option is unlikely unless the price of Focus starts to plunge in the next few weeks.
Fintec Global Bhd -ICPS (Rm 0.05)
Fintec-PA, with face value of 8 sens, that will expire on 4/12/2027 has a conversion price of 16 sens before the current on-going Right-Issue. The holders of Fintec-PA are entitled to convert Fintec-PA into Fintec ordinary share by (i) Convert 2xFintec-PA(2x80 sens) to 1xFintec or (ii) Using 1xFintec-PA(80 sens) plus cash of 80 sens for 1xFintec.
With reference to the Circular issued on 9 October related to the current Right-Issue, click 'Circular' for details, on page 58 & 59, the tentative computation showed that the new conversion price after the Right-Issue is about 11 sens, that is 5 sens lower than the original conversion price of 16 sens. Need to wait for an official announcement from the company to confirm the new conversion price of 11 sens. Rightfully the company should officially announce the new conversion price for all ICPS and Warrants on the Ex-entitlement date of the Right-Issue (on 24 November).
Looking at today's closing price of Fintec (10.5 sens) and Fintec-PA (5 sens), I noticed there is a mismatch in price between the two if I assumed that the final new conversion price for Fintec-PA is 11 sens as computed in the 9 October 'Circular'.
Since the face value of Fintec-PA is 8 sens and if the conversion price is 11 sens, I can either (i) exchange 11/8=1.375 shares of Fintec-PA for 1xFintec or (ii) I can use 1xFintec-PA (8 sens) plus cash of 3 sens to get 1xFintec. As per today closing price, when Fintec is at 10.5 sens, rightfully the price of Fintec-PA should be (10.5-3.0)=7.5 sens instead of 5 sens. The difference is 2.5 sens and that is 50% of 5 sens.
I hope my analysis is on the right track, or have I made any mistake? or any wrong interpretation? If I am right, then today's Fintec-PA price of 5 sens is greatly underpriced.
Dow added 783 point or +2.67% within two days and closed above the 30,000 level. With this 2-day's surge after its completion of its 5-wave c of sub-wave ii, Dow has started its sub-wave iii. Currently Dow is on its mini wave 1 of iii.
The mega wave (3) is expected to take another 10 years to complete. Since the mega wave (1) gained 357%, the mega wave (3) is expected to gain at lest 357% in a normal 5-wave formation unless the super wave VII is going for a 9-wave formation then the magnitude of the mega wave (3) can be smaller than that of the mega wave (1).
From the mega wave (2)'s low of 18,213, a 357% gain will bring the mega wave (3) to above 80,000 in 10 years.
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Dow closed Thursday trading with little change. But with the initial down followed by a small rebounds on Thursday, another followed through rebound in the next two trading days will see the completion of diagonal triangles.
But if Dow were to move lower in the next two trading days, then we can rule out the diagonal triangles with the 5-wave down-trend formation that will lead to the a-b-c wave ii option that I mentioned yesterday.
Out of my expectation, Dow has a 344 points drop on Wednesday. The drop may appeared to be small, only -1.16%, but it causes a change to the chart pattern with great implication - a possible terminal diagonal triangles formation.
This pattern usually appears at the termination points of larger pattern, indicating exhaustion of the larger movement. This 344 points drop brings back the super wave VIII option that I mention previously as one possible outcome again.
Besides this bearish option, another possible bullish option is the expanding A-B-C major wave 2 option with a -14.8% correction that I mentioned on Tuesday
But I am praying very hard that Dow can continue to drop for another day or two to complete an expanding sub-wave ii of major wave 3 formation. If this is the ultimate outcome then Dow will continue with its new record setting next week. Hopefully by the end of this week we can have a clearer picture.
Dow surged 470 points (+1.6%) to a new record high of 29,950 at the close of Monday trading session after Mordena's released preliminary data showing its vaccine candidate was 94.5% effective in preventing Covid-19 infections.
With the Dow surpassing is previous record high of 29,568 and with the possibility of a covid-19 vaccine be available in the near future, Dow is likely on its way to form the mega wave (3) of its super wave VII.
The mega wave (1) took 11 years to move from 6,469 level from March 2009 to 29,568 level on February 2020 for a gain of 357%. The mega wave (3) is expected to have a magnitude that is at least equal to (if not more than) that of the mega wave (1) of 357% gain in a 5-wave movement for its super wave VII unless the super wave VII is a -9-wave movement then the magnitude of mega wave (3) will be smaller than the mega wave (1).
Assuming a minimum gain of 357% for mega wave (3) in the next 11 years in a 5-wave movement, Dow has a minimum target of 83,000 by the year 2031. In general the third wave is expected to be longer than the first wave by Fibonacci ratio of 1.618 or 2.618 in a 5-wave movement.
Dow after reaching a new intra-day record high of 29,933 on Monday, it closed
the day trading at 29,157 level, gaining 834 points or
+2.95%. The run continued into Tuesday gaining another 262 points (+0.9%).
With great possibility, this is the sub-wave i of the wave (i) of its major wave 3 of mega wave (3).
I still need the Dow to continue with its sub-wave iii's run into
record territory to above 30,000 level to put beyond any doubt that mega wave (3) is the option.
It is possible that the current major wave 2 of (3) correction is not over yet. There is a possibility of an 'expanding triangle' A-B-C major wave 2 corrective wave formation of -14.8%.
The super wave VIII option that I mentioned previously may appear to be very unlikely at this moment but technically it cannot be ruled out yet. Just to be a little cautious I will keep it at the back of my mind for a while until such time that it can be ruled out technically.
