ofcourse the land reclaim is not an easy business but Benalec is the leader in this industry check their track record before you invest. Why drop so much from high of 1.5X is because delay in Pengerang and CBT by the Leaw brothers.. hopefully with more contracts coming in revenue and profit will increase ....
Benalec have been actively buying back the Company's share for the last 3 days for a total of 5,872,500 shares at the average price of 0.955.
Why do a company's want to do share buy-back :-
1. Such action can be an indication that the Company's believes the stock price is undervalued and also don't see any better investment other than in themselves.
2. The Company's is saying that its share are currently selling at a discount to their fair value.
3. The Company's find itself with a large amount of excess cash on its hands and must decide what to do with it. Some choose to give dividends while others prefer to buy back their own shares.
4. When a Company spends its cash, its assets are reduced. This will cause the Return on Assets (ROA) to increase. Also, Return On Equity (ROE) is upped because there is less outstanding share floating in the market.
5. Companies may find themselves in a position where another company is planning an unfriendly or hostile takeover. If a company can succeed in buying back a substantial amount of its own shares, this make it more difficult to be taken over.
Conclusion :-
Investors obviously would like Companies to buy back shares of their own because they are currently undervalued. The market has yet to realize the Company's true value and once it does, they would enjoy the price appreciation.
Good Night to all Benalec Investor's, and i sincerely hope this will help you all to make your own decision or judgement to sell or to hold.
I have a silly question .. why Ben need to buy back their share when it is at .95 instead of 0.90.? They can buy it gradually when the market is less concentrate after the announcement being release ..i agreed with all your statement as above said .. The question is why they need yo buy back during hot time ?? Will it be another more positive announcement will be release very soon which will re - value the company ??
ymtan: The simplest answer probably is that they didn't have the money until Tuesday itself. (one of the lump sum payments for the land sales came in, suddenly they're flush with cash with no need for it for operational use)
Of course logic dictates you should spread out your purchases over a larger period of time to get a better average price. I'm guessing though when they had the money (let's assume RM10m for an example), they called their broker (don't think Benalec has someone in the office doing online stock trading :p), tell them how much they have to spend and give instructions to buy up to that amount.
By chance the broker starts buying during the hot market period, thinks "huat ah!" and joins in the rush. :p
The other reason could of course be what you said, there might be another positive announcement coming so management told the broker to buy the shares in x period of time (i.e 1 week, 2 weeks etc) forcing the broker to rush a bit.
JT5774:4. I refer to your point 4 which is stated below
Point 4: When a Company spends its cash, its assets are reduced. This will cause the Return on Assets (ROA) to increase. Also, Return On Equity (ROE) is upped because there is less outstanding share floating in the market.
Wikipedia defines ROE = Net Income/Shareholder Equity
ROE can increase if Net income goes up if there is no change to total number of Equity shares ROE can also increase if Total number of Equity shares are reduced whilst Net income stays the same
How can the ROE of Benalec increase when Benalec buys back its own shares? The total equity shares is still the same whether Benalec buys or other investor buy the shares.
The shareholder equity will be reduced ONLY if Benalec decides to cancel the treasury shares it had bought to reduce the total number of Equity shares. Assuming the Net income stays the same, cancelling the treasury shares will have the effect of increasing the ROE value.
Have Benalec cancelled any treasury shares todate?
Having tracked this counter and the events affecting and involving the company since its IPO, I would venture to paint the following scenario:
1. Having "settled" the issues caused by, and with, the 2 brothers, Seng Hai now has effectively a free hand to drive and lead the company to the next level, both in terms of business as well as good corporate governance. This is evidenced by the spate of land deals (and the latest reclamation contract) closed by the company subsequent to the "settlement".
2. Benalec is on the cusp of kicking off with the mega reclamation projects in Johor and some interested parties are coming out of the woodwork; these include strategic investors, both individual and institutional.
3. I have learnt from my sources that further good news is in the pipeline and that getting a project in Penang is not a remote possibility.
4. With all the positive developments taking place, it makes good sense for the company to aggressively buy back its own shares (which are now trading well below their intrinsic value), which it can do up to a maximum of 10% of its paid-up and issued share capital. In the highly likely event that a strategic investor/partner wants to take up a placement of say 5% of the share cap, the company can easily do so out of its holding of treasury shares, i.e. the shares that it has bought back. This will likely result in a profit for the company and, better still, will not give rise to a dilution of shareholdings in the hands of existing investors.
To me, the jigsaw puzzle pieces seem to be falling into place at just about the right time.
weren't they the same fellas (CIMB) who said Benalec was 'turning sand into gold' not too long ago?
when somebody can change their opinion (180 degrees, no less) so quickly, it makes you wonder about the work/thought they have put in and their competence, really
SavvyOne: Thanks for the clarification. In the event that any company sells its treasury shares to a new investor, how will the sales of treasury shares be treated?
In this case the company will make an accounting profit whereas the treasury shares released through the sale will be added back to the equity capital. So the total number of equity shares will increase by the amount of treasury shares being sold by the company. Right?
In the event the new investor comes in and buys the treasury shares within the financial year, the EPS will reduce to reflect the sale of the new treasury shares to the new investor. Is that correct?
The EPS may reduce, stagnate or increase and it depends on the effect of the release of treasury shares back as equity capital on EPS versus the impact of the accounting profit on EPS.
sunztzhe, you are right on both counts except that the gain(s) made by the company in disposing its treasury shares to the incoming investor(s) will increase the net assets of the company and will therefore increase the NTA per share.
Hope that a good sign and wish they will reward investor by special dividend since they buy back so many share so far. Perhaps I'm dreaming but rather than sleeping.
The daily chart looks nice, the weekly chart also nice, the monthly chart also nice. what can we conclude on the latest trend? Will it continue the trend and set a turnaround to its yearly chart??? Anybody care to be left behind a moving train? what train are we talking here? a cho cho train, electric train, a bullet train or an electromagnetic train??
Haha, jena after Google! what next? Now you replace someone to take on that job? :-)
By data and chart the next important level is RM1. Once break next week then will be good to hold. Or for some folks then will run even with lost.
Axin - its all depend on news and quality project that they are getting from project. If the management continue to surprise the investor with good project and good quarter report then it should be reach your target price in very short time. Of course it depend on your average price for the share. If it still high you probably can consider to average it down by buying some now. If it close to your average price then just hold and see what going on next week.
You absolutely can. Who would know better than the company's management? They have deemed it viable for the company to buy back 6 million+ shares at a cost of RM5.9 million. They certainly think or know that the shares are worth much more than the current price at which the shares are trading. To me the downside risks are minimal, but the upside potential is definitely very attractive.
this doesn't seem right somehow. It seems too good and obvious. Company buying back a super huge chunk at 0.95. And its a HUGE HUGE chunk Why wouldn't everyone buy it? Seems too easy. Like free money lah Somehow, somewhere, very very very fishy.. My opinion only lah ^^ good luck
alivetoinvest - if that the case you tthink of then you already make the decision not to invest in this counter. What the point to invest counter that you did not believe or doubt with. :-) your opinion may be right and who know you will come back to this counter later?
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
MQ Trader 576 views | 3 d ago
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 13066 views | 11 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
taciturn
476 posts
Posted by taciturn > 2014-05-08 18:13 | Report Abuse
Share buyback today by Benalec. 1,186,700 shares at an average price of 95.3 sen each.
http://www.bursamalaysia.com/market/listed-companies/company-announcements/1617917