The oil and gas industry has too many players. The downturn of 2014 to 2018 will wipe out many players too greedy for over expansion by high borrowings
4 years of job dearth now showed up in many oil entities heavy laden with huge debt load and tethering on the verge of bankruptcies
Long ago there were many companies selling palm oil for cooking. In a time of consolidation many were wiped out
Those that survived became stronger
Same goes for banking institutions before Asian Financial Crisis They were 49 banks and credit firms before 1997 crisis
After crisis over many gone bankrupt or got taken over. Only 6 Tier One banks left out of f 49 after banking consolidation. Six banks grew stronger as the pie gets bigger
So now after oil and gas entities like sumatech, daya, perisai, Barakah, Alam Martin, Scomi, and possibly including some others highly indebted ones also going bankrupt...the remaining strong ones will get stronger and stronger
2. Lafarge owner selling out cement operations in Malaysia to local players like Ytl
3. Foreign funds selling klse and leaving
Banks are in dire need of liquid cash
As such they are very stringent with housing, car or any loans for the matter
4. Those oil and gas entities as well as other highly indebted companies will be in trouble borrowing funds from banks.
5. So as a result there will be more private placements with 10% discount to share price to raise funds. In the case of seacera the pp discount was able incredible 30% which showed desperation and panic
6. If no one wants pp then Company goes into Rights Issue. Companies like Sendai might be next to give Rights Issue as well as many oil and gas entities with high debts
7. If everything failed like barakah then it goes into pn17 and final bankruptcy
So it is of utmost importance that we invest in companies with sound balance sheet like Uzma, T7 global, Azrb, Velesto and others
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Beary
1,553 posts
Posted by Beary > 2019-05-26 18:55 | Report Abuse
Today calvin tannenen donated 20 bucks to the church.
Next week he will issue buy call to another stock for his followers to chase.