Report on recent simulation activity of Bursa Marketplace

(The figures for this short report has not been included for the moment)

By: Iliyas Ismail

Introduction
            This report seeks to present my results and findings of the exercise for portfolio management using the simulation Bursa Market Place. The simulation commenced officially on the 12^th March and ended on 29^th of April 2018. Throughout the duration, I encountered many interesting challenges and experiences in attempting to make portfolio gains. The findings of the activity are included in the following sections.

Watchlist

In order to bring further the fruition of profits, several stocks were chosen to be put into the watchlist, under the name ‘Profit Watch’. Several stocks that were believed to be performing were hand-picked to be listed. Some were chosen based on newspaper such as the Edge and The Star, and tools such as the alpha indicator and based on beliefs of established companies being able to bring good returns and projecting preferable trends. Companies such as Berjaya Corp, Malaysia Airport and Nestle are picked and added to the watchlist to see if the general perception that these stocks yield favourable price based on their established nature are correct.

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Portfolio list

The portfolio list as of the final day are attached below. As mentioned, several sources were depended on when choosing the stocks including The Edge newspaper, the Star, Bloomberg and annual reports (for checking those stocks shown in newspapers). The stocks were chosen based also on their different industry background, to create diversity and a hope that these stocks would create good returns based on the better companies in their respective industry field.

FGV was forecasted to have favourable returns this year even though there were negative scandal reports surfacing in 2017. However, as the largest crude oil palm producer in the world and links with the government, I have seen a good trend in their returns recently, and The Star newspaper also listed it in their top five most promising stocks of the year 2017 (the Star, 7 Jan 2017) and this was accelerated by new management teams (the Malaysian Reserve, 4 Jan 2018) especially at this time ahead of general elections.

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Here are brief explanations on some of the stock that were still at my portfolio by the end of the simulation.

Sapura Energy was not a good choice to have purchased, and I admit that the purchase was made rather hastily at the earlier part of the duration for the simulation, picked based on their established branding perception. However, constant low returns were seen and I did not want to sell it until the share price at least closes in to break even, which extended until the end of the game.

Hibiscus Petro has an outperform stock from the alpha indicator when I analysed, and it was stated in a The Star report (24 Feb 2018) also that at that time it was also outperforming. A mistake from my part was to buy too many units of stock (100,000) due to the low price of 0.920 earlier on during the game period, (with high amount of cash on hand), however the share price consistently was below the buy price throughout.

One of my main challenges was due to my position of working in the office, and not used to monitoring the stock every consistently. Only later in the duration that I managed to do so by taking the time, but Hibiscus Petro continued the downward trend of its price and resulted in major losses. Hopes to recover from some of the losses by taking a hold position (as the opinion of analyst) did not come to fruition and the game ended with a loss of RM9,5000.

Inari was chosen from the Edge’s recommendation as it was one of the top performers in 2017. From December 2016 to 2017, the share price saw a steady overall increase from RM1.50 to Rm3.50 (Bloomberg). However, for the short duration that I bought it, the price did not increase much from the buy price, in fact for most of the duration it was below the buy price and thus was another disappointment and it stayed in my portfolio throughout.

Timecom was one of the earlier stock that was bought during mid-April based on a good reading rating of the alpha indicator. At a negative turn of events, the price fell for the most part from Mid-April until end of April, and hopes were given towards the eventual rise of price based on the many analyst consensus advocating for ‘hold’ instead of sell. By early May, the price saw an increase.

Stock price for Time Dotcom. (Insert Figure 3 here)

Trading list

The first stock that was bought was Time dotcom based on the first page of trading history, and it remained in the portfolio throughout as mentioned. During my trading activities, I relied heavily on tools such as Alpha Indicator, heatmap and screener, and Air Asia X according to Alpha Indicator, was outperforming and I bought some shares, which a few days later I sold when the price increased. This quick decision was made after I realized my other shares in Tenaga, Sapura Energy and Hisbiscus were showing losses, and the moment I realize Air Asia X shares were making profit, I decided to sell it to keep my ranking high on the leaderboard.

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Page 1 of history

Other recommended stocks in Alpha indicator that outperformed were Takaful and I decided to sell it a day after purchasing since it was making profits as well, and again, to offset the affect of my steady losses from the other stocks. F&N was bought and sold twice since it was to many of my other classmates, a preferred choice since it was displaying steady increase in prices and I made much profit from this exercise.

Tenaga Nasional was finally sold at 27^th April after being purchased on 13^th of April, after finally exceeding the buy price. The rest of the stocks in Kejayaan Inc portfolio was intended to be sold on the 30^th April itself, but it seemed that it was the day when the simulation ended and I couldn’t sell them off.

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Page 2 of history

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Page 3 of history

Final Result

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The end result could have been better. I fell from rank 11 at Mid April to 29 by the end. My main objective was to avoid being to low in the ranking, and at least that was met.

Suggested improvements

1) Due to my time as a full-time employee, I find it hard initially to keep checking the stock prices, but eventually I did manage to be able to find time between work to keep monitoring the movement of stock prices. In the future, I would be better able visit the site and track the movement more regularly.

2) More time should be invested to explore the annual reports of the companies to get a deeper insight on their company performance. Although admittedly this is a better strategy when it comes to longer term trading simulation activities.

Iliyas Ismail is a financial analyst