Olam Intl   

OLAM_OLAM

You are most welcomed.

Sold my rights at $0.169 and my shares at $1.645 to pay for Midas due to strong short selling pressure. I will come in again when the pressure eases.

sghlynn      ( Date: 07-Jan-2013 15:05) Posted: counter - many tks!

 

counter - many tks!

 

If you want to sell 939 rights, you can key in 939 in either R1 or R313.

sghlynn      ( Date: 07-Jan-2013 14:03) Posted: Sorry but noob question here... if i want to sell my 939rights then i should click sell on Olam R313 US$ Qty  3 right? Alternatively if to top up to full lot i should click on Olam R1 US$ x 61 (1000 - 939) ?  Olam R313 US$ (code: R8HR)

 

Not moving up despite market climb, I think muddy waters still bad mouthing despite company's strong financial position after bond and warrant issues. It is like Iso chanting and chanting for STI, and MW for Olam to come down, lol..

 

Thanks for your hint.

Dont buy now already huat arh..!

Peter_Pan      ( Date: 07-Jan-2013 11:37) Posted: Hope all have big ang bao from this one. Peter_Pan      ( Date: 04-Jan-2013 19:09) Posted: Already cleared my holdings. Big ang bao.

 

Perhaps it is better to seek  your RM/remister's advise.

sghlynn      ( Date: 07-Jan-2013 14:03) Posted: Sorry but noob question here... if i want to sell my 939rights then i should click sell on Olam R313 US$ Qty  3 right? Alternatively if to top up to full lot i should click on Olam R1 US$ x 61 (1000 - 939) ?  Olam R313 US$ (code: R8HR)

 

Sorry but noob question here... if i want to sell my 939rights then i should click sell on Olam R313 US$ Qty  3 right?

Alternatively if to top up to full lot i should click on Olam R1 US$ x 61 (1000 - 939) ? 

 

Hope all have big ang bao from this one.

Peter_Pan      ( Date: 04-Jan-2013 19:09) Posted: Already cleared my holdings. Big ang bao.

 

Agreed with you. This forum is for us to bouncing ideas and huat ah $$$$$$$$$!!!! 

emmm... one more thing..... to improve our thesis writing...heheeeeeee!!!!!

counter      ( Date: 07-Jan-2013 09:37) Posted: The purpose of dicussion is to exchange ideas. It would be naive to think that one can influence the market simply by saying something in this forum.

 

Oops! I meant to write " I am NOT an investor...."

 

I am an investor in Olam so I dont know how the rights are gonna work. Can anybody who is not an underwriter buy more than their fair share of the rights issue for this bond? This is a renounceable rights issue after all.

The credit spread of a bond is dependent on the issuer. If market thinks Olam is doing better then, naturally, the price of its bonds will go higher (ie narrower credit spread vs benchmark and yield lower). As I write, the indicative bid yield to maturity for the USD Olam 5.75% 2017 bond is 6.75%. Theoretically the bond issue proposed is going to do well because the all in yield to maturity is almost 8%. But this is expensive funding for Olam, which is why companies do not announce to the world where they are going to price their bonds weeks in advance, like in the case of Olam, because it is more like hours in advance, hence catered for a different class of investors.

Having said this, corporate bonds which are traded in smaller sizes generally have a wider bid-offer price spread which is why your banker sold you the bonds you invested in at higher than primary issuance price (and hence lower yield).

Bonds especially those denominated in USD are generally sold at slightly below par price in the primary market.



 

counter      ( Date: 06-Jan-2013 18:03) Posted: There is a possibility that the price will rise above $2 and the probability will  depend to a large extent on the time frame one is  looking at. Bt the way, since the rights issue is renounceable, am I right to say that some short sellers may not have returned the borrowed scripts before the XD because they can simply compensate the lenders by buying the rights between 7 Jan and 15 Jan. In the event that this happens, am I right to saty that we may see  a substantial rise in the price of the rights. Obfuscate      ( Date: 04-Jan-2013 12:34) Posted:   http://multimillionairehouseholds.blogspot.sg/2012/12/olam-update-technical-analysis.html   The bounce to $1.73 (50% retracement from recent high) is within expectation and should not be a surprise. The question that should be asked is whether the uptrend can continue from here and beyond $2. Since Nov 2010 when the price was $3.37, we saw lower lows and lower highs for the next 24 months.

 

The purpose of dicussion is to exchange ideas. It would be naive to think that one can influence the market simply by saying something in this forum.

 

why is the olam rights doing usd 0.22??? can someone explain?

 

" Do not try arguing with a market and attempting to tell it why it is not behaving properly (that means going in the direction you THINK it should be going). Guess what? the market doesn't give a rat's ass what you or I or anyone else for that matter, thinks it should be doing. It will do what it wants to do, when it wants to do and the sooner you recognize that and give it the respect it deserves, the sooner you will be on your way to becoming a successful trader or investor."   http://traderdannorcini.blogspot.sg/2012/05/gold-continues-its-bounce.html

The above comment refers to another asset class  but I guess it can also apply to everything else which is traded in the financial markets.

How about a longer term reference point such as the GFC low and measure the equity price appreciation?

counter      ( Date: 06-Jan-2013 23:57) Posted: At the point when Olam announced the bond rights issue, the share price was $1.575. As of last Friday, the price  was $1.68. I find it rather amusing that some people are still talking about Michael Dee's 10 point plan.

 

Religare Capitals, Macquaire, Maybank Kim Eng and OCBC all have a sell/hold call on this stock and a TP at $1.40???

UOB has a target price of $1.98 for Olam and OSK-DMG has a target of $2.20. http://sgx.i3investor.com/servlets/ptg/o32.jsp

This is a classic example of bad jounalism pointed out by Martin Wee.

Octavia      ( Date: 07-Jan-2013 02:15) Posted: IMO, Olam shares will face difficulty re-rating upwards and sustaining even a moderate earnings multiple for the next few quarters, even if the financial risks Muddy Waters warns of do not materialize,Olam's guidance that it won't be generating positive free cash flow until 2015, making it hard for the company to completely dispel the concerns raised.Olam's greenfield Nigerian sugar mill has been postponed indefinitely and a key urea project in Gabon also remains uncertain has been confirmed by Olam.   Religare Capitals, Macquaire, Maybank Kim Eng and OCBC all have a sell/hold call on this stock and a TP at $1.40. Even in March 2008, Merrill Lynch analyst Han Lim Chong cut the commodities trader to “sell” from “neutral”, with a target price of S$1.60, citing the firm’s high debt levels and slower earnings growth. Whereas someone here with no accreditation who said that he chooses stock based on fundamental criteria has a buy call at $2.00 somemore(more like his target exit price).Smell a rat here...Open your eyes,make your own judgment call. I guess you would not want to rub shoulders with headless chicken in the hot tub,rite?.

 

Dear Rosesyrup,

I can see where you are coming from and I agree with you. However, I do not think it would be wise to continue engaging in discussion with a person who accused others of having multiple accounts after running out of reasons to support his argument.

For you information, he once accused in a post that the following usernames belonged to the same person counter, rosesyrup, richardus, serious, jackon5, future, talksense, etc etc. Indeed, virtually everyone who ever said something good about Olam was accused by him of being the same person. You will not be able to find the post as it was put up about 5 minutes before the old threads were deleted on17/12/2012. I was not surprised at all when you got a nasty reply from him after putting up this post.

Rosesyrup      ( Date: 30-Dec-2012 18:38) Posted: Regarding your statement " Sunny quoted " We will take stock and see whether we need to slow down, decelerate, recalibrate. We're convinced that we've got a great strategy . . . but we might recalibrate . . . the pace at which we are doing things," . Sunny merely felt that the company's acquistion plan might be too agressive and too rapid, thus leading to investors' doubt and uncomfortableness. Sunny did not say anything about the firm has difficulty in its debt repayment. If you think that investors' uncomfortableness is a fundamental problem, I have got to fully agree with you. Although it is true that some investors are concered with its high debt, there are still a large number of investors who are willing to buy into Olam. This can be easily seen from Olam current share price- Olam's market value is merely 8% less than what it was piror to MW's attack. Thus such fundamental " problem" is not a major concern for me and it appear to me that the most of the shareholders remain comfortable with this firm. As for the " much anticpated second report from Olam" , I am not sure who is anticpating such a report. You or the market? MW's 133 pages report has already been retorted by Olam's 45 pages report. After its 133 pages report, MW has yet to make any new claim- " new" is the key word here. What is there for Olam to response to? Maybe you would like to quote us some articles on market expecting Olam's second report. As for your demand for a perfect company without any weakness, perhaps Olam with its high debt is reallynot an investment option for you and you should seek for other counters. If you are kind enough, you might like to share with us who are the perfect companies before you leave for other topics on this forum. Remember to quote us the reasons and your definition of a " perfect firm" too- maybe a firms which are monopoly and have 100% of its assets in cash are perfect firms? Thanks in advance.   You have also raised the concern that many of the forum users, who posted supportive comments about Olam, are actually multiple accounts owned by the same person. However, this is something that you can't verify or prove. So what happened to your call for a " more balance,truthful and enriching discussion in a respectful manner" , when you keep harping on something you can't prove? Why not be more respectful, and give everyone on this forum the benefit of doubt. Afterall when it comes to discussion, it's the content of the comments that matter, not the person behind it- be objective!!!! Before I end my comment here, I would like to reiterate the great opportunity I see in the agriculture business in the coming years. Comparative advantage (CA) of farming lies with developing countries due to its cheaper labor, land and other legal aspect. However, for decades developed countries (mostly from Europe) have distorted such CA, by providing their farmers with generous subsidies- for political reason.Such large subsidies lead to great competition for firms in developing countries who giving out lesser subsidies. As a result, agriculture firms in developing countries recieved much thinner margin and are forced to operate in a much more efficient manner in order to survive. Nevertheless, the situation is changing, the recent European financial crisis have forced many of its government to reform: cut subsidies to farmers and move to export goods that they have CA in. One of the most recent example is Dairy farmers from France, Germany, Luxembourg, and the Netherlands went on a strike aganist the low purchase price set by their governemts. Refer to http://www.telegraph.co.uk/news/worldnews/europe/eu/9705438/EU-dairy-farmers-spray-Brussels-parliament-with-milk.html   With the European nations moving away from subsidising agri businesses, we can expect farmers in these nations to shift toward other industries that their countires have CA in. This would in turn reduce the competition for agri firms operating in the developing countries, and their margin would also improve. Most of Olam operations are in developing countries. Olam with its newly acquired business units would provide it with the economies of scales it needed to compete in the agriculture industry when the world economy recover. Just as the lemon are pretty good, grapes are pretty sour too. Octavia      ( Date: 30-Dec-2012 12:59) Posted: Another aspect of your self denial on your part. You said Sunny has a lot to learn from this episode to bring Olam to a new high. It is good to know that he is doing reflection. Sunny quoted " We will take stock and see whether we need to slow down, decelerate, recalibrate. We're convinced that we've got a great strategy . . . but we might recalibrate . . . the pace at which we are doing things,"   Isnt this statement as self admission that something is not working fundamental right? I reckon investors are waiting in anticipation for the second rebuttal report from  Olam. I asked myself  " why the management  would take such  a long time to come out a report.Dont  they have a very the experienced team working inside?" Maybe the report is not coming out afterall with fear of more scrutiny and might damper the share price. I am not here to talk down the company,just that I wish to find out a balance and true views of this counter before any investment.

 

IMO, Olam shares will face difficulty re-rating upwards and sustaining even a moderate earnings multiple for the next few quarters, even if the financial risks Muddy Waters warns of do not materialize,Olam's guidance that it won't be generating positive free cash flow until 2015, making it hard for the company to completely dispel the concerns raised.Olam's greenfield Nigerian sugar mill has been postponed indefinitely and a key urea project in Gabon also remains uncertain has been confirmed by Olam.

 

Religare Capitals, Macquaire, Maybank Kim Eng and OCBC all have a sell/hold call on this stock and a TP at $1.40. Even in March 2008, Merrill Lynch analyst Han Lim Chong cut the commodities trader to “sell” from “neutral”, with a target price of S$1.60, citing the firm’s high debt levels and slower earnings growth. Whereas someone here with no accreditation who said that he chooses stock based on fundamental criteria has a buy call at $2.00 somemore(more like his target exit price).Smell a rat here...Open your eyes,make your own judgment call. I guess you would not want to rub shoulders with headless chicken in the hot tub,rite?.

 

 

At the point when Olam announced the bond rights issue, the share price was $1.575. As of last Friday, the price  was $1.68.

I find it rather amusing that some people are still talking about Michael Dee's 10 point plan.

 

Having your own opinion and make your own descision.Otherwise you will end up like them in hot soup...lol

 

For those who misconstrued Micheal Dee real message.

This was also brought up by Martin Wee, a regular contributor to this forum.

The article ended off by saying that shareholders are getting a very good deal and should thank Muddy Water for Olam’s generosity.Now, if you just read the ST article with the quotes from Michael Dee, you will be painted with a very one-sided view of the Olam rights issue.Having your own opinion and standing up for it is a good thing.However, I think it is very bad journalism to selectively extract quotes and do a 180-degree turn of the original intent of someone else’s view to fit your own story.Incidently some people are very good in doing here as well recently.

The US$750 million debt and warrants package is one sweet deal for Temasek and is not being done for charitable reasons.Olam, as a trading business, has failed to grasp the realities of the post-financial crisis era.Today balance sheets, accounts and financing must be beyond reproach.Olam has not achieved this, but has continued to travel a dangerous path in recent years fuelled by readily available credit.It has a fiduciary responsibility to its equity and debt investors to respond with a credible and thoughtful plan of action to preserve and enhance value.

Olam has paid an extremely dear price to Temasek to buy some time. How it proceeds from here will be the existential question. Michael Dee, an investment banker for over 30 years, was Morgan Stanley's regional CEO in Singapore and a Senior Managing Director of Temasek Holdings from August 2008 to April 2010.He has no position in Olam.

You can read the full article from Michael Deeonon his 10 point plan for Olam here:  more:http://news.asiaone.com/A1Business/News/Story/A1Story20121206-388039.html