Saturday, April 5, 2014

200% return from Elite KSB after 51 months

I was surprised to see a letter for me from the Depository informing me that Elite KSB has been delisted from the Mainboard. In 2009-10, I acquired 16,000 shares costing me SGD 3,300 or about 20.7 cents per share. The dividends and capital distributions received up to the point of delisting amounted to SGD 9,894. This represents almost 200% return on the money I had put in, but the holding period was a long 51 months. Looking back at my original "explanation" of 26 cents being the target price, Elite KSB has outperformed my expectation. 

That said, the stock reached a high of 60 cents in November 2012. Had I sold then and there, I would have made about SGD 300-400 more and reduced my holding period by 12 months. Nonetheless, after clearing four stocks at a loss, this "win" was a welcome sight. Incidentally, this is the third stock after SPC and C&O Pharmaceutical to be taken out of the Mainboard.

I guess there was always the hope that the company would be an RTO target. However, with the heightened scrutiny of Chinese and Indonesian companies by SGX as well as weak overall sentiment, it seems that an RTO of Elite KSB was always going to be a longshot.

I will be revisiting my market call soon. I had on 18 January anticipated a bear market with volatility. This was initially true but the market has since recovered and gained 2% since the date of my call. 

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