KNM aka "Kalau Nak Mati/Menang"

Wow what happened to our beloved oil and gas stock? Known as an aggressive and fundamentally strong company lead by an experienced and hands on Managing Director, investors were often baffled by its buying ventures of overseas competitors and its thirst to be among the leaders in the industry. The company's vision as per the 2007's Annual Report is to become the top 5 global manufacturer of process equipment for oil and gas, petrochemicals processing and energy industries by 2010.

Of late, the fortune of the company has taken a very bad fall. With a market capitalisation of RM9b as at 30 May 2008, the size has dwindled by 70% and currently stands at RM2.8b as I write.

Not much has been revealed out to the public about the sell down today from 90.5 sen to 68.5 sen, down 22sen or 25%. My guess for the panic selling could be explained as follows:-

1) Continued selling by FMR-9.7% shareholder due to redemptions of funds or due to "inside news".(it has about9% of KNM based on the latest disclosure)

2) EPF-5.2% shareholder (via CMS Dresdner) started to sell after it gets "news" from FMR. Not to mention other smaller funds.

3) Global outlook for Oil and Gas is at best flat,

4) KNM unable to convert its short term loans amounting to approximately RM921m to long term loan due to global credit crunch. Total loans for the group is about RM1.1b. It should be noted that KNM has earlier delayed its USD350b bond issuance although shareholders and the Securities Commission have approved it.

5) Maybank or AM Investment recalling their underwriting commitment RM150m of Islamic Commercial Papers Medium Term Notes.

6) Funding problems with some of the newly acquired local/overseas firms . Or problems with fundings/contracts. Are the foreign contracts not hedged fully?

7) simply "no confidence"

Lets wait what the KNM's management has to say about the sell down. Would it be the same old adage "we are not aware of any reasons whatsoever".... The large shareholders are telling you something....get out...as fast as you can...everyone lose big time....hmmm......30sen is a good entry price!

* China's foreign exchange reserve is at USD1.9T as at end of September 2008.

* BNM's website via The Star: The insured amount per institution in countries are: Malaysia USD17,261, Singapore USD13,808, HK USD12,872, Indonesia USD10,616, Philippines USD5,298 and Vietnam USD3,020. A plus point for Malaysia!

* With effect today the revised downward fuel prices are as follows:- Ron97 RM2.30(old RM2.45), Ron92 RM2.20(old RM2.30) and diesel RM2.20(old RM2.40). Why am I not thrilled?