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Patience .......is the key STILL !

hi ! James,
see the date and what I had put on the table. Look at what the market calling GMG now?

Investing is profoundly needed hell a lot of patience.
Without that, speculating in the property with decent leveraging, would be an idea instrument too. Goodthing about property is no daily price quote for viewing.

Some stocks, I have been holding for years. GMG is considered a mid-term play, but in between I had been traded it.

Again, I shall be available next Tuesday/Wednesday, confirm in due course.

thanks & regards


--- On Mon, 8/24/09, wrote:

From: [email protected]
Subject: GMG-Right issues
To: "Warren Oh"
Date: Monday, August 24, 2009, 7:04 PM
Hi ! Warren,
As mentioned this afternoon about participating GMG Global-Right issues. Before elaborating further, I hereby would like to declare my interest/position in this investment selection.

(1) You may have to double check all the facts I’m going
to put on the table.

(2) I’m not a rubber expert or know a lot about the rubber business.
It is purely from my “reading” as a small investor point of view and it meet most of my criteria to put some monies in it for mid-term.

(3) Unlike my previous speculation on East Asia Bank, which I was pretty much sure, if you still remember, a great rally after bonus issue 1 for 10 at HK$14 & dividends.

(4) Lastly, please forgive me if ever there is any error and correct me if you can.

My criteria for stock speculating in mid-term, briefly;
(1) Every season has a reason, I’m not buying anything just because it’s cheap or undervalue.

(2) Every selection has to be attached with an impetus for its price to be accelerated.

(3) Very important to warm-up prior loading-up any heavy
position.

MGM Global-Right Issues;
(1) 9 for 10 @ Right price SGD0.055.
(2) 1,818,544,446 @ $0.055 to raise SGD$100 million for Future Acquisition.

Myself;

(1) I had been trading on this stock prior till G.O in July 2008 by Sinochem International Corporation, a listed company on Shanghai Stock Exchange. Some players behind... made and lost money before.

The market mechanism;

(1) The theoretical ex-price was $0.092, based on the last cum-price of $0.125.

(2) First day trading after ex (Friday, 21 August 2009), mother price dropped till $0.105 and PAL was trading at the ranged-down from $0.05 till $0.035.

(3) On Friday, a few big blocks, about 50 million PAL was crossed at $0.03/35 level.

24 August 2009; (1) GMG-R, closed at $0.035, transacted 200,087,000 shares. Out of that, 142 million shares crossed mostly @ $0.03 cent with about 20million shares @$0.035.

My market reading on the above scenario;
(1) Market over reacted towards its LOW right issues price. This is normally happen whenever a low right issue/placement price, the market just sell down and off course, those will be happily accumulating at the other end. As a contrarian’s strategy, I always love to buy any non- speculative stock under ordinary market situation.

(2) Heavy arbitraging in between the mother & PAL.

(2) Other than that, I’m totally don’t understand why should a company value dropped so drastic? Again, I would like to emphasize; the right issues is for future acquisition, rather than for debt-settlement.

(3) Based on the two days observation, I would like to take the PAL at 0.03/035 is at the bottom benchmark.

Micro interpretation;

(1) Based on the closing price, PAL is trading at a discount against its mother price of 16.67%.

(3)See the attachment, according to the balance sheet as of 30th June 2009; the NTA is about $0.14 cent, at $0.09 (during the crisis price) entry- level is approximately 55% discounted against its NTA.

(4) How about the earning?
GMG Global earning had been at a stable tight range in year 2008, made a lot of profits in year 2007. How about the prospect? What I know is the rubber price is closely tagged upon the automobile industry. The only country automobile industry is doing extremely well is China. (I have been trading some China automobile stocks in HK market and know a little bit of their fabulous financial results recently)

(5) Don’t forget, the earning was from Europe and US before taken over by Sinochem International Corporation (Paid 51% stake at $0.26 per share).

(6) I don’t know exactly how the earning prospect is going to be, but I’ m quite certain; given the current global economy momentum, rubber price shouldn’t be doing so badly, which ought to be translating a set of good earning for GMG Global Ltd.

Risks;
I always ask about risks involved in any speculation; in this context, whether it could be possibly a/some rubbish injection to take out the $100 million from this company?

Please check the below web; http://www.sinochemintl.com/en/2media/1_detail.asp?id=381

Thus, I think and I would say, the possibly rubbish injection is quite low. Given, Sinochem International Corporation, the major shareholder’s entry cost is $0.26 plus this right issues subscription & under writing.

Other risks, I may not know such as;
(1) The fluctuation of rubber price,

(2) Geo-political/country risks in Cameron, South Africa & Indonesia? I think, being a Malaysian, whom is forced to invest abroad, inevitably to take certain degree of risks. Well, this is our career/life, dealt with it then.

(4) Worse case scenario? I think, at $0.09 cent backed with almost $0.055 cash per share. We are buying into this business at only $0.035/4, I don’t see any severe risks behind? If you know any, please tell me.

When to cash out/sell;
(1) As I said, every season has a reason; an impetus is expected to boost the share price with the $100 million future acquisition.

(2) Highly likely to participate in the robust China automobile industry,which is to deliver a good set of earning given its major shareholder background.

(3) Who the hack had been absorbing the crossed block of shares (PAL) and via open market? Are they buying for long-term or fun??

cheers !

IFAC Webb, other key business leaders interviewed by IFAC (Webb, 其他主要商業領袖IFAC訪問摘錄)

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