Friday, March 27, 2015

Malaysian Airport's rights

I have decided to pick up the rights from Malaysia Airport's issues and applied for 92 units extra of excess to make up into board lot.

Below are the updated holdings of MAHB.


This shows that sometimes (not all the times), rights are beneficial to the shareholders, if one is looking at shorter term trading.

Wednesday, March 4, 2015

Between Insas, Keuro and TA

For those who follow or you can check out here, I do own all the three stocks - Insas, Keuro and TA Enterprise. There is one question recently, on which one does a person choose and did I buy TA and Insas because of its relative low Price/NA.

I guess if anyone choose either of these stocks or any other, it depends on ones understanding or appetite. (I do not recommend you to buy, but in many of my cases, there is a reason I buy these stocks and I usually put them down in this blog.)

Perhaps, one does not really understand why I buy many of the stocks that I picked. All three stocks have a strong margin of safety in my mind. (Have not been using this word,  but perhaps the best way to describe is Graham's Margin of Safety)

Keuro - Rimbayu project I deemed to be almost valuable as in the price I paid for the entire stock, Rimbayu's value alone I see it as equivalent to Keuro which I paid for. Remember I said, WCE is a bonus and if it is successful, it is a huge bonus - enormous. I visited many times Rimbayu before I decided to buy Keuro? And yet the main jewel is not Rimbayu yet. I do not have the opportunity to visit WCE.

Insas - same thing Inari has strong value and in itself it is worth around the price I paid for Insas. And Insas has many other businesses. It has recently been purchasing, Ho Hup - I see a good angle for it to do so. And in my blog I mentioned I talked to people in Inari, and they may not know the reason for me talking to them. I also talked to people (companies) who gives projects to Inari.

TA - The foreign properties acts as a strong hedge and they could be undervalued to the books.

However, one most important trait is that they must have good growth, or if not, strong in the future. Things I can see that will make the company valuable looking forward. No point buying a business like telco (Maxis, Digi or worse still Green Packet) when I can't see growth in the future. Telco used to be a darling stock 10 - 15 years ago. Not anymore, today. (Probably only, the one telco which I see value moving forward is TimeCom. Surprise?)

In each of the stocks I picked there are something which I see valuable.

Rimbayu, WCE - good strong projects especially WCE when it is completed.

Inari - a strong business with -remember I mentioned management. But I wanted a margin of safety, which I could not get directly from Inari. Insas, as I see it today seems to be different from Insas 10 years ago. Today's Insas has a sense of direction, which is probably why they are raising funds. Insas 10 years ago, was a careful investor - no doubt good but lacked action.

TA - well, much more defensive, but they know what they are doing and they buy good properties in good locations. Basically you can see that TA is buying for the future value. Which is also why you do not see me buying a lot. It is a strong hedging stock, with decent dividends. This company listed in Bursa is quite unique as probably I cannot find a similar one (unless you buy TA Global), much more asset hedged and top up with it, is undervalued. I would say, if one is to buy gold or silver for that matter, I like TA better.

I like businesses where they go out and work for their value. Strong differentiation and value. You do not see that in both Insas and TA - but others like DKSH, Airport, NTPM, Padini (to some extent) have that.

Well, one can say I am also boring - balik-balik same stocks. There is one place where you can get daily tips and I strongly recommend, the Edgemarkets.

Tuesday, March 3, 2015

Insas-PA

I know most people not so keen to look at longer term (3 to 5 years). Insas Preference shares is out today traded.

It has the following profile:

- Non-Convertible;
- Redeemable at RM1 after 5 years;
- Dividend of 4% payable every half-yearly;

The preference shares is offered at RM1.00 with 2 warrants attached for every preference shares purchased.

During the last 1-1/2 months, I have been asked about what will happen to the price of the preference shares as seemingly its 4% dividend is not attractive. I knew that it would have dropped below RM1.00. In fact, I thought that RM0.90 is a good price to even purchase for those whom would want to hold it longer for the dividends and lower entry price.

Today, upon opening it dropped to RM0.795 and as at this time of writing, it is at RM0.82. Just a note at RM0.82 and with brokerage fees paid, one's return is at 8.652% for 5 years (see below).

Purchased at RM0.82 with brokerage at 0.42%

Obviously, it is not too shabby at all, assuming we are confident that Insas can pay its dividends and repay the RM1 after 5 years. I am confident.

Think of it, if you are paying 5% for your housing loan or your car loan, do not be a smart-Alex to pay them off early.

Note: Anything that you do is at your own risk.

Just a note, at RM0.90, Insas-PA's return is at 6.43%. Well, if you look at it, is below what EPF gave last year!

If purchased at RM0.90
Also, since I picked up 4,400 of the Insas-PA (with it attached 8,800 Insas-WB), do find the latest record on fund here.

Wednesday, February 4, 2015

Lay Hong: The best form of defence is "Private Placements"

Time and time again we have seen that private placements have been misused. It can be issued to people you know but not related, your friendly party. It can also be a tool to be used for yourself by having shareholders as proxy. On top of that it is issued at discount (10%), in the name of hard to place out large quantities if it is not issued at discount.

Note that, I am not supporting either QL or the controlling shareholder of Lay Hong.

We know that QL Resources is having a go at Lay Hong by offering a General Offer for the shares of Lay Hong to minority shareholders. It has been acquiring Lay Hong shares at below RM3.45.


Based on the above, QL has acquired close to Lay Hong's controlling shareholders stake of around 43%.

What does the current management do in defence? Well, through private placements and director's shares options scheme - up to 45% that is (See below). Imagine how much dilution could QL's shares be affected?

Proposal by Lay Hong
See below on the approval - it will need to have approval from shareholders. Now, minority it seems is the king maker in this case i.e. the 15.42%.

Now, the case gets interesting. Would QL up the ante by offering the GO at even higher price just to make the acquisition pricey?