Many investors are so confused and they do not understand the effect of the right issues and share placement. That is why the price has been going up and down like a yoyo in the last 2 months. It could not go above the peak of Rm 1.52 per share. The reason is that many investors are afraid that the right issues and the share placement will dampen the share price. Even our famous Mr Ooi Teik Bee said so. He recommends to buy on weakness at Rm 1.43.

RIGHT ISSUES: According to the rules set by our Securities Commission, the company can issue new shares to all its shareholders at any price. In this case, I understand the right issue price will be below Rm 1.00 per share. I do not think the right issues will dampen the price because investors should want to buy the right issues at a discount. Moreover, my common sense tells me that the controlling shareholders should naturally want to buy the right issues as cheap as permitted to benefit themselves. This is only natural.

No reason for the right issues to dampen the share.

As announced, if you have 10 shares, you can buy 1 share at a discount. I cannot understand why the right issues should dampen the share price. In fact, all clever investors should want to buy more shares now so that they can buy the right issues at a cheaper price. Only stupid shareholders will sell their holdings to avoid buying the right issues.

Share Placement: The share placement will be executed after the right issues. According to the rule set by SC, the price of the placement shares will be the 5 day average price prior the fixing date of the placement with a maximum discount of 10%.

Many not so clever shareholders may think their interest will be diluted due to the share placement and for that reason they are afraid to buy Dayang shares now. But they must remember the Sarawak Government is the buyer of the placement shares and the controlling shareholders should want to push the price as high as possible to benefit themselves and all the shareholders. This is only common sense and not so hard to understand.

Moreover, if the Sarawak Government is a substantial shareholder and since a lot of Petronas oil rigs are situated in the Sarawak waters, Petronas will be obliged to award more maintenance contracts to Dayang. In fact, just a few day ago, Petronas awarded a new contract to Dayang. That is why the price went up 6 sen per share to close at Rm 1.48 on the last trading day.

I am obliged to inform you that 90% of my investment is on Dayang and I am not asking you to buy to help me to make more money. If you do buy, you are doing at your own risk.