On 01 Mar 2018 (Thu) - USA President's Donald Trump proposed tariff on steel imports will be 25% and aluminium imports will be 10% and hence, affect Malaysia steel manufacturer's share price drop significantly. The following show the details of price dropping from closing price on 28 Feb 2018 to 05 Mar 2018 (3 trading days):
| Closing Price on 28 Feb 2018 | Closing Price on 05 Mar 2018 | Changes | ||
| RM | RM | |||
| PressMetal | 5.80 | 4.97 | -17% | |
| Masteel | 1.21 | 1.00 | -21% | |
| ChooBee | 2.60 | 2.36 | -10% | |
| Ssteel | 2.22 | 1.97 | -13% |
However, on 06 Mar 2018 (Tue), those companies' share price rebounded due to the news stated that the steels export to USA are not much, the policy won't significantly affect the company.
| Rebound on 06 Mar 2018 | ||
| PressMetal | 4.23% | |
| Masteel | 4.00% | |
| ChooBee | 3.81% | |
| Ssteel | 3.55% |
On 07 Mar 2018 (Wed), those companies' share price drop again. (KLSE=Increase: 272; Decrease: 687)
| 07 Mar 2018 | Closing Price | |
| PressMetal | -4.44% | RM4.95 |
| Masteel | -9.62% | RM0.94 |
| ChooBee | -0.00% | RM2.45 |
| Ssteel | -3.43% | RM1.95 |
Lesson learned: When bad news came out, don't so fast to buy the failing knife especially those companies' share price previously already increased a lot. Increase fast, drop also fast. You don't know how much and when they will drop until. Always hard to predict what news will come out.
If in future the policy doesn't implement, those companies' profit higher than last year, share price will increase again. Need to do homework and understand their main market is in which country, whether will affect their company or not. Need to understand the fundamental of the company. If want to buy the failing knife. However, bear in mind that steel and aluminium are Cyclical share.
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