Friday, April 01, 2011

A Little Chat With Dali On Perisai

Dali, I see that you had posted a piece on Perisai called Over Eager Reporting and Research


  • My View: The asset is properly priced. Although it has the same name, there has been tons of monies poured into the asset to bring it to what it is, and it comes with a strong recurring contract as well. It comes with a substantiated contract which will propel Perisai's earnings visibility enormously. My advice to all analysts and reporters, when something is so blatantly wrong, usually its not. When something is so blatantly good, usually its not. No one here seems to even bother to pick up the phone to confirm some facts, no fact checking at all. A call to Perisai's office would have negated all that. There were some 100m shares transacted all the way down, that is a massive loss for some people. Who were buying then??? The people who knew better. Who should be responsible for the losses incurred ... hmmm ... Still, the shares should continue its upward ascendency following this quite unecessary debacle.

Firstly, Dali, I do apologise for posting here and not in your comment box ( I will try to post my comments or the link to this post in your posting later). This is because my reply is rather long winded (as usual! LOL! ps: how are you ar? ) and it contain a chart pix.

1. You said "There were some 100m shares transacted all the way down, that is a massive loss for some people." Well is RHB to be blame? Did RHB contributed to the fall?

Here's the one hour chart of Perisai I just took.


From my lousy interpretation of the chart, Perisai started declining yesterday morning, 31st March 2011.

Now the news flash that was posted on 30th March 2011 on the Edge can't be found.

LOL!

Serious.

For some strange reason, I can't find the url of the article but that article can be viewed here: http://my.news.yahoo.com/flash-rhb-research-raises-concerns-over-perisais-acquisition-20110329-181406-445.html

As can be seen, RHB's comments was posted on Wed, Mar 30, 2011 9:14 AM MYT

And Perisai shares did not drop on Wed morning despite those comments posted online on the Edge website. In fact Perisai soared above 90 sen on Wednesday itself.

So for me, I would not blame RHB to be the cause for Perisai's reversal. That's my flawed opinion!

Now yes, I would probably agree with you very much that RHB analyst could have done better had she called up Perisai. A phone call would not hurt yes?

However, what about Perisai themselves?

Firstly the issues that was raised, those were rather logical questions, an analyst would raise and ask, yes?

From my own flawed personal ways, I would indeed prefer very much that an analyst or an report covers BOTH the potential rewards/benefits a deal brings and also the possible negative implication(s) arising from a deal. Yes, I indeed would prefer to see both sides of views.

Yeah, but in a hot market, when one is speculating/trading on that stock itself, it's a no brainer that one does not want to hear any whisper of risks at all.

That's normal and seriously, as you had known me from the good old chat days, I accept such behavior. It's normal la. It's like that one. :=)

So where are we now? LOL!

Oh yeah, the initial issues raised by RHB.

Let me paste here again.


  • RHB Research said on Wednesday, March 30 that this was an unusual transaction which brings the former CEO back into the company, and more so given Perisai had sold Garuda to him in mid-2010 for just US$5 million cash. In early-2010, Garuda had acquired a jack-up rig for US$5m cash, which Perisai now appears to be targeting in this acquisition. Other than a change in name (from Hercules 191 to Rubicone) the rig is currently being converted into a MOPU. The rig has also been chartered out to Gryphon on a 2+1 year bareboat charter basis for US$25 million per annum. “We are concerned about the transaction and the new issue of shares, which will give Nagendran a 13.5% stake at a 20% discount to the current share price of 81 sen. “This will dilute current major shareholder Ezra Holdings' 19% stake to 17%. Moreover, we believe there is a corporate governance issue relating to the effective purchase of the asset at 14x premium to the original disposal price of the same asset,” it said.
Are those questions not valid? Are those not issue of concerns? I could be wrong but I think so la. Perhaps RHB analyst should have called Perisai. I agree. But... but... but.... what about Perisai themselves? This was a 210 million deal involving its former major stakeholder! And did Perisai furnish Bursa with any details? Nope. All i saw was Perisai giving all the info ONLY when Perisai was asked by Bursa to furnish the details! Here's my screenshot of Perisai's current announcement.

Perisai announcement to Bursa on its Garuda deal was on 31 Mar 2011. Perisai announcement to the local media of its Garuda deal was on 30 Mar 2011. Me? I would only ask Perisai why! Seriously, this is corporate governance and transparency. But again that's me. ps: sorry for that long winded post (this is why I cannot reply directly on your site!) and yeah, I do like things long. :=)


update: do see this posting also: Featured Post: Legg Mason Sold Every Single Share Of Perisai They Had Bought On 23 Mar 2011

11 comments:

Salvatore_Dali said...

moolah,

fair comment...

perisai is not at liberty to reveal too much as it was a heads of agreement term sheet for negotiations ... not to be voted on yet or ratified

but since RHB's piece, Bursa had to act, so hence the answers, which was delivered promptly

corporate governance yes, but we must also know the old mgmt is "slow and not able to take the company anywhere" ... the new CEO is the ex-MD of Sapuracrest ... thats why Ezra is in

you can question that the asset should not have been sold in the first place ... thats to the old owner ... it was a fair price then ... the owner knew he could invest in it and make it more attractive ... 12 months later, there is a big change in the makeup of owners in Perisai ... Ezra is in n the Garuda asset now has a contract, the owner actually put in US$40m to invest into Garuda, something Perisai has no financial strength to do back in 2010

its a new shareholdings, calling new shots, the Garuda thing just fell into place ... yes things could have been nicer but sometimes business evolves and changes with important shareholding changes, what was not possible is possible now

Salvatore_Dali said...

another thing, research views or notes do not get its way to share prices so fast ... it may not be as immediate, not everyone reads rhb research or the news sites ... so, yes its a flawed view to think the RHB note is not responsible

Moolah said...

"so, yes its a flawed view to think the RHB note is not responsible"

Well.. err.. err... WOW!

Are we really, really gonna wrestle this issue to death?

LOLOLOLOLOLOL!

Seriously.. I laughed my sss of when I read you said in your posting "uncles and aunties who sold in panic". :)

ps: The stock did went up, up and up everyday from 23 Mar from 73 sen to a high of 93 sen yesterday morning. non stop ... everyday up. Did these aunties and uncles cause that panic also?

:P

elizabeth said...

The share price up because of rumours. Last week itself I 'heard' that this week perisai will move... That is how the share price goes up from 73sen to 92 sen!!! The pattern fits nicely into the classical market manupulation. After all the excitement, we now read that they are only at the term sheet stage.. wonder where they will go from here!!!

Moolah said...

Elizabeth: When there are so many uncles and aunties around, my granny once advised me that its best not to argue much.

:P

Prashan said...

From corrosion experts, to marginal fields and now to corporate Kamasutra. What is it with this former MD. Enter new management and the hoopla continues. And then come along the hallowed research houses that lap up dollops of blue sky from management and dribble it on reports. And others too who do their bidding, complicit (front running) or naïve, I wonder.

Legg Mason have come and gone too. Did it smell a rat. Something smells rotten in Perisai.

Date interest acquired
: 23/03/2011
No of securities : 35,393,700

Number of securities disposed: 31/03/2011




No of securities : 35,393,700


Of all the metric look for integrity in management. Absent that, whatever else cascades down run for the hills.

kc said...

now it looks more obvious right? those people who knew the insider news would buy first , eg . legg mason.. and then sell off which cause a drop in perisai's share price from 92 to 81, 35million shares sold out from 100million..a 6-8million profit out of 2 weeks, if u are legg mason, will u sell? i duno the answer, seems like there are people who know the news upfront create a massive buy and push up the stock and then sell it..

whatever it is, perisai still worth is value even at rm1, i agree with cimb research

Moolah said...

Prashan, thanks for the heads up!

Posted your comments here:

http://whereiszemoola.blogspot.com/2011/04/featured-post-legg-mason-sold-every.html

Moolah said...

kc, I had highlighted several interesting points from snowball in the posting http://whereiszemoola.blogspot.com/2011/04/featured-post-legg-mason-sold-every.html

elizabeth said...

After the Malaysian investors had been had by the likes of transmile and megan, and with so many good companies on bursa that can be invested, a value investors would do well to avoid perisai. Anyway, share price already 85 sen,does the risk commensurate with the reward?

tohff7 said...

I guess legg mason is not your panicking 'uncle and auntie'?