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Recent Comments

AK71 commented on sold alibaba for 51 gain: “Hi SgFire,Taking profit is never wrong. Gong Xi Gong Xi. :)”
AK71 commented on dbs share price to stay higher for: “Hi jeff, Apologies for the slow reply.I remind myself that…”
SgFire commented on sold alibaba for 51 gain: “Hi Ak, took profit on baba and sitting on profit with…”
jeff commented on dbs share price to stay higher for: “Hi Ak, im new to investing the banks now are rather pricey,…”
jeff commented on dbs share price to stay higher for: “hi ak,Im new to investing, however now the banks are very…”
AK71 commented on dbs share price to stay higher for: “Hi Yv,Huat Huat 2025 to you too! :)”
AK71 commented on dbs share price to stay higher for: “Hi bunny,Nope. Not adding.Last time I added was before they…”
AK71 commented on dbs share price to stay higher for: “Hi Deet,I am somewhat busy and might be late in looking at…”
AK71 commented on dbs share price to stay higher for: “Hi Unknown,As long as you have the shares when it goes Cum…”
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ASSI's Guest bloggers

Sino Grandness and rights issue.

Friday, May 26, 2017

Reader:
Just checking can you comment on SINO GRANDNESS rights issue?
Is it worth subscribing to the rights?
Thanks

AK:
Always ask what is the reason for issuing rights. It seems like they have trouble repaying debt and, hence, the rights issue. If so, the rights issue does not add value for investors.
Subscribe if you believe that the company is able to do much better in future.



Reader:
ok thanks for the advise.

AK:
If you are putting in more money but the performance declines, it is a bad deal.

Reader:
yeah



Remember, not all rights issues are created equal. Some will enrich investors and some will impoverish them. 

In general, I do not like rights issues which happen because the balance sheet needs strengthening. They weaken our own balance sheet and do nothing to improve our cash flow.

Related post:
A lesson on rights issue from 2011.

3 comments:

Freedom said...

Isn't consumer staples is a good investment regardless of the economies?

Freedom said...

Isn't consumer staples is a good investment?

AK71 said...

Hi Freedom,

I wonder if loquat juice and its kind are a staple.

I stop taking fruit juice more than a year ago. I rather eat fresh fruits. ;)


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