Thanks guys. I was thinking about it. Let me get you the index stocks to begin with :-). I will post it here later. Anyway, in a related article, UOB Kay Hian mentioned this with regards to small and mid sized caps:


“We advocate being selective, picking beneficiaries of compelling investment themes or with specific event catalysts. These include Deleum, Barakah Offshore and Malaysian Resources Corp Bhd (MRCB),” it said.

Looking at the price chart, the I like the trend based on yesterday's result. The volume is somewhat there coming in late in the day. Today's price movement should shed the light better on how the trend is going to look...

I am long on MBSB

invincible28, I hope you are not too far out of the money. Based on past past records the banks getting acquired did get good valuation in Malaysia. OSK is one recent example. I dare not put a price this being a public forum and all but I am sure EPF would want to extract maximum from the take over and you can see from the consideration price later. All the best.

Hi James95, I looked up AZRB's quarterly report and saw the operating cashlow -50 million from -20 million same period last year. Although I cannot find your figures, I agree the operating cashflow has decreased compared to the same period last year. One of the major item i saw was the increase in amount due from customer for contract work done ( -RM69 million, last year same period -16 mil only). That basically means that AZRB has done RM69 million worth of jobs which people has not paid it yet and since it has to use cash to pay for the job it did, it had reduced its operating cashflow. When it manage to collect the cash, the cashflow will be positive for that period. In layman, done more contract but not collect yet compared to last time.

Decrease in trade and other receivables means that AZRB has reduced its 'borrowings' from the supplier. Supplier cut credit also can cause so we would not know the reason but one thing for sure, since it has used less credit / borrowing from supplier, AZRB had to use more of its own cash for the jobs, therefore reducing the operating cashflow further. In layman, use more of own money for job.

Hope that helps.

JT Yeo, firstly thanks for the comment.

Profit here refers to trading profit, i.e to expect making money from rising prices in the companies within this sector. Having said that, this is a general statement of the industry, we still need to refine or narrow down to the individual companies within the industry as all companies within the O&G sector are not the same, in terms of the business fundamentals as well as the technical.

Secondly, this is expectations, not the actual things. It is my view that given a new set of information, say a prolong price drop, the expectations of this industry would be different and that would affect the share price.

Thank you facai. :-)

I started by listing down all the SPAC in Malaysia again. While the imeediate number that came to my mind was 3, I stopped writing after the names Sona and Cliq. I hesitated to include Hibiscus as i recalled that it had completed its qualifying acquisition (QA).

The question that I had to answer was: was Hibiscus still a SPAC or should I now consider it as an oil and gas company? The answer to this question it only then would I be able to appropriately understand, assess and evaluate the company.

The first thing I checked was the Bursa Malaysia classification. Nope, Hibiscus is no longer classified as a SPAC. How about Bloomberg? When I checked on 7 June 2013, it is stated as Sector: Financials; Industry: Specialty Finance. Sounds like SPAC to me. Well now we have two different 'market experts' with two different opinions on the nature of the beast entity.

But the nature of the company is not as simple as a reclassification on the board. In the actual sense, it should be determined by its business model.

As I had argued in previous posting, I view a SPAC before the QA as a private equity fund. The question is whether post QA, does a SPAC cease to be a private equity company and become a normal operating company or does it continue to be a private equity company. The answer will change the perspective in which I view a SPAC, the risk assessment and the evaluation (some may say valuation).

Continued in length at http://mymusingsmalaysia.blogspot.com

Well done Kulim.

http://mymusingsmalaysia.blogspot.com/2013/10/eyeing-etf-removing-heartache-of-punting.html

A bit on ETF there.

Hi guys. I have some views on SPAC which i posted on my blog which has some views on what is a SPAC, are the investors paying too much and how much the management is getting.

Main points / snippets:

In my book it is like a private equity investment model made available to the public. Private equity investment is where people pool their money together with the intention of investing in businesses that will generate profit and cash flow back to the shareholders. The main difference between SPAC and a conventional private equity model is that in a conventional private equity model...

...But then you need to remember that the company does not have to return back the 10% of funds raised from the IPO and up until recently when the regulators changed the guidelines, that amount could be used to pay the salaries of the management. With regards to the 3 SPAC above, the approximate numbers are RM23 million for Hibiscus, RM36 million for CLIQ and RM55 million for Sona, CASH. Not a bad return for all the cost and expenses in setting up the SPAC and going through the IPO...

...Why does SPAC issue warrants?

Warrant is an instrument of chance and probability. It is a derivative where the return on the warrants depends on the price of the shares (in this case shares of SPAC) rather than the intrinsic value of the company (directly). As we have discussed earlier, price and value are two different things and hence the price of share depends, significantly, over the demand and hype of the shares rather than just the valuation of the shares...

http://mymusingsmalaysia.blogspot.com/2014/06/spac-ipos-of-o-unravelling-acronyms-so.html

If you have other opinions and insights, i would be grateful if you could share it with me / group.

Thanks.