Skip to main content
WHY ... Scomi ... WHY???
Silence From Bursa, SC, EPU, FIC - This Is Where You Should Yell Out NO

Oil and gas support services company, Scomi Group Bhd is a company the Malays should be proud of because of its foray in the world market, said Science, Technology and Innovation Minister Datuk Seri Dr Jamaludin Jarjis. He said Scomi was one of the three local companies which had the expertise in offshore oil exploration. "Scomi's expertise is acknowledged by foreign oil companies operating in the country. We have to be proud of the achievement of Malays who have made their marks in the world market," he added.

The proposed listing of Oiltools in Singapore could see proceeds being used to fund more acquisitions, give higher dividends, or even take the group private. Scomi has proposed to list its oilfield services division (OSD) on theSingapore Exchange by the first quarter of next year. It could raise RM400 million to RM600 million. Scomi would also receive RM130 million as settlement for inter-company loan. The proceeds could be used for many things, including to offset the 30 per cent dilution effect from the initial public offering. After excluding borrowings at holding company level, the Scomi group would have more than RM100 million cash that could be used for capital repayment. Scomi could also afford a dividend payout of 50 per cent of its earnings in the immediate term, it said. At holding company level, Scomi will be in a net cash position after the OSD listing, with the post-consolidation net gearing reduced to 0.6 times from 1.5 times as at March 2006. Another option is for the major shareholders to take the group private. All the operational entities will be listed and there is no point inmaintaining a holding company that will be subjected to a holding company discount. Scomi will form a new group structure of the OSD in which the entity for the proposed listing is an investment holding company that owns 100 per cent of the restructured KMC Oiltools Bermuda Ltd - the world's fourth largest player in the drilling fluids and drilling waste management businesses.

My question is why Singapore and not Malaysia? Better valuation in Singapore? Scomi as a group was assembled together as a few local oil & gas related companies, and grew from that - why the spin off to Singapore? Arguably, KMC Oiltools is the most attractive asset of the group, and now that trading vehicle will be in Singapore. Why the silence from the authorities? I though there would be gentle persuasion from Bursa, SC, EPU, FIC, ...etc.. blah, blah... but nothing.

Not that this is a nationalistic thing or being protective, its just common sense. What defines a stock exchange? Its the companies listed on it. If 99% of companies listed on each and every exchange is the same, then there is no reason to venture out of your local exchange. An exchange's value is in the unique type of companies available for investing, allowing global and local investors to participate in that unique growth. It is fair to say ... without plantations, oil and gas, timber, rubber, gaming ... the KLSE basically looks very dull to everyone.

This is a chance for Scomi to keep the best asset in KLSE but... no, they choose Singapore, where is the loyalty, did the company even care how they got started? You just end up favouring a competing exchange, and at the same time giving the local governing bodies a slap in the face as the move probably indirectly hints at many things inherently unattractive about the local governing institutions.

If it was a chain-listing issue, surely a chat or a plea to the right authorities would get around the problem, so that is no excuse.

What is even more amazing is that with Oiltools, it would just push Singapore's listed market cap of Oil & Gas companies to be bigger than Malaysia's, ... and Singapore has zilch oil & gas in the first place??!! Yes, Datuk Jarjis, Scomi is an exemplary bumiputra company!

Comments

Popular posts from this blog

My Master, A National Treasure

REPOST:  Its been more than two years since I posted on my sifu. This is probably the most significant posting I had done thus far that does not involve business or politics. My circle of close friends and business colleagues have benefited significantly from his treatment.


My Master, Dr. Law Chin Han (from my iPhone)

Where shall I start? OK, just based on real life experiences of those who are close to me. The entire Tong family (Bukit Kiara Properties) absolutely swear that he is the master of masters when it comes to acupuncture (and dentistry as well). To me, you can probably find many great dentists, but to find a real Master in acupuncture, thats a whole different ballgame.


I am not big aficionado of Chinese medicine or acupuncture initially. I guess you have to go through the whole shebang to appreciate the real life changing effects from a master.


My business partner and very close friend went to him after 15 years of persistent gout problem, he will get his heavy attacks at least…

PUC - An Assessment

PUC has tried to reinvent itself following the untimely passing of its founder last year. His younger brother, who was highly successful in his own right, was running Pictureworks in a number of countries in Asia.

The Shares Price Rise & Possible Catalysts

Share price has broken its all time high comfortably. The rise has been steady and not at all volatile, accompanied by steady volume, which would indicate longer term investors and some funds already accumulating nd not selling back to the market.


Potential Catalyst #1

The just launched Presto app. Tried it and went to the briefing. Its a game changer for PUC for sure. They have already indicated that the e-wallet will be launched only in 1Q2018. Now what is Presto, why Presto. Its very much like Lazada or eBay or Alibaba. Lazada is a platform for retailers to sell, full stop. eBay is more for the personal one man operations. Alibaba is more for wholesalers and distributors.

Presto links retailers/f&b/services originators with en…

How Long Will The Bull Lasts For Malaysia

Are we in a bull run? Of course we are. Not to labour the point but I highlighted the start of the bull run back in January this year... and got a lot of naysayers but never mind:






























p/s: needless to say, this is Jing Tian ... beautiful face and a certain kind of freshness in her looks and acting career thus far



http://malaysiafinance.blogspot.my/2016/12/bank-negara-may-have-switched-on-bull.html


I would like to extend my prediction that the bull run for Bursa stocks should continue to run well till the end of the year. What we are seeing for the past 3 weeks was a general lull where volume suddenly shrunk but the general trend is still intact. My reasons for saying so:

a) the overall equity markets globally will be supported by a benign recovery complemented by a timid approach to raising rates by most central banks

b) thanks to a drastic bear run for most commodities, and to a lesser extent some oil & gas players, the undertone for "cost of materials" have been weak and has pr…