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25-04-2013, 07:41 AM
Mr Thai Bev is a shrewed and proven businessman. As he has so many pots boiling, surely F&N's cash hoard is critical to him. Apart from cash hoard, F&N's real estate portfolio is of high quality globally. The established REIT platform is another asset light avenue.
The last time a similar situation arose was OUE. My odd lots certificate was suspended and I thought I will have a piece of memory forever. My F&N odd lot certificate just went through the similar fate. I was hoping to collect all cash and keep the certificate as a piece of history but it never did.
I am confident that Mr Thai Bev after slugging through the fight will extract value over time. Fund managers are the most stupid people in the market place - especially those running passive index trackers. Seriously, I really wonder at times how much value has these fund managers added or more like destroyed over time.
I for one I think I outperformed these blind bats over time.
GG
http://www.businesstimes.com.sg/premium/...g-20130425
Published April 25, 2013
F&N tumbles on index fund selling
By
kenneth lim
print |email this article
application/pdf iCONSharp drop
SHARES of Fraser and Neave (F&N) continued to fall sharply yesterday ahead of the counter being excluded from stock indices.
F&N shed 39 cents, or 4.8 per cent, to close at $7.81 yesterday and was the Singapore-listed stock with the highest turnover value for the day, with $313 million of shares changing hands. The stock is down 17.3 per cent so far this week.
F&N shares have not traded below $8 since July 2012, just before Thai tycoon Charoen Sirivadhanabhakdi's initial purchase at $8.88 per share eventually led to a bidding war for F&N.
Mr Charoen completed his takeover in February with a 90.3 per cent stake in F&N, leading trading in the counter to be halted because it did not meet Singapore Exchange's minimum free float requirement of 10 per cent.
Trading in the stock resumed on Monday after F&N and Mr Charoen said they would seek to restore the public float. The exchange has given until July 19 for the float to be restored.
Jonathan Foster, director of global special situations at Religare Capital, said the selling was mostly the result of F&N coming off MSCI indices after yesterday's close.
In a late announcement on Monday, MSCI announced that F&N would be deleted from its standard and large cap indices from today.
"It's index-related selling," Mr Foster said.
Passively managed index funds buy and sell shares based on fixed rules, and as long as F&N was a component on an index, funds tied to that index would have to hold on to their shares.
F&N had a 3.36 per cent allocation for the MSCI Singapore index, which is one of the most widely followed MSCI indices for Singapore equities, as at the end of March.
Once F&N is removed from the index, index funds linked to the benchmark, such as the popular iShares MSCI Singapore Index Fund, will have to sell F&N shares in order to track the index.
The selling was not just from MSCI-linked funds. The stock has already been removed from the FTSE Straits Times index, the key Singapore-market benchmark, but that action came in the midst of F&N's two-month trading halt.
"F&N was taken out of the index following the trading halt on its stock ... so it could be paring by index funds that need to track the STI performance closely," said DMG & Partners analyst Goh Han Peng.
"The selling is overdone considering the huge gains and cash proceeds from the sale of APB," he added. "The additional capital will either be deployed into growing the remaining businesses, or part of the cash could be returned back to shareholders if the capital is in excess of funding requirements. Moreover, collaboration with Thai Bev on the F&B business will likely yield revenue synergies."
Mr Foster thought the current market price could be close to fair value for F&N. "I just don't know where the aggressive marginal buyers are," he said. "This stock was trading at a steep discount for many years, and if you want to be sensible about it, there's no reason why that would change."
The last time a similar situation arose was OUE. My odd lots certificate was suspended and I thought I will have a piece of memory forever. My F&N odd lot certificate just went through the similar fate. I was hoping to collect all cash and keep the certificate as a piece of history but it never did.
I am confident that Mr Thai Bev after slugging through the fight will extract value over time. Fund managers are the most stupid people in the market place - especially those running passive index trackers. Seriously, I really wonder at times how much value has these fund managers added or more like destroyed over time.
I for one I think I outperformed these blind bats over time.
GG
http://www.businesstimes.com.sg/premium/...g-20130425
Published April 25, 2013
F&N tumbles on index fund selling
By
kenneth lim
print |email this article
application/pdf iCONSharp drop
SHARES of Fraser and Neave (F&N) continued to fall sharply yesterday ahead of the counter being excluded from stock indices.
F&N shed 39 cents, or 4.8 per cent, to close at $7.81 yesterday and was the Singapore-listed stock with the highest turnover value for the day, with $313 million of shares changing hands. The stock is down 17.3 per cent so far this week.
F&N shares have not traded below $8 since July 2012, just before Thai tycoon Charoen Sirivadhanabhakdi's initial purchase at $8.88 per share eventually led to a bidding war for F&N.
Mr Charoen completed his takeover in February with a 90.3 per cent stake in F&N, leading trading in the counter to be halted because it did not meet Singapore Exchange's minimum free float requirement of 10 per cent.
Trading in the stock resumed on Monday after F&N and Mr Charoen said they would seek to restore the public float. The exchange has given until July 19 for the float to be restored.
Jonathan Foster, director of global special situations at Religare Capital, said the selling was mostly the result of F&N coming off MSCI indices after yesterday's close.
In a late announcement on Monday, MSCI announced that F&N would be deleted from its standard and large cap indices from today.
"It's index-related selling," Mr Foster said.
Passively managed index funds buy and sell shares based on fixed rules, and as long as F&N was a component on an index, funds tied to that index would have to hold on to their shares.
F&N had a 3.36 per cent allocation for the MSCI Singapore index, which is one of the most widely followed MSCI indices for Singapore equities, as at the end of March.
Once F&N is removed from the index, index funds linked to the benchmark, such as the popular iShares MSCI Singapore Index Fund, will have to sell F&N shares in order to track the index.
The selling was not just from MSCI-linked funds. The stock has already been removed from the FTSE Straits Times index, the key Singapore-market benchmark, but that action came in the midst of F&N's two-month trading halt.
"F&N was taken out of the index following the trading halt on its stock ... so it could be paring by index funds that need to track the STI performance closely," said DMG & Partners analyst Goh Han Peng.
"The selling is overdone considering the huge gains and cash proceeds from the sale of APB," he added. "The additional capital will either be deployed into growing the remaining businesses, or part of the cash could be returned back to shareholders if the capital is in excess of funding requirements. Moreover, collaboration with Thai Bev on the F&B business will likely yield revenue synergies."
Mr Foster thought the current market price could be close to fair value for F&N. "I just don't know where the aggressive marginal buyers are," he said. "This stock was trading at a steep discount for many years, and if you want to be sensible about it, there's no reason why that would change."
