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M&A increase the total profit of a company as it become bigger. Often senior mgmt bonus is tied to total profit. But higher profit may not mean higher eps and book value per share. A company may need to issue double the shares to acquire another company to increase the profit by 50%. If the original eps is $1, double the shares decrease eps to $0.50 and the new acquisition add 50% more profit to eps of $0.75. Overall still drop in eps. And the book value will also be deeply discounted due to alot of goodwill from overpaying for an acquisition.
This comment is like the username of the poster - goondoo. Totally out of context..
goondoo ( Date: 11-Jul-2014 13:43) Posted:
| Citibank drop from $55 to $1. Will it happen to ocbc? Time will tell. |
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Not all banks same. Look at citibank.
OCBC can keep making acquisitions at high price and issuing more and more debt and equity. In such case the book value and eps per share will keep dropping year after year. If the book value ans eps keep dropping, will the share price ever rise?
@ crucial point
leong3k ( Date: 11-Jul-2014 15:34) Posted:
Actually ocbc drop is good time to accumulate.If u got power to hold no need to sell in loss and buy other "bank stock" as eventually all bank's are same.
limkt009 ( Date: 11-Jul-2014 14:40) Posted:
Agreed, I sold ocbc and bought uob yesterday.
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Actually ocbc drop is good time to accumulate.If u got power to hold no need to sell in loss and buy other "bank stock" as eventually all bank's are same.
limkt009 ( Date: 11-Jul-2014 14:40) Posted:
Agreed, I sold ocbc and bought uob yesterday.
kc0257 ( Date: 11-Jul-2014 14:20) Posted:
| Totally agree with you. This is one of my most mistake buy. Really regret. Was contemplating between this n the other 2 banks. Picked this lousy stock! STI up so much while this fellow drop so much |
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Yes since ocbc mgmt wants their shares to crash then we will fulfil their wishes by selling this junk. The earlier we sell, the less we will lose.
Agreed, I sold ocbc and bought uob yesterday.
kc0257 ( Date: 11-Jul-2014 14:20) Posted:
Totally agree with you. This is one of my most mistake buy. Really regret. Was contemplating between this n the other 2 banks. Picked this lousy stock! STI up so much while this fellow drop so much.
goondoo ( Date: 11-Jul-2014 13:35) Posted:
| It is plain stupidity to buy ocbc when the mgmt is destroying shareholder value by making the share price crash. Rather than buying a sinking ship like ocbc why not consider flying banks like uob and dbs. |
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Totally agree with you. This is one of my most mistake buy. Really regret. Was contemplating between this n the other 2 banks. Picked this lousy stock! STI up so much while this fellow drop so much.
goondoo ( Date: 11-Jul-2014 13:35) Posted:
| It is plain stupidity to buy ocbc when the mgmt is destroying shareholder value by making the share price crash. Rather than buying a sinking ship like ocbc why not consider flying banks like uob and dbs. |
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Citibank drop from $55 to $1. Will it happen to ocbc? Time will tell.
It is plain stupidity to buy ocbc when the mgmt is destroying shareholder value by making the share price crash. Rather than buying a sinking ship like ocbc why not consider flying banks like uob and dbs.
Oh dear!!!
i scooped up @ 9.48:(
looks like have to long very long.
thank you . you are helping me to realize my dream of longing at $9.00.
dicalp ( Date: 10-Jul-2014 13:53) Posted:
My take is OCBC is now busy with take over and has not much money to do share buy back. Under such tough condition, it is good to short OCBC. I have taken a short position on OCBC.
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from 1 to 10 Jul , OCBC share buyback in total 600 000 shares
incase if OCBC wish to raise capital, would it start to buy back some shares to shore up the price to improve market capitalization
So far, Accumulative short positions from 1 to 10 July transaction value S$ 65.6 million
http://www.winghangbank.com/webpages/common/asp/index.asp?locale=en-us
| 1,288,800 |
| 1,403,760 |
| 4,085,280 |
| 4,618,430 |
| 4,499,870 |
| 13,954,790 |
| 15,415,390 |
| 20,370,390 |
| |
| S$ 65,636,710 |
My take is OCBC is now busy with take over and has not much money to do share buy back. Under such tough condition, it is good to short OCBC. I have taken a short position on OCBC.
OCBC Bank - Higher hurdle to cross
Written By Stock Fanatic on Thursday, July 10, 2014
■ With Elliott Capital Advisors in the picture, the privatisation bid for Wing Hang Bank looks challenging.
■ A higher offer price for WHB would be negative we think OCBC is likely to keep its stake at 75% before embarking on its second privatisation bid for WHB a year from now.
■ Negative view reinforced reiterate HOLD.
Possible scenarios for WHB acquisition
The move by Elliott Capital Advisors to accumulate up to 7.8% stake in Wing Hang Bank (WHB) could throw a spanner on OCBC' s bid to take WHB private, which requires at least 90% acceptances. In our view, the two possible outcomes are:
Outcome #1:
OCBC receives less than 90% acceptances but more than 75%. OCBC is required to sell anything in excess of 75% as per the listing requirement that stipulates a minimum 25% free float. We expect WHB' s share price to collapse to HKD83 (1.2x P/BV), its last traded price before the M& A excitement emerged. This represents a 33.6% downside from the offer price of HKD125. OCBC could incur losses as much as SGD311m, equivalent to 1.4% of its core equity Tier 1. From a P& L standpoint, the impact is modest but it could reduce management flexibility.
Outcome #2:
Under a worse-case scenario, OCBC raises the offer price such that WHB can be taken private. In our view, this is an unlikely outcome as it could put management' s credibility at risk. Already, the share price of OCBC has suffered and the earlier guidance of EPS and ROE accretion by FY17E could be pushed back. We think OCBC is more likely to keep its shareholding at 75% before embarking on its second privatisation bid a year later.
Technical Analysis
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| Daily Chart |
This saga reinforces our negative view on the stock
Our SGD9.63 TP is based on 1.24x FY14E P/BV, equivalent to 1SD below its historical P/BV average since Jan 2005. (Read Report)
CIMB notes that Hedge fund Elliott Management disclosed on 3rd Jul that it has accumulated 7.8% stake in Hong Kong' s Wing Hang. The house questions What is the hedge fund trying to do? It is trying to play bluff with OCBC. Under Hong Kong rules, if OCBC falls short of 90%, but has more than 75%, regulators will require OCBC to issue Wing Hang shares back to the market to maintain the 25% minimum float requirement. It is highly likely those reissued shares would sell at a substantial discount to the HK$125 /share (1.77x P/BV) that OCBC has bought the shares for. Before the offer, Wing Hang was trading at 1.2x P/BV. CIMB opines that the hedge fund is trying to play a dangerous game of poker with OCBC. It is clear that Elliott Management is trying to bargain for a second, better offer from OCBC. If OCBC cannot get to the 90%-mark, the cost for OCBC will be high. Not only will it have to sell back shares into the market (at a lower price) to meet the 25% free float requirement, OCBC will have to take a capital charge on a financial institution that is not fully consolidated. While the house cannot get to OCBC management for clarifications, but from its checks, understand that exchange rules generally do not allow for OCBC to raise the offer price to a select group of sellers e.g. Elliott Management, without extending the offer at the revised price, to the rest of the buyers who have previously accepted the offer. The risk for OCBC is that it would have to raise the offer to 1.8x - 1.9x P/BV and this would mean an even more expensive acquisition, and dilution from share issuance would be even higher than our original expectations of 2-7% dilution. This would be a negative for OCBC. Is buying Wing Hang now a good bet? The house would struggle to think so. In its opinion, this is quite a risky risk-arbitrage game for Elliot Management to play also. Elliott would have bought shares close to the HK$125 offer price here. If they were angling from a 1.9x P/BV, it would mean just 7% upside from the entry price. If OCBC called their bluff and chose to walk away from the Wing Hang deal (OCBC would be fairly reluctant to do this though), it would mean up to 30% downside on the bet if Wing Hang fell back to pre-offer price of 1.2x P/BV Overall, the house maintain its Add rating on OCBC with an unchanged TP of $11.01 (1.4x CY14 P/BV) as it believes that OCBC' s share price had sold down earlier the year and had reflected the concerns of overpaying for Wing Hang, and the effect was not as significant as feared. However, this episode is a negative. If OCBC had to raise its offer price for Wing Hang, it would be a risk to the house call.
http://www.youtube.com/watch?v=xM6kyxNXyNU& list=UUbkqdUcnKILN7oLCKrfOzXQ& index=2
日 本 戰 犯 藤 田 茂 罪 行 公 佈 活 人 作 靶 練 兵
http://www.youtube.com/watch?v=Jx8R9GP1A44& list=UUbkqdUcnKILN7oLCKrfOzXQ& index=3
中 央 檔 案 館 公 佈 45名 日 本 戰 犯 罪 行 自 供
OCBC has been yo-yo for some time.
http://www.scmp.com/comment/article/...od-its-economy
Good Luck!
Immortal ( Date: 05-Jul-2014 21:59) Posted:
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