Posted by Pak Lah > 2014-04-19 08:40 | Report Abuse

There are 2 causes that can possibly prompt the share buy back but not highlighted in this article. These two are commonly practised in this country. First, share buy back is intensified when the share prices drop drastically and result in margin calls for the major share holders, e.g. Parksonn? Second, share buy back takes place when major shareholders would like to make an exit. This exit is not necessarily announced in the Bursa as the major shareholders may have other proxy accounts, e.g. Bjtoton? To buy back the shares, the directors will cook up reasons to convince the shareholders to get the required approval. We must therefore exercise extra cautions as share buy back can arguably be done to benefit the major shareholders but at the expense of the retailed investors.

Posted by kcchongnz > 2014-04-19 10:57 | Report Abuse

Excellent comments from Pak Lah. That is one of the pitfalls in investing in Bursa.

However, i won't use Parkson as an example as I think Parkson is truly undervalued. It has quality assets, and plenty of cash flows, even though their earnings were not good last couple of years.

I will use lemon examples like KNM, Guan Chong, London Biscuits etc which fit in your view perfectly.

Posted by Huang > 2014-04-19 13:14 | Report Abuse

I do not know much about Parkson but one thing that its retails biz in China is facing very strong wind. I do not know how much this will hit its financial prospect.

For the last many years in Bursa I have an impression(maybe a false one due to my own short-knowledge) that companies managed by TAN SRI WILLIAM has not doing as well as his great name. As an ordinary, I chose to avoid Parkson.

Posted by Huang > 2014-04-19 13:17 | Report Abuse

I echo that comments of Pak Lah are great.

Posted by kkng0819kk > 2014-04-19 18:45 | Report Abuse

If the major shareholders r selling at the time the com is buying its own share,bursar must intervene /reprimand immediately