Overseas Chinese Banking Corporation (OCBC Bank)

[Hill]

Morning Chialc

Like to seek/borrow to instincts on this stock - ocbc

Can go in at this level.? Tks

[chialc]

Like to seek/borrow to instincts on this stock - ocbc

Mr Hill,
It's going to be a problem advising you on OCBC.
So, why not I share my thinking process instead of advising you?

#1. Owning OCBC - this will never be a wrong decision. it's one of those rare company build to last.

#2. Entry price - it's probably a 'hot' price at this moment. many people is watching now.

#3. Backup plan - must reserve some spare cash for the "right" issues (if any).

#4. Other consideration - other than OCBC, is there another stock that is worth buying?

LC

[Hill]

Hi Chialc

Tks for responding.

Good thoughts to all your replies.


Loss more than profits.. So just decided to put $$ in blue chips and sleep soundly.

Not sure about this right issue thinggi, when bank issue rights, does mother share drop? Or should we wait for this rights issue to surface first, then buy?

What would seasoned investors normally do? Tks

[chialc]

Not sure about this right issue thinggi, when bank issue rights, does mother share drop? Or should we wait for this rights issue to surface first, then buy?

Hi Mr Hill,
Again lar, I'm still learning and I'll gives you what my thinking process instead of advising you.

1. loss $$ so invest in bluechip
Ai yo, headache man.
what type of logic is this?
bluechip can not lost $$?
think again!

2. buy now or wait after rights.
In general, price will drop after rights (but value drop is another thing, ok?)
no model answer here (thou, other value buddies might insist there is one).
ok, for me, no model answer after much observations.
sorry, can not help.
Ok, lar, asked for my instinct?
look carefully at the pricing trends for OCBC.
if someone had take their eye off OCBC and decided to sell, just pick it up from him happily law.

LC

[sgd]

before rights issue sometimes price will go up then after issue it will go down because dilute
but if the stock is good over time will recover. sometime shortly after right issue it may also go up depend on what the story is having the rights issue.

but in a buyout what is usually a after buyout parent company share price could sink because logically a large chunk of money 'has exited' the company, of course the parent could later get the new sub to declare special dividend from their profits and money repatriate back to the parent and stock cheong back up again.

[Temperament]

Just go and look at the history of when DBS bought over HK's DAO HENG. Not that it's comparable with OCBC to WING HANG but be careful in investment, they say there is no guarantee history will repeat itself. And the unsuccessful attempt of DBS trying to buy DANAMON Bank of Indonesia. How the market reacted at that times?
Remember History May Not Repeat Itself − But Sometimes It Rhymes.
Caveat Emptor!

[greengiraffe]

Don't be too pessimistic buddies. OCBC has no ah gong $ and the price they paid for Wing Hang should be considered to be excessive.

Does anyone think they any professionals can make such a strategic decision without the blessings of the Lee Family?

OCBC has also been fairly conservative with their M&A deals. In any event, OCBC share price has been under-performing since the news on Wing Hang was known so the bottom could well be near...

Odd Lots Vested
GG

[Temperament]

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2) Assets allocation & Purchase price entry level
There’s nothing you can do better to control Risks and generate Profit by proper Allocation of Assets and buying those assets at the Right Price.
Right Price
“When” is more important than “What”.
In most cases, when you buy is more important than what you buy. You can make money on the most marginal company if you buy it at the right time; you can lose money in the bluest of blue chips if you buy it at the wrong time.
The right time is when a stock is selling reasonably near the low end of its trading range or at a historically low price/earnings multiple, or when any trustworthy guideline indicates a sharp reduction in risk. This low entry level provides a safety net dangerously missing at higher prices.
The wrong time to buy for a long-term investor is when a stock is selling near the high end of its trading range. Everything depends on the price you pay, regardless how gilt-edge the stock.

UNQUOTE:-
Sorry buddies, if i propagate pessimism.
Actually, i would like to share the above idea. It's O. K. if your is different. To me that's the one of the beatitudes of the Market. And GOD or Lady LUCK or Nature definitely has something to do with the market.

Basically, i think at the end of the day, Human Beings is a specie too smart for his own good. We build and build only to self destruct. No?
NOT VESTED yet.

[Life is a game]

Hmm so does this mean macro analysis come first above all? if so, I am in line with your investment methodology.

[AlphaQuant]

Just go and look at the history of when DBS bought over HK's DAO HENG.

In M&A, management matters.

In DBS+DaoHeng, having American investment bankers driving a very expensive purchase of a HK commercial bank by a Sg commercial bank and then struggling to synergise operations (if any) led to a lot of pain. It was unfortunate that they were early to the Chinese game as all the RMB depeg+internationalisation efforts happened much later.

OCBC+WingHang has yet to play out but i think the interesting thing here is that Samuel Tsien is born in Shanghai and is a commercial banker with stints in CCB and BoA. So there's certain degree of familiarity with the culture fit. His vision for the purchase is also clear - to tap the 70+ branches in the Pearl Delta region for multiple uses - offshore RMB tapping and trade finance in what is perhaps the biggest story in our lifetime i.e. the emergence of China as the biggest economy in the world (though not on a per capita basis).

So far the market has punished OCBC and in a smaller way, DBS, for their exposure to China after all the "bubble bursting fears" and rewarded UOB's ASEAN focus thru organic growth. I note though, that OCBC's recent scrip dividend was 83% taken up - its ability to raise capital through Tier1 common stock should not be a big issue.