On 5 July 13, after-trading hours, Sound Global issued an update, pardon me if I interpreted wrongly, basically it converted its bonds and warrants into shares, about 22.3% (bonds) and 0.7% (warrants), thus with reference to page 3 of 28 June's notice (attached), Wen Yibo and his concerted party's 56.20%, they have control of est. 79.2% of entire Sound Global's shareholding.
Sound Global dual listed in SGX & HK, Chairman Wen Yibo proposed his interest to delist from SGX & offer cash consideration no less than $0.70.
2 things matter to tender offer; 1) the chance of the tender offer to succeed & 2) the time taken to succeed.
1) The chance Chairman Wen Yibo getting regulatory approval of SGX, HK & financing (est.$300 mil.needed) to complete the deal?
Networth of Wen Yibo & family: http://www.forbes.com/profile/yibo-wen/ $1.3 billion
Background:
Wen Yibo is China's first and, for now, only entrepreneur to break into the billionaire ranks thanks to an expertise in treating waste water. His Hong Kong- and Singapore-listed company Sound Global provides water treatment services to several major Chinese cities and manufacturing zones. His Shenzhen-listed Sound Environmental Resources also builds waste processing facilities. Increases in business last year lifted the shares of both, and with it, Wen's wealth. Sound Environmental's sales in first nine months of 2012 rose by 26% to $208 million; it's net profit jumped 42% to $44 million. Sound Global's revenue increased by 12% in the six months ending in June to $191 million. Wen holds a degree in environmental engineering from Langzhou Jiaotong University, where he is a part-time professor. He shares his fortune with his wife.
Unlikely he will fail in getting the financing and regulatory needed, as the deal does not concerns any sensitive interests.
2) time taken to succeed?
I estimated 1-2 months time to confirm the deal & announce a public offer, & another 1 -3 months to get the stakes needed to delist Sound Global from SGX.
If I am not wrong, a 90% tender is needed, since Wen Yibo owns 56% and the deal is only delisting from SGX but remains listed in HK I don't expect any resistance from its other shareholders like Norges Bank 5.9%, Mitsubishi UFJ Financial Group, Inc. 7.19%.
Projected rate of return:
If $0.635, Projected Profit ($0.065) divide by Investment ($0.70) = 9.28%
If assigned 70% chance succeed, our Adjusted Projected Rate of Return (APRR) is 0.7 x $0.065 = $0.0455.
If deal fail, price will drop back to pre-offer traded price of $0.57 (or drop of $0.065), thus loss becomes $0.57/$0.635=89% or aka loss of 11%.
If assigned 30% chance fail, our Adjusted Projected Rate of Loss (APRL) is 0.3 x $0.065 = $0.0195.
Risk-adjusted projected profit (RAPP) = APRR $0.0455 - RAPP $0.0195 = $0.026.
Risk-adjusted projected rate of return (RAPRR) = RAPP $0.026 / Investment $0.635 = 4%.
Assume a desired closing of deal in 3 months, RAPRR annualised becomes 16%
Assume a likely closing of deal in 6 months, RAPRR annualised becomes 8%.
Monday, July 8, 2013
Thursday, June 20, 2013
STI - Downside Resume - Double Down!!
On 16 June 13 (Sun) I posted a trend change, and announce STI uptrend, I was right for only 3 days.
Due to Fed's affirmation that QE3 will be scale down beginning end of this year, market has switched to "cash-in" mode, to sell away holdings and convert to cash / bonds or whatever "safe assets" investors could find.
The STI has shown a failure to breakthrough the downtrend, failing to even touch 20d MA, its price & 7d EMA have taken another dive. This is only beginning of the resumption of "double down"!
Its time to review your holdings, sell if you are unsure or afraid to hold your investments (stimulate dropping another 25% or so), if you can stomach that kind of fall, then hold & add on later.
If you are in losing position, inflation will make everything price higher in mid-term, so if you are confident and wish to hold, go ahead. Otherwise, you can always convert to cash & short later. This apply to majority of stocks, but still some will go against the down trend, eg. medical supplies, mask manufacturers etc. (trust me, this quarter's earning will jump, no thanks to Sumatra's forest fire).
For those bold, and can monitor your trade, try shorting the market with Warrants for SG, options & reverse ETI. All the Best to your trading, may the Force (Trend) be with you ( * - * )")
Due to Fed's affirmation that QE3 will be scale down beginning end of this year, market has switched to "cash-in" mode, to sell away holdings and convert to cash / bonds or whatever "safe assets" investors could find.
The STI has shown a failure to breakthrough the downtrend, failing to even touch 20d MA, its price & 7d EMA have taken another dive. This is only beginning of the resumption of "double down"!
Its time to review your holdings, sell if you are unsure or afraid to hold your investments (stimulate dropping another 25% or so), if you can stomach that kind of fall, then hold & add on later.
If you are in losing position, inflation will make everything price higher in mid-term, so if you are confident and wish to hold, go ahead. Otherwise, you can always convert to cash & short later. This apply to majority of stocks, but still some will go against the down trend, eg. medical supplies, mask manufacturers etc. (trust me, this quarter's earning will jump, no thanks to Sumatra's forest fire).
For those bold, and can monitor your trade, try shorting the market with Warrants for SG, options & reverse ETI. All the Best to your trading, may the Force (Trend) be with you ( * - * )")
Friday, June 14, 2013
STI Market Rout - Is the bottom in sight?
They say it is foolish to predict market directions, and its been sometimes since I last posted my trades...
The past 3weeks have been a painful down market, and it started all by a change of perception "the fear of QE withdrawal".
I thought it is funny, that people are so fearful that market will collapse, because Fed felt the economy is strong enough to exit ICU (aka reduce QE, monthly bond purchase).
In any cases, the fear is valid for certain sectors (such as REITs, high debt companies), why?
Because the removal of QE or reducing of monthly purchase of bonds will eventually allow bond yields > Treasury yields > bank interest lending rate to rise, possibly breaking the 4% and back to 5%? Observer should note that the current money supply in the economy are several times larger than it was in 2007, and this huge money base in the economy is still set to grow bigger (but at a slower pace, with lower bond purchase).
In any cases, companies such as those "Buffett stocks" with strong brands, EPS, yield etc. is great for load up now. But companies that are already heavily financed with debt, especially bank loans, should be avoided and trade with caution, as these companies will be dragged by increasing interest and cost of interest servicing.
So, after so much talk about QE, economy, the big question is "is the bottom in sight"?
Should we enter market now?
My short answer, yes!
Why? Good to ask.
The past 3weeks have been a painful down market, and it started all by a change of perception "the fear of QE withdrawal".
I thought it is funny, that people are so fearful that market will collapse, because Fed felt the economy is strong enough to exit ICU (aka reduce QE, monthly bond purchase).
In any cases, the fear is valid for certain sectors (such as REITs, high debt companies), why?
Because the removal of QE or reducing of monthly purchase of bonds will eventually allow bond yields > Treasury yields > bank interest lending rate to rise, possibly breaking the 4% and back to 5%? Observer should note that the current money supply in the economy are several times larger than it was in 2007, and this huge money base in the economy is still set to grow bigger (but at a slower pace, with lower bond purchase).
In any cases, companies such as those "Buffett stocks" with strong brands, EPS, yield etc. is great for load up now. But companies that are already heavily financed with debt, especially bank loans, should be avoided and trade with caution, as these companies will be dragged by increasing interest and cost of interest servicing.
So, after so much talk about QE, economy, the big question is "is the bottom in sight"?
Should we enter market now?
My short answer, yes!
Why? Good to ask.
From a fundamental point of view, the current PE ratio of STI index is only 12.98, this is lower than the average of 15, not to say the typical market peak's PE ratio of 22-25.
Furthermore, most companies are still predicting similar level of forward earnings, hardly a market peak.
From Technical point of view, see the chart below:
STI just form a "kangaroo tail" where the valley "V" is formed, with a bullish white candle following on Fri, 14/6/13. So, even if S&P500, Dow were to continue to fall tonight, it is likely to bottom in the next few days, and begin a slow and steady uptrend.
The Force Index has formed a shallow bottom, implying the "V" is losing strength, the MACD line has "flatten" and soon to turn up, the RSI has already turn up. In short, multiple bullish indicators signal that the bottom is over, and reversing to uptrend soon.
How high the uptrend will be? This I cannot tell, but I can say is the market has bottomed.
If you have escaped the "crash", now is the time to open your savings wallet and go "Great Singapore Sale" of best Singapore companies! Load up on those companies, with positive operating cash flow, low debt, and best high discount to NAV, and some dividend yield of 4-6%.
This should fatten your money, by the time this year's Christmas for you to buy those latest gadgets for the kids' Christmas gifts!
One point to note, unless tonight's US indices fall by 3%+, & STI dropped 3% too on Mon, resulting in a gap down or long dark candlestick, lower than the "V"; the bottom is safe & you should shop now. But if the markets drop by 3% more, which I feel unlikely, unless there's some material news which are not announced, then the bottom is intact.
Thursday, August 23, 2012
Intra-Trade Sharing 120823 SGX-GEMS TV ~ aka Timothy Syke - Singapore version?
At the start of the day, as usual I go about reading news brief of the day, noticed a stock GEMS TV announced a 1st time annual profit and a dividend of 0.9 cent!
This counter's price started trading in the day at $0.027, I immediately downloaded the earning report & digested the news. Another positive abeit speculative factor is that the management is looking for potential company for reverse takeover and encouraging MMCG to do an Initial Public Offering.
To be frank, I did not even research what does MMCG stand for, the only calculations I did were:
Dividend Yield %: $0.009 divide by $0.028 (price traded at 9.30am) = 32.1%!
NAV: US 2.99cent = roughly SG 3.73 cent (simply multiply by 1.25).
Cash Per Share: US $9,763,000 (Cash and cash equivalent in Q4 report) divide by 1,035,370,220 (total shares issued) = US $0.00942 or SG $0.011 => {this means company able to pay the large dividend}
Naturally I jump into action & bought 500 lots immediately at sell price $0.028 (bid price was $0.027).
My thinking was to wait for few days as I am quite confident that a dividend yield this high plus the various positive management commentary, high NAV, Cash per share etc., for a while in the morning, the price dropped briefly to $0.027, but I ignore and went back to work...(feverish overwhelmed by daily work again, its hard to be an employee :(
Of course, I set a price alert with one of those free Android apps which you could find, but remember that the app is base on Yahoo price which is 10mins later, plus our lousy 3G network, sometimes after the alert, the real-time price may be gone.
Well, in this case, I immediately sold away within the same day at $0.032, netting a cool net profit of $1,894.87. Great huh? well the stock closed up at $0.034, I wont be surprised if the stock go higher over the next few days... But I have earned my day...
If you are interested in his courses with a additional Singapore note that explains with real past examples on how to trade penny stocks in Singapore context, all these for only SG$100!
Look I already showed you how I made $1800+ with half the standard brokerage capital (typically you are given $25K trade limit), imagine how much more thousands you could made from learning my secrets!
For a limited time only, for the first 10 persons that bought Timothy Syke's course materials (DVDs), ebooks + my free note with real cases on how to trade penny stocks, you will get a free one-time guidance on your first trade within 6 months from payment.
What are you waiting for? Take action now!
The next millionarie could be you...
Complete the form below, payment instruction will be emailed to you, only Inter-bank Transfer is accepted at this moment.
This counter's price started trading in the day at $0.027, I immediately downloaded the earning report & digested the news. Another positive abeit speculative factor is that the management is looking for potential company for reverse takeover and encouraging MMCG to do an Initial Public Offering.
To be frank, I did not even research what does MMCG stand for, the only calculations I did were:
Dividend Yield %: $0.009 divide by $0.028 (price traded at 9.30am) = 32.1%!
NAV: US 2.99cent = roughly SG 3.73 cent (simply multiply by 1.25).
Cash Per Share: US $9,763,000 (Cash and cash equivalent in Q4 report) divide by 1,035,370,220 (total shares issued) = US $0.00942 or SG $0.011 => {this means company able to pay the large dividend}
Naturally I jump into action & bought 500 lots immediately at sell price $0.028 (bid price was $0.027).
My thinking was to wait for few days as I am quite confident that a dividend yield this high plus the various positive management commentary, high NAV, Cash per share etc., for a while in the morning, the price dropped briefly to $0.027, but I ignore and went back to work...(feverish overwhelmed by daily work again, its hard to be an employee :(
Of course, I set a price alert with one of those free Android apps which you could find, but remember that the app is base on Yahoo price which is 10mins later, plus our lousy 3G network, sometimes after the alert, the real-time price may be gone.
Well, in this case, I immediately sold away within the same day at $0.032, netting a cool net profit of $1,894.87. Great huh? well the stock closed up at $0.034, I wont be surprised if the stock go higher over the next few days... But I have earned my day...
By the way, just in case you are wondering who's Timothy Syke, he's a self-made millionaire, money manager that focus on penny stocks. His strategies and past trades that he discussed in his courses, are rather insightful and interesting... Basic lesson is still one must know what he's doing when he buy/sell, he traded skillfully especially in cases such as "pump & dump", speculative news (aka story telling)...etc.
If you are interested in his courses with a additional Singapore note that explains with real past examples on how to trade penny stocks in Singapore context, all these for only SG$100!
Look I already showed you how I made $1800+ with half the standard brokerage capital (typically you are given $25K trade limit), imagine how much more thousands you could made from learning my secrets!
For a limited time only, for the first 10 persons that bought Timothy Syke's course materials (DVDs), ebooks + my free note with real cases on how to trade penny stocks, you will get a free one-time guidance on your first trade within 6 months from payment.
What are you waiting for? Take action now!
The next millionarie could be you...
Complete the form below, payment instruction will be emailed to you, only Inter-bank Transfer is accepted at this moment.
Monday, August 6, 2012
Trade Update 120730 **Buy Alert** SGX - SMRT @ $1.63
An update to my **Buy Alert** of SMRT issued on 30 July 12, I managed to entered at $1.625 with 10lots, still the price fell to $1.62 before a sudden 1 day surge today to $1.655 where I closed out my trade.
I closed it this early partly due to unexpected delay in my inter-bank transfer which my LimTan Broker has graciously helped me to hold, but I thought it would be better to simply close it to free up the deliquent amount from my broker's account. I maybe wrong but I was told to be a broker / remiser you need to have a account deposit, should your clients fall short in payment, the broker's account will be used to top up beyond T+3, in the past inter-bank transfers will show up in bank account in 2 working days, but this time it took longer.
Let me know if you are keen to open any accounts with LimTan, LimTan brokerage is the only brokerage in Singapore that gives NTUC Linkpoints for fees charged which is much more useful than the typical points by other brokerages which are low and restricted to their own products. Furthermore there's account openning rewards now, with both applicant and referrer benefiting from NTUC & LimTan vouchers. Now back to the trade analysis:
Firstly, this counter is only at the start of its "up" wave, it is highly likely that the counter will rises further and even reverse its current mid-term downtrend.
As my daily chart below shows, I was lucky to close at the top to today's bar, but all indicators have turned bullish with Parabolic Stop and Reversed (that green dot below today's white bar), the higher Force index, and the impending crossing of the MACD, Signal line.
The key is to watch for opening of price above $1.65 & closing above $1.65.
When this happens, it confirms the reversal of short-term trend, and one could look forward to a rise similar to the period 18 Jun - 3 Jul, when SMRT rises from $1.65 to $1.72 before reversing again.
I closed it this early partly due to unexpected delay in my inter-bank transfer which my LimTan Broker has graciously helped me to hold, but I thought it would be better to simply close it to free up the deliquent amount from my broker's account. I maybe wrong but I was told to be a broker / remiser you need to have a account deposit, should your clients fall short in payment, the broker's account will be used to top up beyond T+3, in the past inter-bank transfers will show up in bank account in 2 working days, but this time it took longer.
Let me know if you are keen to open any accounts with LimTan, LimTan brokerage is the only brokerage in Singapore that gives NTUC Linkpoints for fees charged which is much more useful than the typical points by other brokerages which are low and restricted to their own products. Furthermore there's account openning rewards now, with both applicant and referrer benefiting from NTUC & LimTan vouchers. Now back to the trade analysis:
Firstly, this counter is only at the start of its "up" wave, it is highly likely that the counter will rises further and even reverse its current mid-term downtrend.
As my daily chart below shows, I was lucky to close at the top to today's bar, but all indicators have turned bullish with Parabolic Stop and Reversed (that green dot below today's white bar), the higher Force index, and the impending crossing of the MACD, Signal line.
The key is to watch for opening of price above $1.65 & closing above $1.65.
When this happens, it confirms the reversal of short-term trend, and one could look forward to a rise similar to the period 18 Jun - 3 Jul, when SMRT rises from $1.65 to $1.72 before reversing again.
Wednesday, August 1, 2012
**Watch** SGX - STI Cup & handle formation
Cup & handle is one of the more popular technical formation that traders watch for... For more explaination, you may go to this link at StockChart.com which I find quite useful & practical for traders.
Basically if STI is to open & stay closed above somewhere 3030, the STI may have completed a breakout and will likely achieve 5-15% increase, possibly breaking its next resistance 3100, and reach its previous highs of 3200.
Watch for this week & next, especially the action from Europe and Fed's meeting...
Basically if STI is to open & stay closed above somewhere 3030, the STI may have completed a breakout and will likely achieve 5-15% increase, possibly breaking its next resistance 3100, and reach its previous highs of 3200.
Watch for this week & next, especially the action from Europe and Fed's meeting...
Monday, July 30, 2012
**Buy Alert** SGX - SMRT @ $1.63 & FY13Q1 Result Highlights
FY13Q1 Result
Overall SMRT managed to improved its Q1 result by 4.7% despite increased costs from almost every aspects of its operations: repairs (30.4% increase), depreciation for 17 new trains (19.9% increase), penalty imposed by LTA & other costs (17.2% increase), staff costs (8% incrase) and lastly electricity, diesel costs (6.5% increase).
Still, the management kept a positive outlook in its 7. Prospects and expect the revenue growth to continue in 2Q, FY2013. The management is also expected to tap on LTA's funding to co-share the $900 million cost of renewing train assets for the North-South East-West Line. A revised fare formula, possibly ready in early 2013 may also bring about some relief to the increasing operation costs.
The positive news results stopped the continuous series of black candles, turning around several indicators. The Force Index showed a emerging bull force in its infancy, MACD bar has been green for a while, and RSI at its oversold position, all in all SMRT should trend up for a while with support line at $1.605.
If the trade goes nowhere, traders can hold on till Nov 12's dividend of est.$0.0175.
Overall SMRT managed to improved its Q1 result by 4.7% despite increased costs from almost every aspects of its operations: repairs (30.4% increase), depreciation for 17 new trains (19.9% increase), penalty imposed by LTA & other costs (17.2% increase), staff costs (8% incrase) and lastly electricity, diesel costs (6.5% increase).
Still, the management kept a positive outlook in its 7. Prospects and expect the revenue growth to continue in 2Q, FY2013. The management is also expected to tap on LTA's funding to co-share the $900 million cost of renewing train assets for the North-South East-West Line. A revised fare formula, possibly ready in early 2013 may also bring about some relief to the increasing operation costs.
The positive news results stopped the continuous series of black candles, turning around several indicators. The Force Index showed a emerging bull force in its infancy, MACD bar has been green for a while, and RSI at its oversold position, all in all SMRT should trend up for a while with support line at $1.605.
If the trade goes nowhere, traders can hold on till Nov 12's dividend of est.$0.0175.
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