Reflexivity..."Bottom-Up"

In the face of a tough market, Alpha decided to change approach by adopting 'bottom-up' strategy. This means I will be stock-selective instead of transacting based on the movement of the benchmark index. With this, I have increased equity exposure (77%) further.

My purchases for today:-

1. Ogawa
- An "old-flame" that still hovers around my previous trading range. Still like its high net cash per share and improving earnings. Technically, it has completed its base-building and looks set for a surge.

2. Yilai
- A technical play with good chance for an imminent upside. Fundamentally, its earnings are decent and its balance sheet looks impressive with a cash pile of RM51mil versus a paid-up capital of RM80mil with 0 gearing.

3. MPCorp
- Attracted at its proposal with 2 rights and 2 warrants at RM1 (two-call where 1st call from shareholders at 0.45 while 2nd call at 0.55 payble from retained earning) for every 3 shares held. Exercise price for warrant is at RM1.00. This will go ex on 29th March 2010.
- Fundamentally, MPCorp is not faring well with 4 consecutive quarters of losses but the math on the proposal looks profitable.
- At 0.62, 3,000 shares of MPCorp amount to RM1,860; and with 2,000 rights at 1.00, the total value for 5,000 shares ex-right is RM3,860. The theorectical ex-price is 0.77. But due to the two-call feature, total investment amount is RM2,760 (1,860 + 450 x 2) with an average price of 0.55. This will translate to a gain of 40% plus 2,000 shares of free warrants. Though the warrants will be out of money, it will surely worth something upon listing and this will be additional bonus for investors.