I feel odd when MAA said that they are going into private equity business. Remember when they lost in excess of RM500 million going into commercial lending business. This is also the reason why they are forced into selling the general insurance and other core businesses as they could not meet the minimum capital requirement by Bank Negara.
Private Equity as a business can even be tougher than lending in fact as PE involves having the discipline of sensing good businesses as compared to lending where one should be able to cover its grounds on the risks it is taking. Might as well pay some of the excess cash as dividends which they are not. Is this the reason why the shares is now trading at RM0.46 (market cap of RM140 million), way below the Shareholders Funds and with RM200 million cash owings to be received from Zurich Insurance which they are to receive by September 2013?
Market is not trusting they will do it well by providing them that discount?
1 comment:
The company should go back to basics of being a listed public Co. which is to work for the shareholders. I agree with you that they should reward shareholders by paying excess cash as dividends.
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