Friday, May 28, 2010

Sime Darby Crisis, Any Purchase Opportunity?

                                                                   
13 May 2010 was a bussines tragedy. Investors has been surprised by the news of Sime Darby which has been reported making losses due to cost overruns  for Bakun and a petroleum project in Qatar. The amount of losses was RM1.6 billion and first big financial crisis since merger in November 2007. In 2008 and 2009 Sime Darby has made net profit of RM3.5b and RM2.2b respectively.

As an effect of the losses, share price plunged and in May 26, the price closed at RM7.60, lowest since 10 months. Based on 52 weeks highest price i.e. RM9.24, it was 21.6% drop.

Some investors raised question, can we buy the Sime Darby share at the moment?  The following  questions will help you to make decision.

As an investor, the most important thing should you bear in mind is the future of the company.

Is the existing management which led by new Acting CEO will do something to turn Sime Darby into the earlier business or financial position?  Any hope for Sime Darby to be turned around?

Are you willing to follow Warrent Buffet’s principle? “There is an opportunity in the crisis”. He spent billion dollars by buying Goldman Sach shares when it plunged in 2008 which caused by Goldman Sach financial situation.

The last, know your self  before you buy Sime Darby. Are you trader or investor?

Get an opinion from your remisier or advisor.

- Sabri Jalil

1 comment:

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