IPOs - Icon Offshores and Boustead Plantations: Between Failure and Success

By now most of us IPO applicants of Icon Offshores and Boustead Plantation stocks would have known whether we have been successful or not in our applications.

On 11 June, I found out that I did not have luck on Icon IPO and naturally felt rather down. I had a wrong strategy of applying at a lower amount and so had to face with a lower chance of being successfully balloted. However, for Boustead I went for a bigger amount and of course have a higher chance of success and sure enough (plus better luck here), I am being rewarded with 25% the number of shares I applied for. I just found out about this an hour ago online through my Maybank Account.

I am waiting for Boustead Plantations' listing day on 26 June to see how it would debut but as usual I am going to hold these precious shares for some time and see how the CPO price is trending in the medium to long term.

As for Icon, to be listed on 25 June, I will definitely buy on the market. It's going to be a steely watch over the debut but my broker has been well informed on what to do in case I am not able to keep glued to the screen.

From now on, it's going to be a fun ride with these two new stocks, one obtained through luck, the other would be through sweat. I will keep a close monitoring of these two companies and observe how they perform and have some time blabberings and commenting on stock analysts' reports.

Congratulations to those of you who are successful in your applications and to others you can still make something if you are able to time your purchase at market price. At any rate, good luck to all my reader-investors.

Remember, between failure and success, there is still an opportunity.

This skin infection is preventable

A 36 year old woman came to the clinic with a five-day history of pain and swelling of her right thumb. She is not suffering from diabetes. She claimed that there was initially some redness and itchiness on the skin of her affected thumb with a small scratch which later developed into a larger area with pus formation.

Instead of letting the pus drain naturally, she went on to squeeze it and applied some rice powder paste for good measure and the local swelling worsened to involve the lower two-third of the thumb (proximal phalanx and first metacarpal).

This is how her thumb looks:

Cellulitis of thumb.
Note the small depressed ulcer where it started

There is the rare risk of the infection extending to the joint of the digit (proximal inter-phalangeal) that can turn into septic arthritis and damage the joint affecting its function.

I have come across quite a number of patients with cellulitis ( superficial infection of skin surrounding a boil or carbuncle) because they prick, probe and squeeze the swelling and apply all sorts of concoction from herbal paste to traditional oil.

The best method is to leave it alone and let it drain. If it gets bigger with increasing pain then an incision and drainage will be undertaken by health personnel with or without an antibiotic cover. 

IPO - ICON Offshore

Coming up fast on my IPO radar is Icon Offshore, an oil and gas support service company which launched its prospectus last Friday 30 May 2014. It is a pure-play OSV (Offshore support vehicle) company with a fleet of ships used for transporting people, goods and equipment to offshore rigs. 

The company was formed in 2012 through the merger of  Tanjung Kapal Services Sdn Bhd and Omni Petromaritime Sdn Bhd. It is the first of the spin-off companies under government-linked private equity, Ekuinas, to list on the main market. It is reported to have the youngest fleet of ships compared to its competitors.

Though its valuation is high at RM1.85 (trading at 17-18 times its estimated earnings in 2014), investors however, are not deterred by it. So far it has managed to rope in cornerstone investors such as Permodalan Nasional, Tabung Haji, AIA Bhd and several major funds. Together they have taken up more than 50% of the offered units. These investors will be subject to a lock up period of six months.

According to its prospectus about 35m shares are made available (compared to 64m shares by BPB) to the public via balloting. Applications are being accepted till 6 June at 5pm and balloting on 10 June, allotment of shares to successful applicants on 23 June and listing on 25 June, a day before Boustead Plantation Berhad (BPB).

I don't know about you all, but I think any stock related to  an oil and gas (O&G) industry has always been investors' darling irrespective of analysts' reports. 

 I missed out on UMW IPO last year as I was not happy that they were raising capital to pay off their mammoth debt. I advised some relatives not to apply as well: it was at an IPO of 2.80 (listed on Nov 1 2013) and look at it now, last closing price on Monday June 2 2014 was 10.80! And this fantastic rise is recorded slightly over six months. 

On the other hand, I thought the port operator; Westports was a better choice as they did not issue new shares to pay off any debt at their listing around the same time as UMW. And look at the performance of the two stocks: Westports hardly moved from its IPO of 2.50 over the six months' period from the date of its listing.

Needless to say, I have not been popular ever since. My relatives have stopped asking for my opinion. Well, it's okay as I won't ever get blamed again :)

By the way, there are risks in this O&G industry as it is a cyclical industry coming in waves of five to seven years and an analyst has opined that local OSV market could currently be at the top end of the cycle but did not see a downtrend any time soon.

Other risks are well spelt out in its prospectus which includes business related factors such as governmental regulations, high gearing, Petronas policies towards the oil and gas industry, stiff competition and its dependency on limited customers.

Unlike Boustead Plantation, it doesn't have any fixed dividend policy.

And so for Icon Offshore IPO, I have chosen to review my decision on the amount of fund to be used in my application for BPB IPO as I am going to also try my luck for this O&G related stock. 

To all of you it's "Caveat Emptor", good luck and happy investing!