Bumitama Agri

[weijian]

Sounds like a poison pill to me - nonetheless, it shd be welcomed, as in my opinion, this makes the market more efficient.

[Musicwhiz]

Business Times
Published April 12, 2012

Bumitama IPO 30 times subscribed

Initial public offer pipeline likely to be strong in Q2: HSBC

By lim wei sheng

THE initial public offering of Indonesian palm oil producer Bumitama Agri has attracted overwhelming response from investors, with a subscription rate of over 30 times for 297.5 million shares.

It comprises over 155 million placement shares, 124.8 million cornerstone shares, 15 million public offer shares and 2.7 million management reserved shares.

The public offer tranche drew 14,518 valid applications, with application monies totalling $461.8 million for 619.8 million shares.

The Bumitama IPO launch is the second in Singapore this year, after private cord blood bank Cordlife last month.

The pipeline for IPOs is likely to be strong in the second quarter, according to HSBC head of equity capital markets for South-east Asia Matthew Song, especially since many planned IPOs last year were postponed due to unfavourable market conditions.

Said Mr Song: "With the Hang Seng and Straits Times Index up by about 10 per cent in the first quarter, many issuers were caught by surprise by the surge in the first quarter, and are hence likely to consider issuing in the second quarter."

However, Cheah Le Sa, managing director of equity capital markets at DBS, was more cautious, saying: "Markets are likely to continue to be volatile, hence investors are likely to exercise a lot of differentiation, being highly selective based on the quality of the issuers."

DBS and HSBC were the underwriters for Bumitama's IPO.

Bullish sentiment on Bumitama's stock is likely to spill over into the secondary market, with Macquarie Bank listing two new structured call warrants for Bumitama at exercise prices of 85 cents and $1, expiring on July 2 and Sept 3 respectively this year.

Said Barnaby Matthews, head of derivatives at Macquarie: "We foresee high retail investor demand for the stock, especially since the institutional placement was over 30 times subscribed.

"As such, the warrants will cater to investors who want access but missed out on the IPO . . . investors who foresee a rally in (Bumitama's) stock in the short to medium term."

Mr Matthews added that the warrants were likely to be priced at three to four cents based on underlying asset value.

Bumitama shares, as well as the warrants, start trading today.

[WolfT]

I try for 20 lots cannot even get 1 lot! Crazy!

[weijian]

I try for 20 lots cannot even get 1 lot! Crazy!

Retail portion was 619.8/15 = 41x over subscribed!
I have a friend who got 5 lots - because he is in DBS 'IPO club'. As a member of that club, he has to subscribe to ALL the IPOs that DBS underwrites. Luckily this time around, he has got a winner.

[Musicwhiz]

We are entering la-la land territory, as recent IPOs soar about 30-35%!

The Straits Times
Apr 13, 2012
Bumitama soars in IPO debut
Share closes 32% above offer price; analysts see revival of IPO market

By Anita Gabriel

SHARES in palm oil firm Bumitama Agri surged as much as 37 per cent on debut yesterday as investors clambered for a piece of the largest initial public offering (IPO) here since last June.

The stock rose 26 cents from the offer price of 74.5 cents at the opening bell and inched further up during the day before closing at 98 cents, up 23.5 cents or 32 per cent.

Bumitama, which was the third most actively traded with 233 million shares worth $228 million changing hands, was helped by a more buoyant overall market with the benchmark Straits Times Index rising 1.08 per cent.

The firm has raised about $195 million in net proceeds from the IPO and as at yesterday, had a market value of $1.7 billion.

The prospects for palm oil firms are promising. Analysts generally expect palm oil prices to be supported this quarter due to tight global stockpiles.

'But the third quarter could see some correction in palm oil prices due to seasonal factors,' said a plantations analyst.

Bumitama's IPO offered 327.32 million shares, with only 15 million allocated to the public. These were 40 times oversubscribed.

'With our significant plantation land bank, Bumitama is well-positioned to benefit from the world's growing demand for palm oil, anticipated increase in (palm oil) prices and the expanding Indonesian economy,' said executive chairman and chief executive Gunawan Lim in a statement.

Bumitama is the 30th commodities and resources firm on the Singapore Exchange (SGX), a segment with a total market capitalisation of over $74 billion.

'Bumitama is now a key member of our strong pool of commodities and resource companies, offering global investors an attractive and wide range of investment options,' said SGX chief executive Magnus Bocker in a statement.

'Bumitama's listing reinforces SGX's strength and depth as an international capital-raising centre in this region.'

Bumitama is the second firm to list this year. Private cord blood bank Cordlife Group closed 37 per cent higher on its debut on March 29.

After last year's dismal IPO market - there were only 23 listings, the lowest in at least 10 years - analysts expect a revival this year, although volatility still prevails.

'This IPO performance is being closely watched as it would have an impact on the IPO pipeline for the rest of the year,' said Mr Matthew Song, HSBC's head of equity capital markets, South-east Asia.

'There is money to be put to work but investors' choices will continue to be driven by fundamentals and valuations.'

There had been talk before the IPO about the credibility of the Master of Business Administration degree obtained by Mr Lim from the University of Beverly Hills, California, in 1983.

The Straits Times earlier reported that the university, which closed in 1986, is perceived as lacking accreditation.

Mr Lim told The Straits Times: 'It's not true. First of all, it's not a dubious degree or school. It exists and is accredited by the California state. I included the information in the prospectus as there was nothing to hide.'

anitag@sph.com.sg

[butcher]

Bumitama just made an announcement for variance between its announcement made earlier on 23 Feb 16 as compared to final audited numbers. The adjustment pertains to the foreign currency difference arising from the translation of the
Company's investment in its subsidiaries.

My opinion is usually from the audit process, we will encounter a few adjustments. The Bumitama's adjustment seems trivial, why warrant an announcement?

http://files.shareholder.com/downloads/A...FY2015.pdf

[Curiousparty]

Ripe for a very strong H2 rebound!!!

Effect of botched Q1/Q2 forward hedging is wearing off soon!

If the cut in export levy materializes, then plantation counters such as Bumitama will strongly take off!!

___

https://www.spglobal.com/platts/en/marke...on-sources


Indonesia may cut export levy by $100/mt: sources


New Delhi — Buying interest for palm oil has seen a reduction in Asia markets during the week ending May 21 as traders go into wait-and-watch mode ahead of potential cuts to the $255/mt export levy that Indonesia charges to subsidize its national bio-diesel program, multiple sources told S&P Global Platts.

According to trade sources, a $100/mt cut in the export levy has been proposed and may be announced in the coming weeks. However, there is no official announcement yet.

"Prices have fallen steeply recently and I don't think anybody is rushing to buy much until July at least," Marcello Cultrera, institutional sales manager for Singapore-based Phillip Futures said.

"Until there is more clarity, some will stay on the sidelines."

The same opinion was voiced by two other analysts and an edible oils trader who spoke to Platts on the matter.

Palm oil orders are usually booked a month or two in advance. Therefore the current dip in buying interest could be reflected in July and August shipments.

Indonesia is the world's largest producer of palm oil and accounts for about half of the world's supply for the versatile ingredient used in cooking, confectionary, cosmetics and as a biofuel.

The Indonesian Palm Oil Board (GAPKI) did not immediately respond to a request for comment.

[weii]

Indonesia adds biodiesel capacity ahead of B40 mandate

The current B30 mandate requires around 9.6mn kl/yr of biodiesel but B40 is projected to require 12.8mn kl/yr, raising the need for the additional capacity especially given current utilisation rates of around 85pc.

Paulus Tjakrawan, vice chair of the Indonesian Biofuel Producer Association, said at the Indonesian Palm Oil Conference that he hoped B40 could be implemented at the end of next year (that is 2021) or in 2022.

Reference:
https://www.argusmedia.com/en/news/21652...40-mandate

[Curiousparty]

   

Current Share price way cheaper than previous key batches of share buyback prices !!!

-  In connection with our annual Share Buyback Mandate (as at  11 March 2019), the Group bought back 1,867,200 shares  representing 0.1% of the total outstanding shares at an  average price of $0.674 per share. Bumitama’s share  buyback programme underlines the Group’s confidence in  the prospects of our business.

-  As per our Share Buyback Mandate (based on the  latest practicable date of 7 March 2018), the Group had  bought back 11,988,200 shares representing 0.68% of  the total shares at an average price of $0.742 per share.  This reflects the Group’s confidence in the business  fundamentals of Bumitama and its expectation for growth  in the coming years.

When CPO price recovered towards end of 2019, Bumi followed suit. But unfortunately, pandemic came along. Both CPO and Bumi price crashed. CPO has since recovered and taken off. Bumi share price is playing catch up NOW!!
(See Graphs below)

[Curiousparty]

Q2 has improved a lot compared to Q1 (despite the botched hedging for bulk of H1. Botching hedging in H1 but yet Q2 managed to stage a very strong recovery to H1 net profit up by more than 10% (despite Q1 net profit dropping more than 30%!!!)



Going into H2, Bumi is aided by the following factors:

1. All time high CPO price in the history of CPO since 1980s...

2. lower export tax

3. higher production volume (peak season is H2)

3. no more "botched" hedging as seen in H1

All in all, Bumi is set for a very strong H2 if the current all-time-high CPO persists ...