GOOGLE IS COMING TO BURSA MALAYSIA!

It was noted in the The Star reported on Friday (November 2nd) that OSK will issue Call Warrants on GOOGLE (yes, that GOOGLE, which is about the best company on earth, although I’m putting my money in VM Ware, thank you). The Call Warrants will have an exercise price of US$680. Since Google is now at US$707, the price of the call warrant could range from anywhere between US$40 and above. At about RM140 per call warrant, even 1,000 shares would cost a whopping RM140K! But it seems our friends at OSK have found a creative way to make this instrument cheaper. You will need 3,000 call warrants to convert into 1 Google share. This gives a reference price for the Call Warrant around 0.11 (11 cents), or saying that Google has to move beyond US$778 to make the Call Warrant profitable. No wonder they're saying the share$850!

Being a Call Warrant, there is extreme Volatility involved. Thus, it is important that when trading this new instrument, we use the same strategies that will be used when buying a Call Option on Google. Look at Google’s chart. It’s obvious that Google is on a tear, only seeing occasional pauses at the 10-Day moving average and when RSI-2 becomes “oversold.” Looking at this chart, Google would make a good candidate for a run-up to Earnings in 2008. But being in Malaysia, the speculators will probably run this up as if there’s no tomorrow! Lets see how ridiculous it gets. For the record, Google has not performed well from November to April, netting a loss of -1.54% from 2006 to 2007. Conversely, it netted gains of 13.84% for May-Oct 2006 and 43.11% for May-Oct 2007.

This invasion of foreign Call Warrants is actually good for the local markets, as it allows us locals to invest in global growth from Malaysia. Hopefully, Google is the start of a wave of "hot" companies from the USA (especially tech stalwarts who are leading the Web 2.0 pack). The Chinese invasion has of course been on our shores for quite sometime, with household names such as Petrochina and China Mobile. Check out the charts for yourself on Stockcharts.


Chief Shook