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Why Big Players behind illiquid shares

+5
Recicash
VALUEPICK
sureshot
Teller
investcsesl
9 posters

Go down  Message [Page 1 of 1]

1Why Big Players behind illiquid shares Empty Why Big Players behind illiquid shares Sat May 30, 2015 6:27 pm

investcsesl

investcsesl
Expert
Expert

Why Big Players behind illiquid shares


We have noticed during past few months some illiquid shares has shown remarkable price gains backed up by positive sentiment and future potentials.


To explain my assumption why big players behind illiquid shares I will take ALUF as an example as I have seen huge promotion behind ALUF….. (Please note below is only an example)


ALUF
Total number of Shares                    12,058,200.00
Company share holding                      7,534,470.00
Second Largest share holding                      1,000,000.00
Balance Shares at market                      3,523,730.00
Mandatory offer                                    23.00
Stage 01 - Collection
Note 1: Initial collection was from 23 to 30 from the market
Note 2: Second collection was from 30 to 35 from the market
Total Share collection                       3,000,000.00
Average price                                    30.00
Cost for the collection                    90,000,000.00
Cash payment                    50,000,000.00
Margin payment                    40,000,000.00
Stage 02 - Promotion
Note: Promotion was from 35 to 50
Final Stage - Stabilization
Note: Price stabilization will be done at 50
Total shares in hand                      3,000,000.00
Share value                                    50.00
Portfolio Value                 150,000,000.00
50% Margin                    75,000,000.00
Cash invested                    50,000,000.00
Margin - Utilized                    40,000,000.00
Margin - Un Utilized                    35,000,000.00
 
Above un-utilized 35 million cash will be used for a collection of another illiquid share. Most important how to find out what it is. I will give a hint how to figure it out.


Hint 01 – Not a single post will be published in the forum
Hint 02 – Even if there is a post, you will get a negative reply
Hint 03 – Share price will swing between tiny band widths



Very much easy to find out if the collection is over. Lot of promotions……

Teller

Teller
Moderator
Moderator

The best thing is, identify it early.then go for it with fundamentals. But if you identify lately,do not go for them...

sureshot

sureshot
Vice President - Equity Analytics
Vice President - Equity Analytics

investcsesl  Any analysis on LCEM ?

VALUEPICK

VALUEPICK
Expert
Expert

There are some illiquid shares in the market. In bull market lot of illiquid stocks could become active. For example WATA and SUN were illiquid stocks in the past. Later they had some liquidity. There could be several reasons for illiquidity in stocks such as top investors like to keep stocks as mid or long term investment, unwillingness to sell their stocks at lower prices and they are managers or top owners of the company etc. Therefore these stocks will not go down very badly even in bear market unlike crowded stocks. Small investors can have some opportutnity provided they buy on valuation and trend. If managers including foreign mangers want to be long term investors in their company then they have faith in their organization.
 
It is also time to identify few attractive illiquid stocks in this bull market before they become active. When they become active they can appreciate rapidly. When they see bright future in some industry there could be acquisition or takeover as well in illiquid companies.

5Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Sun May 31, 2015 11:41 am

Recicash

Recicash
Manager - Equity Analytics
Manager - Equity Analytics

sureshot wrote:investcsesl  Any analysis on LCEM ?
Last year news, Army takeover the land?

Maharaja


Expert
Expert

My first good investment was Aluf, thanks for guiding by members..
now please advise should i buy again at these price levels .?

investcsesl

investcsesl
Expert
Expert

Maharaja wrote:My first good investment was Aluf, thanks for guiding by members..
now please advise should i buy again at these price levels .?
Now it is in the stabilizing stage, but it can move further if the players need extra margin facility according to my assumption. It's all depend on the next step of the team. Unfortunately I don't have any info. I think you better keep watching if you really love ALUF.

My advise is try to find another share at the early stage so that it will become your second good investment.

Maharaja


Expert
Expert

Surely it will adjust again when the next interim report comes with better prospects.
in th sense it will appreciate jst coz Daamika perera will not let his companies run to loses.

So these big players ? Is it a team of brokers only , or are directors connected ?
These brokers muust be at high powerful levels right , i mean connectdd to powerful politicians etc.

I have heard many of players are in Lanka securities

investcsesl

investcsesl
Expert
Expert

Maharaja wrote:Surely it will adjust again when the next interim report comes with better prospects.
in th sense it will appreciate jst coz Daamika perera will not let his companies run to loses.

So these big players ? Is it a team of brokers only , or are directors connected ?
These brokers muust be at high powerful levels right , i mean connectdd to powerful politicians etc.

I have heard many of players are in Lanka securities 
Maharaja, as per my calculations it requires only 50 million cash to do this. You don't need to become a director, or connect with a powerful politician or even join with couple of brokers, but if you have initial cash injection then you also can do this.
But of course, company has to show positive results in the future, without giving all off a sudden Right issue. For that information you need some connection with the company.

10Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 12:47 am

investcsesl

investcsesl
Expert
Expert

Below is the workings for MEL, if 25 million out of 35 million of above margin is utilized to purchase MEL....

MEL
Total number of Shares           100,000,000.00 Category
Mackwoods (Pvt) Ltd 62,928,793Owner
Agalawatte Plantations PLC 4,460,972Owner
Claridge Fund (Pvt) Ltd 3,800,500Owner
Epoc Research Laboratories (Pvt) Ltd 3,568,500Owner
Employees Provident Fund 3,508,307Investor
Dr C.N.A.Nonis 3,018,708Director / Investor
Mr A.L.Yatawara 3,022,488Director / Investor
Mr F.L.Fonseka 3,017,500Director / Investor
Mrs N.S.M.Samaratunga 2,839,334Director / Trader
Diversified Fund (Pvt) Ltd 1,688,135Trader
Mr G.M.Kennedy 1,416,200Investor
Ms H.S.Tan 491,500Investor
  
Shares in hand of Owners / investors             92,072,802.00
Balance Shares at market                7,927,198.00
IPO Price                              14.00

Stage 01 - Collection
Note 1: Initial collection was from 6.0 to 7.00 from the market
Note 2: Second collection was from 7.0 to 9.0 from the market

Total Share collection                 7,000,000.00
Average price                                7.00
Cost for the collection             49,000,000.00
Cash payment             25,000,000.00
Margin payment             24,000,000.00

Stage 02 - Promotion
Note: Promotion was from 9.0 to 15.0
Final Stage - Stabilization
Note: Price stabilization will be done at 15
Total shares in hand                7,000,000.00
Share value                              15.00
Portfolio Value           105,000,000.00
50% Margin             52,500,000.00
Cash invested             25,000,000.00
Margin - Utilized             24,000,000.00
Margin - Un Utilized             28,500,000.00

Above un-utilized 28.5 million + 10 million excess margin of ALUF cash will be used for a collection of another illiquid share.

11Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:00 am

player

player
Moderator
Moderator

hi, its a great explanation, but its hard to earn much on these illiquids, so players are not after illiquids, they are after LIQUIDS.

More liquid is a paradise of manipulation Smile

Btw well explained mate.

12Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:09 am

investcsesl

investcsesl
Expert
Expert

player wrote:hi, its a great explanation, but its hard to earn much on these illiquids, so players are not after illiquids, they are after LIQUIDS.

More liquid is a paradise of manipulation Smile

Btw well explained mate.
Player, I agree with you. 
But collection of ALUF and MEL will not be considered as the pump and dump scenario. They will hold the controlling power of both the shares and move upwards with positive announcements to come. At the same time they will do the trading as well. 
Think about the massive margin power which can be generated.

13Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:19 am

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

Loss making companies with proper fundamentals provide better growth prospects instead of profit making companies with less growth prospects.

14Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:26 am

investcsesl

investcsesl
Expert
Expert

Quibit wrote:Loss making companies with proper fundamentals provide better growth prospects instead of profit making companies with less growth prospects.
Quibit, congratulation for your 2000+ posts!!!

15Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:42 am

Quibit


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics

investcsesl wrote:
Quibit wrote:Loss making companies with proper fundamentals provide better growth prospects instead of profit making companies with less growth prospects.
Quibit, congratulation for your 2000+ posts!!!

Thanks my friend. Great to see you around.

16Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 8:33 am

BvsB

BvsB
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

investcsesl wrote:Below is the workings for MEL, if 25 million out of 35 million of above margin is utilized to purchase MEL....

 
MEL
Total number of Shares           100,000,000.00 Category
Mackwoods (Pvt) Ltd 62,928,793Owner
Agalawatte Plantations PLC 4,460,972Owner
Claridge Fund (Pvt) Ltd 3,800,500Owner
Epoc Research Laboratories (Pvt) Ltd 3,568,500Owner
Employees Provident Fund 3,508,307Investor
Dr C.N.A.Nonis 3,018,708Director / Investor
Mr A.L.Yatawara 3,022,488Director / Investor
Mr F.L.Fonseka 3,017,500Director / Investor
Mrs N.S.M.Samaratunga 2,839,334Director / Trader
Diversified Fund (Pvt) Ltd 1,688,135Trader
Mr G.M.Kennedy 1,416,200Investor
Ms H.S.Tan 491,500Investor
  
Shares in hand of Owners / investors             92,072,802.00
Balance Shares at market                7,927,198.00
IPO Price                              14.00

Stage 01 - Collection
Note 1: Initial collection was from 6.0 to 7.00 from the market
Note 2: Second collection was from 7.0 to 9.0 from the market

Total Share collection                 7,000,000.00
Average price                                7.00
Cost for the collection             49,000,000.00
Cash payment             25,000,000.00
Margin payment             24,000,000.00

Stage 02 - Promotion
Note: Promotion was from 9.0 to 15.0
Final Stage - Stabilization
Note: Price stabilization will be done at 15
Total shares in hand                7,000,000.00
Share value                              15.00
Portfolio Value           105,000,000.00
50% Margin             52,500,000.00
Cash invested             25,000,000.00
Margin - Utilized             24,000,000.00
Margin - Un Utilized             28,500,000.00

Above un-utilized 28.5 million + 10 million excess margin of ALUF cash will be used for a collection of another illiquid share.
Thanks lot investcsesl...

17Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 04, 2015 1:09 pm

VALUEPICK

VALUEPICK
Expert
Expert

Quibit wrote:Loss making companies with proper fundamentals provide better growth prospects instead of profit making companies with less growth prospects.
I agree with you. Some loss making companies in out of favour sectors will have faster growth in the coming years. However I have a one fast grower in my basket and it is making profits and also it is going to make attractive earnings in the future. It is also wise to pick value stocks with growth potential.

18Why Big Players behind illiquid shares Empty Re: Why Big Players behind illiquid shares Thu Jun 11, 2015 6:28 pm

investcsesl

investcsesl
Expert
Expert

VALUEPICK, can you please share that stock with us?

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