[Dow Jones] FM Holdings (5GO.SG) +7.3% at 7-month high of S$0.295 as giftware maker's proposed foray into coal business stirs interest in historically illiquid stock. Company looking to acquire 90% stake in TriStar Global Services, which owns concessions to two coal assets in Indonesia. Deal valued at up to S$160 million, but FM hasn't finalized funding structure as it has engaged a technical adviser to conduct due diligence first. But some question wisdom of chasing up share price, noting among other things FM's net profit of just HK$5 million for FY ended March (down 58% on-year). "How are they going to fund it? On top of that, after Dayen's saga, they still want to go into the coal business?" says foreign house dealer, referring to water treatment firm Dayen Environmental's (5BT.SG) recent snag with its own venture into coal mining business. Orderbook suggests stock unlikely to head much higher than session high of S$0.305.
More question raised than answered
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