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I guess there’s a time for everything, and the time had finally come for me to close the curtain on my investment in China Fishery. On the morning of January 21, 2010, I decided to divest my entire stake in China Fishery at a price of about S$1.92, netting a gain of about 87% on my initial investment (excluding dividends). This decision did not come lightly, and follows on the heels of a somewhat love-hate relationship I have with this company, and also the turmoil and conflicts within my brain which came along in the process of owning it. Taking into account my total holding period of about 2 years 2 months, the annual return is approximately 40% (non-compounded).
On the morning of January 21, 2010, China Fishery (“CFG”) announced their intention to dual-list (secondary offering of shares) on the Stock Exchange of Oslo Bors, located in Norway. The aim of the dual listing was to increase recognition of China Fishery as many fishing and fish processing companies were listed on Oslo Bors (there are currently three – Aker Seafoods, Leroy Seafood Group and Austevoll Seafood). The listing would also raise the profile of CFG in Norway and Europe, where many of CFG’s customers and business partners were located. A third reason was also provided of attracting institutional investors in Europe who would be able to trade CFG’s shares in two different time zones, thus improving the trading liquidity of the counter. Apparently, Management believed that going the dual-listing way would improve valuations and allow the counter to trade at a significantly higher valuation (and hence market price).
The arguments and rationale provided above is indeed compelling, but then again once you scratch under the surface and reveal the underside of things, it started to get questionable. I will present the facts and logic of my reason for divestment, and though I do not classify this strictly as an investment mistake per se, let’s say that I did learn a lot of lessons from this episode and will, in future, be a lot more cautious and exercise more due diligence and prudence in conducting my investment affairs. Read more...[caption id="attachment_2390" align="alignright" width="150" caption="Photo by ir0cko"][/caption]
I guess there’s a time for everything, and the time had finally come for me to close the curtain on my investment in China Fishery. On the morning of January 21, 2010, I decided to divest my entire stake in China Fishery at a price of about S$1.92, netting a gain of about 87% on my initial investment (excluding dividends). This decision did not come lightly, and follows on the heels of a somewhat love-hate relationship I have with this company, and also the turmoil and conflicts within my brain which came along in the process of owning it. Taking into account my total holding period of about 2 years 2 months, the annual return is approximately 40% (non-compounded).
On the morning of January 21, 2010, China Fishery (“CFG”) announced their intention to dual-list (secondary offering of shares) on the Stock Exchange of Oslo Bors, located in Norway. The aim of the dual listing was to increase recognition of China Fishery as many fishing and fish processing companies were listed on Oslo Bors (there are currently three – Aker Seafoods, Leroy Seafood Group and Austevoll Seafood). The listing would also raise the profile of CFG in Norway and Europe, where many of CFG’s customers and business partners were located. A third reason was also provided of attracting institutional investors in Europe who would be able to trade CFG’s shares in two different time zones, thus improving the trading liquidity of the counter. Apparently, Management believed that going the dual-listing way would improve valuations and allow the counter to trade at a significantly higher valuation (and hence market price).
The arguments and rationale provided above is indeed compelling, but then again once you scratch under the surface and reveal the underside of things, it started to get questionable. I will present the facts and logic of my reason for divestment, and though I do not classify this strictly as an investment mistake per se, let’s say that I did learn a lot of lessons from this episode and will, in future, be a lot more cautious and exercise more due diligence and prudence in conducting my investment affairs. Read more...
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I guess there’s a time for everything, and the time had finally come for me to close the curtain on my investment in China Fishery. On the morning of January 21, 2010, I decided to divest my entire stake in China Fishery at a price of about S$1.92, netting a gain of about 87% on my initial investment (excluding dividends). This decision did not come lightly, and follows on the heels of a somewhat love-hate relationship I have with this company, and also the turmoil and conflicts within my brain which came along in the process of owning it. Taking into account my total holding period of about 2 years 2 months, the annual return is approximately 40% (non-compounded).
On the morning of January 21, 2010, China Fishery (“CFG”) announced their intention to dual-list (secondary offering of shares) on the Stock Exchange of Oslo Bors, located in Norway. The aim of the dual listing was to increase recognition of China Fishery as many fishing and fish processing companies were listed on Oslo Bors (there are currently three – Aker Seafoods, Leroy Seafood Group and Austevoll Seafood). The listing would also raise the profile of CFG in Norway and Europe, where many of CFG’s customers and business partners were located. A third reason was also provided of attracting institutional investors in Europe who would be able to trade CFG’s shares in two different time zones, thus improving the trading liquidity of the counter. Apparently, Management believed that going the dual-listing way would improve valuations and allow the counter to trade at a significantly higher valuation (and hence market price).
The arguments and rationale provided above is indeed compelling, but then again once you scratch under the surface and reveal the underside of things, it started to get questionable. I will present the facts and logic of my reason for divestment, and though I do not classify this strictly as an investment mistake per se, let’s say that I did learn a lot of lessons from this episode and will, in future, be a lot more cautious and exercise more due diligence and prudence in conducting my investment affairs. Read more...
