Malaysian business services sector

I'm not too hot on the Malaysian business services yet. Loan growth in the area is quite anemic but if you would like to play the business recovery, stay away from anything that requires massive amounts of capital spending.

Businesses won't be induced to spend a lot yet, but they will be wanting to do some small capital expenditures on items that are of good value. Companies still need services and may be induced to spend as products need replacement. I did come across an office supplier AHB holdings but I'm concerned about potential cash problems. They did an SPA sale and lease back for some of their land and this should allay their finances for a while.

Last quarter's revenue did double from the previous year. So it has revenue momentum.

The outlook is good if the company can solve its current liquidity problems, but the stock could very well be worth zero if it has no money to pay its creditors. Overall, though the environment is lacking for business services companies in Malaysia.