Koon Yew Yin's Blog

Author: Koon Yew Yin   |   Latest post: Sat, 26 Sep 2020, 4:29 PM


Dayang: Investors' Dilemma - Koon Yew Yin

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All the shareholders who have sold their holdings when they saw the company’s 2 announcements; 1st one was the 1st quarter result and the 2nd was the right issues and share placement, are in a dilemma.


22nd May 1st quarter result announcement

Some shareholders sold their holdings at 90 sen when the company announced its 1st quarter ending March 2019 result of a small loss of 0.43 EPS. Since then the price has been going higher and higher to close at Rm 1.59 yesterday.



The main reason for the small loss in the 1st quarter was due to the monsoon which had affected the company’s operation of servicing the oil rigs in the open sea.


16th July Right issues and share placement announcement

Some shareholders sold their holdings at around Rm 1.45 per share when they saw the company’s announcement of the right issues and share placement on 16 July. They believe the right issues and share placement will depress the share price.

Obviously they are wrong because the price continue to go higher and higher to make a new high to close at Rm 1.59 yesterday. 

If they should have read page 30 and 31 of the announcement, they would not have sold their holdings. In these 2 pages the company pointed out its profit growth prospect and the long list of contracts which would keep the company busy for many years. Moreover, the price for the right issues will be fixed based on the average price of the 5 trading days before the X date for buying the right issues with a maximum discount of 50%. It is most likely be about 80 sen a share which should encourage more investors to buy more Dayang shares.


Those who believe the right issues would dampen the share price are obviously wrong.  


Short term investors and day traders are disappointed. 

As I said many a time before, no share can continue to drop or go up without a change of direction. The price chart shows that there were a few price corrections which have been quite small. As a result, short term investors and day traders who have sold their holdings are disappointed that they could not buy back what they sold at cheaper prices.


Based on the Dayang’s track record and its receipt of additional contracts, the 3rd quarter will report an increase of profit which will surely push the price higher. The 3rd quarter ending September result will be announced in before the end of November.


Based on the exceptionally large volume of shares traded daily, I believe many rich funds are buying quite aggressively to push the price up higher and higher.


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