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| Will it Come Back to its Former Glory? |
No, no, no, not Hobson's choice.
To buy or not to buy? To sell or not t o sell?
To act insane or you already are with the SC and BSKL trying to screw your brains out!
RM 0.315 sen is the adjusted price today when RCE Capital went ex-all.
I do not know how the market is going to value the new redeemable convertible non-cumulative preference shares (RCPS) which will soon be open for subscription in the first week of November. It is priced at a very high value of RM 0.38 sen on the basis of 2 units for every 5 RCE shares held after the bonus issue.
Let us say you have 2000 shares in RCE which you are fully entitled to the new issues. With the bonus thrown in,it means you have 3000 shares. The original 2000 shares were trading at RM 0.445 sen last Thursday (25th October). That means they were worth RM 0.89 sen.
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| Lending to government servants- a Solid Deal! |
So, now is the moment of truth. You are offered 1,200 units. They will deposit these new units into your CDS account on 31 October 2012.
What would you do?
Sell the option papers into strength when the offer papers go on sale on 1st November or subscribe to 'test the water' by paying for the new rights by 19 November?
Remember the rights trading ends on 7 November if you intend to sell.
I really do not know what is the value.
It is something like Berjaya Foods which can actually fetch a huge value. Today it is trading at 57 sen.
My opinion:
RCE has always been a safe counter until it was 'royally screwed" along with the Angkasa debacle orchestrated by the silly Commission of Cooperatives!
As usual, sadly the rakyat gets screwed by the government.
I think it is on the recovery track and hopefully through this capitalization exercise can go the extra mile to bring up profits as well as RCE's share price.
On the long run, Azman Hashim's counters do not disappoint.
Caveat emptor!
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