Random Trading
CNASIA - The Deal Is Off
Random Trading
Publish date: Mon, 22 Sep 2014, 08:59 PM
Random Trading
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Too dumb to be an expert, too green to called a veteran and certainly not an insider. what's left..... RANDOM!
Disclaimer - I'm too dumb to be an expert thus all the contents of this blog are just my random thoughts and may be incomplete or contain any informational errors. It is certainly not recommendation to buy or sell. You'll be responsible for your own decision. Please consult your investment consultants before making any investment decision.
Disclaimer - I'm too dumb to be an expert thus all the contents of this blog are just my random thoughts and may be incomplete or contain any informational errors. It is certainly not recommendation to buy or sell. You'll be responsible for your own decision. Please consult your investment consultants before making any investment decision.
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:
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.
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