Wow what a mega selldown today.
Ezion recently hoovered around 1.80 and in the last few days got sold down to as low at 1.57 today. I went to dwelve into the reasons for the selldown.
1) Sold off by a substatial shareholder
798,000 shares were sold by Franklin Resources that were declared to SGX. I don't think its very substantial, but I think they probably started the whole thing.
2) USD-denominated debt
This is the largest reason for the selldown apparently, from what I've read in the forums. However, I find it perplexing that even though there is obvious concern for a rising USD on their debt, their contracts wins and assets are denominated in USD too! So that should act as a natural hedge to a rising USD no?
3) Rising oil prices
This one is somewhat unclear, but the entire Oil & Gas industry has been beaten down the last few days because oil has dropped to USD90/barrel. How low will it go I have no idea, but I do know that the worl is consuming more and more oil at a faster pace than even before, so the downside for oil should be limited. Add to that the cost of producing oil has been rising, while resources have been dwindling (companies have to drill deeper and deeper for crude) so it won't make too much sense that oil continue to fall.
That said, these are just my own justifications and views.
I have picked up some at around 1.60. Consequently, my other fav stock has been dragged down to 2.9/3.0cts too. So sad.
Hopefully it will rebound back to its highs and continue upwards.
BTW Nomura has a very bullish Buy call with a TP of SGD2.67! Wow!
HUAT AH!
No comments:
Post a Comment