Thursday, July 25, 2013


Dear All readers,

Thanks a lot for supporting! Would like to let you know that I will be away from Malaysia starts from 26/07/2013 until 3 of August. It's a bad timing as SONA Petroleum is going to be listed by 30th of July 2013. Hope that you all can make some money from it, but I think the return gonna be more if you were to buy and hold it.

As a result of this bad timing holiday (I'm very excited actually, it's been years that I never go holiday), I don't think I will have enough time to look at the market or give any comment when I'm not around. Thanks a lot for following this blogspot and I hope to share more with you after I'm back!

I will miss the market badly! Cheers!


Wednesday, July 24, 2013

SPAC Boom! (Part 1)

Before telling you my rationale for investing in this stocks, pls let me explain to U whether what is SPAC. SPAC stands for Special Purpose Acquistion Company.

What does SPAC mean?
According to Wikipedia, A special-purpose acquisition company (SPAC) is a collective investment scheme that allows public stock market investors to invest in private equity type transactions, particularly leveraged buyouts. SPACs are shell or blank-check companies that have no operations but go public with the intention of merging with or acquiring a company with the proceeds of the SPAC's initial public offering (IPO).

How does it works?
1st There is a group of specialist who used to be the top management of some industries such as Oil & Gas, mining, property or even food and beverages. These people are experienced and have good connections among the industries and they are capable to run a company and they are tired of working for other people (my assumption, anyway, who don't want to be their own boss?). Hence, these great people had came together and wanted to do something "BIG" but their issue with them was, they are lack of $$$ to do "BIG business". So what can they do if they are lack of $$$?

Here comes the concept of SPAC where the top industry guys can gather the investors and invest in their experiences and expertise. Why do the "Smart person" wanted to share their expertise with those small investors like us? As we know, usually this kindda smart person can always look for those big investors or some big fund that can afford for this kindda project, but why are they not looking for them this time but turning to those small investors? Too good to be true isn't it?

Why are they looking for US instead of those big tycoon???
Well, I believe that human will always have something behind their mind before they do anything and that's what we call it motive. Why do these smart people wanted to get money from small investors like us and go through tonnes of grilling from the SC before they can list their entity while things can be done easily if they look for big fund investors or some big venture capital? There must be some reasons behind it!

As what I can think of, those big funds or those tycoon will always look for good deal and will always try to get big chunk of the shares and benefits from those "smart people" and this will make those smart people to get squeeze badly and end up with only a little return for their effort. On the other hand, they could also lose their control towards the major sharehholders or even worst! At the end of the day, if the project is successful and the big investors will always get the company to get listed and make money by selling parts of their shares.

In order to avoid being milk badly from those big investors, those "smart people" are willing to go through some tedious process to get their asset listed as SPAC where they can have almost full control of the company and being protected by the guidelines of SPAC too!

Is it good for small investors like you and me?

As what I said above, there must be some thing behind those smart people and that makes them turn to us instead of those big shots but are we in danger? Will we be their lunch?

As we know, SC is  the regulator of Bursa Malaysia and they knew wery well that this is an important place for those company to gather money from investors to grow big and this is also 1 of the instrument for the goverment to make sure the economy growth as well. For your info, the SC will always try very hard to protect the investors in the market. Why? Who else is going to invest in stock market if everybody is losing money?

As a result, the SC had came out with a set of very strict guideline to protect the small investors especially towards the SPAC's investors. So what's their move?

1st The most important guideline is that the SPAC will have to keep 90% of its money from IPO into the bank and this money will be safeguard by a trustee appointed by the SPAC when they go for listing.
As a result, the management will not able to touch the money or spend it unless it is for asset acquiring.

2nd The SC had given a timeline of 3 years to the management to do the asset acquisition.
If the management failed to acquire any asset within that timeline, the 90% of the proceeds from IPO will be given back to all the mother shares investors
As a result of this, the down side risk of the investors of mother shares is only 10% of the IPO proceeds. It's not easy to get an investment that will pay you back 90% of what you invested and give you a high return. I would rate this as a very safe play.

3rd Moratorium to the initial investors.
The initial investor who are also the management will have a moratorium for not allowing them to sell their mother shares until certain timeframe as well as condition that will stipulate in the prospectus.
In the case of Sona, the Initial investors and management can only sell the shares after they are able to generates one year of audited revenue from the commercial production of its qualifying asset.
Presently, the only restrictions on the transfer or sale of shares are imposed only on the shares held by the Management Team and the initial investors who invested in the shares of the Company at prices lower than the issue price of the IPO shares and such restriction is from the listing date of the SPAC up to the completion of the Qualifying Acquisition. However, the new Shares arising from the exercise of 50% of the Warrants by the Management Team which are held under the SPAC Moratorium will still be subject to the SPAC Moratorium, until its upliftment 1 year from the date of the completion of the Qualifying Acquisition.
This will make sure that no management can run before you if the share is not doing well! As for your info, Sona is having the strictest moratorium among all the SPAC which project a very good image to the investors.

Other than the 3 clauses above, there are still some clauses are there to protect small investors like you and me. Anyway, these 3 clauses is good enough for protecting the shareholders. You know when is the due date, you know your down side risk and you know that management can't run before you. I think SC had did a good job on this and the retail investor are well protected for the SPAC.

To me, I think this SPAC is a very good instrument where both of the parties are being well protected and giving us a chance to join in those company that is just in developing stage as this is the stage where you can always get big gain. 

I will share with you about my darling stocks in the next part of SPAC Boom part 2. Stay tune! 

Disclaimer: The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Monday, July 15, 2013

How to secure your jewel OSK?

1st of all, I would like to congratulate those who followed my buy call on Puncak and I'm so happy as some of those customer did call me and tell me about it. To me, I think Puncak still have lots of potential and let's get our finger crossed!

The Hidden GEM!

After the previous post, there are lots of friends and clients had gave me this question. Can we really win the "war" and avoid our shares to be buy over by the offeror? 

Even though we have ruled out that the highest possibility for the MGO is to achieve more than 50% shares and make it conditional, but we have to be careful that this might turnout to be compulsory take over or get more than 90% which will trigger the market spread issue. So what should we do?

The easiest way to make sure that this company will remain listing with the recent MGO is by ensuring 25% of the shares holding will not fall into the hand of the Offeror. This translates into 242,105,730 shares or a  sum of RM 416,421,855.6 at the price of (RM1.72 per share) in the market.
In order to comply with the market spread regulation, the company has to make sure there are 10% of shares are floating in the market or in the hand of minority shareholders. 

According to what I've posted on the previous article, Tan Sri is now holding about 36.72% That's mean if there are 25% shareholders didn't sell their stake and keep holding their shares then the offeror will not able to take the company go private!

I know, its not easy to have such a big amount to take up such huge amount of shares all on our own just like what had happened to HLCap but I've learned something since I was young is 
Unity is Strength. 

The photo above shows the power of Unity!

How to do that? 
1st You can share this blog and ask ur friends who own this stock to read this. I'm not trying to advertise my blog or what, but this blogs help u to tell ur friend why do he need to keep or even buy more of this share!

2nd I would advice all the shareholders for not accepting the offer and HOLD the share!!!
U knew how much the share value and the potential of the company, so Y selling???
To all those dear remisier and dealer who are reading this, you can help your client by advising them not to accept the offer too! This is because those uncles and aunties don't know much and U do play an important role to make sure this market is a place for small fish like me too! Or else, no one gonna go in to the market anymore!

3rd Buy the share!
This might sounds crazy to you but to be frank, I'm still calling a buy and buying for myself too! Why?
Do U think Tan Sri is not smart? As I explain before, Tan Sri is a very very smart person who is good in doing business and also an Investment banker! So do U think its stupid to follow smart money? The only risk for following smart money this time is afraid of being eat by the smart money!
Don't worry, your risk is just few hundred bucks as there is a willing buyer to buy it from U with RM1.68 for the time being and your reward will be getting back more than what U invested in future! In short, the down side risk is minimal and the upside is there as U knew how much the share price should worth! 

On the other hand, ask your friends to buy too!  We create demand for the shares and show the power of minority shareholders! Your friends and you wouldn't be losing money as this shares worth more than what its trading currently!

Some might ask, if the share really worth that much then how come the price doesnt reflect now? 
The answer is simple, 1st the market is inefficient and 2nd thats what value investing about! If every shares had already fully reflected the real value of the share, then U wouldn't have any chance to do value investing already!

The Trading Price
Btw, 1 thing that I notice and I felt interesting is the current trading pattern for OSK where they are trading above the offer price. Why?

1st Just like what I said previously, the boss are playing psychological game with those uncles and aunties. I offer U RM1.68 and now trading at RM1.7-RM1.72. Good deal to sell in the market right? So will the buyer who bought at RM1.7 and above going to accept the offer? I've no idea, but this might happen.

2nd Speculation that the offeror going to revise the price? Potentially, but let me get enough acceptance at this level 1st. So that I can decide a better price or lower price if I've got enough support for now.

3rd Looking at today's trading volume, I really can't understand who is the one who are queueing to sell at RM1.70++ and also who are the one throwing at RM1.70. Do they know what are they doing? Or this is not the retailers who are throwing but an invinsible hand that is throwing the shares to scare everybody off?

Looking at the price now, I still think that the risk of the minority shareholders that their share being taken over is still very big, it will be better off if its trading at RM1.90 or higher.

Too bad that I'm nor rich enough or else I'm going to do the job like what the YNH Property boss did to HLCap. Lol..

Last but not least, the RHB 16.09 cents dividend is on its way. Will the management of OSK reinvest it? or take the cash? It's an interesting question isn't it? If they reinvested in it, thats mean 1 OSK will own more than 0.25 shares of RHB compare to before the reinvestment.

The Winner of the game
1st Tan Sri wins if he able to privatize the company below RM2
2nd Tan Sri wins if he is able to make the deal turn unconditional which means 50%+1 acceptance
3rd Tan Sri lose if he fails to make the deal turns unconditional.
4th Tan Sri lose if he fails to add up more stakes in the company.
5th Minority who knows the value of the company wins as long as the company is not being taken over!

There are some people saying that the MGO can turns out to be VGO after achieving more than 50% acceptance. Im not sure whether how true is that, but I've consulted some of the colleagues in advisory site, they said that is not possible. 

To avoid your shares being taken private, you can
1.  Hold tight as its not a junk stock but a deeply undervalue stock.
2.  Buy more for yourself as like what I'm doing and ask your friend to buy too! 
3. Ask your friends to read this and try to convince them to hold or even buy!
4. By doing so, I believe we will lessen down the supply and increase the demand and I bet that U know whats going to happen next, right?

Disclaimer: I've no intention to push up the share price but giving an independent view on the company itself and no information should be concluded as buy or sell, please consult your personal remisier for your personal investment decision. I will not pay for your losses but I don't mind you to buy me good food if U made money by following my Investment Thoughts. Cheers! Huat ah! 

Friday, July 12, 2013

A letter to OSK's Shareholders.

When I first heard of the announcement from the radio, I was like going to show this face to the offeror.
DAFUQ??? RM1.68 only???

My clients are going to kill me as I had told them that this is a good share! This is a real surprise as it come even earlier than RHB Cap!

But after looking at the Offer Doc, I've felt much more relief. This is because its a MGO not a VGO and the offeror is forced to make an offer due to the increment of shareholdings from 32.3% to 36.72% within 6 months and the offeror intended to remain the listing status of the company. 
  That's mean the offeror is not going to take the company private. Be mindful, even the offeror is not intended to privatize the company at this stage, but things can change rapidly to the situation. How???
As you can see from the last paragraph, the offeror may do something else if they fail to comply the public spread which is at least 10% share floating in the market. If there are less than 10% share spread in the market which also means in the hand of retailers or non major shareholders, then the Bursa Malaysia will suspend the stock.

If thats the case, the company can do lots of thing like invoke the take over where all the remaining shareholders will get the price of RM1.68 or the latest revise price.  

Is that the end??? NO!!!
No, I'm sure that is not the end! Tan Sri Ong is a very very smart guy who is also a businessman + Investment Banker! I can say his move on this is  well ploted! WHY???

1st, Let's look at the value of OSK. Do you think the OSK worth only RM1.68??? I can assure you that OSK worth much more than that!!!
Without looking at the cash, but just merely looking at the RHB Cap shares that is own by OSK. According to Kenanga Research on Feb 2013, OSK has 245,000,000 shares of RHB Cap. 
According to the annual report of 2012, we can see that the total issued shares of OSK is 968,422,919.
 245,000,000 divided by 968,422,919 equals to 0.2529
What does this calculation mean?
This proof that every OSK share has 0.2529 shares of RHB Cap share!!!  
With the closing price of RHB Cap on 10/07/2013 which is RM8.57. This means the 0.2529 share will worth abour RM2.167 !!!
This is just a simple calculation of the RHB Cap that owned by OSK, and this had ommited the cash as well as other property such as land in Jalan Ampang and some other buildings and also the 16.09 cents dividend that will be pay by RHB Cap soon, this will be around RM39,420,500 CASH!
So do you think this is fair and reasonable to other shareholders??? 
I can't wait to see whether what will the Independent Advisor say about this deal. Unfair but reasonable??? It's Unfair and Unreasonable to me!!!

What's the motive? 
Obviously, Tan Sri Ong knew the value of the shares of OSK and he thinks that the share price is badly undervalued. According to my calculation of RHB asset, it's a 30% discount by excluding the other assets. This can easily turn out to be 40% by including the other cash and property. So to privatize the company is definitely a good thing to Tan Sri Ong.  

1. Why do he place such a low price and saying that he is not intending to privatize the company and maintain the listing status? Was it due to the ruling?
Yes, according to the ruling of bursa. He has to do a Mandatory Take Over Offer.

If its so, is this a good chance for him to own more shares? 
The answer is YES! 
As U can see in the Condition of offer. The offer will turns to unconditional after Tan Sri has acceptance of more than 50%+1, which means the shareholders who accepted the offer will get money and the shares will belongs to Tan Sri. This means, he had successfully buy more of the very undevalued stock!

How to get 50%+1???
after deducting the shares that own by Tan Sri Ong and PACs now, which is 50% minus 36.72% which means Tan Sri Ong will need another  13.28%+1 shares will turn the offer to unconditional!
As we can see, from the 3 years chart of OSK, the stock has the highest point of RM2.23 on 17/12/2010 which is about 3 years ago. As a result, there are quite a lot of "long term investors" who are not savvy enough who get caught at that time will throw the shares to him or even in the market due to the impatience in them and some of them don't even know that this is a MGO but believing that this deal will certainly go through without realising their rights to reject the offer!!!

Why are they throwing in the market? This has to do with the psychology and the knowledge of the investors! As the offer is just about RM1.68 and the shares had moved up to higher level in the market, hence, the old uncles and aunties will think that this is a good deal rather than RM1.68 and decided to sell it in the market which I think the buyer who moved up the price could possibly be the offeror(not allowed to do so in ruling) or some 3rd party who sees value in the share! On the other hand, some of the investors doesn't know that they are this MGO is just a compulsory act and doesn't mean that this company is going to be private!

Even though Tan Sri can only mop share that is below RM1.68, but don't u think there r some willing buyers who will help him to mop the shares in the market below RM2 and accept Tan Sri's offer? I think that's possible and U have to figure out what am I saying here. Stock market is as dark enough. LOL... On the other hand, Tan Sri is still buying cheap shares as long as the purchase is below RM2.

*Please forgive me for having such a Conspiracy theory but this is share market, anything could happen in share market.

 2. As what I had mentioned above, and this stock is badly undervalued and this is not making sense. So other than just buying the shares, will there be any motive behind?
Personally, I think that other than just buying the share, this method is also 1 of the method that to create awareness among the investors that this share is badly undervalued and its definitely a good buy! 

This can be proven that everybody was looking at this deal and the newspaper had started to report as well as those analyst are shouting that this is not fair by showing the valuation. Of course, I'm 1 of them that telling you how much do OSK worth and I've been doing this since last year! (This can be proven by some of my clients, I've been telling that OSK is a good buy and the only issue and risk is how long can you wait until it realise its value)

3. This is always the best thing to do. He is trying to PROTECT his assets!
Why? As he is able to grab more shares, hence he will be able to get tighter grip on his company. As long as he can increase his stake to 40%+ or even 50% then its hard for other ppl to steal his company and he can always demand a better price when there are other people wanted to buy up his company! 

So getting limelight on OSK and letting people know their value which will causes more demand to the shares and heading to higher share price. Good move isn't it???

SO, will the company being taken private in this MGO???

To me, I think the probability is very low. Why???

1st Scenario (Impossible)
Sri get 90% + 1 of the shares acceptance, this shows that the company had failed to comply with the market share spread. As a result, Tan Sri Ong has 2 ways to choose. 1st, delist the company and he may invoke the offer just like what is happening to Latex now. The only different is that Latex is giving better price and its a VGO. Do u think those top 30 shareholders are nuts? According to the annual report of 2012. there are 22.11% of the shares are in those big player. Do U think they will give it to Tan Sri? So this is almost impossible.

On the other hand, Tan Sri can look for other options such as selling some of the shares he own until its below 90% in order to remain the listing status. But seriously, to get 90% acceptance is really mission impossible.

2nd Scenario  (Impossible)
Compulsory take over offer? NO! In order to turn the offer to compulsory, Tan Sri need to get a total acceptance of 90% shares that he hasn't own. As per the announcement, Tan Sri is holding 36.72% which means there are 63.28% are in the hand of public. In order to make it to compulsory take over offer, the 90% of the 63.28% amount which is 56.95% need to accept Tan Sri's offer.
This adds up to 93.67% acceptance. 90% is already ridiculous to me, so do u think its possible to hit 93.67% ??? Hahahahahahaha.....

3rd scenario (High possibility)
In order to make the offer become unconditional, Tan Sri Ong needs 50%+1 where those who accepted will have to surrender their shares to Tan Sri Ong. Such event wouldn't make the offer as compulsory take over offer, but will only let Tan Sri Ong walk away with more shares than he has right now.
As you can see from the announcement in Bursa Malaysia today. They had purchase another 2,000,000 shares (approximately 0.2% which means Tan Sri now had increased his shares holding from 36.72% to 36.92%) at the price of RM1.68 and they will continue to buy if its below RM1.69.
As a result, he is going to benefit from this move.
On the other hand, if he is able to make this deal unconditional then he can extend the offer and also revise the offer price. This will make him own even more shares with a little higher price like RM1.75!

To the shareholders who are reading this, You can stop this from happening by holding on to your shares and do't accept the offer or even selling in the market! This shows that you believe in the value of the shares. U should also ask ur friend who hold this shares to read this blog so he won't sell the shares too! LOL..

4th scenario (Probably but unlikely)
The last scenario is that Tan Sri failed to more than 50% acceptance and make the offer unconditional. As a result, those who accepted the offer will get back the shares instead of RM1.68 cash. In this case, its clear that the shareholder will be the winner of the event while Tan Sri will walk away with nothing but some advisory fee for RHB Investment Bank!
I think this is the reaction of Tan Sri Ong for the last scenario. LOL..

Eventhough Tan Sri Ong were force to make a Mandatory General Offer but he is definitely smart enough and this is definitely a good move by using the ruling! Why?

1. He can own more shares with a cheap price.
2. He may get even more shares by increasing the price a little by little which will also own more shares.
3. If shareholders are not smart enough, throw more shares to him and achieve the 90% mark where he could delist the company then its the best as he will get the share with "cheap cheap price" only.
4. Even he could not take all the shares, but this is definitely 1 of the way to make everyone to aware about how good OSK is and causes the price to move up!

Wow!!! I saw lots of birds being killed with 1 stone only!

Dear Shareholders, how can u defend your asset?

1st. Do not accept the offer!
2nd. Do not sell your shares at this level as this is not the price that the share should be!
3rd. If you still have spare cash, maybe you can buy more of this share. As long as there is no seller, hence the share price will move up gradually.
4th. You can pray that some hero will come out and whallop the shares which just like the case of HLCAP!
5th. Good Luck to you all!

GOOD LUCK and HUAT AH! Disclaimer: No information should be concluded as buy or sell, please consult your personal remisier for your personal investment decision. I will not pay for your losses but I don't mind you to buy me good food if U made money by following my Investment Thoughts. Cheers! Huat ah! 

Tuesday, July 9, 2013

The Dawn Raid Episode 2 (PUNCAK)

I was talking about the Dawn Raid few days ago and in order to make things clear, I had consulted some of my friends whom works in the advisory firm.

The question was, can hostile take over happen in the case of Puncak Niaga?
NO! This is because to take over a company, it's compulsory to acquire 90% of the remaining shares not own by the party. So if one party holds 43% while another hold 45% which they rejected each others offer hence the take over will not be successful.

But, the case will be different! As 1 of the major shareholder, they can throw the management and the board! As a result, they can throw them away and push through the sale of assets! This will need about 50% +1 of the shareholders to agree! (If I'm not mistaken)

As a result of that, there are still chances and reason behind for the Selangor Govt to mop the shares from the market!

Why do they give free Warrant at such timing???
As I said before, this warrant gonna give the major shareholder a tighther grip to the company. But be mindful, If someone exercise the warrant before the deal was done this gonna dilute the earnings  that you are going to get for selling the water assets!

Anyway, the benefit is that the warrant will definitely move higher when the share price rocket up! This will make the shareholders to earn more for selling their warrant in the market! Be mindful, the major shareholder going to earn as well.

Is Puncak Niaga a Good buy right now?????
According to what I saw today, the minutes chart had shows that there are support at the RM2.55 level!
If this going to happen again tomorrow, this means there are ppl supporting it at RM2.55 and it's definitely a good buy at this level!
This shows that buying at the RM2.55 level will be a lot safer. 

Still not convince of Puncak?

 Reasons for me to buy back in!
1st  The previous deal offered by the Selangor Govt on February which translate to around RM2.40 per share (Be mindful, this was before the warrant)

2nd If U were to buy it in at RM2.60 which is the closing price today, thats mean you are buying all the assets and business of Puncak at this price. Assuming that the RM2.40 will be remain, thats mean you are paying RM0.20 for Puncak's Oil and Gas Business and some other business too!

3rd Puncak is going to pay their Final Single Tier Dividend of RM0.05 where the ex-date will be on 11/07/2013. As a result, this will lower your cost to RM0.15 for the other business!

4th The 1 free warrant for every 10 existing shares.

So with RM0.15, you can get the O&G business as well as free warrants. Isn't it a value buy?
You may say that it might go down lower, but who knows?

 Rm2.60 now will offer you a chance of potential upside as well as free warrant and 5 cents dividend. Good deal?

On the other hand, I think KPS will be a good bet as well, don't forget that they are 1 of the major holder of the water assets as well! Selling those assets gonna give them good money too! Does that means, bumpers of dividend is on its way? Personally I think thats what it gonna be and thats why I feels like buying it as well. Were supported at the level of Rm1.85 today.

As u can see, this tussle had been going on for years. Even Tan Sri Khalid wanted to wrap things up before september, but do u think Tan Sri Rozali will be let him walk away so easily? Will it last for another 6 months or even longer? That's the only risk that I see but it will be alright if you don't mind to invest it for long time! 


Disclaimer: No information should be concluded as buy or sell, please consult your personal remisier for your personal investment decision. I will not pay for your losses but I don't mind you to buy me good food if U made money by following my Investment Thoughts. Cheers! Huat ah! 

Monday, July 8, 2013

Will the Dawn Raid Repeat again? After Guthrie now Puncak Niaga.

 "The Dawn Raid" was a famous history in our investment field where it was helm by the current Selangor MB, Tan Sri Khalid Ibrahim whom was also the ex PNB's CEO (1979-1994, according to wikipedia).

The Dawn Raid is where our PNB gets to take the Guthrie back to Malaysian from the Britains. The Malaysian was holding about 25% of the shares that time and they need another 15% to becom the major shareholder. In order to do so, they plan to buy the stock over from most of the major shareholder at the same time in order to not letting the Britains knew about the plan.

On 7th september, thats the day that Tan Sri attack. Even there are some issue like rejection from the OCBC side to sell the share, but Tan Sri was able to mop the shares from the market and able to get 50.41% of the company's shares within 4 hours without the knowledge of Guthrie's management and major shareholders and that make us able to bring Guthrie back and merge it with Sime Darby in the later days.

To those who are interested with the dawn raid, u can check it here, but its only available in "Bahasa Malaysia" and thats how Tan Sri Khalid famous of.

Why do I relate the story of The Dawn Raid with Puncak Niaga? 

1st, Puncak is strongly related to political party and the owner as well as the founder is Tan Sri Rozali who is believed to be a successful business man who is close to the UMNO and I believed thats the reason why the Selangor govt was having a hard time to take over the water assets.

As per last week, there are news saying that the Selangor Govt had get nod from the federal govt to take over the asset while the Selangor Govt had agreed to Langat 2 project if the cost is reasonable. Would that be a deal between them? Give me the water asset and green light for ur mega project? High possibility i guess!

Now, lets get back to Puncak, eventhough the Federal Govt had agreed on the take over to commence, but will Tan Sri Rozali giving his water asset our with kind heart? I guess thats 1 of the reason Tan Sri get lucrative remuneration for this year, because u need to dig the gold mine real hard before u letting go the Gold mine!

As I said, Tan Sri Rozali wouldn't let go the gold mine so easily, he will surely ask for good price or something Ridiculous! I guess thats the reason why Puncak niaga was flying this few days. As a result of that, The Dawn Raid keep on popping in my head! 

Why? As per the latest Annual Report, we can see that the total holding of 3 major shareholders in Puncak is
1) Tans Sri Rozali with 40.83% shares (by using Corporate Line and Central Plus)
2) Lembaga Tabung Haji with 6.40% shares
3) EPF with 7.71%

But according to the latest announcement, where we saw Tan Sri Rozali had increased his stake while EPF had ceased from substantial shareholder and the holding now is
1) Tan Sri Rozali with  41.34% (according to 20 june 2013's announcement)
2) LTH still 6.4%
4) EPF with 4.95% ( according to 20 june 2013's announcement)

With it, we can see that there are 47.31% shares are free floating in the market. Why do I say Hostile take over?

As we can see, the surge of the Puncak Price come with a great volume and I had did some calculations on that,

3rd july 2013 : 34,983,200 was traded
4th July 2013 : 21,692,000 was traded
5th July 2013 : 34,674,500 was traded

Total vol traded was 91,349,700 where total shares of Puncak is 411,142,895. That shows 22.22% shares were traded? According to my observation, there are big eaters where they place 500 lots each time to support or to buy the shares, how many retailers can fork our RM100k each time to buy a share? There must be something big brewing! If it were to be the Selangor Govt, So how many percent have the Selangor govt mopped from the market til now? And how many % have EPF sold?An I'm certain that, the Selangor govt is smart and they may have moped the share of Puncak before all this happen, so how much have they mopped? Have they met and reached any agreement with other substantial shareholders?

Why do Selangor wanted to repeat the Dawn Raid, thats because having Puncak will make no hurdle for them to take over the water assets. The only concern here is, there are some ammendments in the regulations last year. The one that I mentioned is that, in order to take over the company, U will have to get 75% of the shareholders to agree on it. As a result of that, what if the Selangor have 47% shares while Tan Sri Rozali having 42% shares? The hostile take over will only be successful if only the 75% shareholders mentioned are not from the major shareholders that r having tussle. 

On the other hand, there are free warrants coming out and the ex-date is on15 July 2013. Why do it come at this time?

To me, this corporate exercise is one of the way for Tan Sri Rozali to have tighther grip on the company. As we can see, Tan Sri had just got a handsome money from remuneration and he will get to hold more share holding in the company if he were to exercise the warrant!!! Why? If Tan Sri is the only one who exercise the warrants, thats mean the shareholdings of other shareholders will be diluted and its harder for other to attack his company.

But be mindful, everything is double edge, A knife can helps to cut and it can cut u too! Why? As we can see, Tan Sri get more shares for holding the shares, the one who is mopping now can get the free warrants  and exercise it to get more share holding too! That's the bargaining chip for them! and if that's the case, I think the warrant gonna be really valuable for all the shareholders and it's going to bring handsome gain.

After all, I think the story of Puncak still hasn't end and this time its going to be real and the Minority Shareholders are going to be happy if hostile take over is happening as this gonna drive the price fly up high. May All the shareholders gonna earn big this time or it hits the target price of Kenanga Investment Bank research which is RM3.5 per piece! Huat ah!

As a shareholder, I think I'm going to hold as I believe this gonna give good return, but be mindful, correction might come anytime as it had shot about 90 cents is a week. As I believe, active trading will have higher possibility to mistakes and I've decided to hug it! May it bring good fortune to you and me! Huat Ah!

p/s: Please comment and correct me if there is something that u r not agree with. Appreciate somebody could give the right answer whether which 75% of the shareholders that were mentioned in the regulation.

Friday, July 5, 2013

Water Industry Puncak, KPS and Engtex

The water industry had caught most of the limelight recently as Puncak and KPS was flying, this was due to Selangor govt wanted to take back all the water asset.

This had been going on for several years and hope that it can finally comes to an end.

Something that caught my attention is, Y do those news come out in 1 shot? Green light for Langat 2, Nod from federal govt for water asset. MSWG go n make noice about it. Isn't it weird? What a coincident?

Personally Im more to Puncak case as I bought it few weeks back. Something that boggling my mind is

Y do Tans Sri Rozali get so much remunerations? To cash out before take over? 

Will this turns out to be a hostile take over? 
Tan Sri Rozali has about 41.34% stake in Puncak
EPF had ceased from substantial stake holder from 7%+ to now only 4.95% based on the latest announcement.
Tabung Haji hold  6.4%

If thats the case, those who close to Tan Sri is around 52.69%. as there r still around 47% outside the market, could tussle happen? (Khalid is famous with the event of The breaking dawn in UK when he was a fund manager in PNB) If this really happen then hold tight to ur Puncak as it gonna fly! RM3 wouldn't be a dream!

On the other hand, the last offer was about RM2.40 per share(not sure about the liabilities and other asset as no clear details were given), and if its so, thats mean puncak is trading at a cheap price since it still has O&G business.

Another issue is, will KPS gets the water asset after the take over?

2 cents of mind, I will wait for the deal to realised but is it a good buy now? I'm not sure as it might have a might correction before going higher.

In order to get more insight about this water industry, please log in to
Loryau @ Morning Fix  to see what our Head of Analyst talk about it.

Thanks for reading and good day!

Tuesday, July 2, 2013

Invest Fair 2013

Invest Fair 2013 is back!!!

I've been visiting this fair since 2011 and it's a good event that organisd by Share Investor and this is the 5th year!

This year, the event will held on

Just like all other event, this event will have lots of  exhibitor which wanted to offer you something, such as teaching u how to "invest" forex and asking u to join their courses, while other would ask u to invest in their product and surprisingly MBB is 1 of the exhibitor this year. LoL.. Luckily that I'm not chosen to work there on that day.. Haha...

Other than those " very commercial " exhibitors, the attraction is the thing that I'm interested in which I think u should come and have a look as well..  They did invited those famous fund managers to share us the insight of the market. You can click on this link to see whether did those speaker excite u.

On the other hand, the lucky draw is the other thing that excites me too! They have lots of prizes to be won and the grand prize is RM8000 cash!!!

Haha... but don't think too much as the grand prize will be mine this time! LOL.. (I'm the one who think too much)

Last but not least, U can pre-register here to some "mystery gift" and some special service from the organizer. So what r u waiting somemore? Let's join the fair and see whether are u lucky enough to win something back!

Have fun!

* To those smart phone users, I guess the link I paste above can only be connected using PC or laptop. So sorry for the inconveniece.

p/s : I've no relation with the event above but just to share it to the readers here.


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