The Baiting Game from CBG, Have You Been Played?
It is hard not to notice the hike from CBG in these past few days, but its basic factors are not doing so well, so why has the share rallied?
To all’s astonishment, Carabao Group Public Company Limited (CBG) has rallied more than 12% in just two days (3-4 Sep.) along with its high volume. Even though, the bloodshed trading day on September 5 may caused CBG to fall, but in the morning session of September 6, CBG has gained almost 2.51% back.
To give you a clearer picture, let’s focus only on the two-day jump. There are supporting reasons that CBG’s shares did not rally just by its basic factors, but by something similar to what is called “manipulation”.
CBG’s price starts its hike on September 3, 2018 (reverse market situation) from 250,000 big lot shares at ฿47/share (฿0.75 higher than the market price), while DW (Derivative Warrants) also accidentally issues CBG28C1812A that hikes 31.8%.
When CBG’s shares had been supported by DW, the fish did not hesitate to take the bait.
For an easy understanding, the 12% increase on CBG is nothing but a game. The similar cases have occurred with Krungthai Card Public Company Limited (KTC) and Super Energy Corporation Public Company Limited (SUPER) as well.
The basic factors that suppose to be the main drivers to increase CBG share price have been pressured by international markets both from England and China. More importantly, England has just issued a new regulation to prohibit children under 16 years of age on buying energy drinks. Do not forget that CBG had poured over 700 million baht to support the FIFA World Cup and debut the Carabao drink there.
From an evaluation, CBR is at risk in facing constant loss from the investment in England after CBG has sponsored an English football team, with sales being inequivalent to expectation, and considerably quite low as well in Chinese markets.
Thus, even though the sales from domestic and CLMV (Cambodia, Laos, Myanmar and Vietnam) markets might make a slight rebound, but the pressure from Chinese markets and losses from England will keep stabbing CBG, causing its profit to be limited in 3Q18 and 2H18.
To conclude, the two-day hike is too good to be true when compared to its basic factors. Those who have their hands on CBG might get a chill after hearing this. If you are stuck at the “peak”, good luck.