SILKHLD (5078) - The Silk Road of A Highway
The Malaysian equity market had been in a bang at the opening of 2017. The FBMKLCI saw strong rebound from a lowly 1630 to a high of 1682 before retreating into 1672 in the 2nd week of Friday's closing.
If you had been following me recently, I believe that could be looking at a handsome paper gain, or even realized profits in both Gunung and Dataprep. I had been promoting heavily on both of these counters when they are sitting below certain price level which I deemed them very attractive for a strategic position. Of course, both of them had saw share prices surging upwards because proactive reader will take action immediately after knowing the potential of both companies.
In this world, people who act immediately after accessing an opportunity will reap the result. Of course, nothing is guarantee here, as the outcome can be good, can be bad - That's why they have to access it properly in a limited set of time, liken to a competition.
Now, for those who are my avid reader, you know that I like to analyze stuff that no people would go to do, and of course, I always like to share with you on my prediction and analysis like no other people do as well. That is the reason I would like to dwell in company with changes in direction, corporate exercise, take over as well as privatization, because they are always secretive, interesting and very rewarding once you are able to crack the code. Don't you too have a feel of completion after you solved a hard puzzle ?
So what is the next big puzzle that is set in for 2017 in the KLSE ?
Before I would like to show you the subject target of the puzzle, allow me to bring you back a little on some history, and what is the reason for such thing to happen in this manner.
Do you guys remember the story of Green Packet (Gpacket - 0082) on the sale of P1 which emerge as a major topic in 2012 ? News reported that TM had deny any interest in P1, leaving the public guessing around among Digi, Celcom and YTL Communication. In between the period, Gpacket share price rode up and down in a wild manner amidst speculation of different interested parties, which one of them is Digi. However, in the end, TM had emerge as the entity that had bought controlling stake in P1 in 2014, which had finally put a 3 year long puzzle to a closure.
So as you can see, when such a major asset is in the plan of disposal, it will be played around in the market for 3 years.
For this case, allow me to introduce one of the major asset that is up for disposal, and is in it's 3rd year - Silk Highway.
The news of Silk Highway emerge in the market in 28th May 2014 when IJM Corp propose to buy Silk Highway for RM 398 million. (Source - The Star IJM propose to buy Silk). This piece of news had send share price of Silk Holding Berhad flying from a lowly RM 0.35 to a high of RM 1.20 within 9 months.
However, the deal was mutually aborted in 25th November 2014 due to certain condition precedent. Among them is the bondholder wanting a piece of the accrued profit from the asset disposal. (Source - The Star IJM And Silk abort deal)
Subsequently, we saw some other parties that expressed interest. Those are parties like Wzsatu and Taliworks, however, nothing materialize between them.
Now, is 2017 going to see this go through ? So let's look into the chart.
According to technical reading, Silk had recently broke above the long term down trend line which notable volume in build up. After consolidating at an average price of RM 0.40 for more than 1 year, this could be a strong case for 2017 to see it through.
To reaffirm this, familiar sources that are very closely related to this case are looking to see an offer of more than RM 400 million this time around. The estimated price is approximately around RM 450 million. Now, this is a very lucrative offer to start with for the new year.
Now, the main question arises - Who is the potential buyer for Silk Highway this time around ?
Since this is a big chunk of analysis, I will put it to my next post to share with you which is my highest potential company that is looking for a solid offer to Silk, accompanied with references, share price movement and corporate exercise prediction.
But for now, what can you do? Of course, I don't know what is your appetite for such an event. But one thing for sure, whether you like it or not, Silk Highway will definitely be disposed off, and this will definitely create a ruckus in the market, and the people who will stand to benefit are those who took immediate action to lock in strategic position. As for now, a good question for you to consider - Do you want to be left out in this ? You know what is best for you.
Honestly, if you are to look at the share price movement of Silk, this is just the beginning of the show. In my next post, I will try to put down the figure, but for now, anything that is below RM 0.45 is a very good price to take position.
SILKHLD (5078) - The Silk Road of A Highway
http://bonescythe.blogspot.my/2017/01/the-silk-road-of-highway.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+BonescytheStockWatch+(Bonescythe+Stock+Watch)
