Construction shares are getting a lift

27 April 2019

Dear Fellow Investor,

Good news continues to emerge: China has agreed to step up purchases of CPO. Dr. M and his trade representatives have forged several large deals with China including the expansion of the belt and road initiative and the resumption of the ERL project.

Construction shares are getting a lift.

Foreign investors are slowly coming back to Malaysia.

It reminds me of the early rising of the sun as rays of light start to emerge from the dark.

I spoke with the CEO of a prominent plantation company. He told me that for the KLSE and Malaysia to recover,  CPO must recover.  Over 100,000 small holders depend on CPO and with the price drop they have suffered.  Many small towns in Malaysia are economically  quiet and spending has dropped China buying could be the catalyst for recovery.

A weather event would help. Now the growing season for corn, soybeans and wheat is beginning in the US.

Should a drought appear due to global warming the grains would shoot up and CPO would join the party.

For the US grains there does not seem to be a weather premium in the prices meaning the crowd does not anticipate any problems. Guess what ? the crowd is almost always wrong.

Even the continued onslaught of bad news is not depressing prices of quality plantation companies which means the bad news is discounted.

The stability  of oil prices also benefit our countries financial position.

GDP in the US was announced Friday and it came in much higher than expected. This reversed early losses on the Dow and Nasdaq so expect higher Asian markets next week.

Invest well and grow your wealth
Bill

Critter of the week  is the leopard cat. They are used in CPO plantations to kill rats. A leopard cat can kill and eat at least 2 rats a day.