Fgvh

SHOULD I JUMP INTO THE BANDWAGON? THE CASE OF FGVH IPO

Ruzita Abdul Rahim Mohd Hasimi Yaacob

MONEY FALLS FROM THE SKY It was a fine Friday afternoon on June 8, 2012 but Afiq Firash was still startled by the 18th birthday gift that he received from his mother last night. It was a saving account book of Tabung Haji showing a balance of RM25,000 and a brief note “Happy birthday sweetheart. Treat the money well and it might even pay for your degree” written on the birthday card. To Afiq Firash, this message is a clear indication that his mother had agreed to let him pursue a minor-degree in Islamic Financial Engineering (IFE) in a prestigious university in UK. He had already secured a scholarship for an Accounting degree at the same University, but scholarship would not cover the additional tuition fees and living costs of his 1 year stay at the university to attain the minor degree in IFE. He estimated that it would involve an additional cost of RM40,000. HOW WOULD THE MONEY GROW? Not knowing how exactly he should grow the money, Afiq Firash contacted his cousin (Rauf) who is an engineer with an oil and gas company in Sabah for advice. Without hesitation, Rauf suggested an IPO (initial public offering) of Felda Global Venture Holdings (FGVH), which wass already opened for subscription since 31 May 2012. Right after the phone call, Rauf sent emails on some information about the company that he had collected for his own use. He told Afiq Firsah that he had submitted a subscription for 10,000 units under his own account and 5,000 more on his wife’s. ATTACHMENTS FROM RAUF’S EMAILS Prospects in Palm Oil Industry The oil palm tree, also known by its scientific name Elaeis guineensis, is a type of tropical plant that bears oil palm fruits. Each oil palm fruit comprises a hard shell known as the endocarp, a fibrous oil-bearing outer layer known as the mesocarp, and a single seed (nut) or kernel which is rich in oil. Oil palm fruits grow in bunches known as fresh fruit...