Wednesday, September 12, 2012

Err...we could have gotten more at RM4.45 IPO price

EPF claims that the position it has taken on FGV is a long term bet. Well, I would say that it is a very rationale answer. After all, FGV has big plans with downstream investments, having a large landbank for plantation, expanding to Africa etc.

However, my say is that when FGV was looking for investors, EPF could have asked for a larger share (especially the MITI portion). FGV has no problem with float, so why not ask for more IPO shares at RM4.45 which was the original IPO price? I have to agree that FGV has some fundamentals considering that it is one of the largest palm oil planted landbank company. With EPF largely invested in Malaysian equities, I am not surprise of EPF's involvement in FGV. I see EPF buying beyond 10% in fact. It is a no surprise as EPF does own many large Malaysian companies beyond the 10% holding. What I do not understand is that if it sees FGV as a long term hold investment, why not ask for more IPO shares?

Instead, EPF has been buying off from the market at between RM4.70nish to around RM5.25. That seemed like buying off from short term holders especially the MITI recipients. What say you EPF?

Given more at RM4.45, then the EPF contributors would have made much and probably you inclusive. IPO is never a sure win, but the way the purchases are conducted by EPF, KWAP etc provided the indication that they are there to buy at a premium despite selling pressure.

This action by the fund where it is more willing to buy off the secondary market indirectly assisted the ones that were given IPO shares. Is the fund being used as a tool to help the pre-IPO investors or is this what you call it long term investments? What about a bigger share for your contributors by asking for a larger chunk of the pre-IPO or IPO shares next time?

Other article on EPF's buying of FGV:

EPF, KWAP continuing to support FGV?

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