PDZ - No more O&G! More like OMG!

Chart : PDZ daily chart as of Sep 26 2014 (source: ChartNexus)

PDZ, the sizzling hot stock for the last 3 months which saw the entry of MARA as their major shareholder as well as proposed venturing into attractive 'O&G' industry had drew a lot of 'investors' into it in the hope of riding the O&G wave. The initial announcement was made on May 14 that the company will acquire 20% of Efogen Sdn Bhd from Johany Bin Jaafar for RM 18 Million. The details of the announcement can refer to the link below:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1621981

Efogen is principally involved in the chartering of vessels for oil and gas offshore support services, providing geophysical services to the oil and gas industry, trading in related information technology software and hardware apparatus as well as providing consultancy and maintenance services in related fields. 

The conditional share acquisition agreement (SAA) was for a period of 60 days and further extension of 30 days has been agreed by both parties on July 14 then again another extension of 30 days on Aug 13. It is nothing unusual about extension for significant corporate proposal like this one but after 2 extensions the company again on Sep 15 announced another extension for 10 days. So as of this point, is quite reasonable for one to think that the deal should be closed in matter of days. 

Then yesterday the company suddenly announced that the deal is off without any reason given. Just like that!!! Poopsss!!! So what happen to it? Why can't it went through? Don't you think the shareholders have the rights to know about it?

From the chart above, one can notice that the share price of the counter spiked after the 1st extension and peaked immediately after the 2nd extension. Looking at it, one can't help to think that whether the SAA is ever serious or just another hot air to inflate the price of the counter. All those extensions is it really for both parties to iron out the deal or just time given to the operator to distribute their shares to innocent investors. Since no more extension for the deal, I guess they must have offload most of their shares already. With all the rumours flying around linking the counter to Tan Sri Halim Saad (TSHS) and enormous potential of O&G during the run of the share price, it really looks like a classic pump and dump trick.  

So what now? At least MARA still here right! Oh ya, they have sold big chunk of their shares at a good profit. But Megalink Industries Sdn Bhd still here and they are believe to be link to TSHS, so may be there is still O&G potential right? May be! who knows! But one thing I know is that the share price certainly can't be justified by the company current state. 

Refer to my previous post : CNASIA : The Deal Is Off , what is interesting is that both CNASIA and PDZ had subsequently announced the end of their respective O&G deal and are both linked to TSHS by rumours during the run of their share price. Since CNASIA share price has since fall off the cliff after the announcement, I guess PDZ share price will face some serious selling pressure on coming week. How about another company that actually link to the tycoon, Sumatec. Will the Rights Issue and the acquisition of Buzachi Neft oilfield go through? I certainly hope so for the sake of the shareholders. But if, just if, the deal falls through, then how will it affect the valuation of Sumatec. This is something the shareholders need to think about. 

CNASIA - The Deal Is Off

Chart : CNASIA daily chart as of Sep 22 2014 (source: ChartNexus)

CNASIA on June 24 announced that the company enter into a framework agreement with KenMakmur Holding Sdn Bhd for the proposed production of liquified petroleum gas (“LPG”) and condensate from the natural gas supplied by the Rakushechnoye Oil/Gas Field* (“Proposed LPG Production”). The details of the agreement can refer to the link below:

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1665105

Under the agreement, CNASIA Capital or its nominee/subsidiary/principal shall at its own cost, design/procure/construct and commission a 600 MT/day LPG/condensate production plant using the natural gas supplied from the Rakushechnoye Oil/Gas Field (“LPG Production Plant”). In return, there was a profit guaranteed from KenMakmur with conditions. I'm not going to go further into the details of the agreement since it is not the point of this article. 

As we can see from the chart above, share price of CNASIA spiked from around 75 sen on April 4 to closed at RM 1.29 on June 23, the day before the announcement. After the announcement came on June 24, the counter rose even higher and peaked around RM 1.56 two weeks after the announcement. Since then, the share price started to fall and consolidate around RM 1.26 . 

Today the company just announced that both parties have decided to let the MOU lapse without explaining why. So what now? Whoever purchase the stock after the announcement hoping to tap into the potential of the MOU will be quite disappointed with the announcement. With the weak financial condition of the company to begin with, one can't stop thinking that whether the MOU was ever serious in the first place. Anyway, for those who bought near the peak may need to review their investment in the company. 

 

Greenyb - Breaking new high!

Chart : Greenyb daily chart as of Sep 15 2014 (source: ChartNexus)

Refer to my previous post on the counter : Greenyb - Still got leg , apparently there is still more upside to come. Greenyb is a profitable company with consistent dividen of 1 sen for the last 3 years which workout to be 2.4% yield based on last closing price of 41 sen. It broke its multi-years high again last Friday and keep marching on. The upcoming quarter results announcement will be somewhere end of this month. Judging on the run of the share price, there could be more positive surprise for the shareholders. Stay tune!!!

KNM - Bearish breakout!

Chart : KNM daily chart as of Sep 15 2014 (source: ChartNexus)

KNM's share price has soared from around 40 sen to peak around RM 1.14 for the past one year backed by the improved financial performance of the company. But the uptrend may be come to an end. The counter fell by 5.5 sen or 5.79% with heavy volume to closed at 89.5 sen on Monday. The fall caused the share price to broke its uptrend line as well as its immediate horizontal support line at 91.5 sen.

The timing of the decline of the share price is rather interesting. The share price peaked and started decline somewhere around early August which is when the company made an announcement regarding material contract that involved its subsidiary regarding the Pengerang Integrated Complex Project. The details of the announcement is here :

http://www.bursamalaysia.com/market/listed-companies/company-announcements/1703909

The supposed good news not only didn't pushed the counter higher instead the share price started decline after that. The potential contract value for KNM for this RAPID job is estimated to be around USD 300 Million. The latest 'relatively' healthy quarter earning  announced on Aug 27 also can't stop the share price from further declined. 

The selling could be due to temporary profit taking since the stock has more than doubled in 1 year time but the bearish breakout is just something that the investors can't ignore. It could be just a false signal but if the share price do not stabilize or rebound in the next few days then it could be the end of its run for the last 1 year. 

IFCAMSC - God's trade by Brahmal Vasudevan!

Chart : IFCAMSC daily chart as of Sep 8 2014 (source: ChartNexus)

Mr. Brahmal Vasudevan (BV), the founder of Creador, a private equity firm that focus on Southeast Asia region and India. From the main page of the website, it is stated there : Creador is a private equity firm focused on long-term investments in growth-oriented businesses in Indonesia, Malaysia, Singapore and India. 

BV emerged as IFCAMSC substantial shareholders on Aug 26 2014 with direct holding of 10 Million shares and indirect holding of 15 Million shares. On that day, the highest price and lowest price traded was 37 sen and 33 sen and it closed at 35 sen. But mere 4 trading days later, he disposed 11.5 Million shares or close to half of his holding on Sep 2 2014. On that day, the counter traded the highest at 52 sen and the lowest at 47.5 sen and closed at 49.5 sen. Since he didn't disclosed his average entry price and exit price so I'm just going for the average price of the day to estimate his entry and exit price. On Aug 26, highest was 37 sen and lowest was 33 sen so average 35 sen which will be his entry price. On Sep 2, highest was 52 sen and lowest was 47.5 sen so average is 49.75 sen which will be his exit price. So in just four trading days, he made roughly RM 1,659,375 (0.4975 - 0.35 * 11.25 Million shares). With some 13.75 Million shares left, his paper gain on his current holding based on today closing price of 45.5 sen is another RM 1.44 Million. 

In just  4 trading days , he closed his position of 11.25 Million shares with some 42 % gain. This is one hell of a contra trade. Apparently fund manager doesn't necessary aim for long term after all. But with 42% return in just 4 trading days, can anyone blame him for taking his profit? Certainly not. But for those that bought the shares after the star fund manager emerged and thought that he is here for the long term, it could be an unpleasant surprise. 

This is one godly trade that his clients will certainly hope for. It will be great for his clients if the trade is for the company's fund instead of his personal capacity. Anyway, job well done for BV!!!

Dnex - Bullish Breakout

Chart : Dnex daily chart as of Sep 5 2013 (source: ChartNexus)

Dnex (previously known as Time Engineering) broke its horizontal resistance at 34 sen to closed at 36.5 sen with significant volume on last Friday. Some 51.7 Million shares traded which is the second highest for the last 2 years. The counter has tried multiple times for the last 2 years to break this horizontal resistance and finally broke it convincingly last Friday. The impressive Q2 results that saw its earning almost double to RM 3.57 Million from RM 1.8 Million Q2 last year could be the catalyst behind the run. There should be more upside to come.

Takaso - How high can it go? That's only one outcome!

Chart : Takaso daily chart as of Sep 4 2014 (source: ChartNexus)

Refer to my previous post on Takaso, Takaso - Bullish Breakout , honestly, I never thought that the counter will spike to the current level without any correction at all and apparently there is only one buyer all the way from my observation on the counter. How high can it go? Seriously I don't even have a clue, but judging from this counter's previous behavior, I think there can only be one outcome. You certainly know what I means. 

Reach - Who are the sellers?

Reach Energy, the largest SPAC listed on Bursa to date which raised some RM 750 Million from its IPO. The IPO price is 75 sen with 1 Billion shares available but 98% of the 1 Billion shares are 'place' to 'selected investors' including the cornerstone investors. For my opinion on the IPO, you can refer to my previous post:

http://randomtrading.blogspot.com/2014/08/reach-initial-public-offering-or.html

The share price of Reach has been trending lower since its IPO to closed at 65.5 sen today. The free warrant which opened at 28.5 sen during its IPO day also trending lower ever since it listed to closed at 22 sen today. The share price of Reach at its current level is substantially lower than its IPO price of 75 sen and even lower than the pro-rata refund of the trust money per share, which workout to be around 71 sen, in case the SPAC fail to make any QA during the stipulated time frame. 

What puzzling me is who is selling? The portion of the IPO shares that available to the 'Real Public' is just 20 Million shares and I seriously doubted that the lucky few (it is 42 times oversubscribed) that actually got the shares will sell at a loss. As for the warrant, well, since it is free so some may think of disposing it to put some money into the pocket. But again, who is selling? The 20 Million free warrants that the 'Real Public' entitled could be easily absorbed by the market even in the first day of trading as many investors can't get their shares during the IPO. 

The promoter and the initial investor has a moratorium so they certainly can't dispose their shares. What's left is only the 'selected investors' including the cornerstone investors since there is no moratorium imposed on them. If you follow the stock since its IPO, most of the days you will see that there is huge selling pressure on this stock. But why are they selling? I assume since they are the 'chosen one' to be the cornerstone investors or the 'selected investors', they should be very confident with the management and the future of this company, so why they disposed off their shares be it ordinary shares or warrant immediately after the IPO. To make a quick buck?  Not only they 'cornered' the stock during the IPO, now they 'stone' throw the stock to make a quick buck out of it. What kind of cornerstone investors are they? The ordinary folks that jump into the counter during the IPO days, which the ordinary shares traded at high as 76.5 sen and the warrant as high as 29 sen, are scrambling their heads to understand what happened? It is almost impossible for them to get the shares during IPO so they jumped into it as soon as the stock available in the market but now they are stuck with the shares that trade much lower than the IPO price. The seemingly high demand of the stock with some 42 times oversubscribed is just a joke and very misleading.

The 'selected investors' and the cornerstone investors certainly can buy or sell their shares as they like, but if they are just looking for short term gain then they should be allowed to compete with the public for the shares during the IPO. The 98% placement is just not fair to the 'Real Public' and now for those that bought at the high price will certainly force to be the 'cornerstone' investors. 

How this counter will perform? I don't know. I only knows that some 'selected investors' are very happy even the stock is trades at huge discount to its IPO price.