At the core of most investment approaches lies the practice of valuations, the techniques by which the real or intrinsic value of a company can be estimated.
Most investors want to buy securities whose true worth is not reflected in the current market price of the shares.
There is general agreement that the value of a company is the sum of the cash flows it will produce for the investors over the life of the company, discounted back to the present.
In many cases, however, this approach depends on estimating cash flows far into the future, well beyond the horizon of event he most pro-phetic analyst.
Value investors since Graham have always preferred a bird in the hand - cash in the bank or some close equivalent - to the rosiest projection of future riches.
Therefore, instead of relying on techniques that must make assumptions about events and conditions far into the future, value investors prefer to estimate the intrinsic value of a company by looking:
1. first at the assets and
2. then at the current earnings power of a company.
Only in exceptional cases are they willing to factor in the value of potential growth.
KUALA LUMPUR: Sona Petroleum Bhd opened flat at 42.5 sen, which was the reference price when it made its debut on Bursa Malaysia on Tuesday.
However, the warrants saw stronger interest, surging to 23.5 sen from the reference price of 7.5 sen.
At 9am, Sona shares were down 1.5 sen to 41 sen with 118.3 million shares done. The warrant rose 16.5 sen to 24 sen with 35.87 million units done.
The FBM KLCI rose 1.11 points to 1,799.89. Turnover was 63.51 million shares valued at RM25.04mil. There were 87 gainers, 30 losers and 78 counters unchanged.
Below is the earlier story:
KUALA LUMPUR: Sona Petroleum Bhd, which is making its debut on Bursa Malaysia on Tuesday, saw bids at its reference price of 42.5 sen in pre-market trade.
At 8.33am, there were bids at 42.5 sen. However, the warrants saw stronger interest with bids at 20 sen, which was 12.5 sen above the reference price of 7.5 sen.
The initial public offer involved 141 million shares with up to 141 million warrants.
Sona Petroleum is Malaysia’s third special purpose acquisition company (SPAC) to list on Bursa Malaysia.
Sona Petroleum, which aims to eventually make the transition to an independent E&P company, had secured commitments from six institutions both local and foreign as cornerstone investors, making it the first SPAC to do so.
They are Hong Leong Asset Management Bhd, Hong Kong-based hedge fund Segantii Capital and Davidson Kempner European Partners, along with the fund management houses of the three banks backing the listing: CIMB-Principal Asset Management Bhd, Kenanga Investors Bhd and RHB Investment Management Sdn Bhd.
The cornerstones, who did not enjoy a discount to the 50 sen IPO price, were apportioned 275 million shares out of the 959 million shares for institutions.