Beware,Odd Lot Counter Players

Stuck on One!

If you think that you can bargain on the Odd Lot Counter of BSKL, you may have to think twice.

I have played the odd lot counter quite frequently and this is the third time that the sellers had ensnared me.

I started by playing a counter called Gas Malaysia. I asked for 50 units and they gave me 7 units only.

The same goes for Bank Islam Malaysia Berhad (BIMB),where I got another 7 units only in spite of the 50 units I wanted to buy.

Then, there was  IHH Holdings (IHHH). They gave me only one unit of it, while holding the selling price at about 10 times the price I bid.

This late afternoon, they had me again. They gave me again one share at 57 sen while holding the balance at 80 sen for the counter I wanted to buy. I need to buy another 49 units.

What are the implications?

If you are satisfied with what you get,then take no more action.

That was what I did with Gas Malaysia and BIMB.

However, I could not do the same with IHH Holdings (IHHH).

Why?

If I did not buy in a trading 100 unit on the Main Board. it would mean my share would be the price of that unit plus RM 30 for overheads such as brokerage, clearing fees and stamp duty.

Let us assume you bought one unit of IHHH at RM 4.50. Failure to take follow up action to buy more will mean that your IHHH share is priced at RM 34.50 .This would means it cost about the price of KLK and most other blue chips. Big loss, my friend!

So,what do I have to do today for that counter that I have been ensnared?

If I lucked out, it can only mean I would have to buy it at a much higher price than currently on offer.

On the Main Board,the offer price is 58.5 sen. Perhaps, I would have to take up the seller's offer before trading ends at 5 p.m. today.

So,watch your steps when playing in this no-holds barred; anything can happen to you God-forsaken Odd lot counter on BSKL.

Post-script:

I had to buy 100 more shares at 57.5 sen on the main board and 9 more shares at 57 sen on the odd-lot board. He gave to me the 9 units in the afternoon session.

What a hassle.

Strangely, the seller threw in the towel and gave his shares even at 33 sen for a 24 sen loss.

So, I may not have gained but those who bought at 33 sen certainly did!

Hot Seats on MAS!

Going Nowhere?

On 6 November 2014, the same Board of Directors of MAS will again face the bitter minority shareholders.

Unless they can say something pleasing and reassuring to the ears of the minority shareholders or give them a handsome subsidised flight ticket to partly off-set their massive losses holding below par value MAS shares for ages, expect fireworks just like what MAS experienced at their recent rowdy AGM.

This time around-will the minority shareholders allow Khazanah to take MAS shares off their hands for a song? Will Khazanah succeed in privatising MAS?

While independent adviser AmInvest Bank may verbalise the obvious financial platitudes to placate minority shareholders and that the Khazanah offer is prima facie both 'fair' and 'reasonable', I think it will be an uphill task as the shareholders may be looking for a better deal.

Khazanah proposes paying 27 sen per MAS share to take it private so that they can restructure the company and resuscitate it back to financial health. 

It involves both a capital reduction and repayment exercise. 

Let us look at the forces of Khazanah and the minority shareholders.  While Khazanah owns 69.37% interest in this airline, the next 29 biggest shareholders sadly only hold an aggregate quantum of 6.57% of MAS shares. Strangely, 4 billion shares or 24% lie in the hands of the average Joe and Jane investor. They are  an absolutely unhappy lot!

To get through its SCR proposal, Khazanah needs at least 50% in numbers as well as 75% in value acceptance (Likely through a poll with proxy strength). 

I am not sure about what 50% in number means? Does it mean Khazanah and the 29 biggest shareholders of MAS? Or the 4 billion share bloc? Or those who are attending in person and through a vote of hands?

Apart from that, Khazanah needs 90% acceptance from shareholders to de-list MAS from Bursa Malaysia. This may be a tall order again if the mood and tide goes awry on 6th November with the average Joe and Jane shareholder. 

As part of the new plan to salvage MAS, Khazanah will invest RM6bil more, cut 6,000 jobs and migrate the airline’s into a new company which will be operational on July 1,2015.

Interestingly, the circular warned that if Khazanah failed to get the votes it needed to push through its plan, MAS would remain listed and there would be no RM6bil cash-injection from Khazanah, and if MAS continued to incur heavy losses coupled with its cash reserves of RM2.4bil depleting over the next 12 months, the airline could become a PN17 company.

I wonder how the minority shareholders will hold up against this serious scenario.

Will they bite the bullet and go down with the airship or will they run helter skelter with 27 sen to a dollar?

This is an EGM that will  likely see conflagration,not a whimper. 

All minority shareholders should attend!

Can the Chairman, CEO and Board members of MAS willing and ready to be on these hot seats to be grilled once more on 6 November?

The jury is out on that one.

Pay up or No Exit!

Unemployable Unemployed Graduates?

I read with interest that out of 700,000 names on the black-list of the Malaysian Immigration Department, some 85,000 or 12% of them are graduates  who had defaulted on their PTPN or study loans. That means that they will be stopped at any immigration exit points whether at airports, roads,ports or rail and cannot leave the country's borders and shores until they pay up pronto.

While the government is doing its best to get the loans repaid through one-off discounts or a periodic payment schedule of a year, we do not know whether this is going to be effective if the graduates are still out looking for a job or are underemployed and have pittance left to pay these loans after paying for their food,transport and lodging.

Achtung!

Also, possibly, not many are bothered  whether they can leave the country or not as tourism may not be at the top of their priorities right now.

Some of the negative effects will be the probability that many Sabahans and Sarawakians may not be able to cross from their states to Peninsular Malaysia and vice-versa for retraining, to get a job at the bigger Malaysian cities and the inability to visit family members and relatives.