KPJ - Revisited

KPJ did well for the last few days. In fact, it did very well for the whole of 2009. The company is soundly managed with good fundamentals, as was stated in my previous posting on KPJ.

http://malaysiafinance.blogspot.com/2009/12/why-i-like-kpj-healthcare-lot.html

Timing was correct, took me by surprise that it announced the ex-all date so soon. Here comes the interesting bit. The ex-all date is 6 January 2010. If you take the remaining days left:

30 Dec Wed
31 Dec Thu
4 Jan Mon
5 Jan Tue
6 Jan Wed
7 Jan Thu

Technically, the savvy traders who did not want to pick up shares but get a slice of the bonus / splits / free warrants, could buy on Thursday 31 Dec and would just make the ex-all date of 6 Jan. However, the company has also announced that the shares will be suspended on Monday, 4 Jan to make way for the split first. If we were to understand this correctly, why would you suspend 2 days before the ex-all? Does it mean that on Tuesday 5 Jan the shares would trade on a split basis (i.e. if shares were at RM6.40 before Monday 4 Jan, it will trade at RM3.20 on 5 Jan Tuesday?

Just read the announcement: "Please be advised that the trading of KPJ shares will be suspended with effect from 9.00 a.m., Monday, 4 January 2010 in order to facilitate the Share Split. The suspension will continue until the completion of the same." The last phrase that the suspension will continue until the completion of the same, can be read as indefinite. If they take longer than one day, they can.

What the announcement was not clear is whether the shares will only be suspended for that ONE day on Monday 4 Jan. It could be that the shares could go suspended till 6 Jan for the ex-all. If that is the case then the last two days to buy to get the "loot" will be today and tomorrow only!!!

If its the first scenario, whereby the shares come back on 5 Jan on a split basis at RM3.20 ... who do you think will be SELLING? Nobody, that's who! Why would you want to hold for the split only to sell after the split - when everybody knows the real action is in the bonus shares and free warrants. Hold another day for the 1-for-4 bonus and 1-for-4 free warrants. Which means on the Tuesday 5 Jan, KPJ share price could be in for another jump, if this scenario holds true.



I don't know for sure which scenario will play out but it will be very interesting to watch. Bursa, please make sure companies make announcement properly, if its suspended for ONE day, say so. If its indefinite, say so. Btw, holders of KPJ should be sleeping soundly and be ready for a great start to the new year. The free warrants are looking mighty attractive now and should trade around RM1.00 after ex-all.

Subject	:	KPJ - NOTICE OF BOOK CLOSURE
Contents	:	1) Subdivision of every existing one (1) ordinary share of RM1.00 each in KPJ Healthcare Bhd ("KPJ" or the "Company") into two (2) new ordinary shares of RM0.50 each in KPJ ("Shares") ("Share Split") 2) Bonus issue of up to 105,525,308 new ordinary shares ("Bonus Shares") of RM0.50 each ("Shares") in KPJ Healthcare Bhd ("KPJ" or the "Company") to be credited as fully paid-up, on the basis of one (1) Bonus Share for every four (4) Shares in KPJ after accounting for subdivision of every existing one (1) ordinary share of RM1.00 each in KPJ into two (2) new Shares in KPJ. 3) Issue of up to 131,906,635 free warrants ("Free Warrants") in KPJ Healthcare Bhd ("KPJ" or the "Company") on the basis of one (1) Free Warrant for every four (4) ordinary share of RM0.50 each in KPJ ("Shares") after accounting for subdivision of every existing one (1) ordinary share of RM1.00 each in KPJ into two (2) new Shares in KPJ and bonus issue of up to 105,525,308 Shares on the basis of one (1) new Share for every four (4) Shares in KPJ. Kindly be advised of the following : 1) The above Company's securities will be traded and quoted [ "Ex - All" ] as from : [ 6 January 2010 ] 2) The last date of lodgement : [ 8 January 2010 ] 3) Retention Money : Where securities are not delivered in time for registration by the seller, then the brokers concerned :- a) Selling Broker to deduct [ 1/3 ] , of the Selling Price against the Selling Client. b) Buying Broker to deduct [ 20% ] of the Purchase Price against the Buying Client. c) Between Broker and Broker, the deduction of [ 1/3 ] of the Transacted Price is applicable.

Subject	:	KPJ-Suspension of trading arising from proposed share split of each ordinary share of RM1.00 in KPJ into two (2) ordinary shares of RM0.50 each ("Share Split")
Contents	:	Please be advised that the trading of KPJ shares will be suspended with effect from 9.00 a.m., Monday, 4 January 2010 in order to facilitate the Share Split. The suspension will continue until the completion of the same.

p/s photos: Chrissie Chau