5.4.12

Quick Profit: Bumitama Agri IPO

Short Introduction: 
A producer of Crude Palm Oil (CPO) and Palm Kernel (PK), Bumitama Agri operate in three provinces in Indonesia where its oil palm plantations are located, namely Central Kalimantan, West Kalimantan and Riau. 


The Group's primary business activities are 
1) cultivating and harvesting oil palm trees
2) processing Fresh Palm Fruit Bunches (FFB) from its oil palm plantations 
3) selling CPO and PK in Indonesia.



Many people have this question in mind - To subscribe or not to subscribe for this IPO?

Let's take a look at more of the news revolving around it... I will take the snapshots...


According to http://business.asiaone.com/Business/News/Story/A1Story20120404-337604.html:

  • attracted strong demand from funds and wealthy investors looking to tap into the region's booming resources sector.
  • placement was 31 times subscribed, the highest oversubscription rate for a corporate offer since Yangzijiang Shipbuilding's 2007 IPO
  • (The IPO) attracted more than 150 investors but the majority are long-only funds. There's huge demand from high-net- worth individuals and family offices as well
  • Bumitama plans to sell 327.4 million shares, including an over-allotment option, at $0.745 each - the top of an indicative price range of $0.675 to $0.745.
Conclusion

In a nutshell, the IPO fever is coming and wealthy people have nowhere good to place their money now since the property markets are in the overpriced region with the government clamping it down.

Strong interest will mean more volume and more potential for it to go up since everyone wants a slice of it! Furthermore, majority of LONG-ONLY funds means that they will not be short-selling them and likely to push the prices up to buff up their own portfolios (make it nicer for investors to see).



Lastly, Bumitama is clever to sell the shares at $0.745... it shows that they know the IPO fever is here and they are here to earn from it.


I strongly urge people to subscribe for the IPO & set a profit target for it so you can sell within the 1st few days and make a quick profit! As usual, i walk the talk and have subscribed for them already! I will keep you updated as the IPO lists on the first day!

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