Stock Rally Really Unsustainable!

I chuckled when I read the Business Times.

Yesterday Business Times posted the following article: Malaysia's stock rally 'unsustainable': Deutsche

Here's the screenshot.

• MALAYSIA's stock rally is “unsustainable” and investors should sell palm oil producers such as IOI Corp, Kuala Lumpur Kepong Bhd and banks including AMMB Holdings Bhd, Deutsche Bank AG said.
  
  “The market is in denial of worsening economic conditions; this is a market far from offering bargains,” Deutsche said in a report today. “The short-term rally” won’t continue beyond March and this is an “excellent opportunity to take profits.”
  
  Malaysia’s Kuala Lumpur Composite Index, which dropped 39 per cent last year, has risen 3.9 per cent this year, the second best performing benchmark measure in Southeast Asia. Official data in Malaysia points toward a weaker-than-anticipated economy while the government’s fiscal deficit may widen and capital outflows continue, Deutsche said.
  
  Malaysia’s industrial production fell the most in four years in November as a global recession and weakening business confidence eroded demand for goods. Loan approvals in the country slumped 44 per cent in November while applications sank 33 per cent, signaling a “worsening economic environment,” the report said.
  
  Malaysia’s fixed income market is bracing for a “considerable” amount of refinancing this year, estimated at RM50 billion, the report said.
  
  “Much of this has yet to be priced in by the market,” it added.
  
  Shares of IOI, Malaysia’s largest palm oil producer, slid 0.5 per cent to RM3.78 as of 10:07 am, headed for its lowest close since December 31. Kuala Lumpur Kepong lost 0.5 per cent to RM9.80. AMMB, the No. 5 lender, declined 0.8 per cent. Deutsche also said investors should sell SP Setia Bhd, the biggest Malaysian property developer, and Parkson Holdings Bhd, an operator of department stores in China.
  
  The Composite Index is trading at a price-to-earnings multiple of 12.7 times 2009 estimated earnings, a 15 per cent premium to the region, Deutsche said in the report.
  
  Malaysia’s central bank in November cut interest rates by a quarter of a percentage point to 3.25 per cent, the first cut since 2003, and the government announced a RM7 billion (US$2 billion) spending plan to revive economic growth. - Bloomberg

Today, the Business Times carried the following article Deutsche: KLCI rally unsustainable

• MALAYSIA'S stock rally is "unsustainable" and investors should sell palm oil producers such as IOI Corp Bhd and Kuala Lumpur Kepong Bhd (KLK) and banks including AMMB Holdings Bhd, Deutsche Bank AG said.
  
  "The market is in denial of worsening economic conditions; this is a market far from offering bargains," Deutsche said in a report yesterday. "The short-term rally" will not continue beyond March and this is an "excellent opportunity to take profits".
  
  The Kuala Lumpur Composite Index (KLCI), which dropped 39 per cent last year, has risen 3.9 per cent this year, the second-best performing benchmark measure in Southeast Asia.
  
  Official data in Malaysia point towards a weaker-than-anticipated economy, while the government's fiscal deficit may widen and capital outflows continue, Deutsche said.
  
  Malaysia's industrial production fell the most in four years last November as a global recession and weakening business confidence eroded demand for goods.
  
  Loan approvals in the country slumped 44 per cent in November while applications sank 33 per cent, signalling a "worsening economic environment", the report said.
  
  Malaysia's fixed-income market is bracing for a "considerable" amount of refinancing this year, estimatd at RM50 billion, the report said.
  
  "Much of this has yet to be priced in by the market," it added.
  
  Shares of IOI, Malaysia's largest palm oil producer, rose 0.5 per cent to RM3.82 yesterday, while KLK fell 1 per cent to RM9.75.
  
  AMMB, the No. 5 lender, fell 0.8 per cent to RM2.51.
  
  Deutsche also said that investors should sell SP Setia Bhd, the biggest Malaysian property developer, and Parkson Holdings Bhd, an operator of department stores in China.
  
  The KLCI is trading at a price-to-earnings multiple of 12.7 times 2009 estimated earnings, a 15 per cent premium to the region, Deutsche noted.
  
  Last November, Bank Negara Malaysia cut interest rates by a quarter of a percentage point to 3.25 per cent, the first cut since 2003, and the government announced a RM7 billion spending plan to revive economic growth. - Bloomberg

Yesterday already published. Today still want to publish?

LOL!

Ok. Business Times, I got your point and Deutsche Bank's point too.

:D