Rolling War Wagon KPSIt has been a long time I have blogged on KPS. Ever since I chanced upon the underlying value of this counter way back in November 2006, I have been observing its price movement and volume keenly. And it has performed true to form. It has broken out from its Rip Van Winkle state and have rocketted upwards from 38 1/2 sen to above RM1.50 in a short period of 5 months.
There are many rumours in the market. The main ones are the Water Transfer project from Pahang and the Western Tolled Highway. Then there is the bonus possibility of Perak siphoning water as well to Selangor. The last rumour to hit the market is the possible takeover of Puncak Niaga by KPS. All these are good for KPS shareholders.
So what remains in the horizon is for the rumours to come true. The Water Transfer project is a matter of time. The earlier agreement between Kumpulan Darul Ehsan Holdings and KPS will most possibly be nullified now that water is both a state and federal matter following constitutional amendments which was passed. So KPS may be negated a bit here since it is no longer the honcho for the waterworks project per se. Any how, all is not lost.
The corporate takeover of Puncak Niaga is interesting. How is KPS going to fund this purchase? Not through a 100% loan as it would impact upon its operating and dividend capacities. I see a rights issue as well as warrants thrown in as sweeteners. To do a rights issue, KPS shares must go beyond RM2.50.
We are only a ringgit away from that level. Any news will push KPS up. It could be an announcement of the agreed water rates for the water transfer project; potential early discussion with the Perak Goverment on another water transfer project or the tendering of the Western Corridor tolled highway project.
I am watching for this to happen.
Heartsong
There are many rumours in the market. The main ones are the Water Transfer project from Pahang and the Western Tolled Highway. Then there is the bonus possibility of Perak siphoning water as well to Selangor. The last rumour to hit the market is the possible takeover of Puncak Niaga by KPS. All these are good for KPS shareholders.
So what remains in the horizon is for the rumours to come true. The Water Transfer project is a matter of time. The earlier agreement between Kumpulan Darul Ehsan Holdings and KPS will most possibly be nullified now that water is both a state and federal matter following constitutional amendments which was passed. So KPS may be negated a bit here since it is no longer the honcho for the waterworks project per se. Any how, all is not lost.
The corporate takeover of Puncak Niaga is interesting. How is KPS going to fund this purchase? Not through a 100% loan as it would impact upon its operating and dividend capacities. I see a rights issue as well as warrants thrown in as sweeteners. To do a rights issue, KPS shares must go beyond RM2.50.
We are only a ringgit away from that level. Any news will push KPS up. It could be an announcement of the agreed water rates for the water transfer project; potential early discussion with the Perak Goverment on another water transfer project or the tendering of the Western Corridor tolled highway project.
I am watching for this to happen.
Heartsong
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