Jan 11, 2016 06:07 AM | Report Abuse 
Mkt is testing the strength of cos. post extra large split n bonus issues.
The chips of HEVEA, VS, TOPGLOV ... etc r dropping fast like domino pieces.
This hangover is the after effect of over supply of their split n bonus shares in bad times.
All fanatic FA fellows said that there is zero organic value to split n bonus issue in the long term. To a certain extend, I agree with them but not on the speed of price increase in immediate term.
i. A very good case study to do is that done and operated very well by the AIG before the deadly sub-prime crisis.
Hank Greenberg, a clever Jew engineered an explosive rise of AIG in its hey days.
Imagine this, AIG was rated 3 big A, AAA. Msia as a country garnered a mere Bcc or lower, I guess.
I learned that AIG's scripts count only doubled in 5 yrs as the earnings increased in tandem.
AIG had a superb CF advisory who had prior market knowledge learned from study done by Harvard biz school, i.e. 3 small bonus issues in 5 yrs.
i. A very good case study to do is that done and operated very well by the AIG before the deadly sub-prime crisis.
Hank Greenberg, a clever Jew engineered an explosive rise of AIG in its hey days.
Imagine this, AIG was rated 3 big A, AAA. Msia as a country garnered a mere Bcc or lower, I guess.
I learned that AIG's scripts count only doubled in 5 yrs as the earnings increased in tandem.
AIG had a superb CF advisory who had prior market knowledge learned from study done by Harvard biz school, i.e. 3 small bonus issues in 5 yrs.
Each time AIG stock price went above USD$100-150, a bonus issue was announced. After ex the lower price will gradually moved up n up to above 100 to 150 range. When this was achieved, a small fraction of bonus issue was again announced.
I remembered reading AIG's announcements on the 3 bonus issues. The letters written on 3 occasions were almost the same word by word and line by line. The only difference was the date, the # or ratio of bonus issue. This co. seems to be run mechanically.
This simple and safe way to wealth creation is set in motion.
Simply incredible, IF high priced co. like LATITUD wants to follow this amazing duplication plan.
ii. We want funds to hold plc like LATITUD forever.
Many funds in Msia are not allowed to buy fresh stocks below Rm2. More so among the foreign big spenders.
So stocks with prices below rm2 after over size generous split n bonus issues, beware.
The funds might begin to get out when the mkt gets tough or co. transaction is questionable.
New funds are very unlikely to come in. So there goes the demand for their scripts and stocks out-performance going forward.
Once upon a time, the fastest growing plc in msia, KNM was forced to experiment with a reverse split. But the funds fraternity did not trust the co. anymore.
This simple and safe way to wealth creation is set in motion.
Simply incredible, IF high priced co. like LATITUD wants to follow this amazing duplication plan.
ii. We want funds to hold plc like LATITUD forever.
Many funds in Msia are not allowed to buy fresh stocks below Rm2. More so among the foreign big spenders.
So stocks with prices below rm2 after over size generous split n bonus issues, beware.
The funds might begin to get out when the mkt gets tough or co. transaction is questionable.
New funds are very unlikely to come in. So there goes the demand for their scripts and stocks out-performance going forward.
Once upon a time, the fastest growing plc in msia, KNM was forced to experiment with a reverse split. But the funds fraternity did not trust the co. anymore.
iii. Free Warrant issue provides immediate 'steroid' effect to fast reward but the earnings dilution is forever. Unless the earning growth is super fast enough, the valuation has to come down.
Warrant issue is best done during purebear bad mkt condition.
GAMUDA with 3 right timing warrant issues, did it very well during its growing years.
GAMUDA with 3 right timing warrant issues, did it very well during its growing years.
