YTL Corp-Gestation,Digestion and Indigestion

Today is the second day of the 5 for 1 share split for YTL Corp(YTL). The morning was great as it start off for a 3 sen gain. Pushing against the heavy selling gravity, it punched through at RM1.74 but could not hold its ground and slipped to a low of RM1.69.

At about closing time, volume hit  close to 1,300,000 shares and  gain a paltry 2 sen to RM1.70 {I thought it would hit RM1.74. Fat hopes!}

As expected, there is a time called the gestation period. YTL is at that stage. There is a deluge of sellers who have made their money and are looking to exit. These are the speculators who has made a fast buck. The buyers are most likely YTL buying back its shares into the Treasury because of its under value status and the long term institution funds ranging from EPF, Pensions Fund,SOSCO, Public Trustees and perhaps even PNB.

I also think that some foreign funds might be taking small bites.

Once gestation is over and digestion is complete, the share should go up. Before that, expect indigestion and selling pressure from weak holders one more round but at a higher level.

Until then, expect YTL to go for marginal price increases but no big push!