It is the nature of the market that prices of a stock can be pushed to very low level when the crowd is pessimistic. On the other hand, the prices of these same stock can be pushed to very high level when the crowd is optimistic. The reasons maybe fundamental or sentimental.
The market prices reflect thus the sentiment of the investors. However, the value of a stock is unlikely to change very much during these short periods when the market prices may change drastically.
To protect oneself from the volatilities of the market prices, the smart investor needs to understand the value of the business he is investing into.
More investors lose money when they overpay for the stocks when the crowd is overoptimistic. Many hold onto losses in unbelievable denial. This is evident whenever the price of a stock falls. Why does the price of a stock fall? Often these investors blame many external factors for the fall, when in fact, the single most important reason is themselves, they overpaid for the stock during period of over-optimism.
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.