Posted by calvintaneng > 2014-03-19 15:37 | Report Abuse

VERY VERY GOOD. PERAK CORP WAS ONE OF MY FAVOURITE COUNTERS AT 60 CENTS. IN THOSE DAYS OF YEAR 2009 WHEN PERAK CORP WAS RANGE BOUND BETWEEN 40 CTS TO 60 CTS NO BODY BOTHERED WITH PERAK CORP.

THESE WERE THE REMARKS OF NAY SAYERS

1) MANY YOUNG PEOPLE HAVE LEFT PERAK FOR CITIES LIKE KL & SINGAPORE. SO ONLY OLD, OLD PEOPLE REMAIN IN KAMPONG PERAK. SO PERAK CORP NO USE LAH!

2) WHEN I POINTED OUT THAT PERAK CORP HAS 1,000 ACRES PRIME LAND IN LUMUT & ALSO CASUARINA HOTEL. THESE ARE THE NEGATIVE REMARKS THEN.

HA! LUMUT? LUMUT HAS A NAVAL BASE THERE. DANGEROUS PLACE WITH GUNS AND BOMBS. BETTER STAY AWAY.

FOR THOSE WHO BOUGHT PERAK CORP IN THE WINTER OF DISCOURAGEMENT IS NOW REAPING THE PRECIOUS FRUIT OF SUMMER.

HOORAY TO GRAHAM NET NET VALUE INVESTING!

Posted by Tessa Joseph > 2014-03-19 16:59 | Report Abuse

I love anything with perak in it lol btw noted with thanks.

Posted by houseofordos > 2014-03-19 19:50 | Report Abuse

I like this risk arbitrage.... bought before scr announced and after as well.. The problem is if scr doesnt go through and no new offer, prepare to sell fast or hold it long term... Look at Ireka after scr rejected.... better ready to offload some before egm to protect some profit...

Posted by sense maker > 2014-03-20 01:37 | Report Abuse

53% held by the controling shareholder is too far form the 90% needed for compulsory accetpance by MI. If the controlling shareholders holds 75% to 80%, they normally would take time to close the gap by buying up in the open market, thereby pusing up the price a bit and narrowing the buy-sell gap. This is the case typically if they have the intention to raise the offer price later. The 5.7% is the probability of the SCR not going through as assessed by the market. It is not totally riskless, and therefore not arbitrage by definition, strictly speaking.

Posted by kcchongnz > 2014-03-20 02:09 | Report Abuse

That is why there is a "risk" infront of the "arbitrage". Question is what is the risk vs the reward.

Posted by cheahcl > 2014-03-20 15:32 | Report Abuse

I thought is 90% of remaining 47% that are non-interested, and not 90% of total shareholders?

Posted by kcchongnz > 2014-03-22 09:46 | Report Abuse

A probabilistic estimate of SCR exercise price

Based on the information given above, we can carry out a probabilistic estimate of the price for the selective capital reduction exercise as shown in Table 2 below:

Table 2
Value based on Per share Probability Wt Price
Re-valued tangible asset 12.00 0% 0
Net asset backing 5.20 20% 1.04
Offer Price of SCR 3.90 60% 2.34
Present price 3.68 10% 0.37
Before announcement 3.00 10% 0.30
Expected outcome 100% 4.05

The likely outcome of the SCR is RM4.05 per share as shown in the above table. This offers a 10% upside in three months, or an annualized expected return of 30%.

Posted by kcchongnz > 2014-06-17 17:24 | Report Abuse

A review of risk arbitrage of Prkcorp

As the SCR date is getting closer, it is a surprise that the share price of Prkcorp is not converging to the offered SCR price. Why?

As it likely that the exercise would not be carried out? I don't see why not because it was proposed by the major shareholders, and I don't see why the minority shareholders do not take it up.

As Prkcorp reported a loss in the last quarter of 2m, could it be the reason why the share price not going up? But the investment thesis of Prkcorp is the SCR; you are going to be paid RM3.90, not how much earnings it makes. Only this time it is more likely minority shareholders will take up because of the loss.

Let us revised a little on probabilistic estimate of the price for the selective capital reduction exercise as shown below:

Value based on Per share Probability Wt Price
Re-valued tangible asset 12.0 0% 0
Net asset backing 5.14 15% 0.771
Offer Price of SCR 3.90 65% 2.535
Present price 3.64 10% 0.364
Before announcement 3.00 10% 0.300
Expected outcome xxxx 100% 3.97

The likely outcome of the SCR is RM3.97 per share as shown in the above table. This offers a 7% upside in two months, or an annualized expected return of 41%. So why not?

Posted by NOBY > 2014-06-17 17:48 | Report Abuse

KC. how do u know when they will call the AGM ? Whether it s 2 months or 3 months away ?

Posted by kcchongnz > 2014-06-17 17:54 | Report Abuse

GENERAL MEETINGS: NOTICE OF MEETING
PERAK CORPORATION BERHAD

Type of Meeting AGM
Indicator Notice of Meeting
Description Notice of Twenty-third Annual General Meeting of Perak Corporation Berhad
Date of Meeting 27/06/2014
Time 09:30 AM
Venue AmanJaya Convention Centre
Casuarina @ Meru Hotel
No. 1-C, Jalan Meru Casuarina
Bandar Meru Raya
30020 Ipoh, Perak
Date of General Meeting Record of Depositors 20/06/2014

Posted by NOBY > 2014-06-17 19:02 | Report Abuse

KC SCR is not on the agenda of the AGM . Based on original circular on 15 Jan, they would call an EGM for this. Also if there is still a 7 pct discount with only 2 weeks to go I would be worried.

Posted by kcchongnz > 2014-06-17 19:22 | Report Abuse

NOBY, you are right

Posted by Intelligent Investor > 2014-06-20 10:18 | Report Abuse

Hi NOBY,

How you know there is only 2 weeks to go?

Based on the original circular on 15 Jan, it estimated the exercise should be completed by end of Q3.

Posted by NOBY > 2014-06-20 10:24 | Report Abuse

II, I am not saying it will be 2 weeks to go. I m telling KC that it cant be 2 weeks to go judging from significant discount to offer price.

Posted by Intelligent Investor > 2014-06-20 11:12 | Report Abuse

Hi NOBY,

Ok. I get you. I have the same view too.

Posted by Intelligent Investor > 2014-07-17 13:59 | Report Abuse

Hi Mr. Chong and NOBY,

Mr. Market give some discount on this coutner. Take a look.

It is too bad that I have fully invested for the allocation to this counter.

http://klse.i3investor.com/servlets/stk/chart/8346.jsp

Posted by kakashit > 2014-10-26 11:09 | Report Abuse

wa, such a big fat frog jumps on the street

Posted by donfollowblindly > 2014-10-29 22:27 | Report Abuse

If I follow buying at RM3.68, I will lose 41sen or 11%. How does market return past 7 months?

Posted by kcchongnz > 2014-10-30 05:38 | Report Abuse

Posted by donfollowblindly > Oct 29, 2014 10:27 PM | Report Abuse
donfollowblindly 2 posts

If I follow buying at RM3.68, I will lose 41sen or 11%. How does market return past 7 months?


I really cannot understand your new identity, "don'tfollowblindly". Why did you follow? Followed what? Followed somebody telling you to buy at 3.68? Who asked you to buy?

If you didn't follow, why the need to write your comment here? Want to put down put me down? Finally found one stock that I wrote about which came down in price so much?

But when I talked about the net net investment strategy on Perak Corp (not asking you to buy), it was 2.82. Now it is 3.27. How come others made so much money, and you follow blindly and lost 41 sen? Read the article in the link below.

http://klse.i3investor.com/blogs/kcchongnz/62515.jsp

Unbelievable! Incredible!

Posted by Intelligent Investor > 2014-10-30 12:31 | Report Abuse

Mr. Chong did mentioned in the blog title that this is a "Risk" Arbitrage but not "Risk Free" Arbitrage.

Please don't follow blindly and understand what is the risk you are taking when invest in the stock market.