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30-09-2011, 12:30 AM
valuenewb Wrote:Why can/should it be considered a value stock? It trades at an average of 17-18% over the past months, meaning you are only paying 82 cents for $1 worth of investment. Some 5% of the fund is invested in UOB alone.
Why can/should it be considered a value trap? Maybe the discount will be a permanent feature of UIS since the majority (Wees) effectively have control over UIS (through its cross holding in UOB, UOI, Pan Pac).
Any comments?
As the fund is highly unlikely to ever be liquidated (as Laxey is slowly finding out) you can only get out by selling to others. So there are then 2 considerations:
1. Will NAV increase?
2. Will the NAV discount narrow or widen?
A look back in history will make clear whether NAV (adjusted for dividends) has increased over time, and it will also show how the NAV discount changed with time.