Recently, hibiscus petroleum's associate company Lime acquire 2 new concessionaire of petroleum exploration right in Norway and middle east. For your information, Hibiscus Petroleum is the first SPAC or special purpose acquisition company in Malaysia, startup IPO with no business, but using the fund raised from IPO to acquire a business within a certain period. So, 35% share of Lime is acquire recently. The transaction still pending shareholder approval. Due to Lime has several exploration right in middle east, Hibiscus Petroleum share rose to about RM1.60 from RM0.80. After this recent acquisition by Lime, Hibiscus Petroleum share price rose to RM2.10.
I would like to say here that I think Hibiscus Petroleum is a very risky investment. Because,
1st, exploration itself is a very risky business and require huge amount of investment. It might take 5 years or more from exploration stage to production stage before petroleum can be sucked up from the well. In between, no result or cash will come in, hence no dividend, more over, more cash may need to contribute into.
2nd, 35% is a minority stake, it may not have the power to control the financial or management of the Lime. It might be a passive investment and when Hibiscus Petroleum need cash or working capital, it can be only from bank, and from shareholder (potential more right issue in the future). What if the controlling shareholder do not want to pay out dividend?
Considering that, it is still speculating counter to me.
NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees. I may already have positions in the above mentioned counter. The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Saturday, April 14, 2012
Friday, April 13, 2012
Consumer sector in high growth market
For a high growth and populous area, consumer sector is a good place to be when talk about investment. Growth prospect is bright. It is also very defensive if the consumer product is price in an affordable range of wide consumer.
Sometimes I feel that a product that price a little bit expensive in the sense of average wages of the area, the product growth potential is tremendous. It means the product is still pioneer and mostly never been tried before. With a little promotion or advertisement to boast the curiosity of the people, the will save or borrow to buy it. Just like when we are young, we see a shoe, or computer game, or toy that we madly want but cannot afford, we will save for months to buy it. Also because of high growth, they will afford it very soon. That's why McDonald, Starbuck, car sale can grow so fast in China.
When people has some money, they want to live a better life. And once they tasted the sweetness of better life, they will want more. The desire process never stop.
Sometimes I feel that a product that price a little bit expensive in the sense of average wages of the area, the product growth potential is tremendous. It means the product is still pioneer and mostly never been tried before. With a little promotion or advertisement to boast the curiosity of the people, the will save or borrow to buy it. Just like when we are young, we see a shoe, or computer game, or toy that we madly want but cannot afford, we will save for months to buy it. Also because of high growth, they will afford it very soon. That's why McDonald, Starbuck, car sale can grow so fast in China.
When people has some money, they want to live a better life. And once they tasted the sweetness of better life, they will want more. The desire process never stop.
Monday, April 2, 2012
Be cold or no emotion, when talk about money. Only Logic...
We need to take full authority in our money. That's mean
We need to keep track of our money tightly
We need to have full authority to move our money whenever we want.
We need to know what happen all the time or have access to know what happen all the time.
We need to have alternative way to track or verify our money.
We need to have right to hire an independent parties to protect our interest.
Whenever talk about money, we need to be cold, be cautious, be very logic.
Emotional will enable others to take advantage on us.
Friendship, sympathy, relationship, etc is common tactics used by con man.
Cold is 1st barrier i know to protect ourselves, follow by knowledge and logic in subsequent barrier.
We need to keep track of our money tightly
We need to have full authority to move our money whenever we want.
We need to know what happen all the time or have access to know what happen all the time.
We need to have alternative way to track or verify our money.
We need to have right to hire an independent parties to protect our interest.
Whenever talk about money, we need to be cold, be cautious, be very logic.
Emotional will enable others to take advantage on us.
Friendship, sympathy, relationship, etc is common tactics used by con man.
Cold is 1st barrier i know to protect ourselves, follow by knowledge and logic in subsequent barrier.
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