Dayang’s price rise is not reflected on Naim

On 19 Aug 2019, Naim was shooting up from Rm 1.01 to Rm 1.16 sen, an increase of 15 sen or 15% , many investors called to ask why I did not recommend them to buy.  

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Naim is the controlling shareholder of Dayang. It owns 26% of the total issued shares of Dayang. Dayang has a total issued of 965 miilion shares and Naim owns 251 miilion shares. Naim has a total issued of 500 million shares. 

Based on the current prices, Naim’s market capitalization is  500 million shares x 93 sen = Rm 465 million. Naim’s 26% of Dayang is worth 251 million X Rm 1.86 = Rm 466 million. 

Many Naim’s shareholders are hoping for Naim to sell all its Dayang shares so that Naim’s all other assets will be free of charge. 

Many investors asked why don’t I sell Dayang to buy Naim?      

In the last 4 months Dayang has gone up from 90 sen to peak at Rm 2.15 while Naim has been fluctuating like a YOYO. 

As I said many a time before, no stock can go up or down continuously for whatever reason. After a while it must change trend. Dayang’ s price chart shows that its price corrections have always been quite small but the latest correction is quite severe unfortunately. 

Small investors are selling while rich funds are buying

Every day more than 10 million shares changed hands. Many small investors are selling to take profit while many rich fund managers are buying aggressively because they expect the company has very good profit growth. Its eps for 1stquarter was -0.46 sen, its eps for 2ndquarter was 5.71 sen and they expect its eps for 3rdquarter to be better than its 2ndquarter. 

Dayang is the largest maintenance contractor in this region where Petronas has discovered a total of 163 oil fields and 216 gas fields. Dayang has very few competitors such as Carimin, Uzma and Petra Energy which are comparatively small. 

Off shore oil rig: The average price for offshore oil-drilling rigs is approximately US $650 million.

Mini floating city: Offshore rigs vary in the specific type and layout, but they’re often like mini floating cities, with all of the amenities needed to live and work out on the ocean. No matter where the oil rig is located, it operates 24 hours a day, seven days a week no matter what the weather is like. 

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