Chart: Time's weekly chart as at Nov 2, 2009_3.00 pm (Source: Quickcharts)
The rally in Time may be due to the expectation that the stock will be uplifted soon from its present status as a PN17 stock. Time has completed a painless restructuring scheme involving the following:
1. The conversion of a Term Loan of RM342 million from a development bank to a Redeemable Convertible Secured Loan Stocks (RCSLS) of RM342 million; and
2. The book entries to set-off the Accumulated Losses against Share Capital (via Par Value reduction only), Share Premium & Capital Reserve.
The initial restructuring scheme also includes a proposed private placement of up to 77,524,468 new TIME shares, which has been canceled. In July, Time proposed to settle the outstanding RCSLS of RM342 million by disposing off its 28.69%-stake (comprising 726 million shares) in Time.com.
As the proposed disposal of the 28.69%-stake in Time.com was not part of the restructuring scheme, the scheme is now deemed to be completed. See the table below, where the changes brought about by the scheme is denoted as Proforma I and the subsequent settlement of the RCSLS via the sale of the Time.com stake is denoted as Proforma II.
Many would agree that the completed scheme is a half-done job where the existing shareholders suffered no loss in term of reduction in the number of shares held while the development bank probably converted its Term Loan to the RCSLS. The true challenge is to recapitalize the company & to dispose of its stake in the loss-making, Time.com. As you may notice, no new significant business was injected into the company. I expect Time may hobble along for a while- hardly a strong case to buy into the stock.
While one could argue there is no strong case to buy into it, the rise of this stock signals more market participation before the arrival of "King Maxis"??
ReplyDeleteWhat do think about Measat? It is a strategic national security asset, should this be privatised after Bernas?
Hi Solomon,
ReplyDeleteI think Time is riding on the coattail of Lityan's declassification as a PN17 stock. Lityan is not the first stock to have such a spectacular rise & it may not be the last one.
Measat may have broken above its long-term downtrend line at RM1.80 in June. It is now sliding back and may soon be resting on the same downtrend line at RM1.50-55. If it can hold at or above this level, Measat's outlook will remain positive. The catalyst for a more sustained play for this stock will come when it can announce more convincing financial results. Erratic performance makes a weak foundation for any rally, even for a promising stock.
Good call, Alex AVOID LITYAN....do buy yr arguments. It is up to the market maker how they want to play up the sentiments, whether MAxis relisting or year end target.
ReplyDeleteIf USD continues to weaken, MEASAT financial will improve as more than 90% of its debts derives from USD. From now to the relisting of Maxis 16 days more, if MEASAT like deadwood, you could foresee MAxis price would not be as good as expectation.
HI Alex, how do think of gpacket?
ReplyDeletefew catalysts i am aware of this co.
1. expansion plan into singapore wireless broadband.
2. rm500 tax incentive in 2010.
3. agreessive marketing compaign thru potong now which may gain market share for its P1.
although it is still a loss making, 2010 looks good for gpacket.
what do you think of gpacket recent strong run? seems it is too speculator now...
Hi Betx3,
ReplyDeleteI am looking at Gpacket's accounts... It may take a while. My technical take is that this stock has an upside breakout of its medium-term downtrend line at RM0.80 in early October. It has a big move this morning- surpassing the horizontal resistance line of RM1.30 and just tested the next horizontal resistance line of RM1.45. It may continue its uptrend in the days ahead until the strong horizontal resistance line at RM2.00. I will give an update after my study if I have anything interesting to add.
Hi Alex,
ReplyDeleteI am lucky to grab the gpacket-wa at 0.43 on the budget day after the rm500 tax rebate incentive announcement.
Although I think gpacket as the value stock, a bit worry seeing its price movement these days...
Do you see the recent strong run is speculator acts or it is ppl buy into value?
Of course, it is windsock, nobody hold the crystal ball.. seek your opinion..
thks
Hi Bet x3,
ReplyDeleteSee my latest post. I must admit the timing of my post was "bad"- almost exactly when the stock took a plunge. Good luck.
Hi, alex, looks like time is not going to break its resistance, so what is your advice on this stock? at 0.51 now is it good to buy and hold it?what you think about the prospect of this company?
ReplyDeleteHi Sklyte,
ReplyDeleteI don't think anything fundamental has changed in the case of Time. You should approach it from a technical perspective. It may rebound at the horizontal support of RM0.50 or RM0.45. The latter is a stronger support level.
Time rallied from a low of RM0.335 on Oct 29 to a high of RM0.59 on Nov 5- a gain of RM0.255. If we expect a 50%-retracement of that gain, then Time may pull back to about RM0.46.