UEMLand- a rough diamond?

In June 2009, I posted about the potential of UEMLand (here). To wit:

A few weeks back, a friend asked me what I thought the upper limit of the rally in UEMLand would be. I told her that UEMLand might follow the footsteps of its predecessor, UEMWorld which in turn followed the footsteps of its predecessor, Renong. What I've meant was that UEMLand would slowly rise to the RM4.00 level over a period of a few years... The timeline will vary according to corporate development & economic conditions.

I appended below the chart of UEMWorld (no longer listed) & the current chart of UEMLand. The current rally in UEMLand is similar to the rally in UEMWorld From January to May 2007 where the share price rose from below RM2.00 to RM4.50 (denoted as 'C').

The catalyst for a re-rating of UEMLand could be the improved relationship between Malaysia & Singapore, which would facilitate more investment in Johor in general & the Iskandar Malaysia development area in particular. The latter is owned by UEMLand. The better relationship between Malaysia & Singapore was sealed when the long-running problem of KTM land in Singapore was finally resolved recently (here).


Chart: The combined daily chart of UEMWorld (up to its delisting on May 25, 2007) & UEMLand as at 29/9/2010 (Source: Tradesignum)

A cheaper alternative to ride on this play is to get into the CWs or the CBLC. The preferred instrument is UEMLand-CD for long tenor, lower premium & higher gearing. The latter is a double-edged sword! See the table below.


Table: UEMLand's CWs & CBLC- Valuation & Main Terms

Note: CBLCs are like CWs, except they come with a Call Price which necessitates the issuer to "acquire" the instrument when the underlying share price drops below the Call Price. This feature is like an insurance policy but since the share price is so much higher than the Call Price, it is unlikely to be triggered. For all intend & purposes, you may treat UEMLand-JA as a CW.