Wednesday, November 9, 2016

TA and TAGB: The 2 stocks that took the brunt from Trump's almost failed election

Market was jittery. The world seemed like it was going to collapse. S&P's futures dropped 800 points triggering a circuit breaker. It seems like it is now recovering with both DJIA and S&P indexes are on the positive. So now the market is discovering and anticipating what kind of president Donald Trump is going to be. Pro-development? Pro-business?

Of course, during the run towards his presidency, he was expected to lose - and that has some bearing towards 2 stocks. The 2 stocks are TA and TAGB. Just look below.

TA Global over last 6 months

TA Enterprise over last 6 months
Why? Trump and TA Global have a project together. Well, now it is all luck as along the last few months Trump was a depreciated brand - i.e. bad for business partners. That seems to turnaround together with the stocks valuation of TA Global and TA as their shares were two of the not so many which rose yesterday.

The project with Trump managing the hotel is in Vancouver Canada

Both of them rebounded when it was almost certain that Trump was going to win. Prior to this (and now as well), TA and TA Global are trading at below 1/2 of their NTA.

TA and TA Global's share price rose yesterday

The drop in TA and TA Global's share price actually happened over last 2 years. The market is either not knowledgeable or fond of foreign exposed companies. That is quite ironic, as now many of TA's assets are overseas. When Malaysian currency depreciated, it should have been positive for these 2 companies but because of their exposure to foreign denominated loans, in the books it look really bad as they took losses from currency exposure. However, many people did not realise that the assets that they sat on appreciated in value as well just because of they are in other currencies in countries that are in appreciated against RM - Australia, Canada, China, Thailand. In fact, net net it is positive as their asset value (for sure) should be higher than the loan value. It is mainly accounting - not so much about the fundamental of the business.

Despite all this, I am sure there were some uneasiness and concern as well among the members of family of TA when after the Trump is declared the winner, they bought some shares of TA as shown below (just yesterday).

Just in case, you may want to read this.

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