junior's toks

A Bumpy Ride? No Way

You know I was talking about AirAsia, don't you? I think the AirAsia IPO retail investors must have had this funny feeling in their heart. Imagine you subscribe to this IPO and then all the articles were saying how overvalued this company is bla bla bla (if you don't believe me, go to the Nomore Forum and look at that thread. All the articles and the forumners postings were talking how expansive the IPO was)...then the Merchant Bank refuse to disclose how many times the thing was oversubscribed then many made a big hoo haa about it bla bla bla (let me tell you, the oversubscription thing is just a STAGE. ALMOST All the malaysian listings oversubscription are just 'Stage' to lure stupid investors to buy that stock post IPO). But clearly, those who got the shares of AirAsia are laughing their head off all the way to the bank....no point toking, lets see the number.....

2 Dec Top Volume
AIRASIA 255670 1.690 0.190 12.67%
DIALOG 126857 0.560 0.025 4.67%
WCTLAND 125526 1.000 0.000 0.00%
MVEST 94713 1.280 0.090 7.56%
DIGISTA 90520 0.735 -0.015 -2.00%
SEAL 88804 1.090 0.010 0.93%
CBSTECH 70218 0.575 0.070 13.86%
JOBS 66574 1.360 0.210 18.26%

That is almost a 70% gain to those IPO retail investors! If you are some amateur retail investors pretending to know 'value investment', then you might annualise it and say 'WHOA, that is a 840% annualised investment!!!!!' (ok, la...kidding la).

I conceded very early in this valuation game. In fact some of you might remember that I said rite before the AirAsia IPO closing that I DO NOT KNOW HOW TO VALUE AN AIRLINES BUSINESS AND I DON'T BELIEVE IF ANYONE KNOWS. So I could only write on the branding side etc on AirAsia and they will win this price war thing with other airlines. I just did not know who to value an Airlines like AirAsia.

At least I did not pretend to know.

This is FINANCE. It is a self fulfilling industry and sometimes it is A BLIND LEADING A BLIND. If you want evidence, post a comment and email address. I will try to send you a reply.

Do you feel good now? knowing that finance (including KLSE) is just a black box?? :D

I met a top class Forex option trader the other day. He gave us a report on the hedging strategy. In the report he explained how the option etc could help us and how we could structure a exotic hedge etc etc. And there was this FX Outlook in the same report. The only comment which he made was that:-

'Don't look at that. We have never been rite about this'

At least I am not alone.......


Junior

posted by Junior @ 2:20 PM