EONCAP is the holding company of EON bank which has strong position in car loan lending activity. Recently, the board has entered into talk with Hong Leong bank in which latter has granted permission from bank negara to start the talk in effort to acquire smaller rival in the country. The only obstacle would be from Primus Pacific which controlled the EONCAP board. Primus has paid RM 9.55 per share to acquired 20 % of EONCAP in 2007.
It is likely Quek will only pay RM8 per share for EONCAP which equivalent to 1.6 times Price to Book value (PBv). Therefore, Primus will try their best to stop the acquisition.
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ReplyDeleteI would rather stay away from acquisition stock unless i have insider news or i hold it very long.
ReplyDeleteOnce the news out, most probably create speculation from those traders. Beware!
Long Term on Great Business is a way to make big $$$. Short term price gain, will make you become speculator more than investors.
When u buy an entity with known profit-making capability, u are considered investing and not speculating. In long term investment, the profit realisation takes years while in speculation, people tends to lose money. Speculation should be get rid of and avoided.
ReplyDeleteHowever, another one: short term investment, this is a kind of activity which can make money in much shorter time with limited risks.
We must admitted that gain is proportional to time and risk involved. Therefore, to gain in shorter timeframe, people are willing to make short term investment, and risks involved is limited. I am not denying that basic knowledge or investing skills are required for this and sometimes it plays major role also. Therefore, this is independant and varies to individuals.
As in EONCAP case, a lot of people invested their money in and they see banking prospect is good and returning. Quek spoilt their wish!
As minority shareholder, we really do not have much to bargain, have to let go and research for another long term investment target!