Believing The IPO Story

Newly-listed Ranhill Holdings Berhad (“Ranhill”) closed at RM1.01 on its debut day (down from its IPO price of RM1.20 per share). Initial IPO price was set at RM1.70 per share but was subsequently revised down to RM1.20 per share. http://www.dealstreetasia.com/stories/malaysia-ranhill-makes-soft-market-debut-optimistic-of-prospects-34375/

Possible reasons that could explain such poor debut:

Potential Upside?

Are we going through another failed IPO? I beg to differ in this case, as it is backed by stable cashflows & long term power & water concession assets. Hence, we should assess the counter based on its potential dividend yield. Yield is a very important consideration considering there is a prevailing global trend towards negative yield / interest rate. The Star reports : “At its price of RM1.01, Ranhill’s shares are now trading at a projected dividend yield of between 6.5% and 7.7% for financial year 2016 (FY16).”  http://www.thestar.com.my/business/business-news/2016/03/17/ranhill-in-lacklustre-debut/

Public Research has a target fair value of RM1.25 (revised) pegged to this counter. http://www.thesundaily.my/news/1722210

We also saw some support coming from some institutional buyers (e.g LTH) which have been accumulating the counter:

No Announcement Date Company Title
1 28 Mar 2016 RANHILL HOLDINGS BERHAD Changes in Sub. S-hldr’s Int. (29B) – LEMBAGA TABUNG HAJI

2 25 Mar 2016 RANHILL HOLDINGS BERHAD Changes in Sub. S-hldr’s Int. (29B) – LEMBAGA TABUNG HAJI

3 25 Mar 2016 RANHILL HOLDINGS BERHAD Changes in Sub. S-hldr’s Int. (29B) – LEMBAGA TABUNG HAJI

Would the rebound continue?

As of today, Ranhill rebounded from its low of RM1.01 to RM1.10 (current). Personally, the dividend yield range of 5.0% – 5.5% would cap the maximum price range of Ranhill. Assuming a forecast dividend of RM0.065 /share, we are looking at a potential range of RM1.18 – RM1.30

Another important consideration is that there could be potential volatility in the share price of Ranhill once the lockup arrangements with selling shareholders / investors expire 180 days from the listing date (16 March 2016) (http://www.bursamalaysia.com/market/listed-companies/company-announcements/4963809)

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10% return per annum, for real or not?

Read about Red Sena (a Malaysian-listed SPAC) today:

http://www.theedgemarkets.com/my/article/red-sena%E2%80%99s-qa-likely-thailand-indonesia-and-m%E2%80%99sia

Trust cash value at RM0.46 with interest on trust money at approx. 4.4% per annum. Max of 3 years to get the money plus interest back if there is no QA.

Worked out some simple calculation, not sure whether this is right or wrong but if everything works out accordingly, should be able to get an  internal rate of return of approx. 10% if at current mkt price of RM0.40

sena

DISCLAIMER: THIS SITE IS FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS.

 

 

Following The Insiders

Trading pattern of Teo Seng Capital (a listed poultry stock in Bursa Malaysia) appears to be forming a trading range bound of between RM1.10 and RM1.70. Is this a strong range bound, i.e setting strong support and resistance points. What do the insider transactions suggest?

TEOSENG.png

From the list of insider transactions, we saw a number of BUY transactions of between RM1.21  and 1.61. We also saw a number of SALE transactions when Teo Seng’s price hits above RM1.65. There is potential opportunity to trade between the range bound of RM1.20 (support) – RM1.65 (resistance) in the short term.

The list of recent transactions is attached herein.

DISCLAIMER: THIS SITE IS FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS.

 

 

Effective Change Date Stock Name Buyer / Seller Name [Classificationa] Security Bought / (Sold) Price Closing Price(MYR)d No. of Shares After Trade [‘000]
(Notice Date) Types b [‘000]
Direct Deemed Total Direct Deemed Total % Held c
04 Mar 2016 – 04 Mar 2016 TEOSENG Na Hap Cheng [SSH] S/U 65 1.230 156,598 52.235
(09 Mar 2016)
02 Mar 2016 – 02 Mar 2016 TEOSENG Na Yok Chee [SSH] S/U 200 1.240 157,161 52.423
(03 Mar 2016)
02 Mar 2016 – 02 Mar 2016 TEOSENG Na Yok Chee [DIR/CEO] S/U 200 1.240 157,161 52.423
(03 Mar 2016)
24 Feb 2016 – 24 Feb 2016 TEOSENG Na Hap Cheng [SSH] S/U 20 1.260 156,533 52.213
(01 Mar 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Lau Jui Peng [DIR/CEO] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Cw Lau & Sons Sdn Bhd [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Lau Joo Hong [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Lau Joo Heng [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Lau Bong Wong [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Lau Jui Peng [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Emerging Glory Sdn Bhd [SSH] S/U -880 1.650 156,216 52.108
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Leong Hup (malasyia) Sdn Bhd [SSH] S/U -880 1.650 153,989 51.365
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Clarinden Investments Pte Ltd [SSH] S/U -880 1.650 153,989 51.365
(04 Feb 2016)
06 Nov 2015 – 13 Nov 2015 TEOSENG Leong Hup International Sdn Bhd [SSH] S/U -880 1.650 153,989 51.365
(04 Feb 2016)
01 Dec 2015 – 01 Dec 2015 TEOSENG Na Hap Cheng [SSH] S/U 35 1.520 156,513 52.207
(04 Dec 2015)
20 Nov 2015 – 20 Nov 2015 TEOSENG Na Hap Cheng [SSH] S/U 30 1.580 156,478 52.195
(27 Nov 2015)
07 Oct 2015 – 08 Oct 2015 TEOSENG Na Hap Cheng [SSH] S/U 50 1.610 156,448 52.185
(12 Oct 2015)
06 Oct 2015 – 06 Oct 2015 TEOSENG Lau Tuang Nguang [DIR/CEO] S/U 20 1.580 20 0.007
(09 Oct 2015)
25 Sep 2015 – 25 Sep 2015 TEOSENG Na Hap Cheng [SSH] S/U 20 1.420 156,398 52.168
(02 Oct 2015)
18 Sep 2015 – 18 Sep 2015 TEOSENG Na Hap Cheng [SSH] S/U 85 1.340 156,378 52.162
(25 Sep 2015)
17 Aug 2015 – 18 Aug 2015 TEOSENG Na Hap Cheng [SSH] S/U 75 1.250 156,293 52.133
(21 Aug 2015)
03 Aug 2015 – 03 Aug 2015 TEOSENG Nam Yok San [SSH] S/U -270 RM1.610 – 1.643 1.610 153,594 51.233
(04 Aug 2015)
03 Aug 2015 – 03 Aug 2015 TEOSENG Nam Yok San [DIR/CEO] S/U -270 RM1.610 – 1.643 1.610 153,594 51.233
(04 Aug 2015)
31 Jul 2015 – 31 Jul 2015 TEOSENG Nam Yok San [SSH] S/U -265 1.670 153,864 51.323
(03 Aug 2015)
31 Jul 2015 – 31 Jul 2015 TEOSENG Nam Yok San [DIR/CEO] S/U -265 1.670 153,864 51.323
(03 Aug 2015)
30 Jul 2015 – 30 Jul 2015 TEOSENG Nam Yok San [DIR/CEO] S/U -111 1.620 154,129 51.412
(31 Jul 2015)
30 Jul 2015 – 30 Jul 2015 TEOSENG Nam Yok San [SSH] S/U -111 RM1.63 1.620 154,129 51.412
(31 Jul 2015)
29 Jun 2015 – 29 Jun 2015 TEOSENG Koperasi Permodalan Felda Malaysia Berhad [SSH] S/U -482 1.500
(02 Jul 2015)
01 Apr 2015 – 01 Apr 2015 TEOSENG Koperasi Permodalan Felda Malaysia Berhad [SSH] S/U -1,000 2.030 15,000 5.003
(02 Jul 2015)
23 Jun 2015 – 25 Jun 2015 TEOSENG Nam Yok San [SSH] S/U -91 1.700 154,240 51.449
(26 Jun 2015)
23 Jun 2015 – 25 Jun 2015 TEOSENG Nam Yok San [DIR/CEO] S/U -91 1.700 154,240 51.449
(26 Jun 2015)
20 May 2015 – 08 Jun 2015 TEOSENG Nam Yok San [DIR/CEO] S/U -145 1.860 154,331 51.479
(17 Jun 2015)
20 May 2015 – 08 Jun 2015 TEOSENG Nam Yok San [SSH] S/U -145 1.860 154,331 51.479
(17 Jun 2015)

The Irrational Market

Thoughts of the day:

Quarterly earnings are bad, economic data is pointing to a bearish & recessionary environment. Why is our stock market keeps going up?

Up because things are not as bad as they are? Or is it our very nature to long the market, rather than short it.

The market should only go up when

  • Earnings are rising
  • Positive catalysts (internal & external)
  • Equity risk premia is declining
  • Sound macroeconomic fundamentals
  • Positive expectations (?)

I do not see any of the above at this juncture. Thus, how can the market go up?

The truth is what comes up, must come down but when….if you truly believe that the market is overvalued, wait till it pops!