I have bought a good number of Mumias Sugar shares this morning ranging in price from 7.60 to 7.80. I also intend to pick up some more next week depending on how it moves from here.

Why?

The price has gone down by over 20% since the release of H1 results notwithstanding the generally positive outlook. In my view this drop has been overdone.

I have been watching the volumes and I can see there are quite a few guys trying to pick them up and I decided to try and ride the wave.

I am aware that lots of peeps are worried about the end of COMESA safeguards but I doubt whether they will mean too much for MSC, at least not within my speculation time frame. Besides oil prices are VERY high and hence I would expect world sugar prices to remain high.

CAUTION:A little while ago, I had projected that MSC would rebound from 8.50 but the whole market went down dragging down Mumias with it. I am now thinking it is about time it (MSC) rallied.

I have been wrong before on this one, so investors with no stomach for the possibility of losing money had better keep off.

What do the others say?

Today's particular buy was a smash and grab job. I intend to exit with a 10% gain and will be willing to jump ship with a 10% stop loss. I am however expecting an upswing on Monday and if so then I will indeed BUY more with similar intentions.

However, should the price drop more substantially say to Kshs 6, I will sell at least 25% of my current portfolio (70% is in financials) and deploy the proceeds into MSC. At 5/=, I will INCREASE it to 50% of my portfolio. That illustrates my view that threats of COMESA sugar are overrated. Risky, but that is what the stock market is about, isn't it?

@g267. Thanks for the warning. Kindly note that is why I have indicated that I am speculating. If MSC was to however to fall to 6, I would be investing for the long term and I am would be willing to wait it out.

I maintain a minimum of 10-15% of my investible funds in speculative counters, sometimes more depending on the opportunities in the market.

The rest of my stash is in fairly safe counters e.g. Jubilee, KCB, DTK & Equity.

I also buy some fairly outlandish shares when no one else is looking at them e.g. I have held onto C & G for the last 2 years and fortuitously increased my holding on the day of results. I have now sold about 30% of the C & G's and I have money to burn on MSC. I also have agrics - Limuru Tea & WTK. Should I profit from the Mumias move, the money will find its way straight into Jubilee. Its day is coming as sure as the sun will rise tomorrow.

@nahdy, It's not really bravery but a calculated risk. As you can tell from my other holdings, I am a fairly conservative investor - you can tell from my level of diversification (although primarily in financials). This gives me some room to make forays into the likes of KQ (this one is KILLING me) and MSC from time to time with their incredible volatility. I also take my gains fairly regularly on my risky (high beta) portfolio (e.g. I have traded in and out of HFCK several times in the last year).

As for MSC, at 7.60, the price is about 1/2 of its high of 15, shortly before results were released last year. While H1 profits fell, you will note that they were actually better than H2 of 2009-10. Of course COMESA is looming but so too is the Ethanol and Water projects. So, I figured I can make a play on it knowing full well that it is a gamble that I am taking.

For me, the main risk is actually politics with the current shenanigans. This could result in the counter not making the antipicated upward push!

Actually, It COULD GET WORSE, but we will deal with it if it does. If it is any consolation, I am betting that it will not!

BTW, @X13united, which is the wrong side of the Equator? AND where is Njung'e our very own SUGAR BARON?