"Integrity is like oxygen. If you don't have it, nothing else matters."

"Be honest. Never lie under any circumstances. Just basically lay it out as you see it. Simply speak openly and frankly."

Integrity is also about principles, full disclosure and openness.

Integrity is a choice.

The Burdens of Wealth

The burdens of wealth are in

the act of creating,
the fear of keeping,
the temptation of using,
the guilt of abusing,
the sorrow in losing and
the responsibility of handing it over to a succeeding generation.


Just like building a business, with wealth you need to create, build, sustain and pass the baton.

"For a person to build a rich and rewarding life for himself, there are certain qualities and bits of knowledge that he needs to acquire. There are also things, harmful attitudes, superstitions, and emotions that he needs to chip away. A person needs to chip away everything that doesn't look like the person he or she most wants to become." (Earl Nightingale)

COVID-19 | The country's current trajectory suggests more Covid-19 cases ahead, said Health Ministry director-general Dr Noor Hisham Abdullah.

Noor Hisham said this is based on the current Ro value (pronounced as R naught) of 1.5.

Noor Hisham said the R-value is an indication of how many other people a Covid-19 patient can infect, or in short, the infectivity rate.

"For example, if the R-value is four, it means a person who is positive with Covid-19 can infect four other people during the infectious period.

"This chain of infection will grow exponentially if efforts are not undertaken to break them," he told a press conference in Putrajaya today.

Noor Hisham explained that during the start of this third wave of Coivd-19 cases, the R-value was at 2.2 on Sept 20.

"In the four weeks since then, this value has been reduced to 1.5," he said.

How many in this thread believe that NetX is the beginning of a great company like Facebook, Amazon and Google? Ask raider, our dishonest promoter here. Don't laugh.


[For your information, we have a few companies in Bursa that have outperformed even the best tech stocks in US. Yes, you don't have to be in digital companies in US to ride up this bull market since March. Just needs discipline and the right philosophy and frame of mind. Always invest in great growth companies for the long term. ]

stcws or strongcows was smarter. He left these duo promoters. Just look at his reasoning for doing so.

>>>>>>>

stockraider I understand losing 6 figure is tough thing to swallow especially it is your hard earn monies loh...!!

What cause u to lose this big sum ?

I hope u learn something from this situation & make improvement on your future investment model...!!

Good luck to u...loh!

>>>>>>


dishonest raider and conman calvin have been very irresponsible. They promoted NetX and now most of their followers would have lost more than 60% to-date. Worse still, they asked them to take up their rights, thus committing another 200% more money into this gruesome company.

Every investor is different. Without understanding their investing objectives, time horizon, risk tolerance, financial education and financial capacity, what conman calvin and dishonest raider are doing, maybe good for them (pump and dump or ego or other reasons) but maybe very detrimental to some who followed them.

Very irresponsible indeed, driven by greed.

>>>>>>>

Posted by stockraider > Jan 11, 2018 10:39 PM | Report Abuse

U NEED TO UNDERSTAND THIS LOH....THE CHINA FUND NEED TO COLLECT BIG ENOUGH POSITION, B4 THEY PUSH THE SHARE PRICE UP WITH ITS FURTHER AGGRESSIVE POSITION MAH...!!
SO THE FASTER THEY COLLECT HENGYUAN CHEAP CHEAP....THE BETTER THE EVENTUALLY STOCK PRICE WILL UP STRONGLY LATER MAH...!!

ACTUALLY RAIDER ASKING U TO HOLD TIGHT TIGHT & NOT TO SELL MANY TIME, IT IS ACTUALLY NOT TO LONG TERM INVESTOR BENEFIT LIKE RAIDER MAH...!!

BUT WHAT THE HECK? THE SMALL RETAIL INVESTORS ARE NOT MANY HERE LOH.!!
THATS WHY RAIDER & ENCOURAGE U NOT TO SELL & HANG ON MAH...!!
RAIDER DON WANT TO BE A LONELY RETAIL INVESTORS HERE LOH...!!

THATS WHY RAIDER ARE FIGHTING THOSE NAYSAYERS, THE ENVY, THE JEALOUS AND THE NAIVE FROM SPREADING FALSE NEWS TO SELL UR HENGYUAN LOH...!!

THE CHINA FUNDS ARE ACCUMULATING BIG LOH....!!

THEY KNOW HENGYUAN Q4 RESULTS IS VERY GOOD TOO MAH....!!

Posted by satan118 > Jan 11, 2018 10:23 PM | Report Abuse

From 2nd Jan 2018 till now (8 trading days) HY had gained 50sen. HY is still consider steadily moving upward. Will hav more vpower to move price to higher level.

Posted by stockraider > Jan 11, 2018 04:55 PM | Report Abuse X

JUST STAY ON COURSE MAH, THE BROAD MARKET IS CONSOLIDATING MODE, THUS HENGYUAN AFFECTED TOO, AFTER THE CONSOLIDATION MKT WILL BOUNCE BACK MAH...!!
HENGYUAN WILL FLY LOH...!!
TP RM 22.00 TO RM 42.00 IS NOT A DREAM MAH...!!

U must have a conviction loh...in order to be rich loh...!!

Posted by stockraider > Jan 10, 2018 10:43 PM | Report Abuse X

Don be a pondan loh.....!!

General Raider said the current normal trading range of Hengyuan is Rm 15.98 to Rm 18.98 loh.....!!

So today down Rm 0.08 is very normal....it is still under consolidation mah..!!

The TP of hengyuan is Rm 22.00 to Rm 42.00 loh....!!

If u r panicky...raider advice u this loh....if hengyuan drop below Rm 16.00, u lari kuat kuat loh...!!
If hengyuan by 31-3-2018.. still cannot exceed rm 19.00, u also lari kuat kuat loh..!!

Other than these conditions, u just dumb dumb hold....it will exceed rm 20.00 to reach rm 22.00 to rm 42.00 loh....!!

Trust the china fund buying power loh....!!

Posted by stockraider > Jan 10, 2018 10:50 PM | Report Abuse X

Hengyuan average monthly future crack spread until dec 2018 still quite strong about USD 9 per barrel....about 2017 level or even slightly better loh...!!

So do not be mislead loh......!!


>>>>>>>




Screwed in Hengyuan and never learn. Now screwed again in Netx.

Poor dishonest raider. Distressed until profanities flow from raider's many orifices. Truly pitiful. Sad for him.

Given the terrible business and poor business fundamentals of Netx, the present price may still be too high indeed.

But don't take my words for this, make your own decision. Thete are differences between investing, speculating and gambling.

>>>>>>>

https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2019-10-09...

TOP 10 REASONS TO BUY DIGITAL STOCK: NETX (0020) A SUMMARY OF ITS SALIENT FACTORS, Calvin Tan Research
Author: calvintaneng | Publish date: Wed, 9 Oct 2019, 9:45 PM

Hi guys,

After much study and debate on NETX (0020) I have got better clarity

It is by brain storming that we finally sift out facts from fiction, perception and reality

And these are 10 Top Salient Factors for NETX,



1) NETX HAS MARGIN OF SAFETY

At 1.5 Sen with NTA of 3 sen Netx is selling at 50% discount to NTA. This qualifies Ben Graham 30% discount as a margin of safety

>>>>>>>{



conman calvin wrote on the huge margin of safety. It is so foolish to just think intrinsic price is the same as NTA price. Thus, his stupidity shines when he opined this counter at 1.5 sen was 50% below its NTA and he concluded it was undervalued and had a huge margin of safety. Due to his cleverness and superior investing skill and research, he promoted Netx a buy at 1.5 sen. conman calvin is stupid to the core because he has conveniently misled others, perhaps not himself?, by ignoring all the other related quality issues.

Do you know that when the price of a gruesome counter tanks, all the valuation ratios look fantastic, to those not so knowledgeable at least. P/E, P/B, P/S and P/FCF all look like bargains when price falls. Always redo your due diligence.

So what happened to Netx? At 1.5 sen, conman asked you to buy because it has margin of safety. That is the potential for reward is very high, the chance for loss is very low. Smart calvin
After consolidation, those who bought at 1.5 sen would have paid 37.5 sen to own the present share of Netx. Today Netx is at 14 sen and for every share bought at 1.5 sen before consolidation, he would have lost 23.5 sen per share. This is a loss of 63%.


Now can we conclude that conman calvin, dishonest raider and some of their followers are found swimming naked today. Similarly, just like dishonest raider shouting margin of safety everywhere ( classic example in Hengyuan), we can conclude conman calvin knows nuts about margin of safety.

Have a grest Sunday.

https://klse.i3investor.com/blogs/www.eaglevisioninvest.com/2019-10-09-story229166-TOP_10_REASONS_TO_BUY_DIGITAL_STOCK_NETX_0020_A_SUMMARY_OF_ITS_SALIENT_FACTORS_Calvin_Tan_Research.jsp

TOP 10 REASONS TO BUY DIGITAL STOCK: NETX (0020) A SUMMARY OF ITS SALIENT FACTORS, Calvin Tan Research
Author: calvintaneng | Publish date: Wed, 9 Oct 2019, 9:45 PM

Hi guys,

After much study and debate on NETX (0020) I have got better clarity

It is by brain storming that we finally sift out facts from fiction, perception and reality

And these are 10 Top Salient Factors for NETX,



1) NETX HAS MARGIN OF SAFETY

At 1.5 Sen with NTA of 3 sen Netx is selling at 50% discount to NTA. This qualifies Ben Graham 30% discount as a margin of safety



2) A DEEPER LOOK INTO NETX NET ASSETS REVEAL



a) RM34 Millions Cash (In Bank FD & Savings A/c)

b) Another Rm72 Millions Cash owed by Subsidiaries (This is the solution to the puzzle where Company excess cash & profit are stashed away.

Please Refer to NETX ANNUAL REPORT YEAR 2018 (TURN TO PAGE 74)

Under Point Number 15




>>>>>>>



Low quality article by conman calvin to promote and to mislead. He just has a lot of energy doing the same thing repeatedly with different companies.

conman chose Netx to promote because it was a penny stock. If Netx moved from 1 sen to 8 sen, how much was the potential gain? Also, regularly conman came out to reassure his followers that they have nothing to fear. How much more can it drop?

When conman calvin identified this stock to promote, he has to have a story. (Just look at NAIM to see his story for promoting Naim. Only fools can be misled.) For Netx he used the NFCP story to promote. Firerain wrote a beautiful article reasoning why Netx will not benefit from NFCP. Firerain's writing has turned out to be correct while conman calvin was just selling snake oil story. The instance conman calvin talked about his phone call to Ms Penelope, Charles T kindly reminded him that conman calvin may still realise his dream honesty, price of Netx going to double digits but through consolidation of its shares. calvin was absolutely wrong in his writings on Netx and Charles T was chun chun right.


Dishonesty, greed and stupidity are the characters of the 2 main promoters ( calvin and raider) played out in this thread. At 1 year from their promotion, all who are still following this thread today can observe them swimming naked: only they think otherwise. :-)

>>>>>>

calvintaneng Dlady crashed from rm76,000 to Rm38,000 wiped off Rm38,000 more devastating for many more than Netx

What is Netx ?

Netx is a disruptive technology

The arrival of the 1st motor car wiped off thousands of years of chariots and horse drawn carriages

After 299 failures Thomas Edison invested the light bulb

>>>>>>>>>




conman calvin

Have some integrity. Show some respect to yourself and your followers. The fact is you are swimming naked and the hole you are in maybe sucking you deeper.

It is alright to be macho and gungho in your promotion for reasons better known only to yourself. All who are observing your 1 year incessant promotion in Netx today can only fathom your stupidity, evil intent and greed.

Happy Sunday. Pray for forgiveness if you think the same.

>>>>>>

东方不败 NETX's share consolidation had a devastating effect on its share price. Have a look at my analysis:

English: https://klse.i3investor.com/blogs/DFBB/2020-10-17-story-h1534702264-Share_Consolidation_The_Silent_Killer.jsp

>>>>>>>


dishonest raider is screwed. Stupidity and greed explain raider's huge loss in Netx.

Very good explanation.

Let us observe the stupidity and greed of dishonest raider in NetX. Maybe he is right and others are wrong. Price and fundamental can deviate longer than one can remain solvent. Who knows when?

raider is swimming stark naked and hoping to make back his underwear.
Hopefully.

>>>>>

stockraider REMEMBER

Very important DO not LET THE SOHAI, sohai u loh...!!

DON BE CON BY SOHAI....NETX RI SUBSCRIPTION HAS SO MUCH MARGIN OF SAFETY, THAT IT EVEN DROP TO 13 SEN...U STILL MAKE MONIES FROM THE FRE WARRANT MAH!!

VERY IMPORTANT TO U DO YOUR BASIC MATHS AGAIN LOH..!!

>>>>>



What Margin of Safety? This dishonest stoopraider knows nothing about margin of safety. He was buying Hengyuan at RM 16 because his intrinsic value for Hengyuan was RM 45!

stockraider is so stressed. Money does not buy happiness. Mental health is important too. Have a nice weekend. Walk the park. Kick the ducks. You will feel better and realise your inner self more rationally.


:-)

>>>>>>>

Posted by stockraider > Oct 17, 2020 11:08 AM | Report Abuse

Correctloh... the owner want them to throw towel & gasak everything for themselves mah....!!

So if gasak everything for themselves...u will know what will happen next loh ?

REMEMBER RAIDER STRATEGY IS WELL THOUGHT OUT, COVERING ALL ASPECT FOR NETX LOH...!!

>>>>>>>


If only raider can be believed or make sense!

In Rights issue, the insiders will wish to raise as much capital (cash) as possible. When then goes through such an exercise. To do so, they may wish to push up the mother share price to make the rights issue looks attractive (with the exercise price at a discount to the mother price plus free warrants). I do not think the insiders wish to push down the mother share price in any of these fund raising exercises.

Has raider gone bonker with his huge losses?!

Or raider is just his true self ... being dishonest. :-)



https://myinvestingnotes.blogspot.com/2020/10/the-importance-of-integrity.html
The Importance of Integrity

https://myinvestingnotes.blogspot.com/2020/10/the-importance-of-integrity.html

The Importance of Integrity

https://myinvestingnotes.blogspot.com/2020/10/the-importance-of-integrity.html

The Importance of Integrity

>>>>>>

Stock: [NETX]: NETX HOLDINGS BHD

Feb 13, 2020 5:30 PM | Report Abuse

Hi netx comrades,

Today i am happy that i manage to collect 300,000 units of Netx at 2 sen.
I have key in another 300,000 units of Netx at 1.5 sen, but this order is not filled.

I will try to buy 1,000,000 units within my budget of rm 20,000.
Hopefully this can be done.

>>>>>>>>

>>>>>
Posted by gohku > Oct 16, 2020 3:55 PM | Report Abuse

People call this team work & alliance mah...!!

Please think positively...don be a sohai 3iii loh...!!

>>>>>>>>





Suddenly Gohku posted and surprised me. However, knowing his thinking driving his post, perfectly congruent and understandable.

Have a good day. Did you take up your rights putting more of your money at risk in Netx? Nothing to do with the naysayers, do you disagree?


3iii

Follow the Chairman. He has sold down his shares.

>>>>>

stockraider Just like 3iii suggestion...sifu calvin...decide to take break...leaving raider manned the fort loh...!!

>>>>>>


Very interesting. raider is always subservient to conman calvin. Very grateful to his saviour. Very loyal, which is praisable. :-)

Poor dishonest raider

Destroyed by a simple lie.

:-)

maybe we should get off dishonest raider's back for the next month, unless he continues to promote incessantly.

>>>>>>

scenery You cant justify your claims of the following statement, when you lied about you sold Netx at 3.5 cts and made 6 figures, when no such price done during your said periods.

>>>>>>>




A few years ago, raider claimed he bought a quantity of a share at a certain low price the previous day. My good friend, SS (simplesoul) quickly pointed out to everyone that that was impossible. The reason being the total volume of the shares traded for that whole day was much lower than the number of shares raider claimed he bought on the same day.

This was how he earned the notary, dishonest raider.

Westero

Looks like you have revealed all your winners. Maybe you may wish to share your losers too. :-)


In my discussion in this thread, I have observed those who bought at 1.5 sen, 2.0 sen, 2.5 sen and 3 sen. I have never mentioned 3.5 sen ever.

>>>>>>

Westeros Guys let me tell you a story last year in Sept I bought Netx at 0.015 there was someone who told me to buy it and to hold it and this year in Sept I sold it at 0.35 and made a hefty sum of money..yes i needed to wait almost a year however it was so dirt cheap then that when I sold I actually made a 6 figure profit. So no counter is a bad counter its when you go in and when you get out...its all about timing. To the guy who told me to buy Netx THANK YOU SIR
16/10/2020 10:36 AM


>>>>>>>



Congratulation. You are such an outlier, like raider.

Hari hari dishonest raider parades his nakedness. Hopefully he gains insight and for once, be truthful to himself.

Have a great day.

SsLee and others


You do not need to be a rocket scientist to know dishonest raider is swimming naked. Just be amused by his denial and pride.


Have a good day. You will not get any good deal or deed from one lacking integrity.

>>>>>>>

Posted by stockraider > Oct 15, 2020 4:21 PM | Report Abuse

Don be sohai loh...!!

Warren Buffet can wait 50 years u cannot wait 2 mths ah ??

Posted by scenery > Oct 15, 2020 4:20 PM | Report Abuse

already lost how many hundred % still have to wait meh?

Anyway left 2 days for you people to sell before it drop further until R shares out...

>>>>>>

GAMBLING: represents the creation of risks not previously existing – e.g. race-track betting.


Dishonest raider is a gambler.

Individual investors can spot a good growth company quickly.

By arranging the fundamental data in a way, individual investors can see a company’s growth and management performance as well as the stock’s investment possibilities in just a few minutes.

The work required to spot a good value stock is a little more complex.



Regards

3iii

LPI Group, despite the challenges, has managed to report a creditable performance for the 3rd Quarter of 2020.

Folks ignore raider.. being so dishonest you are better off leaving him alone.

Also, same apply to conman calvin too. Ha, 10 houses sold to invest into Net/x. Now raider just as in Insas, peanuts investing!


Mikecyc is absolute right to destroy dishonest raider and conman calvin.

>>>>>>>

Posted by stockraider > Oct 15, 2020 1:17 PM | Report Abuse

Being an x staff of Dr Neoh...raider understand the below statement are actually directed at old economy shares, more than 25 years ago loh...!!

Below statement would not be applicable to NEW Economy shares like Amazon, facebook, alphabet & alibaba who raise many rounds of funds thru placement b4 becoming World Champion loh...!

These new Economy Champion could not exist today, if they are not allow to raise funds many rounds to fund their development loh!

This is quite similar to NETX a new economy technology stock mah!

SO DO NOT LISTEN TO SOHAI 3iii WHO TWISTED THE FACT LOH..!!

Posted by Integrity. Intelligent. Industrious. 3iii (iiinvestsmart)$€£¥ > Oct 15, 2020 1:08 PM | Report Abuse

It is perhaps worth pointing out that a company which has many capitalisation changes all bunched together during a short space of time without a concomitant increase in earnings could be trying to impress its shareholders and the stockmarket. Historically, such companies usually performed poorly after such capitalisation changes were over.


The above by Dr Neoh Soon Kean of Dynaquest is relevant to NetX.


>>>>>>





Dr Neoh Soon Kean is careful in his writings. He emphasized "without a concomitant increase in earnings".


Dishonest raider is just too proud to admit he lost a lot of money in NetX.


Whenever a share price of his company drops a lot, he will come out with such statements:

1. He sold before the drop.

2. He was saved by his stop loss.

3. He bought more and averaged down.

4. He bought and sold within a certain price range.



Sure we all believe you are infallible. But at least be humble and be honest.

Eating a humble pie now and again is actually honesty, in this field of investing.

Where is your integrity?

The Reserves of a company is purely a paper entry.


In order to provide a bonus issue, the company must have this thing called "RESERVES" which can be turned into new paid-up capital to be used for the creation of new shares for paying out as bonus.

Surely this "Reserves" thing must be something of value?

This term "Reserves" is very confusing to people who are not familiar with accounting concepts.

The "Reserves: of a company is purely a paper entry, purely an accounting convention. There is absolutely nothing solid behind the term "Reserves". The "Reserves" you see in the balance sheet of a company belongs in the realm of an accountant's imagination; this is something which exists purely as a written line on the company's accounts books.

The real strength of a company is not shown by how much it has under the item "Reserves" but under the "Cash" and/or "Short term Investments" items as well as its undisclosed borrowing capacity. Many a company have gone bankrupt with lots of "Reserves" still on its balance sheet.

What then does this term "Reserves" mean? The reason why there is an item of "Reserves" in the balance sheet of most companies is due to the nature of our accounting system.

Assets = Liabilities + Shareholders' Equity*

(*defined as Paid up Capital + Reserves)

Under this system of accounting, whenever, there is an increase in the total assets of the firm which is caused by either the purchase of a new asset or an increase in the book value of an asset (the "book value" of an asset is the value which is recorded in the accounting books of the company, it is not necessarily the same as its real value or its purchase price), a similar entry has to be placed on the opposite side of the balance sheet to keep it in balance.




Thus, it can be seen that the reserves of a company can be created out of almost thin air. Such reserves can then be used for the creation of bonus shares which in turn must be regarded as being virtually worthless as well. Thus we can see that it is very difficult for a layman to known how the reserves of a company come into being. Very often such reserves are created at the stroke of a pen. Unless you can separate the "good" reserves from the "bad", you should not be excited by the prospect of a bonus issue as a result of an increase in Reserves.

Ref: Stock Market Investment by Neoh Soon Kean

>>>>>


Posted by Sslee > Oct 15, 2020 12:54 PM | Report Abuse

Haha stockraider
Have you even make anything above 100%? How much have you loss in Netx?

"Opportunity to make 303% & more mah....!!"

>>>>>>



I am just teaching a mad dog hoping it will learn some new tricks. :-)

It is perhaps worth pointing out that a company which has many capitalisation changes all bunched together during a short space of time without a concomitant increase in earnings could be trying to impress its shareholders and the stockmarket. Historically, such companies usually performed poorly after such capitalisation changes were over.


The above by Dr Neoh Soon Kean of Dynaquest is relevant to NetX.

Raider was an office boy in Dr Neoh Soon Kean's office. He learned nothing from this great man. Now, raider is more of a gambler and speculator. So much for not learning the right stuff at the right time. What a waste of an opportunity? Looks like conman calvin quoted Dr Neoh Soon Kean frequently but does not actually understand the true teaching of Dr Neoh.





Here is what Dr Neoh Soon Kean shared on bonus and rights issue.

"SPG does not believe that bonuses increase the value of shares, and advise investors not to pay much attention to the past number of bonus issues.

We look at rights in another light, however, as we are not in favour of rights issues unless the company has been an exceptionally fast growing ones (i.e. growth in excess of 20% per year). In other cases, a company which has issued more than one rights in the past decade ought to be viewed with caution.

It is perhaps worth pointing out that a company which has many capitalisation changes all bunched together during a short space of time without a concomitant increase in earnings could be trying to impress its shareholders and the stockmarket. Historically, such companies usually performed poorly after such capitalisation changes were over."

A large number of bonuses are not made for financial reasons.


It is more than possible that a large number of bonus issues are made for the purpose of giving a temporary boost to the price of the stock. As to why any company should desire to achieve a temporary boost in the price of stocks, the inevitable conclusion is that a large number of bonuses are made for the purpose of benefiting insiders and their friends. This is an extremely serious indictment made only after the most careful reflections.

Why some insiders should want to give the price a temporary boost?

A sharp rise in price provides insiders with the opportunity to sell shares which they had picked up on the cheap before the price was artificially boosted. This is only the average picture and the average picture is not representative of all the firms which give bonuses. It does not mean that all local companies which declare bonuses are doing so to benefit from a temporary boost in price.

It is likely that local companies are made up of at least two types.

The first are those in which the insiders do not have an interest in seeing the price being temporarily boosted, and
The second are those in which the insiders do have this desire.

It is likely that the former would not experience much price movement prior to the announcement while the latter would. This would be the primary way by which we can separate the two classes of companies.

Are there evidence to suggest a great deal of insider trading prior to some bonus announcements?

Warren Buffett said: "The stock market is like God in that it helps those who help themselves, but unlike God, it does not forgive those who know not what they are doing." You can best "help yourselves" by learning more about the stock market as a whole and finding out more about the companies you are interested in. If you go in blindly, "not knowing what you are doing", basing your actions on rumours, you will have nobody to blame but yourselves if you lose money.

Futile to chase up price of shares based on Rumours of bonus issues


It can be very difficult for a layman to know how the reserves of a company come into being. Very often such reserves are created at a stroke of a pen.

Unless you can separate the "good" reserves from the "bad" reserves, you should not be excited by the prospect of a bonus issue as a result of an increase in Reserves.

It is futile to chase up the price of shares based on rumours that a particular company is about to make a bonus issue. The really wise investors or the truly cunning insiders would have got in when the price was a lot lower. Rumours of bonus issues are usually spread to provide opportunity for people other than the small timers to make money.

Bonus and Rights issues do not increase the value of a share



The value of an individual share depends on two factors:
- The value of the company as a whole and
- the number of shares of that company which is outstanding.
This important principle is the basis for stating that bonus issues in themselves are of no value at all.

Many things in the stock market are not what they seem to be. Every investor should be on guard.

Bonus and rights issues can be manipulated for insiders' benefit. Every investor needs to be aware of this possibility.


Investors in the rest of the world have understood this principle. Elsewhere, a bonus issue or a share split is treated as a non-event and nobody ever gets excited about it. At the ex-bonus date, the price automatically adjusts downward such that the value of the whole company remains the same.

Why do some local newspaper commentators and speculators go on insisting that a bonus issue is an event of great advantage?

It is widely known and documented that Berkshire Hathaway boasts one of the best long-term track records among American corporations in increasing shareholder wealth. However, what is not widely known is the fact that during this nearly three decade long period (1964-1992), the total number of shares outstanding has increased by just over 1%!

Put differently, the entire gains have come to the same set of shareholders assuming shares have not changed hands and that too by putting virtually nothing extra other than the original investment.

Further, the company has not encouraged unwanted speculation by going in for a stock split or bonus issues, as these measures do nothing to improve the intrinsic values. They merely are tools in the hands of mostly dishonest managements who want to lure naïve investors by offering more shares but at a proportionately reduced price, thus leaving the overall equation unchanged.

There are possibly four important conclusions about the local market regarding bonus issues.

1. A large number of bonuses are not made for financial reasons.
2. There is strong evidence for the existence of either insider trading or insider inspired trading prior to bonus announcement.
3. Local investors/speculators do chase after bonuses.
4. There is strong evidence of heavy selling after bonus announcements have been made.

What this means in plain terms is that the typical investor who buys the stocks of a company undergoing bonus issue either just before (by basing his purchase on rumours) or just after the announcement of a bonus almost certainly ends up losing money on a relative basis. That is, had he bought other shares, he certainly would have done better.

Futile exercise to chase after bonus issues.

Summary:

Most of the time, such an action will lead one to make losses relatively and during bear markets it will lead you to make absolute losses. But the most galling aspect of chasing after bonuses is that some of the time, one is being led blindly into traps prepared by crafty insiders or their friends. In such instances, you are like innocent lambs led to the slaughter. The chances of you losing a great deal of money is very real.

Since it is very difficult for you to know which bonuses are of the innocent variety and which are not, is it not better to ignore all of them?

The best approach to take is the fundamentalist one; only buy those stocks which provide you with a reasonable return and which have the prospect of providing a constant long-term growth in earnings and dividend irrespective of whether they give bonus or not.

In Britain and more in particular, the US, the market seldom reacts so kindly to rights issues.

Most rights issues are treated with great suspicion.

The market usually takes a "wait and see" attitude and will only react favourably if it is convinced that the new capital obtained from the rights issue is put to good use and that the profit of the company can increase as a result of the rights issue.

In fact, the market in the US is so suspicious of rights issues that it is most unusual for a large US corporation to make a right issue.

Though not all rights are automatically bad, local investors could do with a good dose of cynicism and ought to treat rights issues with a bit more suspicion.

Local investors ought to be aware of the fact that not all rights issues are the same.

Each rights issue should be treated on its own merit and if it is truly good, then there is a case for bidding up the price of the shares and taking up the rights issues.

If we blindly follow the market without knowledge what we are doing, we can so easily be taken advantage of.

Opportunists, insiders and rumour-mongers are abound in the local market.

Here, as with everywhere else, Caveat Emptor (Latin for "let the buyer beware") is the key.

In order to understand why the Western investors are so suspicious of rights, we must go back to the first principle and try to understand:

- what is so bad about a right issue and
- the reason a company has for making a rights issue.


https://myinvestingnotes.blogspot.com/2009/09/not-all-right-issues-are-same-ought-to.html

Whenever a company announces that it is making a rights issue, the market in Malaysia/Singapore, on the whole, does not react adversely especially when the right issues are accompanied by a bonus issue.

The price of the company's shares usually moves up and seldom does one come across cases where rights are badly undersubscribed.

But, companies may have to raise new capital by making rights issues under three types of abnormal circumstances. These three cases are:

(1) The company is improperly managed such that it is either not very profitable (or even losing a lot of money) such that the incoming cash is not adequate to support the need to purchase more assets. Or owing to poor management of its assets, it now requires a lot more assets to support its operations.

(2) The company is moving into another line of business which is large relative to its current size and it requires a great deal of additional capital to start up the new venture.

(3) The company is in a very fast growing business. In fact, it is so fast growing that retained earnings and new borrowing alone are insufficient to sustain the growth.

In order to be a prudent investor, we must analyse the situation of the company which has announced a rights issue carefully to see which category it falls into in the first place.

Depending on which category of rights it is issuing, we can then carry out a further analysis to decide whether the rights issue is a good or a bad one.

Through examining each type of rights issue, an intelligent investor can tell the wolves from the sheep.

Pricing the rights also requires proper evaluation.



https://myinvestingnotes.blogspot.com/2010/01/some-rights-issues-are-good-others-can.html

Why Companies Have to Make Rights Issue?


To put it bluntly, a company only needs to make a rights issue when it is short of money.

A business, any business, requires investment in various forms of assets in order to carry out its operations. A company is usually required to continually buy new assets in order to carry on its business either because its old assets have to be replaced or its expanding business requires more assets. To buy new assets, it will need new capital.

A company can obtain necessary money to purchase its assets from any one of three sources or a combination of all three.
- It can borrow the money,
- retain part or all of its profit or
- it can sell new shares.


Under the normal circumstances, a company should be able to finance its additional purchase of assets from either retained earnings or new borrowing or a combination of the two. There are many examples of very fast growing businesses in Malaysia that have prospered without recourse to issuing rights (for examples: Nestle and BAT )