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Post by oldman on Oct 25, 2013 4:45:16 GMT 7
Thanks Puregold for the link. Yes, there is likely to be another bloodbath for the 3 shares when market opens today. I think when the designated status was lifted, many investors thought that this meant a clean bill of health. Now, fund managers and many other investors are likely to jump ship. I pity all those retail investors who were trying to look for a bargain. Yes, SGX should have stated that they were doing a probe before lifting the designated status as this would have thrown caution to retail investors. I will not be surprised if the 3 stocks are suspended this morning. Given the nature of probes, I think it is also a good idea to stay away from all the rest of the related shares mentioned in this article: sg.finance.yahoo.com/news/annica-holdings-ltd-why-pay-080000820.html
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Blumont
Oct 25, 2013 10:01:47 GMT 7
Post by oldman on Oct 25, 2013 10:01:47 GMT 7
PPVAF is taking a big risk in betting a company that is collapsing, of course more collaterals are needed. But I wonder why they are interested in Blumont in the first place? Will Blumont be able to pay the hefty interest? Surprisingly, the 3 shares are only down around 10% this morning. This is the wonder of the market. Always unpredictable. It will be interesting to see if the proposed convertible bonds will proceed given the probe as well as the share price being below 20cts... -------------------- Mandatory Tranche Conditions
PPVAF’s obligation to subscribe for the Mandatory Tranches shall be conditional upon, inter alia, the following being satisfied or waived (collectively, the “Mandatory Tranche Conditions”): (i) the results of PPVAF’s legal and financial due diligence investigations on the Company based on publicly available information being reasonably satisfactory to PPVAF; (ii) the lifting by the SGX-ST of its declaration of the Shares as a “designated security”; (iii) the closing price per Share on the market day immediately preceding the relevant Completion Date being a minimum of S$0.20; (iv) the daily volume weighted average price per Share for the 10 consecutive market days immediately preceding the relevant Completion Date being a minimum of S$0.20; (v) the approval of the shareholders of the Company (the “Shareholders”) for the issue of the Bonds, the Conversion Shares and the Interest Shares; (vi) the approval of the SGX-ST for the listing and quotation of the Conversion Shares and the Interest Shares on the SGX-ST, such approval to be in terms acceptable to PPVAF; (vii) there being no material adverse change in the business, properties, operations, financial condition, results of operations or prospects of the Company and its subsidiaries, taken as a whole, occurring at any time between the date of the Bond Term Sheet and the Initial Completion Date; and (viii) there being no material breach by the Company of its representations, warranties, covenants and indemnities contained in the final definitive subscription agreement for the Bonds (the “Bond Subscription Agreement”) that would adversely affect the value of the Bonds or the Conversion Shares. infopub.sgx.com/FileOpen/Blumont_Convertible_Bonds_Platinum.ashx?App=Announcement&FileID=260172
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Blumont
Oct 25, 2013 13:43:16 GMT 7
Post by me200 on Oct 25, 2013 13:43:16 GMT 7
How much money did broking houses and investors lose when Blumont, Asiasons Capital and Liongold shares were suspended and subsequently declared designated securities by the SGX ?Thursday, 24 October, 2013 1:4 PM Posted by Kevin Scully www.nracapital.com/Research/KevinBlog/755
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Blumont
Oct 25, 2013 15:01:32 GMT 7
via mobile
Post by oldman on Oct 25, 2013 15:01:32 GMT 7
Excellent analysis. The numbers are indeed scary. How much money did broking houses and investors lose when Blumont, Asiasons Capital and Liongold shares were suspended and subsequently declared designated securities by the SGX ?Thursday, 24 October, 2013 1:4 PM Posted by Kevin Scully
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Blumont
Oct 25, 2013 19:37:52 GMT 7
Post by oldman on Oct 25, 2013 19:37:52 GMT 7
Interesting comments from SGX. If I read correctly, they are confirming that the 3 stocks are now under investigation. Do read the full text at infopub.sgx.com/FileOpen/20131025_SGX_corrects_misconceptions.ashx?App=Announcement&FileID=261295---------------- Investigation is a separate matter from maintaining orderly trading Any investigation into possible breaches of the Securities and Futures Act, including insider trading and market manipulation, is a distinct and separate action from the regulatory tools to bring about informed and orderly trading. Investigations are undertaken to review past trading conduct and detect possible transgressions. In line with global practices, they can proceed without suspension of trading in the securities. Investigation of misconduct SGX devotes significant resources into detecting and investigating market misconduct and work closely with statutory authorities against offenders of the law. While we appreciate the interest of the public on recent developments in the 3 securities, we are unable to comment any further to preserve the integrity of any investigation.
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Post by oldman on Oct 26, 2013 6:58:45 GMT 7
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Post by me200 on Oct 28, 2013 8:23:47 GMT 7
I posted on my FB on Oct 1, 2013 to warn people that Blumont potential bubble is forming and a time bomb. 3 days later, it went busted.
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Post by oldman on Oct 28, 2013 8:39:29 GMT 7
me200, well spotted. I only looked at the stock when it started its descend.... By the way, any special meaning to your username me200?
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Post by me200 on Oct 28, 2013 10:39:01 GMT 7
Hi oldman, I like mercedes car and being drving for >20 years. Hence, me200 stand for Mercedes E200...
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Post by puregold on Oct 28, 2013 10:48:20 GMT 7
Hi oldman, I like mercedes car and being drving for >20 years. Hence, me200 stand for Mercedes E200... That makes sense now. Oops, that means I like pure gold? Ermmm..., who does not like pure gold?
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Post by me200 on Oct 29, 2013 8:10:04 GMT 7
How to prevent another penny stock fiascoThe recent fiasco involving three local stocks wiped billions off investors’ portfolios. More seriously, it exposed major structural problems in Singapore’s stock trading processes, which should be addressed to prevent the episode from repeating itself. Published on Oct 29, 2013 www.straitstimes.com/premium/opinion/story/how-prevent-another-penny-stock-fiasco-20131029Summary view from experts. Contra System''Contra does not encourage investing; it encourages gambling,'' said Mr David Gerald, president and chief executive of the Securities Investors Association (Singapore), the main retail investor lobby group. ''It encourages people to have a short-term view.'' CPF Investment Scheme''When CPF (Board) puts a stock on the list, the man in the street may have the perception that somebody has done the due diligence,'' said Singapore Management University's associate professor Jeremy Goh, who researches corporate governance
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Post by oldman on Oct 29, 2013 8:36:26 GMT 7
How to prevent another penny stock fiascoThe recent fiasco involving three local stocks wiped billions off investors’ portfolios. More seriously, it exposed major structural problems in Singapore’s stock trading processes, which should be addressed to prevent the episode from repeating itself. Published on Oct 29, 2013 www.straitstimes.com/premium/opinion/story/how-prevent-another-penny-stock-fiasco-20131029Summary view from experts. Contra System''Contra does not encourage investing; it encourages gambling,'' said Mr David Gerald, president and chief executive of the Securities Investors Association (Singapore), the main retail investor lobby group. ''It encourages people to have a short-term view.'' CPF Investment Scheme''When CPF (Board) puts a stock on the list, the man in the street may have the perception that somebody has done the due diligence,'' said Singapore Management University's associate professor Jeremy Goh, who researches corporate governance Thanks for the link. Yes, it is a very good article. I take a different view of our contra system. I think this is important to our markets as it gives liquidity and with it, excitement. If you take away contra, I will not be surprised that the banks then take over this function and give loans to investors to play the market instead. On the surface, it really makes no difference if the banks or the brokers provide the margin to trade stocks. However, if this happens, remisiers are likely to lose their jobs as broking houses can deal directly with their clients given that there will no longer be the risks of default with a money up front system. I know of remisiers who are really good at guiding newbie investors along the way and in the end, investors may lose out on a good source of advice. Yes, I have many friends who are remisiers and I wish them well. As for the CPF Investment scheme, I think the best way forward is only to allow investors to buy STI index stocks as these surely should be less volatile.
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Post by puregold on Oct 29, 2013 10:13:30 GMT 7
Just like the term "remisier", contra trading is also uniquely Singaporean and Malaysian. I agree with Oldman that contra trading does provide the liquidity for market participants. Our trading volume is already small compared to other markets, it will be worse if contra trading is not allowed.
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Post by me200 on Nov 4, 2013 8:20:29 GMT 7
18 counters routed in penny stock falloutThey lost half their value or more in October as 3 'designated' stocks sankPublished on Nov 04, 2013 ST www.straitstimes.com/premium/money/story/18-counters-routed-penny-stock-fallout-20131104>> "It was a domino effect," said remisier Alan Goh. "When such a big event (the losses in Blumont, Asiasons and LionGold) occurs and the losses are there, the same players may have less risk appetite for other penny stocks."
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Post by me200 on Nov 5, 2013 10:11:22 GMT 7
Good reminder... Never Catch a Falling Knife. pertama.freeforums.net/post/24/quote/37 Never catch a falling knifeIf a share crashes from $2.40 to 14cts, this share may now look 'cheap' compared to its trading price in the past. If one buys the share at 14cts and it then collapses further to 5cts, his loss is as significant as someone who bought it at its height. Let me share some numbers to illustrate this point. If you were to have bought at the height of $2.40 and the share collapses to 5cts, your loss is 98%. If you were to have bought at 14cts and it collapses to 5cts, your loss is 64%. Assuming that in both cases, you invested $10,000 in the stock. Scenario 1 will mean that you have lost $9,800. For Scenario 2, you would have lost $6,400. Hence, in both cases, the loss is very significant as compared to the initial capital. This is why investors must realise that it is foolish to think that buying a share that has collapsed from $2.40 to 14cts is a safe bet. It is not. A share is not cheap just because it has collapsed in price. You must still do your due diligence to arrive at a fair value for the shares that you intend to buy. The market is not always right with regards to the share price. The share price is determined by demand and supply and many times, it does not truly reflect its fair intrinsic value. There is no margin of safety when a share collapses in price. Margin of safety is only applicable when you buy below its fair intrinsic value. The only way to estimate the intrinsic value is to analyse the company using traditional fundamental analysis methods.
On the other hand, if you are a trader, you probably do not care about the fundamentals as you are trading based on the momentum of the stocks. Good traders have a good sense of demand and supply. If they sense heavy selling from fund managers or know of forced selling by the banks, they are unlikely to be buyers.
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