BJFoods-T Minus 3 Days to Go

Will it roast,fry,fly or soar?

The calm before the storm?

Or has the crying hills turn into dying hills like in Penang?

Why is there so little interest in food-based counters which take cash plenty upfront and get supply on 60 days to 90 days credit? Even if credit cards are being used, food companies get cash into your account after three banking days.

There will be less food-based counters on Bursa KL. Going out of the door are KFC and QSR Brands. They are taken out to save Johor Corp which is cash-strapped and need large dividend payout to stave off CIMB and Maybank on their tail for principle payback of more than RM2 billion this month. If CIMB can pull out from the Asian Petroleum hub project, they can also pull the carpet off Johor Corp here.

Old Town and Tai Tung Resources are the other publicly traded food concern. Tai Tung Resources is also a Berjaya associated company through Dijaya Corporation.

The other food shares indirectly traded are Sushi King through Texchem and A&W through KUB.

Today is T-3 day to the ex-all date of BJFoods (BJF) rights at 0.65 sen and free warrants at a conversion price of 70 sen. The rights is 4:5 meaning for every 5 shares held, you are entitled to 4 rights share and a similar number of free warrants. The number of warrants to be issued will be determined by the number of rights taken up. Less will be issued if there is no total uptake of the rights. So,buy excess shares,won't you?

Today, trading on BJFoods started hesitantly. From nowhere(not being queued), 50 lots of 100 shares were thrown into the arena bringing the counter down three sen. Fortunately, there were genuine level-headed buyers picking up the stock gradually as the hours ticked by.

At this moment(4.34 pm),there are more than 440 lots on demand at RM1.34 while selling lots account for 112 lots. Last done was RM1.34 for a one sen gain. At a volume of 2,441 lots done, it can be said that it is an active day out for BJF. (PS. There was no business done until 5pm and the stock closed up one sen at RM1.34;... tsk!tsk!-tomorrow is another day!)

Assuming the counter holds good at RM1.35 as it closes on 11 July, then theoretically it should open at the same price on 12 July ex-all. That would mean that you could then sell the shares you have and still be entitled to the rights and warrants. If you do not want the rights and warrants, you can also sell out the offer documents for valuewhen they trade from 17 July to 23 July. It ceased trading on 24 July.

After that, you would have to cough out hard cash to take up your entitled rights. You must subscribe for the rights before 5 pm on 31 July 2012. So get your drafts ready and pay your revenue stamp of RM10.00 for every offer form to be subscribed. The best bank to get your drafts is Public Bank.

I have written up my theoretical scenario in earlier posts and will not repeat it here.

The similarity between investing and gambling is that both involved risk capital.

The difference between gambling and investment however is that the risk capital in share investment is based on calculated risk after studying the counter. If at all things do not come your way, it will come by and by if it is a good stock that you have bought in.


Gambling is sudden death. Put all your money on a Sports Toto draw and if you do not win, all the capital will be lost forever. Stocks give you many times to recover and to make handsome profits too.

Rotisserie Goodness

So, in BJF, what are the odds against you? First there is the cheap rights at a 50% discount, then the warrants with a value spread of 65 sen which can be sold for good cash; good dividends annually (Interim 2% just paid) and now the potential inclusion of BStarbucks RM4.5 million profit into BJF's revenue stream in September 2012. 


Also do not forget the potential earnings from the Indonesian operations in Jakarta, Surabaya and Medan and the forthcoming Dubai investment proposal.