Ingress: Where Is My Dearest UMA?

Posted this morning: Ingress: Yesterday's Hot Stock Got Even Hotter!

Stock then was 0.415. It closed at 0.385.

Look at the insane jump in Ingress stock price.

And no UMA (unusual market activity) query from Bursa!!

In the afternoon, DowJones had this newsclip.

• 0323 GMT [Dow Jones] Ingress Corp. (7112.KU) +17.4%, or 6 sen, at 40.5 sen in heavy volume; dealers cite follow through buying interest on award of MYR61.9 million worth of contracts expected to contribute positively to FY09, FY10 earnings. Also, investors speculating Sukuk-holders will vote in favor of extending maturity date of first tranche of MYR160 million Sukuk at ongoing EGM to Jan. 9, 2010, from July 9, 2009. "If they are successful in extending the maturity date, the burden on cashflow will be mitigated. The award of new contracts is also working in favor of the stock," says dealer. Resistance at 64.5 sen (August 2008 peak). (VGB)

Two reasons give by the dealers (not the company). I wonder who are these dealers? Does these dealers have any vested interests?

Anyway...

Reason 1. Power contract from TNB. Contribute positively? As per posting Today's Hot Stock: Ingress Corporation, Ingress had a rather lousy record in the power sector. It tend to lose money more than it makes. And even, if it makes money, the money made was rather minimal.

Reason 2. Sukuk thingee. On the Edge Financial Ingress gets 6-months extension

• KUALA LUMPUR: Ingress Corporation Bhd has received a six-month extension to repay the first tranche of its sukuk amounting to RM50 million which was due July 9.
  
  The company said on July 2 the sukuk holders, had at its EGM, approved the resolution to extend the maturity date to Jan 9 next year.
  
  "The approved six months extension is to enable the company to formulate and finalise a comprehensive financial restructuring plan for the whole of the Ingress group," it said.

Extension to pay back loans. LOL! It's this a justifiable reason for the stock to soar?

6 months to pay back rm 50 million!

Time to check out the balance sheet.

rm 27.9 million left in the piggy bank.

The liabilities...



See the increased borrowings.

And lastly the cash flow statement.

How?

How do you rate Sukuk holders chances of collecting back rm 50 million in 6 months time?

How now my dearest UMA?

Confusing Headlines On Malaysian Export Numbers

On Business Times: 'Malaysian exports inching towards recovery'

• By Rupa Damodaran Published: 2009/07/02
  
  MALAYSIAN exports are taking small steps towards recovery as manufacturers take advantage of inventory replacement activities worldwide, economists said.
  
  Malaysian manufacturers mainly produce electronic and electrical items that are used to make computers, among others.
  
  They have been hit hard by weak demand due to the global recession.
  
  Although there seems to be some improvement in the month-on-month E&E orders and industrial output, economists were still concerned whether the data was sustainable.
  
  They forecast May exports to contract further by 28.83 per cent, with imports also down by 23.91 per cent. Trade balance may average RM8.68 billion.
  
  The contraction in May, from a minus 26.3 per cent in April, will be made worse by high numbers last year as commodity prices were strong then.
  
  The International Trade and Industry Ministry will release the data tomorrow.
  
  Irvin Seah from DBS said the worst quarter of the recession was behind and an impending recovery for Malaysia would be visible in the months ahead.
  
  "As far as we're concerned, the trough of the export cycle (in absolute level) was back in January."
  
  "Improvement in the global economic environment, led by restocking by producers as well as the recent increase in oil prices probably will contribute to the headline export figure in May."
  
  The oil prices also rose to US$65 (RM228.80) per barrel from US$39 (RM137) per barrel between April and May.
  
  "That's a 32 per cent increase, which will certainly inject some 'price effects' to the export number."
  
  Standard Chartered Bank economist Alvin Liew expects a sharper contraction in exports in May, driven by the plunge in export value of key commodities like crude palm oil and crude oil.
  
  This would translate into a trade surplus of RM7 billion, which could be the narrowest monthly surplus since April 2007.
  
  TA Research economist Patricia Oh said faltering trade activities are likely to persist considering the rise in unemployment, dampened consumer sentiment and reduced demand for goods and services.

Hmm... I wonder why Business Times decided to name that headline ''Malaysian exports inching towards recovery' when two of the three economists mentioned inside the article itself weren't optimistic at all.

Strange eh? :p2

On Star Business, the headline was Economists see further fall in Malaysia’s exports

• By FINTAN NG
  
  PETALING JAYA: Malaysia’s exports continued to contract year-on-year in May as the bottoming-out process worked its way through the global economy.
  
  A Bloomberg poll of 12 economists saw exports contracting 28.2% year-on-year in May (April: minus 26.3%), imports falling 23.2% (April: minus 22.4%) and the trade balance rising to RM8.8bil (April: RM7.4bil).
  
  The Statistics Department is expected to release the external trade figures tomorrow.
  
  Economists are still cautious of the landscape although there are signs that things are looking better ahead with China’s purchasing managers’ index expanding for a fourth month in June and consumer confidence in Britain and the euro-zone rising.
  
  However, a gauge of US consumer confidence dropped in May while Japan’s Tankan business survey showed confidence among the country’s manufacturers was still down in June as factories remained under-utilised.
  
  The economists said the key driver remained government stimulus measures to boost domestic demand as there was no recovery in exernal demand.
  
  Oversea-Chinese Banking Corp Ltd treasury research and strategy head Selena Ling said global demand, especially from the G3 countries (the United States, Japan and the 25 members of the European Union) remained “very weak”.
  
  “In Malaysia’s case, we see continued weakness in the electrical and electronics (E&E) segment of manufacturing, with revenue contribution to exports versus commodities continue falling,” she told StarBiz yesterday.
  
  Ling said the conflicting data coming from various parts of the world was quite common at the inflection point.
  
  “It’s a bottoming-out process, there will be stabilisation but there will not be real growth as most of it is coming through stimulus measures,” she said.
  
  Forecast Pte Ltd economist Joanna Tan said there were still no blatant signs of demand recovery, with the global E&E sector still in contractionary mode although it was off its lows from the start of the year.
  
  “Right now, it’s good to be cautious as there are no compelling signs the recovery is gaining momentum,” she said.
  
  Standard Chartered Bank economist Alvin Liew said even if China were to recover, final demand still hinged on the G3 nations.
  
  “However, countries such as Australia and Malaysia, with strong base in commodities, will benefit from China’s relatively stronger performance,” he said.
  
  Liew said the liberalisation measures taken by Malaysia would help but benefits should be seen only in the long term.
  
  On Tuesday, Prime Minister Datuk Seri Najib Razak announced measures aimed at liberalising the capital markets, of which the dismantling of the 30% bumiputra equity policy was an important part.
  
  United Overseas Bank Ltd economist Ho Woei Chen said the bullish stock markets and upturn in consumer sentiment signalled that the worst was over but a firm recovery in external demand had yet to happen.
  
  “Most trade statistics in Asia remain weak and will likely be the case for the coming months until we see US consumers spending again,” she said.
  
  HSBC Holdings plc senior Asia economist Robert Prior-Wandesforde said the data in recent months were not quite as bad.
  
  “The Tankan survey showed a drop in business confidence but capital investment has improved quite a lot,” he said.
  
  Prior-Wandesforde added that China was clearly at the forefront of the global recovery. Although its exports had fallen, fixed investment was up more than 40% year-on-year while industrial output had also improved, he said.
  
  He said the leading indicators had shown for some time that things were starting to improve. “We believe the worst is over, with industrial output in Taiwan, South Korea and Singapore rising more than 20% from the lows.”

Asia's Overblown Growth Hopes And A 20-Year Bear Market?

Stephen Roach was on a CNBC interview and here is some transcript from the video: Hopes of growth from Asia overblown: Stephen Roach

• Q: How are you mapping economic conditions from hereon for the second half of 2009?
  
  A: Demand remains subdued at a low level and the recovery call is a tough one. It is not that we won't have it, but it is going to be a choppy recovery with periods of improvement followed by periodic setbacks. It will be a little better than an L but a long way away from a V. The markets after having panicked late last year and early this year have recovered from the panic, but now they are going to be rangebound for a while, echoing the choppy pattern in global economy. Asia is very export led, so with that much demand from the developed world, I think it is going to be a lot tougher for Asia than what consensus think. The consensus has fallen in love with Asia as the new engine of the global economy. I think those hopes are overblown at this point.
  
  Q: For the Asian space what happens to external demand and hence growth might be a bit stifled is going to be the key challenge?
  
  A: The numbers are clear for developing Asia. Go back to the Asian financial crisis in 1997-98. Exports were about 36% of pan regional gross domestic product (GDP) in 2007. Just before the world fell apart that number was 47%. So the region has increased its reliance on external demand significantly. The bulk of the finished goods to come of this region do go to the developed world which is still in a rare synchronized recession. This will be a challenge for Asia moving into the second half of this year and looking well into 2010.
  
  Q: Where does this leave commodities and the commodity cycle? If your view is that we won’t get a very solid recovery from hereon, economically speaking, what does it mean for the commodity complex you reckon?
  
  A: I don't think we are in a depression. We are through the worst of the global downturn, although the recovery is going to be limited. I think the deflation call for commodity prices is largely behind us. We could see some normal ups and downs. These are obviously sensitive prices that trade both ways and have done so for a long time, but I don't see a pronounced downturn in commodity prices like we saw in the immediate aftermath of last crisis.
  
  Q: Give us your thoughts on what has been happening with China as a market because a lot depends on that by way of demand and where the market moves from here?
  
  A: The Chinese consumer is one of the big question marks in the global outlook. You are right to raise that as an issue. The Chinese want us to believe that they provide a lot of stimulus for internal private consumption. But if you look carefully at this four trillion Renminbi (RMB) stimulus package that was enacted last November, over 70% of it went to infrastructure and earthquake reconstruction, very little of it went to the Chinese consumer.
  
  Yes, they had a healthcare insurance bill that went through and expanded nationwide medical coverage. If you do the math, it works out to about USD 30 per year over the next three years for each Chinese citizen. So, it is not exactly giving consumers the confidence that they have a much of a safety net which will enable them to draw down excess levels of savings and starts stepping up as spenders. Same is true with social securities, pensions, unemployment insurance. Chinese families save because they are scared of future and current income prospects. Until they overcome those fears, I think the Chinese consumer is going to be missing in action.

Link to the video clip: http://www.cnbc.com/id/15840232?video=1167820563&play=1

Everyone's talking about China.

Professor Pettis latest piece rather interesting. Look at the size of the loan growth posted in his latest posting, China’s loan growth isn’t boosting my confidence in China’s “green shoots”

• Credible rumors suggest that new loans in June will hit RMB 1.2 trillion or more, as banks rush to inflate their quarterly loan numbers, just as they did in March, on the assumption that any cap in quarterly loan growth will be based on the previous quarter’s numbers. I would argue that new lending in 2009, running at 2 to 3 times the new lending over the same period in 2008, is not at all normal and is very unlikely to be healthy.

See also The China Accident Waiting To Happen To Every One Of Us, Would China Have A Debt Problem? and Andy Xie Calls It Speculative Inventory And NOT Commodity Stockpiling!

And John Mauldin features David Galland's summary of the June's Casey Report which features an interview with Neil Howe. Author of the book, The Fourth Turning. John Mauldin's outside the box is called A 20-Year Bear Market?. The following passages caught my attention.

• You don't need me to tell you that the United States and in fact the world are now facing a plethora of intractable problems. The world's former powerhouse economy, the U.S., is now the world's largest debtor nation – and by a wide margin. The nation has trillions in unpayable liabilities coming due on Social Security and Medicare, to name just two of many broken government programs weighing on the country. And our much vaunted democracy is increasingly dysfunctional – rotten to the core, truth be known – thanks largely to entrenched special interests and a voting public clamoring for their own piece of the pie, while trying to hand the bill off to somebody else.
  
  Meanwhile, the economy – despite rigorous jawboning by the government and its many friends in the large banking institutions -- is in serious trouble, with the housing market buffeted by tsunami-like waves of defaults, foreclosures, overvaluations, historic levels of personal debt, and tight credit that has left the U.S. government as the sole lender in many markets.
  
  Bernanke and his ilk may see green shoots, but what they're really seeing is the deep, green sea rising up once again to bury the economy.
  
  That's the bad news...........

• Most importantly, if Howe is right, this crisis is far from over. In fact, when I asked him where we are today on a scale from 1 to 10 -- with 10 representing as bad as the crisis will get -- he replied that we are at either 2 or 3. In other words, the worst is very much yet to come. And, per above, he expects this period of turmoil to take 20 years to play out. Thus, if nothing else, you may want to continue approaching matters of personal finance cautiously.

Ingress: Yesterday's Hot Stock Got Even Hotter!

Posted yesterday: Today's Hot Stock: Ingress Corporation

As reasoned, fundamentally there wasn't enough justifications for Ingress Corporation to sky rocket.

Company's fundamentals were poor. More so that in April it failed to deposit its sukuk payment of 25 million. ( see Ingress Fails To Make Sukuk Repayment, Stock Gets Slammed! ).

Yes it announced it was awarded a 61.9 million contract from Tenaga but then it can be argued that the contract is no big deal since Ingress past history showed that its PER (Power, Electric and Rail) division had a history of losing money.

But yet the stock soars.

LOL!

Yesterday the stock closed at 34.5 sen. See the amazing surge below.

This morning, last I saw, the stock was trading at 41.5 sen. Up another 20%!

Life is good.

Hmmm... how ironic.

Ingress wasn't even queried yesterday!

I wonder if it will today!

Hmmm... how ironic when we have articles like this in our financial newspapers. 20th June 2009 Monitoring market manipulations

• STOCK market shenanigans are as old as the market itself. From insider trading to full-blown stock price manipulation, market participants have long been trying to maximise profits from share trading by not playing by the rules.
  
  As the market matures, such shady manoeuvres have slowly been weeded out. However, these have not been totally eliminated even though investors are getting more sophisticated and the regulators’ surveillance net is being cast wider.
  
  “These things happen when there is too much easy money,” said Jupiter Securities head of research Pong Teng Siew.
  
  Vigilance against manipulation is an ongoing battle for the authorities, which have over the years learnt from every period of stock market excess.
  
  Aokam Perdana Bhd, PWE Industries Bhd and Idris Hydraulic (M) Bhd were some of the punter favourites in the mid-1990s, when the ramping up of shares was common place prior to the Asian financial crisis.
  
  In fact, the second board used to be a gold mine for excessive speculation as share prices soared to levels that would be unthinkable today.
  
  Repco Holdings Bhd was the most infamous of the ramped-up stocks. Its share price prior to the Asian crisis in 1997 hit a high of RM140.50. The stock has since been delisted.
  
  But the highest-priced stock was biscuit maker Hwa Tai Industries Bhd. Its share price prior to the 1997 crisis was just over RM200 a share. On an adjusted basis, that would be equivalent to RM96 today. Hwa Tai closed on Thursday at 62.5 sen.
  
  Speculation was also rife during the dotcom craze in 1999 to early 2000, when a number of technology-linked stocks surged.
  
  In 2001, the speculation reached ridiculous levels when the price of Ho Wah Genting Bhd warrants exceeded that of the mother shares.
  
  That was followed by a number of other ramped-up counters such as Lipo Corp Bhd, Kobay Technology Bhd, General Soil Engineering Bhd and Sinmah Resources Bhd during a play on a latex stimulant called reactorrim.
  
  In 2005, the Fountain View Development Bhd case boiled over and caused huge losses among brokers. Kosmo Technology Industrial Bhd shares attracted intense speculative interest and was made a designated counter.
  
  The last headline-grabbing speculative play was Iris Corp Bhd. The Mesdaq counter saw its share price rise about seven-fold in a short period of time.
  
  These market controversies have been invaluable lessons for the regulators. Accordingly, they have devised techniques, tools and procedures to deal with such speculation that borders on market manipulation.
  
  Even though the spikes in volumes in the recent rally hovered at record levels, the instances of excessive share speculation or blatant manipulation, as in the Fountain View case, have been limited.
  
  “The scope of surveillance covers all dimensions of the trading activities. If there is any evidence of market manipulation, the SC (Securities Commission) and/or Bursa Malaysia will investigate and take appropriate enforcement action,” an SC spokesman told StarBiz in a report on Thursday.
  
  “This is further complemented by SC’s investor education programmes conducted regularly to help investors make informed investment decisions.”
  
  Hunt for red flags
  
  But the regulators are not sitting idly as they might have done in the past. In recent days, Bursa Malaysia has issued a number of unusual market activity (UMA) queries.
  
  The UMA queries are designed to extract more information from a company as to why a company’s share price is moving dramatically. The principal view behind such an action is that such price movements should be explained. Trading volumes are also scrutinised.
  
  Whereas Bursa’s warnings and queries represent a visible element of regulatory oversight, the behind-the-scenes work is also comprehensive and has been silently effective.
  
  The authorities have penalised dealers for actions deemed to be not fit and proper. In such cases, suspect brokers have been suspended for months at length, effectively sealing their ability to trade and make money. In short, it hurts them via their wallets.
  
  This is part of a code of conduct for brokers, which emphasises diligence.
  
  Another step was to get directors and heads of stockbroking companies to comply with new guidelines and rules. People in charge of various operations in broking houses are expected to watch out for red flags that pop up when there are suspicious trades.
  
  The brokers’ economic losses or gains are also being monitored for any excessiveness, and there has been constant mining for patterns or signals that indicate irregular activities.
  
  These steps are part of a more exhaustive approach being taken to combat manipulation, in which regulators will act when red flags are raised early instead of waiting to prove a criminal case in a court of law.
  
  Day trader watch
  
  Stockbroking companies are also in the loop in ensuring a more orderly market. Losses from past financing indiscretions, such in the Fountain View incident, are no longer tolerated, and the companies themselves are monitoring against unhealthy practices.
  
  The system might not be perfect but improvements have been made.
  
  The crisis on Wall Street has also indirectly helped surveillance of the stockbroking firms. Checks at the onset of the crisis, intended to gauge the exposure of margin accounts by stockbroking firms, gave an insight into the activity of those companies.
  
  While the movement in the stock market, in particular involving the second and third liners, is similar to what some other regional bourses are experiencing, a watchful eye is now being cast on proprietary day traders.
  
  The role of those 25 people, who were given licensed dealer representative status in 2007, is to act as marketmakers of sorts.
  
  And it appears to have worked. Liquidity has been boosted and those licensed day traders generally come into a stock when there is active trade in the beginning of the day. Those day traders are allowed to short sell a counter during the trading day.
  
  This is privilege granted to those people and it can be revoked. The possibility of revocation is rising as unhealthy trading patterns are emerging among a few of those licensed day traders.
  
  Systems, processes, guidelines and surveillance have all been ramped up to make it as difficult as possible for people to engage in manipulation activity. Nevertheless, they will not stop the more determined crooks from attempting to outsmart the regulators.

Where is my dearest UMA?

Today's Hot Stock: Ingress Corporation

One of the hot stock in today's trading is Ingress.

At the time of writing, Ingress is at 0.355 sen. UP an incredible 86.8% in today's trade!!!! (It was trading as high as 0.39 sen at one time!)

The intraday chart belows captures the action.





Here is how Ingress has been faring the past year. As you can see it has been doing rather POOR.


There were some rather justifiable reasons why. As blogged before.

• Ingress Fails To Make Sukuk Repayment, Stock Gets Slammed!
• Ingress Again!

Ok, Ingress reported its earnings last night.

It made 587 thousand for the quarter. Surely this is not a justifiable reason to go punting on the stock. :D

Then I saw this news on Business Times. Ingress clinches RM61.9m TNB deal

• AUTO parts maker Ingress Corp Bhd (7112)has clinched a RM61.9 million contract from Tenaga Nasional Bhd (TNB).
  
  The project involves a diversion of cable to a power station and the supply, building and commissioning of an auto transformer.
  
  Work will take between 13 and 24 months.

It looked like such a postive set of news.

However... as posted before Regarding Ingress Corporation Again, PER or (power, engineering and rail projects) is one segmental business in which Ingress has FAILED to produce!

Let me reproduce and update some new numbers from the posting Regarding Ingress Corporation Again

>>>>>>>>>>>

Let me share something about its PER (power, engineering and rail projects).

new.. fy 2009. Quarterly rpt on consolidated results for the financial period ended 31/1/2009 (Ingress lost some 39.9 million for the fiscal year!)

pg. 10. the Power Engineering and Rail Electrification (PER) division together with its associate companies registered a loss before tax of RM2.3 million and revenue of RM11.2 million as against previous year corresponding quarter loss before tax of RM1.6 million and revenue of RM15.3 million.

new... fy 2008. Quarterly rpt on consolidated results for the financial period ended 31/1/2008 (Ingress lost 10.958 million for the fiscal year)

pg13. The Power Engineering and Rail Electrification (PER) division together with associate companies registered a profit before tax of RM1.04 million whereas units categorised under Others recorded a loss before tax of RM2.90 million

1. fy 2007. Quarterly rpt on consolidated results for the financial period ended 31/1/2007

pg 16.
Power Engineering (PER) registered a loss before tax of RM7.58 million while rail electrification associate contributed RM6.76 million to result in an overall PER loss before tax of RM0.82 million.

2. fy 2006. Quarterly rpt on consolidated results for the financial period ended 31/1/2006

There was a 50% increase in revenue for PER. Both PER and rail electrification associate benefited from the satisfactory progress of the projects undertaken. (Ingress PER had a profit of 1.3 million)

3. fy 2005. Quarterly rpt on consolidated results for the financial period ended 31/1/2005

PER recorded improved revenue of 27% from preceding quarter but did not achieve favourable result due to losses in the existing substation and transmission works as mentioned above. (Ingress PER recorded losses of 3.567 million)

4. fy 2004. Quarterly rpt on consolidated results for the financial period ended 31/1/2004

PER and associate company, Balfour Beatty Rail Sdn. Bhd., experienced slowdown in progress. Despite the favorable increase in revenue from preceding quarter, PER had to contend with the extra costs associated with the additional time to complete the projects and the unfavorable foreign exchange on the Euro. (Ingress PER made a profit 69k for the fiscal year)

5. fy 2003. Quarterly rpt on consolidated results for the financial period ended 31/1/2003

Despite the high turnover, PER had to content with costs related to delays for which possible compensation has not been considered. (Ingress PER made 417k for the fiscal year)

So Ingress's PER (power, engineering and rail projects) business, it's rather not too exciting eh? And if you total the last 5 year's performance, its PER division simply lost money!

-------------------------

And after adding in the latest two fiscal year earnings, I can just copy and paste what I had written before.

So if you add up the numbers from fy 2003 to fy 2009, Ingress's PER (power, engineering and rail projects) business, it's rather not too exciting!!! Its PER division is simply losing money.

So this morning, you have Ingress getting a rm61.9 million contract from TNB.

Do you reckon I would go over the moon because of this contract?

Do you reckon that this set of news justify the incredible stock performance in this morning's trade?

How?

Bursa Malaysia Asks Listed Companies To Sell More Shares

On Business Times: Bursa to push firms to sell more shares

• BURSA Malaysia Bhd, operator of the nation’s exchange, said it will press publicly traded companies to sell more shares to stay in a revamped benchmark stock index, a move aimed at making the equities easier to buy and sell.
  
  “One of the biggest complaints by investors is you have very good companies, but they find it difficult to buy the shares,” Datuk Yusli Yusoff, Bursa’s chief executive officer, said in an interview in Kuala Lumpur yesterday. It will “bring a sense of competition; a lot of companies would want to be in that benchmark,” he said.
  
  The bourse is replacing the Kuala Lumpur Composite Index of 102 companies with the new 30-share FTSE Bursa Malaysia KLC on July 6. Companies in the new index will be required to have at least 15 per cent of their shares publicly available for trading, a level that will increase every six months.
  
  The government said yesterday it plans to sell more of its holdings in some of the nation’s biggest companies to help lure more foreign investment to Malaysia after the benchmark index’s 23 per cent climb this year lagged behind returns of other Southeast Asian stock markets.
  
  At least five of the nation’s 10 biggest publicly traded companies by sales, including Tenega Nasional Bhd and Petronas Dagangan Bhd, are partly owned by the government’s investment company, data compiled by Bloomberg show. -- Bloomberg

I do not quite agree.

I do think that from a business perspective, as a listed entity, Bursa Malaysia is biased towards more liquidity. More liquidity means more transactions and more transactions means more business.

Well is the lack of liquidity the main reason why investors chose not to invest in our stocks?

Would having more liquidity increase the attractiveness of our shares?

And what about the current shareholders in these companies?

If I have shares in say a stock named 'Banyak Shares Bhd' and if the company does a placement of 20% just to increase the liquidity, how would I feel? Won't this stock sale dilute my earnings per share by 20%? Would I be over the moon?

So stock sale or placement dilutes the earnings for the minorities. What about rights issue? The minority would then be given a chance to participate in such an exercise. Well, some might not like it because given the current economic conditions worldwide, not all minority shareholders will have the excess money to buy more shares!!! So would the minority shareholder be over the moon?

Some More Thoughts On AirAsia's Proposed Stock Sale

I was just wondering.

Ok, I was thinking for a moment. Hey I could be wrong hor.

Anyway as per yesterday's posting Comments On AirAsia Stock Sale

• Piggy bank cash balances now is at 223.991 million. Total loans stood at 6.934 Billion!!!!!!!

Now assuming the full 500 million raised from the stock sale is used to par down AirAsia debts, it would mean a cash balances of 223.991 million versus a reduced loans of 6.4 Billion!

Which is still incredibly high, yes?

And considering that AirAsia is going to have to take delivery of more new planes, surely this is not cutting it, yes? I mean the total debts is still going to increase a lot!

Now since AirAsia Says That "There Is A Huge Appetite For Our Shares...", I am wondering....

So how about AirAsia doing a more BIGGER stock sale?

How about a 1 for 1 rights issue?

Yeah, instead of getting new investors, why don't AirAsia current shareholders, fork out more money?

As mentioned, a 20% stock sale or placement could raise some 500million, just imagine how much a 1 for 1 rights issue could raise?

How about this?

At least this way AirAsia could really raise a whole lot of money!

And at least, it also shows how much AirAsia's own shareholders are really optimistic about AirAsia's future prospects.

Just food for thought lah.

If you don't like it, just spit it out. :D

AirAsia Says That "There Is A Huge Appetite For Our Shares..."

Posted yesterday. Comments On AirAsia Stock Sale

On today's Business Times: AirAsia eyes RM500m

• AirAsia Bhd (5099) is looking at raising about RM500 million by placing out up to a fifth of its shares to private investors to pay off some debt, says its chief executive officer.
  
  AirAsia's total debt stood at RM6.9 billion as at the end of March 31 2009.
  
  "Local and foreign investors (demand) drove us (to placing out more shares). There is a huge appetite for our shares, and obviously as an airline, it is always good to have cash. Liquidity is also good in the market now and so we decided on a private placement," AirAsia Bhd chief executive officer Datuk Seri Tony Fernandes (pic) said.
  
  He said the budget carrier has yet to hire bankers for the placement and has not decided on whether it will stagger the placement (10 per cent now and another 10 per cent later) or do an outright 20 per cent placement.
  
  This is the second time AirAsia is placing out shares after its initial public offering in 2004.
  "If there was concern on AirAsia, I think the prime minister's (Datuk Seri Najib Razak) announcement on wanting to create a level playing field has removed any doubts that equity investors may have had on AirAsia's chances. It is a great environment to raise equity," Fernandes said.
  
  Fernandes was speaking on the sidelines of Invest Malaysia 2009 in Kuala Lumpur yesterday.
  
  "It is what I have been asking for, for seven years. Today will really unleash the enormous potential that AirAsia can achieve and we are thrilled by the prime minister's speech," he said in response to Najib's call for more level playing field between GLCs and private firms.
  Besides calling for greater competitiveness and performance from GLCs such as those in electricity and airport businesses, Najib also stated that the government will not help GLCs to the detriment of private sector competition.
  
  Fernandes has been lamenting on the protective nature of the aviation industry in Malaysia since the setting up of AirAsia in 2002, starting with the placement of Firefly, a unit of Malaysia Airlines, in Subang, to the aeronautical charges imposed by Malaysia Airports Holdings Bhd.
  
  He also called for regulation of monopoly industries to ensure that there is transparency in pricing and costing.
  
  Fernandes said the key is not really to have competition within the country but to have competitive industries that can go global and create bigger opportunities.

Hmm... "There is a huge appetite for our shares..." ?????

Flashback 2004. AirAsia IPO share price falls 17% short

• AirAsia's initial public offering (IPO) will reportedly raise less than expected due to the lack of interest in the high price set by the company for its shares.
  
  Malaysia's leading low-cost airline set a price of MYR1.51 for institutional investors and MYR1.40 for retail investors but sources close to the deal were quoted as saying on Friday (29 October) that institutional investors will only pay MYR1.25 per share, a drop of 17%, and retail investors will pay MYR1.16 per share. The IPO is now expected to raise USD226m.
  
  Fund managers said that they were not surprised by the figures as high oil prices and competition from Tiger Airways in the region led to concern from investors. Despite the IPO falling below AirAsia's own estimates the shares still value the company at 16.7 times over its forecast earnings for the year ending June 2005, reports Reuters.

On another article AirAsia IPO takes off

• November 23, 2004
  
  Shares in Asia's only major listed budget airline, Malaysia's AirAsia, jumped 12 per cent in their debut on Monday, as investors bet that cheap fares would drive strong growth in air travel across the region.
  
  AirAsia, which wants to be Asia's leading low-cost carrier and is negotiating to acquire up to 80 new planes, had priced its US$226 million (HK$1.763 billion) initial public offer below its own indicative price last month, ensuring the shares went to market oversubscribed.
  
  ``We are quite happy with what we have got,'' Chief Executive Tony Fernandes said when asked if he was disappointed with the IPO price. ``Our main focus is not on the [share] price; it's on delivering the numbers,'' he added. AirAsia has forecast net profits to triple between 2003-04 (July-June) and 2004-05.
  
  The stock, sold to institutions at 1.25 ringgit (HK$5.90), hit a high of 1.45 ringgit in Kuala Lumpur before closing up 12 per cent at 1.40, giving AirAsia a market value of about US$860 million. This was still below the original indicative price of 1.51. ( long article.. click the above link to read in full)
  

AirAsia's stock performance since listing.

And how did AirAsia did after listing?

The extremely optimistic tripling of profits never did happen. AirAsia failed to deliver what it had promised during its IPO.

Do refer to this old posting AirAsia.

Huge appetite for their shares???

I really do wonder.