Regarding The Plunge Of OilCorp Shares Today!

Quite some chatter over OilCorp today.

Here is a short clip from Dow Jones Newswire.

• OilCorp (3697.KU) hits limit down threshold, down 38.5% to 48 sen on requotation; stock suspended since May 20 pending reaudit of company's accounts for 2008 after discovery of discrepancies. Clarifies audited group PATAMI for FY07 is MYR3.975 million vs unaudited result of MYR15.41 million. Deviation of more than 10% between the two figures attributed to adjustments made to various costs and "adjusting events." Oilcorp also submitted yesterday 2007 annual report and quarterly results up to period ended Sept. 30, 2008. For 9-month period ended Sept 30, Oilcorp posted loss of MYR2.3 million from MYR262.4 million in revenue vs revised net profit of MYR11.9 million from revenue of MYR277.1 million in previous year. "The selldown is not surprising. Investors are just looking to conserve whatever cash they can. There's just way too much selling pressure after so many months of suspension," says dealer

I decided to take a peep.

Just a small tiny weenie peep.

Long term borrowings......... 187,934
Trade and other payables.... 254,851
Short term borrowings......... 216,305

Well that's what they owe 'others'. A cool 659 million!

And what they have to offer is the following...

Ahem.. fixed deposit if 26.725 million and cash balances of 3.477 million.

That's not a lot compared to what is being owed by them and most worrying is the 498.257 million in trade receivables!!!!

The size of it is simply unbelievable!

Look at its share capital. It's only some 219 million!

Think for a moment.

What if due to 'unknown' circumstances, OilCorp could not collect half, yes just half, of these debt owing to them and needs to write it off as bad debts? (Is this not possible? Check past earnings. If these receivables could be collected, the amount should never be so much! Yes?)

Well half of that 498.257 million is some 249+ million!

Which is more than its share capital!!!!!!!!!!!!!

How?

This is totally unreal yes?

And to make it worse, OilCorp 'can' only manage a PAT (profit after tax) Loss of 3.3 million!

How?

And remember as it is, OilCorp owes 'others' some 659 million!!!

And if remember correctly, some local 'experts' called this a 'fundamental' stock!!

Iceland Stock Exchange Plunges Big Time

Totally incredible. Iceland stock exchange has plunged 77 percent when it resumed trading!

YES IT'S 77 PERCENT!

Holy Cow!

The iceman plummets!

Posted on the UK Guardian.

• Iceland's blue-chip stock exchange plummeted 76% when it resumed trading today.
  
  Icelandic stockmarkets had been suspended since Thursday. The OMX 15 fell 76% to 716.27 points, while the all-share index dropped 66% to 953.14 points. Six financial stocks — Kaupthing, Landsbanki, Glitnir, Straumur-Burdaras, Reykjavik Savings Bank and Exista — remained suspended.
  
  Last week Iceland took control of Kaupthing, Landsbanki and Glitnir, a move that brought much of the country's banking sector under state control.
  
  Britain and Iceland are working together to help the creditors of failed Icelandic banks, which include many British savers, local authorities and charities.
  
  British retail tycoon Sir Philip Green jetted to Iceland at the weekend to negotiate a deal with the troubled investment group Baugur to buy up to £1bn of its debts. A deal could give him huge influence over Baugur's retail investments, which include Oasis, Karen Millen, Debenhams and Moss Bros.
  
  Toy shop Hamleys and department store House of Fraser, which are partially owned by Baugur, rushed out statements yesterday stressing their independence.
  
  In a statement today, Baugur said that, despite media speculation, it had not appointed any advisers. "We continue to monitor the situation in Iceland, where possible maintain a dialogue with the banks and manage and plan our business accordingly," said chief executive Gunnar Sigurdsson. "We have no plans to place our UK business into administration."

Source: http://www.guardian.co.uk/business/2008/oct/14/iceland-marketturmoil

See also: http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4940623.ece

And Iceland problem is also a problem to Britian!!!!!!!!!

Take the following BBC report!

• The government has defended its investment advice to councils who deposited £858.3m in Icelandic banks which later failed.
  
  Communities secretary Hazel Blears said the guidance had been "prudent and sensible" and that none of those affected would "struggle" to pay staff.
  
  The Local Government Association has demanded an inquiry into the investments made by 116 councils.
  
  Ministers have revealed universities also have £77m in Icelandic banks.
  
  'Strong ratings'
  
  LGA chairman Margaret Eaton said: "This isn't the time for a blame game. This is an unprecedented situation, the extent of which could not have been foreseen.
  
  "However, at the appropriate moment, there needs to be a full and independent inquiry to find out just how these banks continued to get relatively strong credit ratings until a few days before they went under."
  
  The government and the LGA have set up a joint "rapid response unit" to provide financial advice to councils affected by the banking crisis.
  
  Ms Blears said: "The government's first priority has been to do everything we can to help local authorities, along with other creditors, get back the money which they had deposited in the banks."
  
  But for the Conservatives, shadow communities secretary Eric Pickles said: "There is a difference between light touch regulation and neglect."
  
  In a ministerial statement, the government revealed that 12 UK universities have total deposits worth £77m in failed Icelandic banks.
  
  But the Department for Innovation, Universities and Skills said the figure should be viewed in the context of annual turnover of £18bn.
  
  In a separate statement, Cabinet Office Minister Liam Byrne, said charities accounted for "an extremely small fraction" of the total of £56bn invested in Icelandic banks.
  
  'Complacency'
  
  Government ministers were warned about the possible collapse of Iceland's banks and the threat to depositors' cash in July, when credit rating agencies downgraded them.
  
  Lib Dem Treasury spokesman Lord Oakeshott and Tory MP Michael Fallon, deputy chairman of the influential Commons Treasury committee, both raised the issue with ministers.
  
  But they were told depositors would be protected by law.
  
  Speaking to BBC News on Friday, Lord Oakeshott accused ministers of "complacency" for apparently ignoring warnings from the City.
  
  "Alarm bells were ringing all over about the Icelandic banks and the Treasury must have been blind and deaf not to hear them," he said.
  
  In a statement, the Treasury said it was not the government's role to advise savers and ministers had stressed Iceland had a legal obligation to pay compensation.

Source: http://news.bbc.co.uk/2/hi/uk_news/politics/7669918.stm

The Day After The Plunge!

The active stocks.



Top Gainers!

Meat Loaf - It's All Coming Back To Me Now

Some comments from S'pore Business Times

• S&P sees Malaysian deficit widening
  
  This could happen if govt fails to raise fuel prices after poll setbacks, it says
  
  (SINGAPORE) Malaysia's budget deficit may widen if the government fails to raise fuel prices after losing its two-third majority in Parliament in weekend elections, according to Standard & Poor's (S&P).
  
  South-east Asia's third-largest economy also faces the risk that private investors will 'stand aside' amid concerns about the nation's political stability, said Sani Hamid, S&P's director of sovereign ratings on Malaysia.
  
  'This is something really new,' he added.
  
  Malaysia's ruling Barisan National coalition suffered its worst defeat since the nation's independence in 1957, winning 63 per cent of the legislature compared with 91 per cent in 2004. It is also now out of power in five of the country's 12 states.
  
  'We will be watching to see if the government's plans for investments in the northern corridor will fall through now that the states involved there have lost out to the opposition,' Mr Sani said.
  
  Prime Minister Abdullah Ahmad Badawi's government last July said it expects to generate RM177 billion (S$76.8 billion) of investment by 2025 to spur growth in the country's northern states. The northern corridor includes Penang, Perak and Kedah, three states that fell to opposition parties in this election.
  
  'We will be watching closely for any significant policy changes or potential impediments to the policy-making process and passing of legislation,' said Elena Okorotchenko, S&P's senior director for Asian sovereign ratings in Singapore.
  
  Still, Ms Okorotchenko said the weekend election result would have 'no immediate impact' on Malaysia's credit rating.
  
  S&P has an 'A-' rating on the country's long-term foreign currency debt with a positive outlook. Its last revision was in July 2007, when it raised the ratings outlook to positive from stable.
  
  S&P said it will be monitoring Malaysia's budget deficit, especially fuel subsidies.
  
  'If oil prices stay above US$100, the budget deficit will definitely widen if the government can't pass on some of these costs to the public,' Mr Sani said. He warned that Barisan National's reduced majority in Parliament could make it harder for the government to cut fuel subsidies to keep the budget target on track.
  
  Mr Abdullah's government aims to trim the budget shortfall to 3.1 per cent of gross domestic product this year from 3.4 per cent in 2007. The government spent RM35 billion in subsidies to keep fuel prices low last year. A pledge not to increase fuel costs expired at the end of 2007\. \-- Bloomberg

And

• Malaysian economic outlook uncertain after polls shock: analysts
  
  KUALA LUMPUR - Malaysia's shock election results, which have left an untested opposition ruling key states, have raised fears over economic growth and investment prospects, analysts said on Tuesday.
  
  The stock market plunged 9.5 per cent on Monday in a panicky reaction to the gains by the opposition, which on Tuesday moved to reassure investors that it would implement 'business-friendly' policies.
  
  Economists said growth could be affected if the new coalitions running five states clash with the federal government over planned infrastructure mega-projects and funding allocated under a national development blueprint.
  
  But they said that while the stock market will remain under substantial short-term selling pressure, when the political dust settles it could reveal a brighter future under a revitalised government.
  
  In Saturday's watershed elections, the Barisan Nasional coalition failed to secure two-thirds of the vote for the first time in almost 40 years, and conceded four states to the opposition in addition to one it already held.
  
  They include Selangor and Penang - Malaysia's most developed and industrialised states which account for nearly half the national economy.
  
  A funds manager with an insurance firm said the changeover could derail contracts that have already been awarded, and jeopardise the government's stated plans to lure billions of dollars in investment to Malaysia's regions.
  
  'The country's political risk premium has gone up a few notches because of the uncertainties. Land approvals are handled by the states. The fear is that projects could be scrapped,' he told AFP on condition of anonymity.
  
  Credit Suisse analyst Stephen Hagger predicted a bearish mood on the local bourse until questions over beleaguered Prime Minister Abdullah Ahmad Badawi's future are resolved.
  
  'Malaysia will be dead money until there is some political clarity that emerges over the next six to 12 months,' he said.
  
  Foreign research firm Merrill Lynch said the negative reaction on the stock market, which staged a partial recovery on Tuesday, was due to an expected slowdown in the decision-making process with a strong opposition in parliament.
  
  'There will also be some short-term uncertainties with regards to investment growth especially in states which are now held by the opposition parties,' it said.
  
  Anwar Ibrahim, the former deputy premier who rallied three opposition parties to the resounding election result, said on Tuesday that there could be a review of state projects.
  
  'We will have to respect the existing agreements. But where adjustments are required, we have to look at it, especially those that imposed hardship to the people,' he told reporters.
  
  He nevertheless downplayed concerns projects could be cancelled.
  
  'I may be in the opposition but I will not sacrifice the economic performance of this country. I assure that we will be market friendly and implement all the initiatives (of the previous administration),' he said.
  
  'The country should be stable and we should be able to instill confidence among domestic and foreign investors.' -- AFP

Market commentaries from Dow Jones

• KUALA LUMPUR (Dow Jones)--Malaysian stocks staged a mild recovery Tuesday after a 9.5% plunge Monday, helped by a technical rebound and gains in regional markets.
  
  However, analysts said the market's rebound may be short-lived due to prevailing political uncertainty and a slew of downgrades by brokerages and research houses after the ruling coalition Barisan Nasional emerged weaker from a poll Saturday. In an unexpected result, the ruling coalition failed to garner a two-thirds majority for the first time in four decades.
  
  The benchmark Kuala Lumpur Composite Index ended up 2.8% at 1206.54, to close off an intraday high of 1211.75 points at the midday break, led by gains in shares of construction, plantation and government-linked companies.
  
  The modest recovery in equities helped the Malaysian ringgit to close marginally firmer at MYR3.2030 against the U.S. dollar from Monday's two-week low of 3.2020.
  
  Several houses have already slashed their market forecasts. AmResearch lowered its fair value for the KLCI to 1,300 from 1,590; Aseambankers reduced its year-end target to 1,350 from 1,450; OSK shaved its year-end target to 1,340 from 1,650 and CIMB cutting its year-end target to 1,380 from 1,700 previously.
  
  "Investors should avoid getting distracted by taking trading positions until the dust settles," said Citigroup Malaysia's Head Of Research Choong Wai Kee in a report Tuesday. "We advocate a strategy of staying focused, targeting just blue chips. Our picks are Telekom Malaysia, IOI Corp, Public Bank, Malayan Banking and Resorts World."
  
  ING Funds (Malaysia) Head of Investment Wu Yah Ning is less bearish on Malaysian equities.
  
  "We expect some degree of volatility in the near term but there's good value in this market. The KLCI is now trading at a price-to-earnings ratio of around 13 which is close to the lower end of its historical P/E trading band of 12 to 16 times," she said, maintaining a positive stance on plantation stocks and oil and gas related companies for solid earnings growth.
  
  Edward Ong of Macquarie Research also maintained his positive outlook for Malaysian equities.
  
  The ruling coalition's "loss of a two-thirds majority is likely to be perceived as negative in the short-term but this could also mean stronger checks and balances, particularly in terms of constitutional changes, and potentially spur reform in the medium term," Ong said in a note.
  
  "In the larger context, with ongoing global liquidity contraction, we foresee more potential multiple contractions in the short term. This would be amplified by the recent election results, which would also dent market sentiment in the immediate future," he said.
  
  Among the biggest gainers, IOI Corp added 3.8% to close at MYR6.90, Sime Darby rose 4.3% to MYR9.80, Bumiputra-Commerce Holdings gained 6.3% to MYR9.35 and property concern Equine Capital jumped 31.7% to 93.5 sen.

Sugar Bun Honey

The Sugar Bun had finally melted. The following is a report from Business Times.

• November 7 2006
  
  SHARES and warrants of Sugar Bun Corp Bhd hit limit down yesterday.
  
  Sugar Bun shares declined 36.73 per cent or RM1.08 while its warrants fell by 41.25 per cent (99 sen), with 22.41 million and 1 million shares done respectively.
  
  The decline also marks Sugar Bun's lowest closing in four weeks. However, on a year-to-date basis, its stocks are still trading at 163 per cent higher.
  
  At the close, the Kuala Lumpur Composite Index was 0.47 per cent or 4.72 points lower at 993.30.
  
  Sugar Bun shares and warrants gave up 29.9 per cent and 30 per cent to RM2.06 and RM1.68 respectively during the first half of the trading session, before sliding further in the second half. Shares and warrants were down to as low as RM1.45 and RM1.18 before closing at RM1.86 and RM1.41 respectively.
  
  Early last week, Sugar Bun was queried by the Bursa Malaysia Bhd for unusual market activity.
  
  Last Friday, the firm officially announced plans to venture into the oil, gas and energy sector. Its unit, Borneo Energy Sdn Bhd, entered into agreements with three firms in Thailand to provide management and technical services. The service pacts are with Suntech Palm Oil Co Ltd, Siam Gulf Petrochemical Co Ltd and Transtech Energy Company Ltd.
  
  "The agreements are expected to contribute positively to the financial performance of the group in the future," the company told Bursa Malaysia.
  
  Sugar Bun posted a net loss of RM2.15 million during the second quarter ended July 31 2006, an improvement of 11.18 per cent compared against its net loss of RM2.42 million a year ago. Revenue declined by 25.17 per cent to RM4.48 million.
  
  For its full year ended January 31 2006, it posted a higher net loss at RM17.23 million, against a net loss of RM16.99 million a year ago. Revenue also fell by 36 per cent to RM23.32 million.
  
  The firm has been posting net loss every financial year end since January 31 2001, when it recorded a net loss of RM13.38 million.

Flasback. I wrote this Sugar is TOO Sweet!!

Incredible. Sugar Bun paid RM15,000 for a USD1.00 company. And after that a news story where Sugar Bun, a company which had losses since 2001, reported to be targeting rm300 million worth of oil and gas contracts. A company which had NO prior expertise in the oil and gas industry. A company which is in real, deep, deep financial troubles, losing money since 2001. Sometimes I wonder, do Petronas hands out contracts for charity. I really wonder.

But yet the stock price rocketed UP.

Take a good look again at Sugar as posted here

1.



That's losses since fy 2001.

2. Any improvement lately?



3. Cash piggy bank.



4. How about this?



How?

Sugar Bun CLOSED YESTERDAY at 1.86!!!!!!!!!!!!

Again I asked .. how high should Sugar Pie Honey Bunch fly?

2.00?

1.00?

or 0.50?