Recently i entered into a stock challenge game organised by the following website:
http://www.nextinsight.com.sg/
The game has started on 3rd Nov 2008 and will run for the next 6 months. Below are some of the stocks i have bought or shorted with my virtual start-up capital of $100K with supporting reasons.
1) Bright World (Long)
How can i not put money where the mouth is after spending time researching on the company?
I am confident that all the pre-conditions of the takeover offer will be fulfilled in the coming months. Even though there is no guarantee, I feel the potential return outweighs the associated risks. Moreover, some sweeteners have been included in the post-acquisition period for current shareholders of China Holdings Acquisition Corp which bodes well for the success of this deal. Those who are not familiar can refer to my earlier postings on bright world.
2) Wilmar (Short)
Shorted Wilmar purely for trading purposes. I feel that the buy-in was overdone as it gained about 20% from Monday to Thursday last week. There was a rebound in CPO prices in the last 10 days or so. But I believe this upsurge in prices will be temporary.
3) UOB (Short)
Shorted UOB as I expect its 3Q earnings report to be weak as compared to the last quarter. I see the UOB share price on a downward decline and took the opportunity to short it when there was a small rally on Thursday 30th Oct. I believe the demand for loans will continue to be soft and thus UOB’s margin will be affected. Further impairment charges will have to be taken as we progress and that will reduce the profits too.
I will post new updates if there is any change in my portfolio.
Cheers!
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http://www.todayonline.com/articles/289206print.asp
Bright World probed
Company may have run afoulof Securities and Futures Act
Wednesday • November 26, 2008
conrad raj
editor-at-large conrad@mediacorp.com.sg
MAINBOARD-LISTED Bright World PrecisionMachinery, which makes metal stamping machines in China, has been told by the Monetary Authority of Singapore (MAS) that it might have breached disclosure obligations under Section 203 of the Securities and Futures Act.
Neither the company nor the MAS would elaborate on the matter. A spokesperson of MAS would only say it “had written to Bright World PrecisionMachinery in connection with an inquiry”. She added: “It is premature and inappropriate to give furtherdetails at the moment, in the interest of ensuring that the ongoing inquiry is not compromised.”
The company itself said it “intends to cooperate fully” with the financial regulator and will be providing the relevant information and documents sought by the authority. The two most recent announcements made by the company relate to its financial results and a proposed takeover.
Bright World is presently the subject of a takeover by China Holdings Acquisition Corp (CHAC), a US-listed special purpose acquisition vehicle. The deal, which is in part-shares, part-cash, values the Singapore-listed company at between US$263 million ($395 million) and US$404 million. At yesterday’s close of 27.5 cents a share, Bright World was valued at $110 million.
The offer price was about double the prevailingvolume weighted average price of 38.7 cents a share when the announcement was made around mid-July. CHAC will issue a promissory note, which is automatically convertible to at least 19.9 million of its shares to World Sharehold for its77.42-per-cent stake in Bright World.
World Sharehold is controlled by Wang Wei Yao and Shao Jian Jun, Bright World’s chairman and chief executive officer respectively. Following the takeover, Messrs Wong and Shao will end up with about 54 per cent of CHAC’s enlarged share capital.
Minority shareholders will receive between70 cents and 75 cents a share; they will get the higher price if CHAC receives more than 90 per cent of Bright World’s outstanding shares.
It is not known if the MAS query relates to the takeover, with no one willing to confirm or deny press queries.
Earlier this month, Bright World posted its results for t:he first nine months ended September: :Net profits rose 19 per cent to 113.5 million yuan ($25 million) from a year ago. However, in the third quarter, net earnings fell 19 per cent to 34.7 million yuan from the previous corresponding period, while turnover jumped 22.5 per cent to 515 million yuan. About 36 per cent of turnover came from subsidiary Bright World Heavy Machine Tools, said the group.
The company said then that despite slowing sales, it remained optimistic over its long term prospects as “the metal stamping industry forms the backbone of many manufacturing industries and the PRC (China) remains the world’s manufacturing base”.
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