Where are the Cornerstone Buyers,Mr Astro?

No let up in selling?

If you look at the trading yesterday,the pattern is that the sellers are mostly spooked retailers or possibly day traders/margin traders and short-sellers.

For the day traders, any day traders, they have taken home the booty.

No big buyers in sight really though there were a small number of  lot buyings of 1000 but far in between.

The question to be asked is where are the big players.

With such a big fall to almost 7.6% from its  IPO price, where are the cornerstone buyers of beleaguered Astro? 

Twiddling their thumbs in anguish?

Where is Permodalan Nasional Berhad,Great Eastern Life Insurance,Universities Superannuation Scheme.Standard Pacific Capital, Corston-Smith Asset Management and Nomura Asset Management? They are currently holding a huge chink of 430 million shares and losing value pretty fast at this rate.

Also, what about bumiputra trust agencies and individuals,especially those who got the portion from MITI?

Aren't they all strategising to move in to buy more?

Isn't an equalizer formula favourable now? Or are we playing limbo rock now, how low will Astro go?

They must have known something the open market doesn't?

They will buy in but I guess at a more agreeable price.

We will see how the market  performs today, to see whether they is a price traction level or a rebound.

Not Every Nation is Kind

Spurn in Canada

It rather shocking and sad that Canada has spurned Petronas’s bid to take over Progress Energy Resources Corporation. The reason for the nay is that the bid will not benefit the Canadian nation.

In spite of Petronas’s pledge to help spur Canada's nascent liquefied natural gas export industry by building an LNG export facility on the country's Pacific coast, the government was unmoved.

However, Petronas has 30 days to make an appeal to the rejection.

What I am trying to impress here is that we have squandered God-given resources in Malaysia just to take on less economical ventures in far off areas. 

I do understand President and CEO  Shamsul’s concern that it is about time that dividends to the government be capped so that development funds can be made for new acquisitions abroad as our own wells are really drying out. 

Malaysia will be a net import gasoline nation the way we we are recklessly spending in luxuriant disregard for tomorrow!

The future is somber.

Cooking Astro's Goose

Bringing Astro down!

Astro was cooked almost to cinder in the afternoon session.

As for its fundamentals, they, however, remain intact.

After first falling 19 sen, it was chipped down ( more like chopped down) further by small lots trading to end down a stupefying 32 sen at RM2.77.

Chopping down Astro to Size

UOB Kay Hian Malaysia Research said there were several entry barriers for competitors seeking to compete against Astro.

In its report issued ahead of its IPO last Friday, the research house said Astro had exclusive rights to broadcast via satellites (DTH) until 2017, which essentially prohibited any competition from using the same technology to broadcast TV programmes.

The research house further pointed out Astro's large variety of exclusive popular international content also prohibited competitors from broadcasting those programmes in Malaysia.

"Its 68 Astro-created TV channels, with more than 40,000 hours of in-house produced content for the local audience, makes it difficult for a newcomer to penetrate the local content segment.

"The heavy capex that is needed to build a broadcast network acts as a deterrent to would-be competitors. This includes the need to set up terrestrial broadcasting network, operating centre and satellite transponder space.

"A long gestation period is needed to set up an entire broadcasting system before commercialisation can even begin. This gives Astro a significant head-start over any new entrant," said UOB Kay Hian Research.

However, the research house said excessive bidding for exclusive content may result in cost overrun. This includes bidding for the popular English/Barclay's Premier League (EPL/BPL) as well as bidding for content that will boost its premium position in the pay TV market.

Another factor it said were competitive pressures. Already broadcasting variations of what was available on Astro, Telekom Malaysia (TM) could be a force to be reckoned with in the IPTV segment in the future.

Other risks were that the younger generation was increasingly turning to the internet for entertainment, such as YouTube, which could threaten Astro's viewership as well as advertisement revenues.

Anyway, Astro is oversold and may need a traction price point for a good rebound.

Will that happen tomorrow?

The Astro Gambit-Would You Take A Position?

Overselling 

Now, that Astro has been taken to the cleaners, what should one's stance be toward this counter?

Do you think that there will be at least some fair premium above the IPO price?

If so, at the current price of RM 2.89, would you take a gambit and enter for a play?

My mind tells me that once the massive overselling subsides, the market will operate in a less tumultuous and predictable way.

Then genuine investors will have a re-look at Astro and its propensity for trading gains;at the very least.

Can Astro grow trading profits in the short term?

For now, those who have got the IPO shares as well as those who went in to buy yesterday afternoon and this morning, it looks like they have to hold the stocks and wait for a opportune to sell into some moderate profits.

The Astro Sellers-Who Are They?

Falling with Selling Gravity from a Big boy

With Astro's price plummeting from Day 1, who do you think were these sellers selling down the counter as if it was sampah sarap?

Let me speculate who will sell below IPO price?

Short sellers that will sell down the price only to buy back later at even lower prices.

Is this scenario possible? Unlikely is my answer as you would have to sell short by at least 6 sen to break even.

Margin traders who trades on a day basis, paying RM 20.00 for a buy and sell deal?

Again possible. Those who sell will need to buy back at 2 sen difference.

I think these traders may have started the selling deluge and have re-couped by now. Assuming they sold at RM2. 96 and bought back at RM 2.89, they would have gained 5 sen per lot of 1000 units.

Then, the RM64,000 question.

Who is a likely seller that needs cash for some reason and will cash out, for reasons best known to him, after being given a super-rich valuation by the apa macam authorities?

Likely mystery seller that could sell below IPO?

Could it be Ananda?

If so, until he complete selling down his big chunk, Astro will keep on falling.........

At lunch close, Astro slumped to RM 2.89.

Indians will look at the counter and remorsefully squeal, Kalawoleh!

Is MCA Playing The Emperor's New clothes?

I wonder.

On the closing note of the party's 59th AGM, the party believed they can win with the magical formula called the Ah Jib Kor factor. I doubt they can win BIG!

I am actually worried.

When I was at the Asian Institute of Management a long time ago when Marcos was still in power in the Philippines, I was taught one thing.

Avoid single-cause thinking.

Leading MCA members into more trouble?

I am sure that they MCA can take a leaf of learning from this simple concept.

As such, I would like to advise MCA to be not overtly dependent on this factor because even Najib has his detractors.

So, hopefully Chua Soi Lek would not lead all his members to sea like the Pipe Piper of Hamelin!

Ananda's ASTRO Got Roasted Kaw Kaw

Market is Saying So. No?

Yes, his stocks are getting hyper drubbing.

The market has sold him down the Old Swanee River.

From the word, "Go!", Astro shareholders dumped the burnt out former star like a plague.

It was sent reeling under intense selling pressure right through the RM 2.90 psychological level and if there was not a huge deluge of buyers at RM 2.88, it would have gone down to join the Penguins at the Antartic!

Right now, it is standing at RM 2.90.

Looking at the huge number of sellers, it looks like it may just drop below RM 2.85 this morning.

I can only see see salvaging work and salvation work done in late morning and early afternoon.

If not, Astro will fell further.

Like UOA Development, it might be given shoddy treatment by the market!