YTL-Will it Pay?

This is Day 3 of the ex-split. Not much magic has been spun.

That is good and that is also not so good.

Let us look at the not so good and see whether there exists a silver lining before we look at the good.

The price has only risen 11 sen since YTL Corp (YTL) went ex. For those who wanted to see a spike in price, it was downright disappointing. Many expected it to race to the moon. That did not happen. It did not come close even to touch RM1.80.

Right now it is languishing around RM1.70. Hopefully the fantastic Wall Street overnight performance can translate into something for YTL today. As always, expect sellers to come in drove if prices move up too rapidly. Then gestation will have to set in before price can really firm upwards.

So, where is the silver lining? Can anyone see it? I have not.

The good news. There is also none in the short term until something appears before YTL holds its AGM sometime in late November. That is another 7 months to go. By then, we should know what dividend will be paid up too as well as revenue generated.

As the market is buoyed or stymied by sentiments,I would say there is good sentiments for a blue chip such as YTL. Chances are there will be more investors than speculators in YTL and so I see more chance of a price rise in the offing in the medium term.I expect most fund managers to buy in and lock it for the long term. Not many such opportunity for a blue-chip counter such as YTL. This is the prime buying period and so I believe more buying is on which is seen by the incessant bargain hunting and the huge block transactions.

There was no magic today with YTL shares touching a low of RM1.68 before ending flat at RM1.70.

The shares goes split officially tomorrow.

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!

YTL Corp-More Pre-push than Post Push

Today the 26 th of April saw YTL Corp(YTL) go ex-share split. There was some numerological placing looking at the favoured heavenly number of RM1.68 before the start of trading. Pre-trading also saw it pushed down by weak sellers to RM1.62. Then buying pressure came in to push  the price to RM1.75. I think this is another marker that they wanted established.

With that  done, they let the market the free-play to trade. Many saw profits as there was a pre-push of 17 sen yesterday when the shares were cum. So they sold. Right now on heavy volume of 1,730,000 shares it is trading at RM1.66 for a 7 sen gain.

As today is the first day of its ex, I think YTL will conduct a mopping up operation to buy up all those weak buyers off the trading radar before the 'real' price of the market can be fathom.Also Treasury buying may come in sometime today or tomorrow.

My best guess is it will yoyo all day before settling down at possibly RM1.68.
(PS: How true! It settled at RM1.68 when the last purchase was 20,000 shares clinching a 9 sen gain for the day. Now let us watch the RM1.75 marker tomorrow.)

I think many who made money has left. After all tomorrow is another day....

Those who are holding will likely be long term investors and institutional buyers.

So what is in store?

This, we should ask Francis as he said his shares are undervalued. At the current price, it is still lower than the original 2010 peak price of RM8.60

Looking at the further horizons, I think cash rich YTL may be in for some strategic acquisition.

If not, I am sure a bonus issue may be somewhere in the pipeline or a capital repayment,perhaps?

YTL Corp-The Eleventh Hour

Before trading this morning, there was a hidden hand fixing the price upwards. Just when the bell rang for trading, YTL Corp (YTL)'s price went up 20 sen and before you knew it, YTL was trading up to RM8.05.

That was the marker price they wanted to show for the day. After that genuine traders came in. As it was the last day cum trading before YTL goes ex-share split tomorrow, not many sellers sold down except those that had already made profit the last week or so.

Buying during the last 30 minutes was mostly buy-ups, taking off the  sellers at RM7.99. The final count was 1,853,600 shares done and the counter ended with a 17 sen gain.

At an easy to calculate price of RM8.00, that would mean the theoretical ex-price is RM1.60 tomorrow.

Will we see handsome premiums tomorrow?

Let us watch YTL's new price trajectory tomorrow (26 April 2011)

YTL Corp Growth Prospects

 YTL Corp (YTL) envisions good growth for the company for the current challenging  year of 2011.

 YTL Singapore Pte Ltd executive director, Ruth Yeoh Pei Cheen in an interview with BERNAMA expresses that YTL  will continue to perform good business.

YTL recently announced a 13.3 per cent growth in revenue to RM8.905 billion for the six months ended Dec 31, 2010 compared with RM7.857 billion in the previous corresponding period ended Dec 31, 2009.

The group’s utilities comprise power generation and transmission in Malaysia, Singapore, Indonesia and Australia, water and sewerage services in the United Kingdom, merchant multi-utility businesses in Singapore and communications in Malaysia.

Yeoh said the company also took to ensuring that all its businesses strived to preserve the environment. The companies have to send the sustainability report every year, she added.

When asked on new projects, the Director of International Real Estate of YTL Singapore, Kemmy Tan said the group was looking to develop its projects in Malaysia.

"We also bought the 460-hectare Niseko Village in Hokaido last year."

YTL Group MD Tan Sri Dr Francis Yeoh Sock Ping had announced YTL's master plan to re-energise the development of Niseko Village in Hokaido.

Targeting affluent individuals, Niseko Village will be transformed into an all-season mountain resort offering exclusive hotels, luxury homes, ski-in ski-out estates and exclusive shopping and dining, all with spectacular views of Mount Yotei (Ezo Fuji, the Mount Fuji of northern Japan).

Tan said the project is being managed by  the Singapore office.

In time to come, Tan said two projects in Singapore namely Sentosa Cove and the land in Orchard Boulevard will be streamlined into YTL Land.

The Japanese assets were acquired for about US$66 million while the Singapore project cost S$575 million, she disclosed.

The project in Singapore is in the planning stage and the launch could be probably next year.

So besides YTL, watch out for YTL Cement and now YTL Land!

Tracking YTL Corp Before Ex-Share Split

The upward trajectory price of YTL Corp(YTL) reversed today in tandem with  overall market sentiments hitting a low of RM7.78 and hovering at the price piece de resistance of RM7.80.

There is still 5 days to go before it exes. Looking at the trading numbers, most lots done are below 100 block lots. There were many blocks of 100 to 400 lots done at the RM7.78-RM7.79 level . Possibly from institutional buyers  getting a good bargain from traders who made profit during the last three trading days. The stock ended at RM7.79 sen for an 11 sen loss.

Let us see what happens the next few days.

I am not super optimistic but I believe my hunch is correct that it will go up before it cum split this Monday 25th April or ex-split on Tuesday 26 April.

YTL had huge block buying interests up to 1000 lot I think the institutional investors have come in pre-share split. The share price closed at RM7.81 for a 4 sen loss.

Let us see what a dull Friday will do to YTL tomorrow (22April 2011).

Pumping Up YTL Corp

At the last AGM in late November 2010, MD Francis Yeoh advised shareholders not to sell off their YTL Corp (YTL) shares . The AGM attendees were told that the YTL shares were undervalued. Definite plans will definitely afoot to realise the real value of  YTL shares.

There was speculation galore in the street rumours as well as market punters on how Francis will shore up prices.Some thought YTL will be considering strategic M&As buy-ins. Yet, until the EGM on 14 April, there  not a squeak from Francis. So what gives?

Every one knew that YTL has one of the biggest cash horde on this side of the  non-GLC corporate world. At that time, its cash reserves was a whopping RM10 billion, far more than Genting Malaysia's RM 2 billion.

At the EGM, Francis informs the meeting that now their cash reserves have gone up to RM12 billion! He added that the last two years were not good years for M&As. And most offers were too expensive to consider. If none appears on the horizon soon, YTL may just consider buying up more shares in its own strategic subsidiary, YTL Cement which is moving very close to the RM5 market price.

After long month of dull and listless trading, YTL shares finally rested at the RM7.20 price level for the issue of the share-split documents to its shareholders.For every existing RM50 sen share, 5 sub-divided shares at RM0.10 will be issued. This puts the ex-price of YTL at RM1.42 per share.

On 26 April 2011, YTL shares will be traded ex-split offer. The last date of lodgement is 28 April 2011.

As such, all shareholders will have YTL new shares deposited in their CDS account on 29 April 2011. However, those who want can start selling their new shares beginning 26 April 2011.

Here is an example taken from its announcement to Bursa.

"For example, if Mr X purchases 100 YTL shares on cum basis on 25 April 2011, Mr X should receive 100
shares on 28 April 2011. As a result of the share split, 500 YTL shares will be credited into Mr X's CDS
account on the night of 28 April 2011 being the Book Closing Date. Therefore, Mr X can sell the share
split shares of 500 on or after the Ex-Date ie from 26 April 2011 onwards."

Last Thursday when it held its EGM, YTL shares moved up 20 sen to RM7.45. On Friday which is a dull listless days on most markets, YTL bucked the trend to settle down at RM7.72 for another 27 sen gain. Now that the date of the ex-split is out, there is buying pressure to grab the mother share. It went up as high as RM7.99 in the first hour of trading this morning and settled at RM7.94 for another 22 sen gain.

From the buying pattern, it looks like either big funds are not here or they are taking small bites before the shares go ex. I believe the current 2.263 million shares traded today are mostly from small retail players except for a few chunks of shares at 300 lots and one 500  possibly coming from institutional investors.

The counter closed at RM7.90 for an 18 sen gain.

My Take:

I believe that YTL shares are under valued. I believe it is tightly held. I do not know who is throwing out the shares just before its ex date.

But I can foresee one scenario. It the shares go beyond the psychological RM8.00 mark, many local fund managers will move in. I believe long term investors such as PNB, Khazanah, EPF, SOSCO, and the Pension Funds are getting in now. If foreign funds should come in, do not be surprised to see YTL shares shooting past RM2.00 ex.

It will certainly pump up the fever and the pressure when feeding frenzy starts. By then it may just be too late to get premium profits.

You know what I mean?